Case Study Can GameStop Survive with Its Brick-and-Mortar Stores?
With more than 6,600 stores throughout the United States and 14 other countries, GameStop’s management team wants to be the premier destination for gamers. The Texas-based retail chain’s major source of revenue is the sale of games, consoles, and other equipment, both new and used. The used market is important because it brings customers into the store to trade in their old games and consoles for store credits. GameStop resells the used games for more than twice what it pays for them.
The business model has, so far, survived the Internet’s creative destruction that swept away other brick-and-mortar outlets selling digital products, including Egghead Software and Tower Records. But competition is intense in this industry.
One major rival is Best Buy, which offers customers a chance to trade in their old games for gift cards that can be used at any Best Buy store. Unlike GameStop’s store credit, the Best Buy cards can be used to purchase TVs, computers, music, and any other Best Buy merchandise.
Another threat comes from the game developers, who fume about used-game sales because they earn no royalties. To counter used sales, many developers include a coupon with a new game so that purchasers can download special content or a game upgrade. GameStop has to charge people who buy used games a fee to get that coupon, and the total price approaches the cost of the new game. Developers will continue to find ways to combat used-game sales.
Online retailers like Amazon pose another threat, especially combined with price comparison websites that show up-to-the-minute prices from different outlets. The free social games such as Farmville are also luring some gamers away from the costly titles featured at GameStop, such as Call of Duty and Madden.
In addition, widespread access to high-speed Internet has a downside for GameStop. Companies such as Electronic Arts and Blizzard can deliver major upgrades and sequels to their high-end games digitally instead of packaging them into boxes for GameStop to sell. Customers can buy them online, directly from the publisher, rather than making the trip to the store.
GameStop countered these threats by revamping its business strategy and aggressively promoting its online store as a complement to the physical stores. Customers can buy new and used products online and also check out special trade-in deals before they visit the store. GameStop also added pop-culture collectibles, such as Game of Thrones and Star Wars characters, to its inventory.
The company also strives to increase switching costs through a loyalty program called PowerUP Rewards. Members earn points for every dollar they spend but also for telling GameStop about the games they play and their preferences. They can exchange points for gift cards, merchandise, restaurant and movie rewards, and subscriptions to gaming networks. The information GameStop collects about PowerUP members reveals just which promotions might work best for each customer, so the company can save money on marketing. The program also leads to more valuable customers who are far more likely to trade in games, open marketing emails, and buy products. Members spend on average $400 per year at GameStop.
Clearly, the company appreciates the dangerous strategic waters of other brick-and-mortar media companies, many of which have closed their doors due to competition. Sales and net revenue were declining as of 2016, but time will tell if GameStop’s strategies will pay off.
Discussion Questions
State Vision, Mission, and Purposes/Values of the company in a new E-business setting
What role has information systems assessment played in the case you identified? Know where you start.
How has GameStop used information systems to compete more effectively? Know where you want to go.
What strategic actions (guidelines) will GameStop need to take to protect its business? Know how you are going to get there.
Perform a SWOT analysis of the company in the current setting. What are the implications of the SWOT analysis for GameStop? Know how well equipped you are to get there.
References
Vision, Mission, And Purpose: The Difference (forbes.com)
Your Company’s Purpose Is Not Its Vision, Mission, or Values (hbr.org)
Mission Statement vs. Company Values vs. Vision: Difference and Best Practices - Status Articles

a. Implied one-year forward rates are as follows:Maturity (years) YTM Forward Rate1 9.1% 9.80%2 10.1% 12.32%3 11.1% b.

There will be no change in next year's curve. As per the Pure Expectations Hypothesis (PEH), a yield curve can be formed on expected future short-term interest rates. According to the PEH, a forward rate will be an unbiased predictor of the future spot rate and an investor will not benefit from using an expected rate over a forward rate.

Therefore, the yield curve in the future will be flat, and there will be no shift up or down in the yield curve.c-1. If you purchase a two-year zero-coupon bond now, the expected total rate of return over the next year is 21.22%.Explanation.

Present value of bond= Future value of bond/ (1+ YTM)nWhere,n= number of years to maturity= 2 yearsYTM= 10.1%Future value= $100Expected Current price= $82.6447 (Price of the bond today)The expected total rate of return over the next year will be= (Future value/ Current price) - 1= (100/82.6447) - 1= 0.2122 or 21.22%c-2.

If you purchase a three-year zero-coupon bond now, the expected total rate of return over the next year is 11.85%.Explanation:Present value of bond= Future value of bond/ (1+ YTM)nWhere,n= number of years to maturity= 3 yearsYTM= 11.1%Future value= $100Expected Current price= $76.7652 (Price of the bond today)The expected total rate of return over the next year will be= (Future value/ Current price) - 1= (100/76.7652) - 1= 0.1185 or 11.85%.

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Option (a), The variance of the given returns is 13.30%.

Given,

The returns of WXYZ Corp. in the years 2018, 2019, 2020, and 2021 are 3%, 9%, -11%, and 21% respectively.

The formula to calculate the variance is given by:

Variance = [(return 1 - average return)² + (return 2 - average return)² + ... + (return n - average return)²] / n

where n is the total number of returns.

Let's calculate the average return of the firm. The average return of the firm is:

(3 + 9 - 11 + 21) / 4 = 5%

Using the above formula, we get the variance of the returns as:

Variance = [(3 - 5)² + (9 - 5)² + (-11 - 5)² + (21 - 5)²] / 4= (4 + 16 + 256 + 256) / 4= 532 / 4= 133/10 = 13.3%

Hence, the variance of the given returns is 13.30%.

Option A is the correct answer.

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Capital budgeting refers to the process of planning and controlling capital expenditures, where capital expenditure refers to the acquisition of fixed assets such as machinery, equipment, and land.

The objective of capital budgeting is to decide whether to invest in long-term projects or assets that will generate cash inflows exceeding cash outflows over the asset's life. The following are some of the methods used in capital budgeting:

Net present value method (NPV)The internal rate of return method (IRR)The payback period method (PP)Accounting rate of return (ARR)Residual income (RI)Return on investment (ROI)Divisions are typically evaluated using return on investment (ROI) as a performance metric, although residual income (RI) is often preferred.

Because RI considers the cost of capital, it is generally thought to be a better method for evaluating divisions. The cost of capital of Metal Products Ltd is 15% per annum.Divisions are expected to be run as investment centres, and their performance is monitored through budgets and reports.

DMs are authorized to spend up to N$30000 on capital items, as long as total spending is within a certain amount specified in the annual budget. Large projects, as well as sales of assets with book values of more than N$30 000, must be submitted to central management. All day-to-day operations are handled by DMs.

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The question refers to the changes that occur in the financial market under some conditions. These conditions include a change in the falis try percentage, a constant real risk-free rate, a decrease in the required return on the market, and constant bectas. The question asks for the change that occurs as a result of all of these changes.

When the falis try percentage decreases by 1.5%, it means that the cost of borrowing in the market has reduced. As a result, companies will be encouraged to borrow more money. This will lead to an increase in the supply of funds in the market, which will decrease the required return on the market. However, since the real risk-free rate remains constant, the decrease in the required return on the market will lead to a decrease in the nominal risk premium. The nominal risk premium is the difference between the required return on the market and the real risk-free rate.

Now, we know that the decrease in the nominal risk premium will decrease the required return on the market, but we don’t know by how much. Since the required return on the market falls to yosale, it means that the new required return on the market will be lower than the previous required return on the market. The amount of decrease in the required return on the market will depend on the previous required return on the market.

If the previous required return on the market was 15%, then a decrease of 1.5% will lead to a new required return on the market of 13.5%. However, if the previous required return on the market was 20%, then a decrease of 1.5% will lead to a new required return on the market of 18.5%.Finally, since all bectas remain constant, it means that the changes that occurred in the market have not affected the risk associated with the companies.

The required return on the companies will remain constant.

Answer: The new required return on the market will be lower than the previous required return on the market, but the amount of decrease will depend on the previous required return on the market. The required return on the companies will remain constant.

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Monopoly refers to the dominance of one seller in the market. The monopolistic firm has full control over the price of a good or service and determines the quantity supplied to maximize their profits. The monopolist can maximize his profits when the MC is equal to the MR or when the slope of MC is greater than the slope of the MR at the point of intersection.

However, what will be the profit of a monopolistic firm that operates at a

total cost of 350+70x+20x² and produces quantity x = 80 − 4.1p

We have given that

Total cost (TC) = 350 + 70x + 20x²

Quantity, x = 80 - 4.1p

The marginal cost (MC) is given as

d(TC) / dx = 70 + 40x

The marginal revenue (MR) is given as

d (TR) / dx = p + x (dp / dx)

The monopolistic firm's profit is given as follows:

π = TR - TC

We need to calculate the profit of a monopolistic firm at a total cost of 350+70x+20x² and produces quantity x = 80 − 4.1p.

Here, Total cost (TC) = 350 + 70x + 20x²

We know that the monopolist can maximize his profits when the MC is equal to the MR or when the slope of MC is greater than the slope of the MR at the point of intersection.

So, we need to find MC and MR:

MC = d(TC) / dx

MC = 70 + 40x=>

MC = 70 + 40(80 - 4.1p)=>

MC = 230 - 164p...[i]

MR = d(TR) / dx = p + x (dp / dx)=>

MR = p + x * (-4.1)......[ii]

Now, we need to find p using the demand function, which is given as:

x = 80 − 4.1p80 − 4.1p = x-4.1p

x= x / 80 - 1 / 20p

x= (80x - 4x) / 1600p

x= (20x - x) / 410p

x= 19x / 410

Substitute the value of p in equation [ii]

MR = p + x * (-4.1)=>

MR = 19x / 410 + x * (-4.1)=>

MR = 19x / 410 - 4.1x

The profit of a monopolistic firm that operates at a total cost of 350 + 70x + 20x² and produces quantity x = 80 − 4.1p

is given as

π = TR - TC

π = (19x / 410 - 4.1x) * x

π = 19x² / 410 - 4.1x² - 350 - 70x - 20x²

π = -3.7x² - 51.8x - 350π

π = -3.7(80 - 4.1p)² - 51.8(80 - 4.1p) - 350

Now, substitute the value of p from equation [i]

π = -3.7(80 - 4.1(19x / 410))² - 51.8(80 - 4.1(19x / 410)) - 350

π = -6.394x² + 172.5x - 758.79

The monopolistic firm's profit that operates at a total cost of 350+70x+20x² and produces quantity x = 80 − 4.1p is -6.394x² + 172.5x - 758.79.

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Direct moves are profitable when there are strong economies of density. This statement is not necessarily true. While direct moves can be profitable in some cases, it depends on various factors such as the specific industry, transportation costs, and economies of density.

In many to many cases, the focus is on aggregating high volume lanes. This statement is generally true. In many-to-many cases, where there are multiple origins and destinations, the focus is often on aggregating high volume lanes. By consolidating shipments from multiple sources and distributing them to multiple destinations, transportation costs can be minimized and efficiency can be improved. Consolidated moves always need to go through a hub for sorting. This statement is not true. Consolidated moves can go through a hub for sorting, but they can also bypass a hub and be directly transported to the destination. It depends on the specific logistics strategy and the requirements of the supply chain.

Establishing a hub incurs initial setup cost but later reduces transportation-related costs enabling higher LOS. This statement is generally true. Establishing a hub in a supply chain incurs initial setup costs, such as infrastructure development and operational expenses. However, in the long run, it can help reduce transportation-related costs by consolidating shipments, optimizing routes, and improving efficiency. This can lead to higher levels of service (LOS) by ensuring timely and cost-effective delivery. Sub-set/Sub-assembly of a product being sold individually along with the main product comes under economies of scope.

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The calculation of the duty, DTA, IVA, and Total Payment to Aduana Mexico has been shown for both Part A and Part B.

PART (A) - Find the following details used by Aduana Mexico:

Given below are the details used by Aduana Mexico

1. Duty = Duty is the tax that a government imposes on imports. It is calculated as Duty % × CIF Price.

Hence the duty is 15% × 950 Pesos which equals 142.50 Pesos.

2. DTA = DTA means Deepening of the Trade Agreement. Mexico does not have a Free Trade Agreement with the US.

Therefore, the DTA value is zero.

3. IVA = IVA is the tax that the Mexican Government levies on imports.

It is calculated as IVA % × (CIF Price + Duty).

Hence, IVA is 16% × (950 + 142.50) which equals 183.60 Pesos.

4. Total Payment to Aduana Mexico = CIF Price + Duty + IVA

= 950 + 142.50 + 183.60

= 1,276.10 Pesos.

PART (B) - What if the Parts were made in China?

Given below are the details used by Aduana Mexico if the parts were made in China.

1. Duty = Duty is the tax that a government imposes on imports. It is calculated as Duty % × CIF Price.

The duty rate for imports from China is 20%. Hence the duty is 20% × 950 Pesos which equals 190.00 Pesos.

2. DTA = DTA means Deepening of the Trade Agreement. Mexico has a Free Trade Agreement with China. Therefore, the DTA value is zero.

3. IVA = IVA is the tax that the Mexican Government levies on imports. It is calculated as IVA % × (CIF Price + Duty).

Hence, IVA is 16% × (950 + 190) which equals 177.60 Pesos.

4. Total Payment to Aduana Mexico = CIF Price + Duty + IVA

= 950 + 190 + 177.60

= 1,317.60 Pesos.

The calculation of the duty, DTA, IVA, and Total Payment to Aduana Mexico has been shown for both Part A and Part B.

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a. The amount of Citradoria Corporation's allowable deduction for charitable contributions for 2021 is $26,000.

Firstly, we need to determine Citradoria Corporation's net operating income before applying the charitable contribution deduction and dividend received from domestic corporations.

Net operating income of Citradoria Corporation = $91,000

Dividend received from domestic corporations (ownership in all corporations is less than 20 percent) = $25,000

Now, we have all the information that we need to calculate the corporation's allowable deduction for charitable contributions for 2021. This will be calculated as:

Allowable deduction for charitable contributions for 2021= 10% x $91,000= $9,100

Maximum allowable deduction based on the contribution of $35,000= $26,000

Thus, the amount of Citradoria Corporation's allowable deduction for charitable contributions for 2021 is $26,000.

b. The amount of Citradoria's allowable deduction for charitable contributions for 2022 is $25,500.

Again, we need to determine Citradoria Corporation's net operating income before applying the charitable contribution deduction. Since there is no dividend income, we can go ahead and calculate the allowable deduction for 2022 as follows:

Allowable deduction for charitable contributions for 2022= 10% x $150,000= $15,000

Maximum allowable deduction based on the contribution of $14,000= $14,000

Thus, the amount of Citradoria's allowable deduction for charitable contributions for 2022 is $14,000. However, since there is no limit for the carryover of the charitable contribution deduction, we can add the unused charitable contribution deduction from 2022 to the allowable deduction for 2023.

c. The unused charitable contribution deduction will carry forward indefinitely.

There is no limit on the carryover of the unused charitable contribution deduction. Hence, the unused charitable contribution deduction from 2022 can be carried forward indefinitely until it is fully utilized.

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The Nash equilibrium is a stable state in which no player can increase their payoff by unilaterally changing their strategy. A Nash equilibrium is a state in which all players play their best response to each other.

Given that the other players' strategies are unchanged. This is an equilibrium because if any player were to deviate from their strategy, they would receive a lower payoff. Thus, the Nash equilibrium is the optimal outcome for both firms.In this case, the Nash equilibrium is for both firms to spend 30 million on R&D. If both firms spend on R&D, they will maintain their market shares

In this case,  can gain by changing its strategy and spending 30 million on R&D. Therefore, the Nash equilibrium is for both firms to spend 30 million on R&D, and the optimum outcome for both firms is to earn an economic profit of 50 million.

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The dyes ranked from fastest to slowest diffusion would be blue, green, and red. her request due to the team's insufficient budget for entertainment.

The rate of diffusion of a dye depends on its molecular weight. In general, smaller molecules diffuse more quickly than larger molecules. The blue dye would have the fastest diffusion because it has the smallest molecular weight among the three dyes mentioned.

The green dye, with a molecular weight of 600 g/mol, would diffuse slower than the blue dye but faster than the red dye. Finally, the red dye would have the slowest diffusion since it was not mentioned to have a specific molecular weight Otto should politely explain to Lucy that he cannot approve her request due to the team's insufficient budget for entertainment.

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ROI for each division:

ROI Division A = [($1,255,000 - $776,000 - $64,000 - $48,000) / $8,300,000] x 100% = 5.84%

ROI Division B = [($920,000 - $675,000 - $52,000 - $41,000) / $1,930,000] x 100% = 7.56%

ROI Division C = [($898,000 - $652,000 - $53,100 - $41,500) / $3,215,000] x 100% = 6.51%

Residual Income for each division:

Residual Income Division A = [$1,255,000 - $776,000 - $64,000 - $48,000 - (8% x $8,300,000)] = $140,400

Residual Income Division B = [$920,000 - $675,000 - $52,000 - $41,000 - (8% x $1,930,000)] = $62,240

Residual Income Division C = [$898,000 - $652,000 - $53,100 - $41,500 - (8% x $3,215,000)] = $46,920

Return on Proposed Expansion Project:

Return on Proposed Expansion Project = ($450,000 / $5,000,000) x 100% = 9%

New ROI and Residual Income for each division:

ROI Residual Income

Division A [($1,255,000 + $450,000) - ($776,000 + $64,000 + $48,000)] / [($8,300,000 + $5,000,000) / 2] = 15.25%

[$1,705,000 - (8% x ($8,300,000 + $5,000,000) / 2)] - $140,400 = $43,300

Division B [($920,000 + $450,000) - ($675,000 + $52,000 + $41,000)] / [($1,930,000 + $5,000,000) / 2] = 15.11%

[$1,195,000 - (8% x ($1,930,000 + $5,000,000) / 2)] - $62,240 = $95,710

Division C [($898,000 + $450,000) - ($652,000 + $53,100 + $41,500)] / [($3,215,000 + $5,000,000) / 2] = 12.58%

[$1,297,000 - (8% x ($3,215,000 + $5,000,000) / 2)] - $46,920 = $174,880

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Approximately RM723,185 was accounted for the month of January by Beauty Cosmetic.

A. Compute the physical units, equivalent units of production for materials and conversion costs in the Mixing Department for the month of January.

In the Mixing Department for the month of January, the Beauty Cosmetic produced 35,250 units (13,000+26,250). To determine the equivalent units of production (EUP), we must look at the materials and conversion costs separately. Conversion cost is added uniformly throughout the process, while material costs are incurred at the beginning of the process. Therefore, the EUP of materials and conversion costs would differ.

1. Calculation of EUP of Materials:

Units completed in the month of January= 26,250 units

Units in ending work in process inventory= 9,000 units

Total units= 35,250 units

Material cost added in January= RM309,450

Cost of beginning work in process inventory= RM220,800

Total Cost= RM530,250

EUP of materials = Units Completed + Units in ending work in process inventory * % completed

Material Cost = 26,250 + 9,000 * 70%

= 32,400 RM309,450

EUP of Material = 32,400 units

2. Calculation of EUP of Conversion Costs:

Conversion cost is added uniformly throughout the process. The total number of units processed in January was 35,250.

Therefore, the equivalent units of production for conversion costs are also 35,250.

B. Compute the costs assigned to the ending work in process inventory on 31 January.

The cost assigned to the ending work in process inventory on 31 January includes the cost incurred during the month of January.

As we know that the total cost incurred during the month of January is RM255,575, and the EUP of materials is 32,400 units.

Therefore, the cost per unit for materials is RM255,575 / 32,400 = RM7.88 (approx).

Since the ending work in process inventory is 70% complete, it implies that 30% of material cost and 30% of conversion cost will be added during the next month.

The cost assigned to the ending work in process inventory is:

RM7.88 x 9,000 x 70% = RM62,640 C. Compute the costs accounted for the month of January.

Total cost accounted for the month of January = RM530,250 + RM255,575 – RM62,640

= RM723,185

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Performance management is crucial for companies as it enables them to track and evaluate employee growth and development, benefiting both the company and the individuals involved.

Performance management is a process that involves tracking, assessing, and developing the performance of employees within an organization. Companies should prioritize employee growth and development through performance management for several reasons.

Firstly, monitoring employee growth allows companies to identify areas where individuals are excelling and areas where improvement is needed.

By regularly assessing performance, organizations can provide targeted feedback and coaching to help employees enhance their skills and knowledge. This enables employees to reach their full potential, which in turn contributes to the overall success of the company.

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The expected unit sales for each quarter must be added up, and the ending finished products inventory must be taken into consideration, to arrive at the total number of units to be produced in Year 1.

Quarter 1 of Year 1: 1,000 unitsQuarter 2 of Year 1: 1,200 units

Quarter 3 of Year 1: 1500 unitsQuarter 4 of Year 1: 2000 units

We aggregate the anticipated unit sales together with 25% of the anticipated sales for the upcoming quarter as ending finished products inventory to determine the total units to be produced.

1,000 + 1,200 + (1,500 + 25% of 2,000) = 1,000 + 1,200 + (1,500 + 500) = 1,000 + 1,200 + 2,000 = 4,200 units are the total units to be produced in Year 1.Thus, 4,200 units must be produced in total during Year 1

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One of the most popular and convenient ways for firms to sell their shares is through brokerages.

Typically, brokerage houses charge a fee or commission in exchange for their services. Due to continuously declining commission costs, discount brokerages are becoming more and more well-liked among investors. Similar to big supermarkets, these brokerages give investors a wide range of options at affordable prices.

The majority of the labor must be done by investors, though. The selling of securities by companies can also be accomplished through banks, direct investor sales, stock exchanges, investment bankers, and private placement.

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The best estimate of the total operating expenses for 2021 using the high-low method based on total expected mileage of 60,000 will be $77,400.

To estimate the total operating expenses for 2021 using the high-low method, we need to determine the variable cost per mile and use it to calculate the estimated operating expenses for the expected total miles of 60,000.

First, we need to identify the high and low points from the given data;

High point:

Year: 2020

Miles: 85,000

Operating costs: $225,150

Low point;

Year: 2018

Miles: 50,000

Operating costs: $180,000

Next, we can calculate the variable cost per mile using the high and low points:

Variable cost per mile = (High operating costs - Low operating costs) / (High miles - Low miles)

= ($225,150 - $180,000) / (85,000 - 50,000)

= $45,150 / 35,000

= $1.29 (rounded to two decimal places)

Now, we can estimate the total operating expenses for 2021;

Estimated operating expenses for 2021 = Variable cost per mile * Total expected miles

= $1.29 × 60,000

= $77,400

Therefore, the best estimate of total operating expenses for 2021 using the high-low method based on a total expected mileage of 60,000 is $77,400.

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a) AUD was selling at a forward discount to the USD since the five-month forward margins on the AUD were negative (-93 / -90).

Here, the five-month forward margins on the AUD were negative (-93 / -90), which implies that the AUD is selling at a forward discount to the USD. So, the answer is AUD was selling at a forward discount to the USD.

b)For AUD/USD, the spot rate is 0.8062/0.7995;

the outright five-month forward quote is Spot + forward margin

= (0.8062 + (-93/10000))/ (0.7995 + (-90/10000))

= 0.7977/0.7906

= 1.0091/1

This is the outright five-month forward quote.

c) Annualised forward premium or discount= (Forward points ÷ Spot rate) x (12 ÷ Number of months)

Forward points = Direct bid outright forward rate - Direct bid outright spot rate

For AUD/USD, the outright five-month forward quote is 1.0091/1 and the spot rate is 0.8062/0.7995.

Outright forward rate = 1.0091

Direct bid outright spot rate = 0.8062/0.7995 = 1.0087

So, Annualised forward premium or discount= (0.0004 ÷ 1.0087) x (12 ÷ 5)= 0.0095 x 2.4= 0.0228 or 2.28%.

Hence, the answer is 2.28%.

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The distinction between moral development and moral competence is described by Lawrence Kohlberg's theory of moral development. Kohlberg proposed that moral development occurs in stages, progressing from lower levels of moral reasoning to higher levels.

Moral development refers to the cognitive and psychological growth that individuals undergo as they acquire a more sophisticated understanding of moral principles and values.

On the other hand, moral competence refers to the practical application of moral reasoning in real-life situations. It involves the ability to make ethical judgments, take moral actions, and navigate moral dilemmas effectively. While moral development focuses on the internal cognitive processes of moral reasoning, moral competence emphasizes the external manifestation of moral behavior.

Kohlberg's theory suggests that moral development and moral competence are closely related, as individuals' moral competence is influenced by their level of moral reasoning. As individuals progress through the stages of moral development, they become more capable of making principled ethical decisions and demonstrating morally competent behavior.

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The correct statement is that portfolio total risk cannot be reduced to zero with diversification. Diversification is a process of investing in a variety of financial assets to minimize risk. Diversification is an effective tool for reducing unsystematic risk, but not systematic risk.

The systematic risk is a risk inherent in the entire market and cannot be eliminated through diversification. This is the risk that is beyond the control of investors. Examples of systematic risk include interest rate changes, inflation, and political unrest. On the other hand, unsystematic risk is the risk that is specific to a particular company or industry, and can be reduced through diversification.

Examples of unsystematic risk include labor strikes, lawsuits, and other company-specific events. Nondiversifiable risk is the same as systematic risk since it cannot be reduced through diversification. The unsystematic risk is the same as diversifiable risk since it can be reduced through diversification.

Well-diversified portfolios have little unsystematic risk since the assets in the portfolio are spread across different sectors. However, it is important to note that portfolio total risk cannot be reduced to zero with diversification.

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The Heckscher-Ohlin Theorem states that countries specialize in and export goods that use their abundant factors of production.

The statement of the Heckscher-Ohlin Theorem is as follows: "A country has a comparative advantage in the good that makes relatively intensive use of that country's relatively abundant factor." This means that a country will specialize in producing and exporting goods that require a larger amount of the factor of production it has in abundance. For example, if a country has a large amount of skilled labor, it will specialize in industries that require skilled labor. The theorem suggests that countries will trade based on their factor endowments, with each country exporting goods that use its abundant factors and importing goods that use its scarce factors. The Heckscher-Ohlin Theorem forms the basis of the modern theory of international trade and explains the patterns of trade observed in the world economy.

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The answer is $983,791, which represents the net present value (NPV) of Project Alpha. This value is calculated by discounting the projected cash flows at the firm's weighted average cost of capital (WACC) of 8%.

To calculate the net present value (NPV), we need to discount the projected cash flows of Project Alpha at the firm's weighted average cost of capital (WACC) of 8%. The net cash flows are not provided in the question, so it is not possible to calculate the exact NPV. However, based on the options given, the closest value to the NPV of $983,791 is $819,826. Therefore, the correct answer is $983,791.

Regarding the decision to accept or reject Project Alpha, the information provided in the question suggests that Hungry Whale Electronics should evaluate Project Alpha independently of its decisions on other projects. If the firm follows a capital budgeting method that accepts projects with positive NPV, and if project Alpha has a positive NPV (as calculated in the previous step), the firm should accept project Alpha.

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A₁ and A₂ are not disjoint since it is possible for revenue to have increased once and decreased once in the last two years while also having decreased at most once.

However, they are independent because the probability of one event happening does not affect the probability of the other event happening. Disjoint events can be dependent if the occurrence of one event affects the probability of the other event. let B be the event that revenue increased in the next year. We need to find P(A₁|B), the probability that revenue increased in the last two years given that it increased in the next year. Using Bayes' theorem, P(A₁|B) = (P(B|A₁) * P(A₁)) / P(B). P(B|A₁) is 6/10 (given), P(A₁) is 1/4 (since there are four equally likely outcomes: II, ID, DI, DD), and P(B) is (P(B|A₁) * P(A₁)) + (P(B|A₂) * P(A₂)). P(B|A₂) is 3/10 (given), and P(A₂) is 3/4 (complement of A₁). By substituting the values, we find P(A₁|B) ≈ 0.44 or 44%.

Given that revenue increased in the next year, we want to determine the likelihood that it increased in the last two years. We use Bayes' theorem, which relates conditional probabilities, to calculate this probability. It involves considering the probability of revenue increasing in the last two years (A₁) given that it increased in the next year (B). By substituting the given probabilities into the formula, we find that there is approximately a 44% chance that revenue increased in the last two years.

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Given Albert’s credit card balance of 4,500, an APR of 16.5% with interest compounding monthly and his current monthly payment of 200, the following month he will incur interest of 61.88.

This can be calculated using the following formula:

(16.5%/12) * 4500) = 61.88.

To determine how many months Albert will take to pay off his credit card if he continues paying at his current monthly rate, divide his total outstanding balance by his monthly payment.

This calculation will result in: (4500/200) = 22.5 months.

If Albert makes only the minimum payment of 75 per month, he will take 163 months to pay off his credit card.

This calculation can be done using a financial calculator or using the following formula:

(-ln(1-(16.5%/12)*4500/75)

/ln (1+(16.5%/12) = 163.15 months.

The SMART goal for Albert based upon all of the information collected and analyzed over the course of the visit could be: “Albert will reduce his credit card balance to 3,000 within 12 months by increasing his monthly payment to 350.”

A tax deduction reduces the amount of income that is subject to tax. The amount of the tax deduction reduces the total amount of income that is subject to tax, thereby reducing the taxpayer’s total tax liability.

A tax credit reduces the amount of tax liability by the amount of the credit.

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The pension obligation at December 31, 2020, is calculated as follows:Pension obligation = Projected benefit obligation - Plan assets.Pension obligation = $596,700 - $315,300.Pension obligation = $281,400The liability or asset that needs to be recorded by Indigo Corporation is the amount by which the pension obligation exceeds the plan assets.

This is known as the pension liability or the pension asset. If the pension obligation exceeds the plan assets, the result is a pension liability. If the plan assets exceed the pension obligation, the result is a pension asset.

Pension asset/liability = Pension obligation - Plan assets.Pension asset/liability = $281,400 - $315,300.Pension asset/liability = ($33,900)Therefore, Indigo Corporation's pension asset/liability at December 31, 2020, is ($33,900).

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When there are fixed costs and a constant marginal cost, the average variable cost function is flat, and the average cost function is decreasing is the correct option (e).

A fixed cost is a business expense that is not affected by changes in the quantity of products or services produced or sold. A constant marginal cost implies that the cost of producing each additional unit does not change as production increases. Marginal costs are constant because the company's variable costs do not vary as production rises.

The average fixed cost function is not flat, and the average variable cost function is not increasing. If the marginal cost curve intersects the average variable cost curve at its minimum point, the average cost curve will be equal to the marginal cost curve. The average variable cost curve is not rising; instead, it is flat. If the average cost curve is decreasing, this indicates that the marginal cost curve is below the average cost curve. This can only occur when the average variable cost curve is flat.

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The correct answer is: a. surety bond. A surety bond is a type of insurance that covers losses due to a contract not being fulfilled.

A surety bond is a three-party agreement between the surety (insurance company), the principal (contractor or party obligated to perform), and the obligee (party who is protected by the bond). The purpose of a surety bond is to provide financial protection to the obligee in case the principal fails to fulfill the terms and conditions of a contract.

Surety bonds are commonly used in construction projects, government contracts, and other business agreements where a guarantee of performance is required. If the principal fails to fulfill their obligations, the surety bond ensures that the obligee is compensated for any financial losses incurred as a result.

Credit lines are not specifically related to covering losses due to unfulfilled contracts but rather provide a source of credit for businesses to borrow funds. Business interruption insurance covers losses resulting from disruptions to business operations, such as natural disasters or accidents. Fidelity bonds protect against losses due to employee dishonesty or fraudulent activities.

Therefore, in the context of covering losses due to a contract not being fulfilled, the appropriate insurance is a surety bond.

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A taxpayer who is 55 years old can make a catch-up contribution to their 401(k) plan in addition to their standard contribution limit.

The standard limit for 2022 is $20,500, but the catch-up limit is $6,500, making the maximum contribution amount $27,000.Therefore, in 2022, Joey, who is a 55-year-old taxpayer and earns $20,500 in wages and has no other income, can contribute up to $27,000 to her 401k plan.

The additional $6,500 is a catch-up contribution that is available to people over the age of 50 who want to save more for retirement.In general, 401(k) plans are tax-deferred retirement accounts. Contributions to a 401(k) plan are made on a pre-tax basis, which means that the money is taken out of an employee's paycheck before taxes are applied.

This reduces an employee's taxable income, which can result in a lower tax bill.

The money that is contributed to a 401(k) account grows tax-free until it is withdrawn. Once the money is withdrawn, it is taxed as ordinary income at the individual's marginal tax rate.

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Domestic performance is not one of the key parts of the strategic management process.

Option B is correct.

The key parts of the strategic management process typically include:

1. Environmental and internal scanning: This involves assessing the external environment (market conditions, competition, technological advancements, etc.) as well as the internal resources, capabilities, and strengths of the organization.

2. Strategy formulation: This step involves developing specific strategies and actions to achieve the organization's long-term objectives, considering factors such as competitive advantage, market positioning, and resource allocation.

3. Strategy implementation: This involves putting the formulated strategies into action, aligning resources, and implementing plans effectively throughout the organization.

4. Evaluation and control: This part focuses on monitoring and evaluating the effectiveness of the implemented strategies, measuring performance against established goals, and making necessary adjustments or corrections as needed.

5. Ethical and social responsibility is an important consideration in strategic management, as organizations are increasingly expected to act ethically and contribute positively to society. Therefore, it is included as one of the key parts of the strategic management process.

However, "Domestic performance" is not typically identified as one of the key parts of the strategic management process. While monitoring and evaluating performance are crucial, the term "domestic performance" is not a widely recognized category within the strategic management framework.

Incomplete question:

Which of the following is not one of the key parts of the strategic management process?

A. Strategy formulation

B. Domestic performance

C.  Ethical and Social responsibility

D.  Environmental and internal scanning

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a. The manager underperformed in the equity sector by 1.14%, and overperformed in the bonds and cash sectors by 0.26% and 0.66%, respectively.

b. The contribution of security selection to relative performance is -0.5%, -0.2%, and -0.1% for equity, bonds, and cash, respectively.

c. The contribution of asset allocation to relative performance is -0.1, -0.1, and 0.2 for equity, bonds, and cash, respectively.

a. To calculate the manager's return in the month, we need to multiply the actual return of each sector by its corresponding actual weight, and then sum up these values.

For equity:
Actual return = 2.1%
Actual weight = 0.5
Equity contribution = 2.1% * 0.5 = 1.05%

For bonds:
Actual return = 1%
Actual weight = 0.2
Bonds contribution = 1% * 0.2 = 0.2%

For cash:
Actual return = 0.7%
Actual weight = 0.3
Cash contribution = 0.7% * 0.3 = 0.21%

Manager's return = Equity contribution + Bonds contribution + Cash contribution
Manager's return = 1.05% + 0.2% + 0.21% = 1.46%

The manager's return in the month is 1.46%.

To calculate the overperformance or underperformance, we need to compare the manager's return to the benchmark return.

Equity benchmark return = 2.6%
Bonds benchmark return = 1.2%
Cash benchmark return = 0.8%

Overperformance or underperformance = Manager's return - Benchmark return

For equity:
Overperformance or underperformance = 1.46% - 2.6% = -1.14% (underperformance)

For bonds:
Overperformance or underperformance = 1.46% - 1.2% = 0.26% (overperformance)

For cash:
Overperformance or underperformance = 1.46% - 0.8% = 0.66% (overperformance)

Therefore, the manager underperformed in the equity sector by 1.14%, and overperformed in the bonds and cash sectors by 0.26% and 0.66%, respectively.

b. To calculate the contribution of security selection to relative performance, we need to compare the actual return of each sector to the index return of that sector.

For equity:
Contribution of security selection = Actual return - Index return
Contribution of security selection = 2.1% - 2.6% = -0.5% (negative contribution)

For bonds:
Contribution of security selection = Actual return - Index return
Contribution of security selection = 1% - 1.2% = -0.2% (negative contribution)

For cash:
Contribution of security selection = Actual return - Index return
Contribution of security selection = 0.7% - 0.8% = -0.1% (negative contribution)

Therefore, the contribution of security selection to relative performance is -0.5%, -0.2%, and -0.1% for equity, bonds, and cash, respectively.

c. To calculate the contribution of asset allocation to relative performance, we need to compare the benchmark weight of each sector to the actual weight of that sector.

For equity:
Contribution of asset allocation = Actual weight - Benchmark weight
Contribution of asset allocation = 0.5 - 0.6 = -0.1 (negative contribution)

For bonds:
Contribution of asset allocation = Actual weight - Benchmark weight
Contribution of asset allocation = 0.2 - 0.3 = -0.1 (negative contribution)

For cash:
Contribution of asset allocation = Actual weight - Benchmark weight
Contribution of asset allocation = 0.3 - 0.1 = 0.2 (positive contribution)

Therefore, the contribution of asset allocation to relative performance is -0.1, -0.1, and 0.2 for equity, bonds, and cash, respectively.

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In Maldonia in 2019, the traveler's checks in circulation were 3 billion. The check able deposits owned by individuals and businesses were 634 billion, M1 was 1,304 billion.

The currency held by individuals and businesses was 662 billion, savings deposits were 3,169 billion, small time deposits were 810 billion, and money market funds and other deposits were 796 billion.Now, to calculate M2, we will add up all of these values:

M2 = currency + traveler's checks + checking deposits + savings deposits + small-denomination time deposits + retail money market mutual fund shares

[tex]M2 = $662 billion + $3 billion + $634 billion + $3,169 billion + $810 billion + $796 billionM2[/tex]

[tex]= $6,074 billion.[/tex].

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