When an individual pays private mortgage insurance (PMI), they may be able to claim a deduction on their tax return. However, the amount of the deduction that can be claimed varies based on the taxpayer's adjusted gross income (AGI) and other factors. In the case of a single individual with an AGI of $101,000 who purchased a new home in 2011 and paid $1,200 in PMI in 2022, the amount of the deduction they can claim on their 2022 Schedule A will be $0.
The deduction for PMI is subject to a phase-out based on the taxpayer's AGI. For a single taxpayer, the phase-out begins at an AGI of $100,000. For each $1,000 of AGI above $100,000, the amount of the deduction is reduced by 10%. At an AGI of $109,000 or higher, no deduction is allowed.
In this case, the taxpayer's AGI is $101,000, which is $1,000 above the threshold for the phase-out. This means that the amount of the PMI deduction they can claim is reduced by 10%. Since they paid $1,200 in PMI, the amount of the deduction is reduced by $120 (10% of $1,200), leaving a deduction of $1,080.
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During the first month of operations ended March 31, IceBox Fridgeration Company manufactured 165,000 mini refrigerators, of which 150,000 were sold. Operating data for the month are summarized as follows:
1
Sales
$11,250,000.00
2
Manufacturing costs:
3
Direct materials
$1,980,000.00
4
Direct labor
4,290,000.00
5
Variable manufacturing cost
412,500.00
6
Fixed manufacturing cost
2,475,000.00
9,157,500.00
7
Selling and administrative expenses:
8
Variable
$450,000.00
9
Fixed
1,125,000.00
1,575,000.00
Required:
1. Prepare an income statement based on the absorption costing concept.
2. Prepare an income statement based on the variable costing concept.
3. Explain the reason for the difference in the amount of operating income reported in (1) and (2).
During the first month of operations ended March 31, Ice Box Refrigeration Company manufactured 165,000 mini refrigerators, of which 150,000 were sold.
Operating data for the month are summarized as follows:
1) Preparing Income Statement Based on Absorption Costing Concept Sales of the firm are given as $11,250,000. The cost of goods sold in an absorption costing system includes direct materials, direct labor, variable manufacturing overhead, and fixed manufacturing overhead. Let's calculate the cost of goods sold to get the gross profit.
Direct materials $1,980,000Direct labor $4,290,000 Variable manufacturing costs $412,500 Fixed manufacturing costs $2,475,000 Total manufacturing costs $9,157,500Add opening inventories $0 Less closing inventories (15,000)Cost of goods sold $9,142,500.
Gross Profit = Sales - Cost of goods sold= $11,250,000 - $9,142,500 = $2,107,500 Selling and administrative expenses are given as $1,575,000, which is deducted from the gross profit to obtain the operating income.
Operating Income = Gross Profit - Selling and Administrative Expenses= $2,107,500 - $1,575,000= $532,5002) Preparing Income Statement Based on Variable Costing Concept Under the variable costing method, only variable costs are included in the cost of goods sold.
Direct materials $1,980,000Direct labor $4,290,000.
Variable manufacturing costs $412,500.
Variable selling and administrative expenses $450,000.
Total variable costs $7,132,500 Contribution Margin
= Sales - Variable Costs
= $11,250,000 - $7,132,500
= $4,117,500.
Fixed Manufacturing costs of $2,475,000 and Fixed Selling and administrative expenses of $1,125,000 are not included in cost of goods sold, hence they will be treated as period costs. Therefore, fixed costs will be treated as a deduction from the contribution margin to calculate the operating income.
Operating Income = Contribution Margin - Fixed Costs= $4,117,500 - $3,600,000= $517,5003.
Explanation of the Difference in the Amount of Operating Income Reported in (1) and (2)The difference in the amount of operating income between the two methods of costing is due to the difference in the treatment of fixed manufacturing overhead costs. Under absorption costing, fixed manufacturing overhead costs are included in the cost of goods sold and are expensed as the units are sold.
In contrast, under variable costing, fixed manufacturing overhead costs are treated as period costs and are deducted from the contribution margin to calculate operating income. The sale of 150,000 mini-refrigerators resulted in $2,107,500 of operating income under absorption costing and $517,500 of operating income under variable costing. Therefore, there is a difference of $1,590,000 between the two methods.
This difference can be explained by the fact that absorption costing assigns fixed manufacturing overhead costs to products while variable costing does not. Hence, under absorption costing, some of the fixed manufacturing overhead costs assigned to the unsold units are deferred to the future periods. This leads to a higher amount of operating income under absorption costing as compared to variable costing.
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After a Covid, management has decided company must can now adopt
a hybrid model.Write an email to all staff explaining the changes
in all operations.Need a sample of email
Subject: As we continue to navigate through the Covid pandemic, the management team has made the decision to adopt a hybrid model for our company's operations.
This means that we will be transitioning to a more flexible work environment that will allow our employees to work from home or in the office as needed. Under this new model, some of you will be working remotely full-time while others will be required to come into the office on a part-time basis. In order to ensure that everyone is on the same page, we have put together a detailed plan that outlines how our company's operations will change. Here are some of the key points that you need to be aware of;
• All employees will be given the option to work from home or in the office depending on their role and responsibilities.
• Our offices will be modified to ensure that social distancing guidelines are followed and that our employees feel safe when they come into work.
• We will continue to hold virtual meetings and conferences to keep everyone connected and informed.
• We will also be implementing new technology to ensure that our employees can work efficiently from any location.
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BLJ say that cash differs from open-loop and closed-loop payments systems in which of the following ways? (p. 118; Kindle, 2014) (Ch. 6. Introductory paragraph) 1. It can be used anonymously. 2. Neither the payer nor the payee needs an account with a provider. 3 . It is not subject to a set of rules written by a third party. A. 1 and 2 B. 1 and 3 C. 2 and 3 D. 1,2 , and 3 2. Some economists say that of the cash produced in the U.S. is held overseas (BLJ, p. 117; Kindle, 2020) (Ch. 6, Cash Volumes) A. a small fraction B. less than half C. as much as three-fifths D. over four-fifths 3. According to BLJ, the only way cash can get into the economy is through (BLJ, p, 118; Kindle, 2026) (Ch. 6, Cash Production and Supply) A. the Treasury using cash to make payments to the public B. banks and other depository institutions ordering eash from the Fed C. the public going to the Federal Reserve to request currency D. banks and other depository institutions ordering cash from the Treasury
BLJ say that cash differs from open-loop and closed-loop payments systems in which of the following ways According to BLJ, cash differs from open-loop and closed-loop payments systems in the following ways:It can be used anonymously.
Neither the payer nor the payee needs an account with a provider.It is not subject to a set of rules written by a third party.Thus, the correct answer is A. 1 and 2. More than 100 words:Cash is a physical payment medium that can be used to settle transactions, and it is issued by the government. It is one of the most important and long-lasting financial instruments, and it has certain qualities that distinguish it from other types of payments systems.Cash differs from open-loop and closed-loop payments systems in the following ways
:1. Cash can be used anonymously.Cash is a tool for anonymous transactions, as it does not have any unique identifying features. As a result, it is frequently used for illegal transactions because it is difficult to track. It's also utilized by people who value privacy and wish to avoid being tracked by financial institutions.
2. Neither the payer nor the payee needs an account with a provider.One of the most appealing aspects of cash is that neither the payer nor the payee requires an account with a financial institution. This reduces the need for banks or other financial intermediaries to become involved in transactions. Furthermore, it makes it possible for individuals who do not have access to banking services to conduct transactions.
3. It is not subject to a set of rules written by a third party.Cash is a payment medium that is not subject to any third-party regulations. It is an alternative to other payment systems that require the involvement of intermediaries such as banks, credit card companies, and other financial institutions. As a result, cash transactions are not subject to the same fees and other costs associated with these intermediaries.
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Which of the following are inversely related and are present when the cost of an input changes?
A. The complement and output effects.
B. The substitution and complement effects.
C. The substitution and resource effects.
D. The substitution and output effects.
The substitution and complement effects are inversely related and are present when the cost of an input changes (option b).
The substitution effect refers to the change in the quantity of one input used when the price of another input changes while keeping the level of output constant.
When the price of an input decreases, it becomes relatively cheaper compared to other inputs, leading firms to substitute the now cheaper input for the relatively more expensive input.
This inverse relationship between the prices of inputs and their quantities used is known as the substitution effect.
The complement effect, on the other hand, refers to the change in the quantity of one input used when the price of another input changes while keeping the level of utility or satisfaction constant.
In production, complementary inputs are used together in the production process, so when the price of one input changes, it affects the quantity demanded of the complementary input.
For example, if the price of labor decreases, a firm may decide to hire more workers, which would increase the demand for complementary inputs like machinery.
Both the substitution effect and the complement effect are inversely related to changes in input costs. As input costs change, these effects come into play, leading to adjustments in the quantities of inputs used in production.
Therefore, the correct answer is B. The substitution and complement effects.
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Messman Manufacturing will issue common stock to the public for $30. The expected dividend and the growth in dividends are $2.75 per share and 6%, respectively. If the flotation cost is 16% of the issue's gross proceeds, what is the cost of external equity, re? Round your answer to two decimal places
In order to determine the cost of external equity, the following formula is used Cost of external equity:
Re = (D1 / (P0 - F)) + g
where,
D1 = expected dividend = $2.75P0 = the market price of the stock = $30F = flotation cost = 16% of $30 = $4.8g = growth rate of dividends = 6%
Substitute the given values in the above formula,
Re = ($2.75 / ($30 - $4.8)) + 6%Re = ($2.75 / $25.2) + 6%Re = 10.9127%
Rounded off to two decimal places,
Re = 10.91%
the cost of external equity is 10.91%.
Explanation:
: Re = (D1 / (P0 - F)) + g
Here,
D1 is the expected dividend and g is the growth rate of dividends.
P0 is the market price of the stock and F is the flotation cost.
The given values are:D1 = $2.75P0 = $30F = 16% of $30 = $4.8g = 6%
Substituting the values in the formula,
Re = ($2.75 / ($30 - $4.8)) + 6%Re = ($2.75 / $25.2) + 6%Re = 10.9127%
Rounded off to two decimal places,
Re = 10.91%.
the cost of external equity is 10.91%.
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How can measuring market share be helpful to a brand looking into entering said market? Are there any ways to break into a market that is dominated by a monopoly?
Measuring market share is helpful to a brand looking to enter a market as it helps in determining the proportion of total sales of a specific product or service that a particular brand controls.
Market share analysis is a vital tool to determine how well a business is doing against its competitors. If the brand looking to enter the market can analyze its competitors' market share, it can find a way to compete with them. The following are the advantages of measuring market share to a brand looking to enter the market.
Market share analysis helps identify competitors: By analyzing competitors' market share, a brand can determine which market leaders it must contend with in the industry and how to compete against them.Marketing Strategy Development.
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Who was John Maynard Keynes? How does his approach to macroeconomic management depart from the previous status quo? How was American society transformed to make the Keynesian approach more salient than its predecessor? How was the Keynesian approach manifest in macroeconomic policymaking? If you were advising the government of the United States would you suggest more or, less, Keynesianism? Explain. Is the US government likely to become more or, less Keynesian in the coming 12 months? Explain.
John Maynard Keynes (1883-1946) was an English economist who is regarded as one of the most important economists of the 20th century. Keynes's approach to macroeconomic management departed from the previous status quo in a few different ways. Firstly, he believed that government should play an active role in managing the economy. This was a departure from the classical liberal view, which held that the government should not intervene in the economy.
Keynes also believed that economic downturns were caused by a lack of demand in the economy, rather than supply-side issues. In other words, he believed that economic problems were caused by people not spending enough money, rather than there not being enough goods or services available.
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AB partnership is a 50/50 PS; A has a June 30 year end (YE), and B has a July 31 year end. What is the required taxable year of the partnership?
Partnerships are regarded as pass-through entities for federal tax purposes. As a result, the partners pay tax on their share of partnership income and deductions on their own tax returns.
Every year, partnerships are required to file an information return called Form 1065 with the IRS.AB partnership is a 50/50 PS, which means that both partners share an equal interest in the partnership. A has a June 30 year end, whereas B has a July 31 year end. To determine the taxable year for a partnership, we must first comprehend the concept of partnership tax years.
A partnership's tax year is its fiscal year or the calendar year. The tax year of a partnership can be determined in one of two ways. A partnership can choose its own tax year by filling out Form 1065 and attaching a statement with its tax return stating that it has a legitimate business reason for the year it is using.The other way to determine the tax year of a partnership is based on the tax years of its partners.
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please answer simply and correctly- need this for presentation!
thank you in advance! :)
After the negative confidence shock, what can the
government do to restore the original equilibrium
output
The government can restore the original equilibrium output, by; Lowering taxes, Increasing government spending, Lowering interest rates and Implementing policies that improve investor confidence.
After a negative confidence shock, the government can restore the original equilibrium output in the following ways:
Lowering taxes: By lowering taxes, the government can increase people's disposable income and boost consumption, which can result in an increase in aggregate demand, output, and employment.Increasing government spending: Government spending can be used to create jobs and stimulate demand for goods and services. When the government spends money on infrastructure, education, and other public services, it creates employment opportunities and increases output.Lowering interest rates: By lowering interest rates, the government can encourage borrowing and investment, which can lead to an increase in aggregate demand, output, and employment. When the central bank lowers interest rates, commercial banks can offer loans at lower rates, making it easier for businesses and households to invest and consume.Implementing policies that improve investor confidence: The government can implement policies that increase investor confidence, such as stabilizing the political situation, improving the business environment, and increasing transparency and accountability.Know more about the negative confidence shock,
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Sun Shield Corporation has the following data available on December 31 for the year just ended:
A 45.22%
B. 17.00%
C. 20.20%
D. 26.00%.
The data provided shows the percentage of each major product sold by Sun Shield Corporation. Sun Shield Corporation is in the business of manufacturing and selling sunscreens and tanning lotions.
The percentage of products sold is given as follows: A- 45.22%, B- 17.00%, C- 20.20%, and D- 26.00%.The given data shows that product A has been sold the most among all the four products sold by Sun Shield Corporation.
The next two most sold products are D and C, with percentages 26.00% and 20.20%, respectively. And the least sold product is B with only 17.00% sales in the same period.The data can be useful in various ways.
Firstly, the company can use it to decide on which products are to be produced more based on their demand and sales percentage. The data can also be useful for future decision-making, for example, whether to invest more in product A, given that it has sold the most, or B, given that it has sold the least.
The data can also be used to predict future sales and decide on the company's product pricing strategy.A company can also use this data to determine if their marketing strategies are working effectively and whether more resources should be devoted to the least performing product in order to increase its sales.
Therefore, the company should carefully analyze this data and use it for future strategic decision-making.
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ben's investment account was valued at $15,000 but then lost 15% of its value. what percent increase is needed for the investment account to return to its previous value?
15% increase is needed for Ben's investment account to return to its previous value.
How much percent increase is required for Ben's investment?To find the percent increase needed, we will calculate the percentage of the original value that was lost and then determine the percentage increase required to make up for it.
The amount lost from the original value is 15% of $15,000, which is:
= 0.15 * $15,000
= $2,250.
To return to the original value, the investment account needs to increase by $2,250. To get percentage increase needed, we divide the increase by the original value and multiply by 100:
Percentage increase = ($2,250 / $15,000) * 100 = 15%.
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How and why can the decision of U.S. citizens
to save money cause economic
problems for the economy? So, if the economy
is in a recession, who is
at fault: business, households, or governments
The decision of U.S. citizens to save money can cause economic problems for the economy. The government's role is to stimulate the economy by engaging in deficit spending.
If the economy is in a recession, no one party can be blamed for it. In this case, the decision of US citizens to save money will not cause economic problems. Instead, in an economy where there is a lack of spending, this decision to save could make the recession worse. What is the role of the government in a recession? During recessions, governments aim to stimulate the economy by engaging in deficit spending. This means that they increase spending and decrease taxes to increase aggregate demand. The aim of this is to stimulate economic growth and prevent a prolonged recession. In a recession, it is nobody's fault. Recessions occur due to a combination of factors such as inflation, unemployment, low GDP growth, and a decrease in aggregate demand. They are caused by economic cycles and are a natural part of economic activity. In conclusion, the decision of US citizens to save money is a good economic decision. However, in an economy where there is already a recession, this decision could worsen the recession. During a recession, no one party can be blamed. Instead, it is a natural part of the economic cycle. The government's role is to stimulate the economy by engaging in deficit spending.
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What is a balance sheet, (as compared to an income statement), and what is the important ‘balance sheet equation’? The ‘income statement equation? What are some of the principal assets and liabilities on the balance sheet and explain how these are related to both bank, stability, profitability and money creation. Using both types of financial statements, how did rapidly rising interest rates lead to the collapse of the Savings and Loan industry?
A balance sheet is one of the most important financial statements that any company or organization prepares. It provides an overview of a company's financial situation by showing what assets and liabilities it has. The balance sheet is different from an income statement, which shows the company's revenues and expenses over a specific period.
The balance sheet equation is Assets = Liabilities + Equity. This means that a company's assets must equal its liabilities plus equity.
This equation is important because it ensures that a company's assets are always balanced with its liabilities and equity.
The income statement equation is Revenues - Expenses = Net Income.
This equation shows how much money a company has earned after deducting all of its expenses. Some of the principal assets on a balance sheet include cash, accounts receivable, inventory, property, and equipment. Some of the principal liabilities include accounts payable, loans, and taxes owed. These assets and liabilities are related to bank, stability, profitability, and money creation in several ways.
For example, if a company has a lot of cash and accounts receivable, it can easily pay its bills and maintain stability. Similarly, if a company has a lot of inventory and property, it can create more products and generate more revenue, which leads to greater profitability.
On the other hand, if a company has a lot of debt, it may be less stable and less profitable. Rapidly rising interest rates led to the collapse of the Savings and Loan industry because many Savings and Loans (S&Ls) had made long-term loans at low interest rates and then had to pay higher interest rates to attract depositors. This made it difficult for S&Ls to make a profit and led to many of them going bankrupt.
Additionally, many S&Ls had invested in risky assets that lost value when interest rates rose, further contributing to their financial problems. As a result, the federal government had to step in and bail out many S&Ls to prevent a complete collapse of the industry.
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Study the screenshot above. The tabs PivotTable Analyze and Design, are not ordinarily visible. What do you need to do in order to access these tabs and the functions they contain?
a. To display them tick the Pivot Table Tools tick box in the Tables group
b. To display them click anywhere within a Pivot Table
c. To display them hover your mouse above the normal tabs on the ribbon
d. To display them click on the Pivot Table tab on the ribbon
In order to access the tabs PivotTable Analyze and Design, and the functions they contain, you need to click on the Pivot Table tab on the ribbon.
The PivotTable tab is not ordinarily visible on the ribbon, and so it is necessary to first create a PivotTable or select an existing one for the PivotTable tab to appear.
Below is a step by step guide on how to access the PivotTable Analyze and Design tabs on the ribbon.
Step 1: Create a PivotTable or select an existing one on the Excel worksheet.
Step 2: Click on any cell within the PivotTable.
Step 3: The PivotTable Tools tab appears on the ribbon with three sub-tabs, including Options, Design, and Analyze.
Step 4: Click on the Analyze or Design tab to access the functions they contain.
Option A is incorrect because the Tables group does not have the Pivot Table Tools tick box.
Option B is incorrect because clicking anywhere within a PivotTable does not cause the PivotTable Tools tab to appear.
Option C is incorrect because hovering the mouse above the normal tabs on the ribbon does not display the PivotTable Tools tab.
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how will market interest rates and bond prices most likely change if the federal reserve decides to make a small, one-time increase in the money supply? interest rates bond prices group of answer choices increase increase increase decrease decrease increase decrease decrease
If the Federal Reserve decides to make a small, one-time increase in the money supply:
- Interest rates are likely to decrease.
- Bond prices are likely to increase.
The market interest rates and bond prices are likely to change in the following way if the Federal Reserve decides to make a small, one-time increase in the money supply:
1. Interest rates:
When the Federal Reserve increases the money supply, it usually aims to stimulate economic activity and encourage borrowing and spending. As a result, the increase in the money supply could lead to a decrease in interest rates. This is because there is more money available for borrowing, which increases the supply of loanable funds. With an increased supply of funds, lenders may lower interest rates to attract borrowers. Therefore, in this scenario, interest rates are most likely to decrease.
2. Bond prices:
When interest rates decrease, the price of existing bonds tends to increase. This is because bond prices and interest rates have an inverse relationship. When interest rates go down, the fixed interest payments offered by existing bonds become more attractive compared to the lower rates in the market. Consequently, investors are willing to pay more for these bonds, driving up their prices. Therefore, in this scenario, bond prices are most likely to increase.
To summarize:
If the Federal Reserve decides to make a small, one-time increase in the money supply:
- Interest rates are likely to decrease.
- Bond prices are likely to increase.
It's important to note that while this is the general trend, the relationship between interest rates, bond prices, and the money supply is complex and can be influenced by various economic factors.
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Suppose that a risk-free investment will make three future payments of $100 in 1 year, $100 in 2 years, and $100 in 3 years. Instructions: Round your answers to 2 decimal places. a. If the Federal Reserve has set the risk-free interest rate at 8 percent, what is the proper current price of this investment? $ b. What is the price of this investment if the Federal Reserve ralses the risk-free interest rate to 10 percent? $
Suppose that a risk-free investment will make three future payments of $100 in 1 year, $100 in 2 years, and $100 in 3 years.
If the Federal Reserve has set the risk-free interest rate at 8%, is the proper current price of this investment. In order to calculate the current price of this investment, we will use the Present Value formula. The Present Value (PV) of the investment can be calculated as:
The proper current price of this investment is $257.70. b. What is the price of this investment if the Federal Reserve raises the risk-free interest rate to 10%?If the Federal Reserve raises the risk-free interest rate to 10%, we can use the same formula as above to calculate the new present value of the investment.
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Wardell Company purchased a mainframe on January 1, 2019, at a cost of $57,000. The computer was depreciated using the straight-line method over an estimated five-year life with an estimated residual value of $6,000. On January 1,2021 , the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $1,200. Required: 1. Prepare the year-end journal entry for depreciation in 2021. No depreciation was recorded during the year. (If no entry is required or a transaction/event, select "No journal entry required" in the first account field. Round your final answer to nearest whole tollar.)
In 2019, the Wardell Company purchased a mainframe at a cost of $57,000, which was depreciated using the straight-line method over an estimated five-year life with an estimated residual value of $6,000. In 2021, the estimate of useful life was changed to a total of ten years, and the estimate of residual value was changed to $1,200. We must now prepare the year-end journal entry for depreciation in 2021.
As a result, there are a few things to keep in mind before beginning the journal entry: This entry will only be used to make an adjustment to the estimate of the asset's remaining useful life and the asset's residual value. The depreciable base of the asset will not be changed by this entry. The depreciation expense for the prior years will not be modified by this entry, only the amount that will be recorded for the current year will be changed.
The following journal entry will be made:
Debit: Depreciation Expense $2,400 Credit:
Accumulated Depreciation $2,400 (To record the adjustment of depreciation)
Therefore, the year-end journal entry for depreciation in 2021 will be Depreciation Expense $2,400 Accumulated
Depreciation $2,400.
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Name three different companies and explain which of Porter's
three competitive strategies they have adopted and why it is
successful or not.
Introduction Porter's Three Competitive Strategies are a great way to classify a company's competitive edge. They are called cost leadership, differentiation, and focus. Three companies that have adopted these strategies are Apple, Walmart, and Netflix.
Porter's Three Competitive Strategies are as follows: Cost Leadership: This is the most popular strategy, which is about providing products and services at the lowest possible cost. It is the most difficult strategy to achieve because firms must keep their costs lower than their competitors. To achieve cost leadership, a company must use a variety of methods, such as process efficiency, technological advancements, and outsourcing.
Differentiation: This is about creating products and services that are different from those of your competitors. Companies that follow this strategy aim to create products that have a unique set of features that set them apart from others.
Focus: Focus is about targeting a niche market. It is about selling products and services to a specific group of people that are underserved by other companies. Companies that adopt this strategy are often very good at serving the needs of a specific group of people.
Example 1: Apple - Differentiation Apple is known for its unique products. Apple uses differentiation as its main competitive strategy, which has helped it create a loyal customer base. Apple's products stand out in the market due to their unique features, such as the camera, touch screen, and sleek design.
Example 2: Walmart - Cost Leadership Walmart is known for providing products and services at the lowest possible cost. Walmart has been able to achieve cost leadership through a variety of methods, such as process efficiency, technological advancements, and outsourcing. Walmart has been able to maintain its position as a low-cost provider, which has helped it attract a large customer base.
Example 3: Netflix - Focus Netflix is known for its streaming service. Netflix has been able to achieve success by focusing on a niche market. Netflix targets customers who want to watch movies and TV shows online, and has been very good at serving their needs. Netflix's success is due to its ability to offer a wide selection of movies and TV shows at a low price.
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Create Your Own Organization / Analyze an Existing Organization For this Independent Study Project, you will be designing your own organization or analyze an organization. You may assume the role of either the owner of a business or the Chief Executive Officer (CEO) of an organization if you wish. Length: At least 6 pages single spaced maximum 12 point font. Instructions You will be applying skills in the four functions of management (Planning, Organizing, Leading, Controlling) that we study. Specific topics for consideration might include the following: - Give a general description of the organization. - Define the objectives of the organization (ie. Mission Statement, Focus areas). - Describe the product or service. - Do a market analysis. Analyze the product, industry, competition. - What strengths, weaknesses, opportunities and threats exist for the organization? - What type of plans and planning tools and techniques are used? - What are policies and procedures? - How will the organization keep things under control? - What tools are used in order to maintain control? - Describe the structure of the organization (ie. Organizational Chart, Chains of command, Span of control). - Describe the level of centralization and delegation. - What type of organizational design will the organization display? - Describe the work process design of the organization. - How does the organization attract a quality workforce? - Develop an application process and interview potential management level employees. - How does the organization develop the quality workforce that is attracted? (ie. Orientation, Training) - What leadership styles and traits does the organization utilize? - Describe the communication process in the organization. - How is conflict managed? - How will the organization be creative and innovative? - What motivation techniques will be utilized in the organization? - What compensation tools will be utilized in the organization?
Introduction: A company is a group of individuals with shared objectives who perform tasks together. There are four fundamental principles of administration: planning, organizing, leading, and controlling.
The organization's framework is defined and implemented through these principles, ensuring that the objectives are accomplished. The following essay will outline an organizational analysis of ABC Corporation.
ABC Corporation is a technology-driven firm specializing in creating custom software solutions for businesses of all sizes. ABC Corporation is devoted to the highest level of customer satisfaction, quality software, and customer service. With 24-hour customer support, the company guarantees that all clients' issues are resolved promptly and efficiently. The organization's mission is to assist businesses in achieving their goals through the use of cutting-edge technology.
The company has established long-term objectives that will guide it through 2030, such as improved consumer satisfaction, which is reflected in customer surveys, product and service excellence, innovation, and organizational efficiency. The organization is committed to providing the best possible service and expertise to its clients, as well as creating a safe and supportive environment for its employees. The organization's product portfolio includes software development and IT solutions. ABC Corporation is committed to investing in high-tech technology and talent in order to provide the best and most innovative products and services to its clients. The organization recognizes the importance of being current and remaining up-to-date in order to meet client needs and remain competitive. This involves a continuous cycle of research and development, as well as regular product and service upgrades, with the goal of achieving a competitive edge and offering superior services to clients.
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In Irving Fisher's quantity theory of money, velocity was determined by A) interest rates. B) real GDP. C) the institutions in an economy that affect individuals' transactions. D) the price level.
In Irving Fisher's quantity theory of money, the velocity of money was determined by the institutions in an economy that affect individuals' transactions.
Irving Fisher's quantity theory of money is a classical economic theory. It is based on the idea that the general price level of goods and services is directly proportional to the amount of money in circulation.
This theory has a famous equation of exchange, which is M * V = P * T, where M represents the money supply, V represents the velocity of money, P represents the price level, and T represents the total quantity of goods and services bought and sold in an economy.
In this theory, the velocity of money is the number of times that a dollar is spent in a year. It is determined by the institutions in an economy that affect individuals' transactions.
Irving Fisher's quantity theory of money was developed in the early twentieth century. It is a classical economic theory that is based on the idea that the general price level of goods and services is directly proportional to the amount of money in circulation.
This theory has a famous equation of exchange, which is M * V = P * T, where M represents the money supply, V represents the velocity of money, P represents the price level, and T represents the total quantity of goods and services bought and sold in an economy.
According to this theory, the velocity of money is the number of times that a dollar is spent in a year. It is a measure of the rate at which money circulates in an economy. The higher the velocity of money, the more quickly money is changing hands, and the faster the economy is growing.
The velocity of money is determined by the institutions in an economy that affect individuals' transactions. These institutions include the banking system, financial markets, and other financial intermediaries. They affect how quickly money is transferred between buyers and sellers, and how easily transactions can be made.
Overall, Irving Fisher's quantity theory of money is an important contribution to the field of economics. It provides a framework for understanding the relationship between money and prices, and the role that institutions play in determining the velocity of money.
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GAT. Inc. has issued a $1.000 par 4% annual coupon bond that
is to mature in 18 years. If
your required rate of return is 6.5%, what price would you be
willing to pay for the bond?
Therefore, the price you would be willing to pay for the bond is [tex]$762.76[/tex], if your required rate of return is [tex]6.5%.[/tex]
The given information is as follows: [tex]Par value of the bond (face value) = $1,000[/tex] [tex]Coupon rate = 4%[/tex] [tex]Annual required rate of return (yield to maturity) = 6.5%[/tex]
[tex]Time to maturity = 18 years[/tex]
Formula for the present value of a bond:
[tex]PV = C * (1 - (1 + r)^-n) / r + FV / (1 + r)^n[/tex]
where PV is the present value of the bond, C is the coupon payment, r is the required rate of return, n is the time to maturity in years, and
FV is the face value of the bond. Using the given formula to calculate the price of the bond:
[tex]PV = 40 * (1 - (1 + 0.065)^-18) / 0.065 + 1,000 / (1 + 0.065)^18[/tex]
[tex]= $762.76[/tex]
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An investor takes the pay floating side of a plain-vanilla interest rate swap and makes payments at the rate of LIBOR-90 plus a quoted margin of 200 basis points. The swap fixed rate equals 5% (based on a 360 day year). The notional principal of the swap is $10 million and each settlement period is three months long.
16. If LIBOR-90 at the end of the second quarter equals 3%:
A. There is no settlement payment at the end of the third quarter.
B. The settlement payment at the end of the second quarter equals $200,000 C. The settlement payment at the end of the third quarter equals $50,000
17. If LIBOR-90 at the expiration date of the swap rises to 3% (compared to the previous reset date):
A. The pay-floating side will make a payment.
B. The pay-fixed side will make a payment.
C. There will be no payment at expiration of the swap
16. Payment at the end of the first quarter
= Notional principal × (LIBOR-90 + Quoted margin - Fixed rate) × (Actual days in quarter / 360) = $10,000,000 × (3.0% + 2.0% - 5.0%) × (90 / 360) = $50,000
Payment at the end of the second quarter
= Notional principal × (LIBOR-90 + Quoted margin - Fixed rate) × (Actual days in quarter / 360) = $10,000,000 × (3.0% + 2.0% - 5.0%) × (91 / 360) = $50,000
Thus, there is no settlement payment at the end of the third quarter.
Hence, option A is correct.
17. The pay-floating side makes payments based on the prevailing rate of LIBOR-90, so if the LIBOR-90 at the expiration date of the swap rises to 3% (compared to the previous reset date), the pay-floating side will make a payment.
Therefore, option A is correct.
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doc. brown inc. has a monopoly on flux capacitors. assume that doc. brown inc. is maximizing its profits at its current level of output while facing positive marginal costs. we may conclude that the absolute value of the price elasticity of demand for its flux capacitors is:
The absolute value of the price elasticity of demand for Doc. Brown Inc.'s Flux Capacitors is greater than 1.
Is the price elasticity of demand for Doc. Brown Inc.'s Flux Capacitors greater than 1?When a monopoly like Doc. Brown Inc. maximizes its profits at the current level of output, it implies that the firm has some degree of market power, allowing it to set prices higher than its marginal costs.
In this scenario, if the absolute value of the price elasticity of demand for Flux Capacitors is greater than 1, it indicates that the demand for these products is relatively elastic. This means that a change in price will lead to a relatively larger change in quantity demanded.
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The United States implemented one of the largest economic relief programs in its history during the COVID-19 pandemic. Use the information and interactive features at www.covidmoneytracker.org and describe the COVID-19 relief that has gone to businesses (small vs. large), state and local governments, education and healthcare providers. Which sectors were the largest beneficiaries of the relief programs? How did Nevada benefit from those programs? Also, discuss what you would have done differently regarding the size and distribution of the economic relief.
During the COVID-19 pandemic, the United States implemented one of the largest economic relief programs in its history. Below is the description of COVID-19 relief that has gone to businesses (small vs. large), state and local governments, education and healthcare providers.
Businesses (small vs. large) Small businesses have been the main beneficiaries of the economic relief program in terms of the number of loans issued. This is because of the Paycheck Protection Program (PPP), which has issued over $788 billion in loans since its inception in April 2020.
Large corporations, on the other hand, have benefited from government bailouts and financial stimulus packages to help stabilize the economy during the pandemic. State and local governments State and local governments have received financial assistance from the Coronavirus Relief Fund, which was established as part of the CARES Act. This fund provided $150 billion to help state and local governments respond to the COVID-19 pandemic. These funds were used to support hospitals, healthcare workers, and research into treatments for COVID-19.
Educational institutions also received significant funding from the CARES Act, with the Higher Education Emergency Relief Fund allocating over $14 billion to institutions of higher education across the United States. The largest beneficiaries of the relief programs are small businesses, state and local governments, and healthcare providers. This is because they are the ones who have been hit hardest by the pandemic and have struggled the most to keep afloat. Nevada has benefited from these programs by receiving financial aid from the Coronavirus Relief Fund, which helped the state's government respond to the pandemic's challenges. I would also have given more funding to small businesses, especially those that are minority-owned and those in industries that have been hit hardest by the pandemic, such as the travel and hospitality industry.
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XYZ Enterprise allows a 2 percent discount on any invoice it sends out that is paid within 30 days. In the past, 20 percent of its invoices have been paid within 30 days. If it sends out 12 invoices on 31st March, and if the payment of these invoices is independent, calculate the probability that (a) All receive a discount. (b) The number receiving a discount is less than the expected number receiving a discount.
The probability that all 12 invoices receive a discount is approximately X%.
To calculate the probability, we can use the binomial distribution formula. Let's denote success as an invoice receiving a discount and failure as an invoice not receiving a discount. The probability of success (p) is 0.20 (since 20% of invoices are paid within 30 days), and the probability of failure (q) is 1 - p = 0.80.Using the binomial distribution formula: P(X = k) = C(n, k) * p^k * q^(n-k). where n is the total number of trials (12 invoices) and k is the number of successful trials (12 invoices receiving a discount), we can calculate the probability of all 12 invoices receiving a discount:
P(X = 12) = C(12, 12) * 0.20^12 * 0.80^(12-12). (b) The probability that the number of invoices receiving a discount is less than the expected number is approximately Y%.The expected number of invoices receiving a discount can be calculated by multiplying the total number of invoices (12) by the probability of success (0.20):Expected number = 12 * 0.20.To calculate the probability that the number of invoices receiving a discount is less than the expected number, we need to sum the probabilities of all possible outcomes from 0 to the expected number (exclusive).
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Suppose that the distribution of the 1-year loss is as follows.
Loss ($ million) Probability
−1 0.4
0 0.2
1 0.2
2 0.1
4 0.1
(a) Find the 1-year 70% VaR.
(b) Find the 1-year 70% ES.
(c) Find the 1-year 80% VaR.
(d) Find the 1-year 80% ES.
Suppose that the distribution of the 1-year loss is given as:L($ million) Probability 0.1a) 1-year 70% is defined as the maximum possible loss for a given level of confidence and period of time.
The 70% VaR, therefore, implies that the confidence level is 1-70% = 30%, and the period of time is 1 year.To calculate the 70% VaR, we need to find the maximum loss of the 30% probability:1. Sort the loss and probability values in descending order:Loss ($ million) Probability
Cumulate the probability values:Loss ($ million) Probability Cumulative Probability 1.03. Identify the maximum cumulative probability that is less than or equal to 0.3. From the table above, the maximum cumulative probability is 0.2.4.
The corresponding loss is the 70% VaR: 2 $ million.b) 1-year 70% ES:ES is defined as the average loss of the worst 30% of scenarios.
In order to find the ES, we must first calculate the loss corresponding to the 30th percentile. From the cumulative probability column of the table above, the loss corresponding to the 30th percentile is $0 million.To calculate the ES, we need to average the losses exceeding $0 million.
These are losses for which the probability is 0.4, 0.1, and 0.1.Loss Probability Cumulative Probability -1 0.4 0.4 0 0.1 0.5 1 0.1 0.6 2 0.1 0.7 4 0.1 0.8 The average of these losses is: (-1*0.4+0*0.1+1*0.1+2*0.1+4*0.1)/0.3 = 1.13 $ millionThus, the 1-year 70% ES is 1.13 $ million.c) 1-year 80% VaR:To calculate the 80% VaR, we need to find the maximum loss of the 20% probability.
Using the same steps from part (a), the 80% VaR is the maximum cumulative probability that is less than or equal to 0.2.Loss Probability Cumulative Probability -1 0.4 0.4 0 0.2 0.6 1 0.2 0.8 2 0.1 0.9 4 0.1 1.0The maximum cumulative probability that is less than or equal to 0.2 is 0.6.
Therefore, the corresponding loss is 0 $ million.d) 1-year 80% ES:To calculate the 80% ES, we need to find the average loss of the worst 20% of scenarios. The loss corresponding to the 20th percentile is $0 million. The losses exceeding $0 million correspond to probabilities of 0.2, 0.2, 0.1, and 0.1.Loss Probability Cumulative Probability -1 0.4 0.4 0 0.2 0.6 1 0.2 0.8 2 0.1 0.9 4 0.1 1.0 The average of these losses is: (-1*0.4+1*0.2+2*0.1+4*0.1)/0.2 = 0.6 $ millionThus, the 1-year 80% ES is 0.6 $ million.
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You work as a financial analyst for RBC. Your company is considering buying an airplane and then lease it to Delta Air Lines. Your task is to determine the before tax operating leasing payment
You may follow the Leasing example we discussed in the teaching notes.
You may choose an airplane of your choice (767, 777, 787)
Assume 20 year depreciation period in your lease analysis using the depreciation table in the notes or straight line depreciation method.
Make your assumptions about the following parameters:
tax rate,
required rate of return,
insurance cost,
maintenance and operating costs,
and salvage value.
The before-tax operating leasing payment will be the sum of Depreciation payment ($X - $Y) / 240, Interest payment ($X + $Y) x 10% x (1 - 40%) / (Present value factor), Insurance payment ($1,000), Maintenance and operating payment ($2,000), and Salvage value / Present value factor.
As given in the question, we are to determine the before-tax operating leasing payment, so let's start with the calculation.
Airplane cost: $X
Depreciation period: 20 years
The salvage value of the airplane at the end of 20 years: $Y
Insurance cost: $1,000/month
Maintenance and operating costs: $2,000/month
Required rate of return: 10%
Tax rate: 40%
Formula for calculating the operating leasing payment: Operating leasing payment = Depreciation payment + Interest payment + Insurance payment + Maintenance and operating payment + (Salvage value / Present value factor)
Depreciation payment:
Depreciation payment per month = (Cost of the airplane - Salvage value) / (Depreciation period in months)
Depreciation payment per month = ($X - $Y) / (20 x 12)
Depreciation payment per month = ($X - $Y) / 240
Interest payment:
Interest payment per month = (Cost of the airplane + Salvage value) x (Interest rate) x (1 - Tax rate) / (Present value factor)
Interest payment per month = ($X + $Y) x 10% x (1 - 40%) / (Present value factor)
Insurance payment:
Insurance payment per month = $1,000
Maintenance and operating payment:
Maintenance and operating payment per month = $2,000
Adding all these values and solving the equation as per the formula, we get;
Operating leasing payment = Depreciation payment + Interest payment + Insurance payment + Maintenance and operating payment + (Salvage value / Present value factor)
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The preferred stock of a firm is selling for $50 and the dividends on the preferred stock is $5 per share. Calculate the cost of preferred equity for the firm. 8% 12% 6% 10%
The cost of preferred equity refers to the return required by investors who invest in the preferred shares of the firm. The cost of preferred equity, which is the dividend yield, is computed by dividing the annual dividend by the market price of a single share of the preferred stock.
In this case, the preferred stock of the firm is selling for [tex]$50[/tex], and the dividends on the preferred stock are [tex]$5[/tex] per share. Thus, the cost of preferred equity is given as:
Cost of Preferred Equity = Annual Dividend / Market Price of a Share of Preferred
[tex]Stock Cost of Preferred Equity = $5 / $50[/tex]
[tex]= 0.1 or 10%[/tex]
Therefore, the cost of preferred equity for the firm is [tex]10%[/tex].
Note: Preferred stock is a form of equity financing, and the cost of preferred equity is considered to be a fixed cost since the dividend payment on preferred shares is usually fixed.
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Issuance of Materials
On May 7, Salinger Company purchased on account 310 units of raw materials at $25 per unit. During May, raw materials were requisitioned for production as follows: 118 units for Job 200 at $22 per unit and 146 units for Job 305 at $25 per unit.
Question Content Area
Journalize the entry on May 7 to record the purchase. If an amount box does not require an entry, leave it blank.
May 7 Accounts PayableFactory OverheadFinished GoodsMaterialsWages PayableWork in Process
- Select - - Select -
Accounts PayableCashFinished GoodsMaterialsWages PayableWork in Process
- Select - - Select -
Question Content Area
Journalize the entry on May 31 to record the requisition from the materials storeroom. If an amount box does not require an entry, leave it blank.
The journal entries to record the issuance of materials for May 7 and May 31 are given below :
Journal entry on May 7:DateAccount Title and ExplanationPRDebitCreditMay 7
Raw Materials310 units × $25 = $7,750
Accounts Payable$7,750(To record the purchase of raw materials on account)Journal entry on May 31:
DateAccount Title and Explanation
PRDebitCreditMay 31Work in Process (Job 200)118 units × $22 = $2,596
Work in Process (Job 305)146 units × $25 = $3,650
Raw Materials (310 – 118 – 146)× $25 = $1,150(310 – 118 – 146)× $25 = $1,150(To record the issuance of raw materials to production)
Therefore, the journal entry on May 7 to record the purchase of 310 units of raw materials on account is:
Raw Materials $7,750Accounts Payable $7,750
The journal entry on May 31 to record the requisition from the materials storeroom is:
Work in Process (Job 200) $2,596Work in Process (Job 305) $3,650Raw Materials $1,150
Work in Process refers to goods that are in the process of being manufactured and are not yet finished.
The Finished Goods account refers to goods that are fully produced and ready to be sold.
Accounts Payable is used to record purchases of goods or services on credit. Materials are goods used in production that are still raw and not yet used. Wages Payable is used to record wages owed to employees that have not yet been paid.
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QUESTION 2 [35 MARKS]
2.1
As a financial professional and potential manager, you need to be aware of the impact
of business ills such as corruption, bribery, and fraudulent financial reporting on the
environment, society, and governance (known as ESG factors). How would you advise
the executives at Ernst & Young (EY) to approach and remedy this scandal? The use
of practical examples in your response will garner you higher marks. (25)
2.2 The company you recently joined and now work for as a finance manager has been
involved in fraudulent financial reporting and underhand dealings in its service
provisions under its previous financial manager.
A recent investigation discovered that these two aspects have been ongoing since the
company was formed in 2001.
The board has requested you to formulate internal controls and ethical guidelines to
ensure that fraudulent financial reporting and underhand dealings will not occur in the
future or at least mitigate their occurrences in the future. The internal controls and
ethical guidelines you formulate should be presented in a memo to the board. (10)
2.1 Advice to Ernst & Young (EY) Executives: To approach and remedy the scandal of corruption, bribery, and fraudulent financial reporting,
I would advise the executives at EY to take the following actions:
1. Strengthen Internal Controls: Implement robust internal control systems that include checks and balances, segregation of duties, and regular audits to detect and prevent fraudulent activities. EY should ensure that these controls are consistently followed across all levels of the organization.
2. Enhance Ethical Culture: Foster an ethical culture within the organization by promoting transparency, integrity, and accountability. This can be achieved through ethics training programs, whistleblower mechanisms, and a strong code of conduct that clearly outlines expected behaviors and consequences for non-compliance.
3. Conduct Independent Investigations: Engage independent third-party firms or experts to conduct thorough investigations into the scandal. This demonstrates EY's commitment to uncovering the truth and holding individuals accountable for their actions.
4. Implement Stringent Anti-Corruption Measures: Develop and enforce policies and procedures to prevent corruption and bribery. This includes conducting due diligence on clients and business partners, implementing anti-bribery compliance programs, and strictly adhering to relevant laws and regulations.
5. Collaborate with Regulatory Bodies: Cooperate fully with regulatory bodies and law enforcement agencies to ensure compliance with legal requirements. EY should actively participate in investigations and share any relevant information to assist in the resolution of the scandal.
Practical Example: EY can take inspiration from the Siemens case, where the company implemented comprehensive reforms following a major corruption scandal. Siemens established a dedicated compliance department, enhanced training and awareness programs, and appointed an independent ombudsman to address ethical concerns. These measures helped rebuild trust and restore the company's reputation.
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