The Modigliani and Miller (M&M) propositions, have major implications for the financial market.
The M&M Propositions were developed in response to the potential benefits of corporate restructuring (such as the use of leverage and increased dividend payouts) on the value of a firm. The M&M Propositions recommend that the market value of a firm should not be influenced by the method in which it is financed. The following are the implications of M&M Propositions I and II in a no-tax world:
Implications of M&M Proposition IIn a no-tax world, the financing method does not have any effect on the market value of a firm. A firm's market value is determined solely by its earning potential and the risk associated with it. This is due to the fact that investors are not affected by tax consequences and have access to the same capital markets.
Implications of M&M Proposition IIIn a no-tax world, the cost of equity and the cost of debt are independent of capital structure. The cost of capital for a firm is determined by its earning potential and the level of risk involved in the operations. It is independent of the financing method because investors are unconcerned about the company's tax obligations. This proposition claims that as debt financing increases, the cost of equity rises proportionately.
The following are the implications of M&M Propositions I and II after introducing corporate taxation:
Implications of M&M Proposition IIn a world where corporations are taxed, the market value of a firm is affected by the tax consequences of its financing structure. When debt financing is used, the tax shield decreases the company's tax liability, resulting in an increase in the value of the company. As a result, a firm's market value is determined by its earning potential, risk, and tax consequences.
Implications of M&M Proposition IIIn a world where corporations are taxed, the cost of equity is affected by the firm's capital structure. Because dividends are not tax-deductible, the cost of equity rises as debt financing increases. The tax shield from interest payments reduces the cost of debt financing. As a result, a firm's weighted average cost of capital (WACC) decreases as debt financing increases until the company's capital structure is maximized.
Learn more about debt financing: https://brainly.com/question/12524731
#SPJ11
Which of the following is NOT a best practice for financial model inputs? Add comments to cells to give more information Use colour to separate inputs from outputs Data should only be entered once Protect inputs by locking input cells 2 Complex financial models are all of the following EXCEPT: They typically model most outputs from first principles They are more prone to error due to size and complexity They are easy to follow and audit They offer users a high degree of precision 3 Forecast the 2019 Cost of goods sold on the previous year's number and the assumptions 2018 Actual 2019 Estimate Sales Growth 6% 8% Gross Margin 40% 40% 50,000 Revenues Cost of Goods Sold 27,000 26,630 29,160 32,400 35,200 O00 4 Forecast the accounts receivable for Company XYZ using the following annual information. Receivable days assumption = 55 days Payable days assumption = 69 days %3D Forecasted revenue = $263,500 • Forecasted cost of goods sold = $114,780 17,296 49,812 39,705 21,698 5 What formula below can be used to forecast inventory? (Inventory days / Cost of sales) x 365 (Inventory days / 365) x Cost of sales (Inventory / Cost of sales) x 365 (Inventory days / 365) / Cost of sales
Forecasted accounts receivable = (55 / 365) x $263,500 - (69 / 365) x $114,780= $39,165.21Formula to Forecast Inventory:The following formula can be used to forecast inventory:(Inventory days / 365) x Cost of salesSo, option (B) (Inventory days / 365) x Cost of sales can be used to forecast inventory.
Best Practices for Financial Model Inputs:The following are some of the best practices for financial model inputs:Use Cell Comments to Provide Additional Information: While building the financial model, ensure that cell comments are used to explain any assumptions made in the financial model. This is a handy way to remind oneself of the original intent of an input after it has been created. It also aids in communication with others who may use the model later.Use Colour to Distinguish Inputs from Outputs: The distinction between inputs and outputs is important when using the model, particularly when sharing it with others. It makes it simple to determine where inputs can be modified and where outputs are determined.Data Should Only be Entered Once: When constructing a financial model, the same data is often used in several different calculations. This increases the chances of data entry errors and makes it difficult to update the model. As a result, it's best to put data in a single location and refer to it in the calculations.Protect Inputs by Locking Input Cells: To protect financial model inputs from unintentional modifications, it is best to lock the input cells. This is done by selecting the cell or group of cells and then selecting the 'Format Cells' option from the 'Format' tab.Complex Financial Models:A complex financial model is a financial model that is difficult to construct, understand, and interpret. Following are the characteristics of complex financial models:They model most outputs from first principles.They are more prone to error due to size and complexity.They are difficult to follow and audit.They offer users a high degree of precision.Forecasting Accounts Receivable: To forecast accounts receivable for Company XYZ, we'll use the following annual information:Forecasted revenue = $263,500Forecasted cost of goods sold = $114,780Receivable days assumption = 55 daysPayable days assumption = 69 daysThe formula for forecasting accounts receivable is:Forecasted accounts receivable = (Receivable days / 365) x Forecasted revenue - (Payable days / 365) x Forecasted cost of goods soldSubstituting the values into the formula, we have:Forecasted accounts receivable = (55 / 365) x $263,500 - (69 / 365) x $114,780= $39,165.21Formula to Forecast Inventory:The following formula can be used to forecast inventory:(Inventory days / 365) x Cost of salesSo, option (B) (Inventory days / 365) x Cost of sales can be used to forecast inventory.
To know more about Inventory visit :
https://brainly.com/question/30203092
#SPJ11
Lewin's Force-Field Theory of Change states that for a change to occur A The resistance to change must be higher than the forces for change. B The resistance to change must equal the forces for change. C The resistance to change must be lower than the forces for change. D The resistance to change is not a force to consider.
According to Lewin's Force-Field Theory of Change, the correct answer is B: The resistance to change must equal the forces for change.
Lewin's Force-Field Theory suggests that any change process involves two opposing forces: driving forces and restraining forces. Driving forces are the factors that push for change, such as the need for improvement or external pressures. Restraining forces, on the other hand, are the factors that resist change, such as fear of the unknown or a desire to maintain the status quo.
For change to occur successfully, Lewin proposed that the total driving forces must outweigh the total restraining forces. In other words, the forces for change need to be stronger than the forces against change.
However, it is important to note that this doesn't imply that the resistance to change is completely eliminated. Rather, it suggests that the resistance should be balanced by the forces pushing for change, creating an equilibrium that allows for successful change implementation.
Learn more about Lewin's Force-Field Theory here:
https://brainly.com/question/27334968
#SPJ11
Write a essay and explain At what point any project
does the cost/budget curve peak? What activities are driving the
peak in project costs? In your view, is the cost curve
manageable, or would it be m
Project management is a crucial aspect of any business or organization. It involves planning, organizing, and controlling resources to achieve specific goals and objectives within a set time frame and budget.
One important aspect of project management is cost control. The cost/budget curve is an important tool that helps project managers keep track of the project's financial performance.
The cost/budget curve is a graphical representation of the project's planned cost against its actual cost over time. It is a common belief that the peak of the cost curve indicates the point at which the project's cost is at its highest. However, in reality, there is no fixed point at which the cost curve peaks. The cost curve may continue to rise throughout the project's life cycle due to various factors such as scope creep, change requests, unforeseen events, etc.
Several activities may drive the peak in project costs. These activities may include changes in project scope, delays in project schedule, increased resource usage, unanticipated expenses, and more. For example, if a project team encounters unexpected challenges during implementation, it may require additional resources, which can increase project costs. Similarly, if there are changes in project requirements or scope, this may result in additional work, which can drive up project costs even further.
In my view, the cost curve is manageable to a certain extent. Effective project management practices, such as developing a comprehensive project plan, properly defining project scope, setting realistic budgets, and closely monitoring project progress can help keep the cost curve under control. Additionally, regular communication between project stakeholders can help identify potential issues early on, allowing for timely intervention and resolution.
However, while the cost curve may be manageable to a certain extent, it is important to note that unforeseen events and changes in project requirements can make it difficult to control costs completely. Therefore, it is essential to have contingency plans in place to mitigate risks and ensure that the project remains within the budget. These contingency plans may include setting aside some additional funds or adopting a more flexible approach to the project's timeline.
In conclusion, managing costs is a critical aspect of project management. While there is no fixed point at which the cost curve peaks, it is important to closely monitor the project's financial performance and take corrective action as needed. With effective project management practices and contingency plans in place, project managers can help keep the cost curve under control and ensure that the project remains financially viable.
Learn more about Project management here:
https://brainly.com/question/4475646
#SPJ11
"Mauritius runs a self-assessment tax system. Therefore,
voluntary compliance is a key element in the efficient and
effective tax administration and revenue collection."
a) In the light of the abo
In a self-assessment tax system, taxpayers are responsible for calculating and reporting their own tax liabilities to the tax authority.
It shifts the burden of assessing and reporting taxes from the tax authority to the taxpayers themselves. Under this system, individuals and businesses are required to accurately calculate their income, deductions, and tax liabilities based on the tax laws and regulations in place.
Taxpayers are expected to maintain proper records, perform necessary calculations, and submit their tax returns within specified deadlines. They are also responsible for making accurate payments of the taxes owed. The tax authority's role is primarily to review and verify the accuracy and completeness of the information provided by taxpayers, rather than initiating the assessment process.
Self-assessment systems rely on voluntary compliance, trust, and integrity of taxpayers. It requires individuals and businesses to be honest and transparent in reporting their income and fulfilling their tax obligations. Tax authorities provide guidelines, support, and resources to assist taxpayers in understanding and meeting their tax obligations. Effective administration and revenue collection in a self-assessment system depend on taxpayers' voluntary compliance and cooperation with the tax authority.
Learn more about liabilities here
https://brainly.com/question/14921529
#SPJ11
7 10 You skipped this question in the previous attempt. Problem 11-5A (Static) Payback period, break-even time, and net present value LO A1, P1, P3 Salsa Company is considering an investment in techno
The payback period is the time required for an investment to generate cash flows equal to the initial investment.
To calculate it, divide the initial investment by the annual cash inflow. The break-even time is the point when revenues equal costs, which means there's no profit or loss. To find the break-even point, divide fixed costs by the contribution margin per unit. The net present value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows over a specific time period. To calculate NPV, discount future cash flows and subtract the initial investment.
By using these calculations, Salsa Company can determine the feasibility of their technology investment, and make informed decisions based on the results. Remember to consider factors such as the cost of capital and the company's financial goals when evaluating these metrics.
To know more about investment visit:-
https://brainly.com/question/15105766
#SPJ11
the current ratio measures profitability. solvency. liquidity. all of these options are correct.
A current ratio of less than 1 implies that the business does not have enough current assets to pay off its current obligations.
The current ratio is a liquidity ratio, which indicates whether or not a business can meet its current obligations. It is computed by dividing the business's current assets by its current liabilities. In other words, the current ratio shows a company's capacity to pay back short-term obligations with its current assets. The current ratio is one of the most widely used liquidity ratios. A current ratio of more than 1 indicates that the business has more current assets than current obligations. However, a current ratio of more than 2 implies that the business has too many current assets. In that case, it is preferable to invest the excess funds or convert the current assets into fixed assets. In summary, the current ratio is a useful measure of a company's liquidity but is not a measure of profitability or solvency. The answer to the question is that the current ratio measures liquidity. It does not, however, measure profitability or solvency. Profitability is a measure of a company's capacity to earn money, whereas solvency is a measure of a company's capacity to pay its obligations in the long run.
To know more about business visit:
https://brainly.com/question/8119526
#SPJ11
A construction company has taken up a project to build a high-rise office complex. The time required to complete a construction project is normally dis- tributed with a mean of 80 weeks and a standard de- viation of 10 weeks. A construction company must pay a penalty if the project is not finished by the due date in the contract. (a) If a construction company bidding on this con- tract puts in a due date of 80 weeks, what is the probability that they will have to pay a penalty? (b) If a construction company bidding on this con- tract wishes to be 90% sure of finishing by the due date, what due date (project week #) should be negotiated?
The time required to complete the construction project is normally distributed with mean μ = 80 weeks and a standard deviation σ = 10 weeks.The question is asking to calculate the probability of paying a penalty if a due date of 80 weeks is put in the contract.X ~ N (μ, σ²)Z = (X - μ) / σ
\For part (a), Z value needs to be calculated, it is given by;Z = (X - μ) / σ = (80 - 80) / 10 = 0Using the Z-table, the probability of Z < 0 is 0.5 which means the probability of completing the project in 80 weeks is 0.5 and the probability of paying a penalty is 0.5EXPLANATIONTo calculate the probability of paying a penalty if a due date of 80 weeks is put in the contract, first, we need to calculate the Z-value.Z value is given by;Z = (X - μ) / σWhere X is the project completion time which is equal to 80 weeks, μ is the mean completion time.
which is equal to 80 weeks and σ is the standard deviation which is equal to 10 weeks.After substituting the given values;Z = (X - μ) / σ = (80 - 80) / 10 = 0Using the Z-table, the probability of Z < 0 is 0.5 which means the probability of completing the project in 80 weeks is 0.5 and the probability of paying a penalty is 0.5.Hence, the probability of paying a penalty is 0.5 if a construction company bidding on this contract puts in a due date of 80 weeks.
To know more about distributed visit:
https://brainly.com/question/30051967
#SPJ11
Caribbean Power Supply Limited has the following capital structure: i. Debt 40% ii. Preferred shares 10% iii. Common shares 50% The company is issuing preferred stock at $130 per share with a stated dividend of $16.75 and a flotation cost of 5%. For its common stock, Caribbean Power expects the next dividend payment to be $3.30 per share. The price of its common stock is currently $22 and it is estimated that the firm will grow at a constant rate of 5%. Also, the cost of debt for is 12% and the tax rate is 40%. A. Compute the cost of debt, preference share and common stock for Caribbean Power Supply Limited. (6 marks) (4 marks) B. Calculate the Weighted Average Cost of Capital (WACC). (2 marks) C. Comment on the WACC computed at B. D. Discuss FOUR (4) problems this company might face as a result of being highly geared. (8 marks) (Total 20 marks)
Cost of debt: 12%, Cost of preference share: 17.88%, Cost of common stock: 20%. WACC: 14.668%. WACC represents the average rate of return required by investors.
Caribbean Power Supply Limited's debt, preference share, and common stock costs: Debt Cost: Interest Rate * (1 - Tax Rate)
Debt cost = 12% * (1 - 0.40)= 7.2% debt cost
Cost of Preference Shares: (Dividend / Price) + Flotation Cost = ($16.75 / $130) + 0.05 = 0.1288 + 0.05 = 0.1788 or 17.88%
Cost of Common Stock: Dividend/Price + Growth Rate
Common Stock = $3.30/$22 + 5%
Common Stock = 0.15 + 0.05
Common Stock Cost 0.20%
B. WACC = Debt * Cost + Preference Shares * Cost + Common Stock * Cost.
WACC = (0.40 * 0.072) + (0.10 * 0.1788) + (0.50 * 0.20)
WACC = 0.14668 or 14.668%.
C. WACC computation at B:
The company's capital structure's WACC is 14.668%. It discounts investment projects. Higher WACCs signify higher risk and poorer value for the company.
D. Higher Interest Expense, Financial hardship Risk, Limited Financial Flexibility, Credit Rating.
To know more about WACC
https://brainly.com/question/25566972
#SPJ11
Q3)
pls answer
Quiz: QUIZ 10 This question: 30 point) possible uary 2, 2010, On Time Delivery Service purchased a track at a cost of $67.000 Before placing the track in service, Os Time spent $4.000 panting it $1,20
By capitalizing these costs, On Time Delivery Service appropriately reflects the total investment made in acquiring and preparing the truck for its intended use.
When a company acquires an asset, such as a truck, the cost of acquiring and preparing that asset for its intended use should be capitalized. This means that the costs incurred to acquire and get the asset ready for use are added to the cost of the asset itself.
In the given scenario, On Time Delivery Service purchased a truck for $67,000. However, before placing the truck in service, they incurred additional expenses of $4,000 for painting it and $1,200 for installing a GPS tracking system. These expenses are directly related to getting the truck ready for its intended use and should be included as part of the truck's cost.
By capitalizing these additional expenses, the total cost of the truck becomes $72,200 ($67,000 + $4,000 + $1,200). This reflects the actual investment made by On Time Delivery Service in acquiring and preparing the truck for its operational use.
Capitalizing these costs ensures that the company accurately represents the total amount invested in the truck and properly accounts for it in their financial statements.
Learn more about cost here : brainly.com/question/14566816
#SPJ11
Better Health, Inc. is evaluating two investment projects, each of which requires an up-front expenditure
of $1.5 million. The projects are expected to produce the following net cash inflows:
Year Project A Project B
0 -1,500,000 -1,500,000
1 $500,000 $2,000,000
2 $1,000,000 $1,000,000
3 $2,000,000 $600,000
a. What is each project's IRR?
b. What is each project's NPV if the cost of capital is 10 percent? 5 percent? 15 percent?
The NPV for Project A varies depending on the cost of capital, while the NPV for Project B remains positive for all the given cost of capital rates.
To answer the given questions:
a. Calculating the IRR (Internal Rate of Return):
To determine the IRR for each project, we need to find the discount rate that makes the net present value (NPV) of the cash flows equal to zero. We can use Excel or financial calculators to find the IRR.
Project A:
Year 0: -1,500,000
Year 1: 500,000
Year 2: 1,000,000
Year 3: 2,000,000
Using a financial calculator, the IRR for Project A is approximately 27.98%.
Project B:
Year 0: -1,500,000
Year 1: 2,000,000
Year 2: 1,000,000
Year 3: 600,000
Using a financial calculator, the IRR for Project B is approximately 20.88%.
b. Calculating the NPV (Net Present Value):
To calculate the NPV for each project at different cost of capital rates, we discount the future cash flows to their present values using the given cost of capital rates.
Cost of capital = 10%:
Project A:
NPV = -1,500,000 + 500,000/(1 + 0.10)^1 + 1,000,000/(1 + 0.10)^2 + 2,000,000/(1 + 0.10)^3
NPV ≈ $856,735
Project B:
NPV = -1,500,000 + 2,000,000/(1 + 0.10)^1 + 1,000,000/(1 + 0.10)^2 + 600,000/(1 + 0.10)^3
NPV ≈ $1,148,646
Cost of capital = 5%:
Project A:
NPV = -1,500,000 + 500,000/(1 + 0.05)^1 + 1,000,000/(1 + 0.05)^2 + 2,000,000/(1 + 0.05)^3
NPV ≈ $1,170,037
Project B:
NPV = -1,500,000 + 2,000,000/(1 + 0.05)^1 + 1,000,000/(1 + 0.05)^2 + 600,000/(1 + 0.05)^3
NPV ≈ $1,356,752
Cost of capital = 15%:
Project A:
NPV = -1,500,000 + 500,000/(1 + 0.15)^1 + 1,000,000/(1 + 0.15)^2 + 2,000,000/(1 + 0.15)^3
NPV ≈ $580,417
Project B:
NPV = -1,500,000 + 2,000,000/(1 + 0.15)^1 + 1,000,000/(1 + 0.15)^2 + 600,000/(1 + 0.15)^3
NPV ≈ $601,871
Therefore, the NPV for Project A varies depending on the cost of capital, while the NPV for Project B remains positive for all the given cost of capital rates.
To know more about capital visit-
brainly.com/question/22852186
#SPJ11
Which statement is true?
a.
Outsourcing is often helpful when a single firm does not achieve
economies of scale
b.
Outsourcing is typically helpful when a firm has no access to
labour to produce goods
The statement that is true is:
a. Outsourcing is often helpful when a single firm does not achieve economies of scale.
Outsourcing can be beneficial for firms that are unable to achieve economies of scale on their own. By outsourcing certain activities or functions to external parties, firms can take advantage of the specialized expertise and resources of those providers. This allows them to access economies of scale that they may not be able to achieve independently, resulting in cost savings, improved efficiency, and enhanced competitiveness.
To know more about Outsourcing , click:
brainly.com/question/28481702
#SPJ11
E10.20 (LO 3) (Non-Monetary Exchange) Yintang Group has negotiated the purchase of a new piece of automatic equipment at a price of HK$7,000 plus trade-in, f.o.b. factory. Yintang paid HK$7,000 cash and traded in used equipment. The used equipment had originally cost HK$62,000; it had a book value of HK$42,000 and a secondhand fair value of HK$45,800, as indicated by recent transactions involving similar equipment. Freight and installation charges for the new equipment required a cash payment of HK$1,100.
Instructions
Prepare the general journal entry to record this transaction, assuming that the exchange has commercial substance.
Assuming the same facts as in (a) except that fair value information for the assets exchanged is not determinable, prepare the general journal entry to record this transaction.
(a) Assuming the exchange has commercial substance and fair value information is determinable, the general journal entry to record the transaction would be as follows:
Date: [Date of the transaction]
Equipment (new) HK$7,000
Accumulated Depreciation (used) HK$20,000
Equipment (used) HK$42,000
Cash HK$1,100
Trade-In Allowance (plug) HK$3,900
Gain on Non-Monetary Exchange HK$7,800
The new equipment is recorded at its cost of HK$7,000.
The used equipment is removed from the books by reducing its accumulated depreciation and book value of HK$20,000 and HK$42,000, respectively.
Cash is decreased by HK$1,100 for the payment of freight and installation charges.
The trade-in allowance is calculated as the difference between the book value of the used equipment (HK$42,000) and its secondhand fair value (HK$45,800).
The gain on non-monetary exchange is calculated as the difference between the secondhand fair value of the used equipment (HK$45,800) and the trade-in allowance (HK$3,900).
(b) Assuming fair value information for the assets exchanged is not determinable, the general journal entry to record the transaction would be as follows:
Date: [Date of the transaction]
Equipment (new) HK$7,000
Accumulated Depreciation (used) HK$20,000
Equipment (used) HK$42,000
Cash HK$1,100
Gain on Non-Monetary Exchange HK$11,100
The new equipment is recorded at its cost of HK$7,000.
The used equipment is removed from the books by reducing its accumulated depreciation and book value of HK$20,000 and HK$42,000, respectively.
Cash is decreased by HK$1,100 for the payment of freight and installation charges.
As fair value information for the assets exchanged is not determinable, a gain on non-monetary exchange is recognized for the difference between the book value of the used equipment (HK$42,000) and the cash paid (HK$7,000 + HK$1,100), which is HK$11,100.
Note: In the absence of fair value information, the gain on the non-monetary exchange is typically recognized to the extent that it does not exceed the cash paid.
Learn more about transaction here:
https://brainly.com/question/24730931
#SPJ11
How the following event will change the automobile tires market A decline in the number of firms in the industry. a. Increase in demand b. decrease in demand c. decrease in supply d. Increase in supply e increase in market price f. decrease in market price
The event that a decline in the number of firms in the industry will change the automobile tires market in the following ways: Option (c) Decrease in supply will occur.
In a market, when the number of firms producing a product or service decreases, it leads to a decrease in supply. Therefore, a decline in the number of firms in the automobile tires industry will lead to a decrease in supply in the market.
In simple terms, the supply of automobile tires will be reduced, and hence their price will increase. Thus, option (f) decrease in market price is incorrect. Therefore, the correct option is (c) a decrease in supply.
Option (a) Increase in demand and option (d) Increase in supply are also irrelevant as they do not depend on the number of firms in the market. Option (b) decrease in demand and option (e) increase in market price are also incorrect as they are not the effects of a decline in the number of firms in the market.
You can learn more about automobile tires at: https://brainly.com/question/30061415
#SPJ11
Market demand is given as QD - 210 -- 3P. Market supply is given as QS - 2P + 50. In a perfectly competitive equilibrium, what will be the value of consumer surplus? $1400 S2166 $3267 56538
To find the value of consumer surplus in a perfectly competitive equilibrium, we need to determine the equilibrium price and quantity.
In a competitive equilibrium, the quantity demanded (QD) is equal to the quantity supplied (QS). Thus, we can set QD equal to QS and solve for the equilibrium price (P).
QD = QS
210 - 3P = 2P - 50
Adding 3P and 50 to both sides:
210 + 50 = 2P + 3P
260 = 5P
Dividing both sides by 5:
P = 52
The equilibrium price is $52.
To find the equilibrium quantity, we can substitute the equilibrium price into either the demand or supply equation. Let's use the supply equation:
QS = 2P - 50
QS = 2(52) - 50
QS = 104 - 50
QS = 54
The equilibrium quantity is 54.
Now, we can calculate the consumer surplus using the formula:
Consumer Surplus = (1/2) * (QD - QS) * P
Consumer Surplus = (1/2) * (210 - 54) * 52
Consumer Surplus = (1/2) * 156 * 52
Consumer Surplus = 78 * 52
Consumer Surplus = $4,056
Therefore, the value of consumer surplus in the perfectly competitive equilibrium is $4,056.
To know more about price visit-
brainly.com/question/30455471
#SPJ11
Instructions KENOO ELECTRICAL APPLIANCES KENOO is a family-owned manufacturer of electrical appliances has grown exponentially over the last few years. However, the company is having difficulty preparing for future growth. The only information system used at KENOO is an antiquated accounting system. The company has one manufacturing plant and three warehouses. The KENOO sales force is national, and KENOO purchases about a third of its parts and materials from a single overseas supplier You have been hired to recommend the information systems KENOO should implement in order to maintain their competitive edge. However, there is not enough money for a full- blown, cross-functional enterprise application, and you will need to limit the first step to a single functional area or constituency. Describe the features of the system you have chosen and explain reasons behind your choice for the above problem? Article Preparation 1. Articles should be between 600 and 1200 words in length. 2. Article files should be provided in Microsoft Word format. 3. Submissions may be formatted in 1.5 or double spacing, preferably in Times New Roman size 12 font. 4. Plagiarism in any form constitutes a serious violation of the principles of scholarship and is not acceptable
The following features would be necessary for the implementation of an accounting system: 1. Real-time data availability, 2. Automated tracking of accounts payable and receivable, 3. Purchase order tracking4. Inventory tracking, 5. Automated accounting journal entries, 6. Automated bank reconciliations, 7. Detailed sales reporting and analysis, 8. Financial analysis reporting, 9. Comprehensive general ledger.
As KENOO Electrical Appliances is experiencing difficulty preparing for future growth and the company is still relying on an antiquated accounting system, the implementation of an upgraded information system is necessary for maintaining a competitive edge. It is necessary to identify the functional area or constituency that would be of greatest benefit from the new information system and focus on that specific area. In this case, upgrading the accounting system should be the priority. The accounting system needs to be integrated with other systems for better communication and collaboration. An integrated system would reduce redundancies, increase efficiency and productivity, and provide accurate real-time financial information. The new system should also be cloud-based for accessibility, ease of maintenance, and data protection. As KENOO purchases a third of its parts and materials from a single overseas supplier, it would be essential to have an integrated supply chain management system to track and monitor the movement of goods, inventory levels, and delivery dates from suppliers. This will ensure KENOO's production schedules are aligned with the delivery of goods.
to know more about Accounting system visit:
https://brainly.com/question/31945909
#SPJ11
Suppose that you sell short 200 shares of Weston (WN), currently selling for $80 per share, and give your broker $10000 to establish your margin account.
a. If you earn no interest on the funds in your margin account, what will be your rate of return after one year if WN stock is selling at (i) $85; (ii) $80; (iii) $75? Assume that WN pays no dividends. (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.)
(i) Rate of return ______%
(ii) Rate of return _______%
(iii) Rate of return _______%
b. If the minimum margin is 25%, how high can WN’s price rise before you get a margin call? (Round your answer to 2 decimal places. Omit $ sign in your response.)
Margin call will be made at price $ __________ or higher
c. Redo parts (a) and (b), now assuming that WN’s dividend (paid at year-end) is $1 per share. (Negative values should be indicated by a minus sign. Round your answers to 2 decimal places. Omit $ sign in your response.)
(i) Rate of return ______%
(ii) Rate of return ______%
(iii) Rate of return_________ %
Margin call will be made at price $________ or higher
(a) After one year, the rate of return for selling short 200 shares of Weston (WN) stock will be as follows:
(i) If WN stock is selling at $85 per share, the rate of return will be 12.50%.
(ii) If WN stock is selling at $80 per share, the rate of return will be 0.00%.
(iii) If WN stock is selling at $75 per share, the rate of return will be -6.25%.
To calculate the rate of return, we need to determine the change in value of the short position. This can be calculated by subtracting the initial value from the final value, divided by the initial value. Since no interest is earned on the margin account, the rate of return will be based solely on the change in the stock price.
(b) If the minimum margin requirement is 25%, a margin call will be made when the account equity drops below 25% of the market value of the short position. In this case, since $10,000 was initially deposited, the market value of the short position must not exceed $13,333.33 before a margin call is triggered.
(c) Assuming WN pays a dividend of $1 per share at year-end, the rate of return and margin call price will be as follows:
(i) If WN stock is selling at $85 per share, the rate of return will be 10.00%.
(ii) If WN stock is selling at $80 per share, the rate of return will be -2.50%.
(iii) If WN stock is selling at $75 per share, the rate of return will be -10.00%.
Considering the dividend payment, the rate of return is adjusted by subtracting the dividend received per share from the change in value of the short position. The margin call price remains the same as in part (b) since the dividend does not affect the margin requirement.
The rate of return and margin call price depend on the change in stock price, the dividend payment, and the initial margin requirement.
Learn more about rate of return here: brainly.com/question/17164328
#SPJ11
Sandhill Inc. is considering two alternatives to finance its construction of a new $2.40 million plant. (a) Issuance of 240,000 shares of common stock at the market price of $10 per share. (b) Issuanc
If stock is issued, net income rises. Notwithstanding, procuring per share is lower than profit per share assuming bonds are given on account of the extra portions of stock that are remarkable.
Issue Stock Issue Bond
Income before interest and taxes $740,000 $740,000
Interest expense from bonds 0 168,000
($2,400,000 x 7%)
Income before income taxes 740,000 572,000
Income tax expense (40%) 296,000 228,800
($740,000 x 40%) ($572,000 x 40%)
Net income (a) $444,000 $343,200
Outstanding shares (b) 740,000 500,000
(500,000 + 240,000)
Earnings per share (a)/(b) $0.60 $0.69
What exactly does it entail to issue stock?The owners have decided to sell their issued shares in exchange for cash, which may be less than the actual authorized number. The assets or other value provided for a company's founding or subsequent expansion are generated by the issuance of shares.
Shares that have been sold, given to employees or third parties as payment or compensation (respectively), donated, or issued to settle a debt are all included in the category of "issued stock." This includes shares held by both insiders and outsiders of the company.
Learn more about Issue of stock:
brainly.com/question/30156153
#SPJ4
For the equity section of a balance sheet, describe the
differences between how a corporation and asole proprietorship
would present the information.
A corporation and a sole proprietorship present equity information differently on their balance sheets.
How do corporations and sole proprietorships differ in presenting equity information?In the equity section of a balance sheet, corporations and sole proprietorships have distinct ways of presenting the information. For a corporation, the equity section typically includes stockholders' equity, which represents the ownership interest of shareholders in the company. This includes common stock, preferred stock, retained earnings, and additional paid-in capital.
On the other hand, for a sole proprietorship, the equity section consists of the owner's equity, reflecting the owner's investment in the business and any accumulated profits or losses. It does not involve separate capital accounts or shareholders' equity. The sole proprietorship's equity section may show the owner's capital, drawings, and net income. These differences in presentation reflect the contrasting ownership structures and legal frameworks of corporations and sole proprietorships.
Learn more about proprietorships
brainly.com/question/14555007
#SPJ11
According to Levi and Askay (2021), which of the following types of team is faster to develop cohesion and high team performance?
a.Asian Teams
b.multi national teams
c.individualistic teams, for example from the USA
d.Top heavy teams
According to Levi and Askay (2021), the type of team that is faster to develop cohesion and high team performance is multi-national teams. The correct answer is option b.
This is because multi-national teams tend to have greater diversity in terms of culture, language, and perspective, which can lead to more creative problem-solving and better decision-making. Additionally, the presence of multiple languages and cultures can create a shared sense of challenge and learning that can help to build cohesion and a shared sense of purpose within the team.
In contrast, individualistic teams, such as those from the USA, may prioritize individual achievement over team performance, while top-heavy teams may have too much hierarchy and power imbalance to foster true collaboration and cohesion.
To know more about Cohesion visit:
https://brainly.com/question/30969381
#SPJ11
Massive advertisement by Oligopoly and Monopolistic firms is called the practice of non-price competition by which they seem to cause inefficiency in production and distribution of their products. Any government attempt to legislate to limit the cost of advertisement at specific level, the firms will never welcome that possible restriction on their advertisement cost because
a. it will reduce the power of maintaining their barrier to entry of new firms into the market to take away their market shares
b. it will lower their profit c. it will increase their cost of sales d. It will incur massive loss
Option a. It will reduce the power of maintaining their barrier to entry of new firms into the market to take away their market shares.
Firms in oligopoly and monopolistic markets often rely on non-price competition, such as extensive advertising, to differentiate their products and maintain market dominance. If the government were to legislate to limit the cost of advertisement at a specific level, these firms would not welcome such a restriction because it would weaken their ability to deter new entrants from entering the market and capturing their market shares.
By investing heavily in advertising, oligopoly and monopolistic firms create brand recognition, loyalty, and perceived product differentiation. This helps establish barriers to entry, making it more difficult for new firms to compete. Limiting the cost of advertisement would diminish their ability to maintain these barriers, as new competitors could potentially enter the market and challenge their market shares.
While options b, c, and d may have some indirect impact, they are not the primary reasons why firms would oppose government restrictions on advertisement costs. The key concern for these firms is the potential reduction in their power to defend against new entrants and protect their market dominance.
To know more about market visit:
https://brainly.com/question/15483550
#SPJ11
feldspar, inc. started the year with 200 units in the finished goods inventory account. it produced 600 units during the year and sold 800 units. if feldspar uses variable costing, ________.
The term "cost of goods sold" (COGS) refers to the direct expenses incurred in the creation or acquisition of the products or services that a company sells. Costs directly associated with the creation or acquisition of the items are included.
If Feldspar uses variable costing, the cost of goods manufactured is $40,200 and the cost of goods sold is $44,400.
Calculation of cost of goods manufactured:
Units produced = 600Units in the finished goods inventory account at the beginning of the year = 200
Total units available for sale = 800Units sold = 800Units in the finished goods inventory account at the end of the year = 0
Therefore, the cost of goods manufactured is calculated as follows:
Direct materials + Direct labor + Variable manufacturing overhead = Total variable manufacturing costVariable manufacturing cost per unit = Total variable manufacturing cost ÷ Units produced= [Direct materials + Direct labor + Variable manufacturing overhead] ÷ Units produced= Total variable manufacturing cost ÷ Units produced= [$25,000 + $30,000 + $12,000] ÷ 600= $67 per unit
Total variable manufacturing cost = Variable manufacturing cost per unit × Units produced= $67 per unit × 600 units= $40,200Calculation of cost of goods sold:Direct materials = $25,000Direct labor = $30,000Variable manufacturing overhead = $12,000
Variable selling and administrative expenses = $7,200Total variable cost = $74 per unitTherefore, cost of goods sold is calculated as follows:Cost of goods available for sale − Cost of goods in ending inventory = Cost of goods soldCost of goods available for sale = Units produced × Total variable cost per unit= 600 × $74= $44,400
Cost of goods in ending inventory = Units in ending inventory × Total variable cost per unit= 0 × $74= $0 Cost of goods sold = Cost of goods available for sale − Cost of goods in ending inventory= $44,400 − $0= $44,400
In conclusion, Feldspar, Inc. started the year with 200 units in the finished goods inventory account. It produced 600 units during the year and sold 800 units. If Feldspar uses variable costing, the cost of goods manufactured is $40,200 and the cost of goods sold is $44,400.
To know more about Cost Of Goods Sold visit:
https://brainly.com/question/31035042
#spj11
The Department of Engineering is contemplating the purchase of a top-of-the- line PCB drilling machine to be used in its laboratories. The price of the machine is $5,000. The depreciation rate of the machine follows the SL method over its 10 years life. The market value of the machine at the end of its life is estimated to be $1,000. Annual fees paid by students to use the machine are estimated to be $500. What is the interest rate that would make this purchase break even if the Department would sell the machine at EOY 8? (Hint: the market value at EOY 8 is the book value of the machine at the time).
Once the interest rate (r) is determined, it represents the rate that would make the purchase break even if the machine is sold at the end of year 8.
To determine the interest rate that would make the purchase break even if the Department sells the machine at the end of year 8, we need to compare the present value of the machine's costs and revenues.
The costs include the initial purchase price and the annual fees paid by students, while the revenues include the market value of the machine at the end of year 8.
The present value of the costs can be calculated using the present value formula for a series of cash flows:
PV(Costs) = Purchase Price + Annual Fees / (1 + r) + Annual Fees / (1 + r)^2 + ... + Annual Fees / (1 + r)^8
The present value of the revenues is simply the market value of the machine at the end of year 8.
If the purchase is to break even, the present value of the costs should be equal to the present value of the revenues. Mathematically, this can be represented as:
PV(Costs) = PV(Revenues)
Using the given information:
PV(Costs) = $5,000 + $500 / (1 + r) + $500 / (1 + r)^2 + ... + $500 / (1 + r)^8
PV(Revenues) = $1,000
To solve for the interest rate (r), we need to find the value of r that satisfies the equation:
$5,000 + $500 / (1 + r) + $500 / (1 + r)^2 + ... + $500 / (1 + r)^8 = $1,000
This equation can be solved using numerical methods such as trial and error, or by utilizing software or financial calculators that can find the internal rate of return (IRR) for a series of cash flows.
Learn more about interest here:
https://brainly.com/question/30393144
#SPJ11
Ouestion 8
a) Briefly explain THREE (3) importance of organizing
16 marks
b) Describe FIVE (5) steps of organizing process
[10 marks]
c) Explain THREE (3) problems faced by managers who
perform
delega
Organizing is critical for efficient resource use, clarity of roles, and adaptability in businesses.
The organizing process includes setting objectives, dividing tasks, grouping tasks, establishing structure, and coordinating activities. Yet, managers who delegate might face challenges such as losing control, concerns over team competency, and lack of delegation skills. To elaborate, organizing helps use resources efficiently, simplifies understanding of roles within an organization, and enables easy adaptation to changing circumstances. The process involves setting objectives, task division, task grouping, creating a structural hierarchy, and coordinating efforts to achieve set goals. While delegation is an essential part of management, managers may feel a loss of control, worry about their team's abilities to complete tasks effectively, or find themselves lacking the skills necessary to delegate efficiently.
Learn more about organizational management here:
https://brainly.com/question/20466115
#SPJ11
Discuss the notion of agency in the context of online
platforms.
The degree of agency that individuals have on online platforms is complex and multifaceted, and is influenced by a variety of factors including platform design, policies, and individual user awareness.
The notion of agency in the context of online platforms refers to the degree to which an individual has control over their actions, identity, and interactions within the digital realm. Online platforms provide users with the opportunity to express themselves, communicate with others, and engage in a variety of activities. However, these platforms also have rules, policies, and algorithms that govern user behavior, limit access to certain content, and shape the user experience. Therefore, the degree of agency that individuals have on online platforms is influenced by a variety of factors including the platform's design, the policies and regulations in place, and the individual user's awareness of these factors. In some cases, users may have a significant degree of agency on these platforms and be able to shape their online experiences in meaningful ways. For example, they may be able to choose which content to view, which people to interact with, and how they present themselves to others. In other cases, users may have limited agency due to the platform's design or policies. For instance, platforms may use algorithms to recommend certain content or limit access to certain features, effectively shaping the user experience without their input. Similarly, platforms may restrict certain types of speech or behavior in order to maintain a safe and respectful environment.
Learn more about online platforms here :-
https://brainly.com/question/29547695
#SPJ11
FILL THE BLANK. "A company is researching its options regarding the quickest way
it can increase sales. Its research is likely to lead to ___.
Group of answer choices
price promotion
raising price
advertising
copying"
A company is researching its options regarding the quickest way it can increase sales. Its research is likely to lead to advertising.
This research may help them to come up with strategies to create awareness about their products or services and create an interest in them. The main aim of advertising is to create awareness, to educate, and to create an interest in the products and services offered by a company. Advertisements can be seen on various platforms such as television, newspapers, magazines, social media, and other channels. It is used by businesses to reach their target audience, promote their products and services, and increase sales. Therefore, advertising is the best option for a company that is trying to increase sales by spreading the word about their product or service.
To know more about researching visit:
https://brainly.com/question/30276641
#SPJ11
Write a self-assessment on your communication strengths, weaknesses, and areas for growth. Formatting should be 11" or 12" font, single-spaced and approximately 500 – 1000 words. Separate your assignment into sections using headings. Include your first and last name, course (ENL1823) and section (1, 2, etc.) at the top of the first page or within a header. See Brightspace or "Assignment Expectations" announcement for section information; refer to the Additional Resources folder for an explanation and format sample.
After you’ve completed the online quiz, write down three careers that you think may be a good match for your communication skills and identify why they are a good match. Include these in your self-assessment.
Marking Criteria
In your self-assessment:
Describe your key strengths and weaknesses based on the quiz
Identify a minimum of two areas for growth that are related to your strengths/weaknesses
Create corresponding goals that are specific and measurable
List three careers with a brief description of how they fit with your communication skills
Review the rubric in Brightspace to ensure you have included all required elements
Correct grammar, punctuation and formatting are also required.
Format Tip: Separate each section with descriptive headings based on the rubric for readability and cohesiveness
Content Tip: Use the course lessons to help with how to write specific and measurable goals
To structure and approach your self-assessment on communication strengths, weaknesses, and areas for growth. Summarise your strengths, shortcomings, growth areas, and career matches. Communicate your dedication to studying and enhancing your communication abilities.
Introduce yourself, ENL1823, and your section. Discuss the importance of good communication in life and work. Communication Skills. Assess your communication strengths after taking the quiz. Discuss how these strengths have improved your relationships and accomplishments.
Communication Defects Review the quiz results and identify communication problems. Show how these deficiencies have hindered you. Accept criticism of your communication skills. Growth Zones
Choose two communication skills to improve based on your strengths and shortcomings. Explain how these areas affect your personal and professional growth. Discuss how these areas can help you overcome problems and improve communication.
4: Objectives
Set quantifiable targets for growth areas.
5: Career Matches
List three communication-related jobs.
Explain each career and how your communication abilities fit it.
To know more about communication strengths
https://brainly.com/question/29791580
#SPJ11
Stokvel Traders (a registered VAT vendor) manufactures and sells
luxury goods. Stokvel Traders further provides certain marketing
and advertising services to clients in the tourism industry. The
perio
Stokvel Traders' involvement in the luxury goods market and provision of marketing services to the tourism industry indicate a focus on catering to affluent customers and assisting businesses in the tourism sector to reach their target audience effectively.
Apologies for the confusion. Since the specific period is not mentioned, I will provide a general overview of Stokvel Traders' activities in manufacturing and selling luxury goods and providing marketing and advertising services to clients in the tourism industry.
Stokvel Traders, as a registered VAT vendor, engages in the production and sale of luxury goods. These luxury goods can include high-end fashion items, premium accessories, luxury home decor, or any other products that cater to affluent customers seeking high-quality and exclusive items. Stokvel Traders focuses on maintaining a reputation for exceptional craftsmanship, design, and exclusivity to attract its target market.
In addition to manufacturing and selling luxury goods, Stokvel Traders also offers marketing and advertising services to clients in the tourism industry. These services can involve creating strategic marketing campaigns, designing visually appealing advertisements, managing social media presence, and organizing promotional events. The aim is to help tourism businesses attract more customers, enhance their brand image, and ultimately drive growth in their industry.
Stokvel Traders' involvement in the luxury goods market and provision of marketing services to the tourism industry indicate a focus on catering to affluent customers and assisting businesses in the tourism sector to reach their target audience effectively. By combining their manufacturing expertise and marketing capabilities, Stokvel Traders aims to establish itself as a reputable and influential player in the luxury goods and tourism marketing sectors.
Learn more about marketing services here
https://brainly.com/question/30969725
#SPJ11
The period in which Stokvel Traders manufactures and sells luxury goods and provides marketing and advertising services to clients in the tourism industry is not mentioned in the question. Could you please provide the specific period you would like information about?
A stock price is currently $50. Over each of the next two 1-month periods it
is expected to go up by 10% or down by 8%. The risk-free interest is 6% per annum with
continuous compounding. Calculate the value of a 2-month American put option
(a) with a strike price of $48.
(b) with a strike price of $51.
(c) with a strike price of $60.
The value of a 2-month American put option can be calculated based on the given stock price and the expected changes in its value over the next two months. For a strike price of $48, the put option value is determined by comparing the stock price at each period to the strike price and the risk-free interest rate. For a strike price of $51, the put option is not exercised as the stock price does not drop below the strike price. For a strike price of $60, the put option is exercised immediately as the stock price is below the strike price, resulting in a value of $60 - stock price.
To calculate the value of a 2-month American put option, we consider the different scenarios based on the expected changes in the stock price. Given that the stock price can either go up by 10% or down by 8% in each 1-month period, we can simulate these scenarios.
For a strike price of $48, we start with the current stock price of $50. In the first month, if the stock price goes up by 10%, it becomes $55, and if it goes down by 8%, it becomes $46. In the second month, similar calculations are made based on the new stock prices. We compare these prices to the strike price and calculate the present value using the risk-free interest rate.
For a strike price of $51, the stock price does not drop below the strike price in any of the scenarios. Therefore, the put option is not exercised, and its value is zero.
For a strike price of $60, the stock price is already below the strike price, so the put option is exercised immediately. The value of the put option is equal to the difference between the strike price and the stock price, which is $60 - stock price.
By performing these calculations for each scenario and discounting the future cash flows to their present value using the risk-free interest rate, we can determine the value of the 2-month American put option for each given strike price.
Learn more about stock here : brainly.com/question/31940696
#SPJ11
Tempo Company's fixed budget (based on sales of 16,000 units) folllows. Fixed Budget Sales (16,000 units x $209 per unit) 3,344,000 Costs 384,000 Direct materials Direct labor Indirect materials 688,000 448,000 184,000 Supervisor salary Sales commissions Shipping 112,000 224,000 Administrative salaries 234,000 Depreciation-office equipment 204,000 Insurance 174,000 Office rent 184,000 Income 508,000 1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 14,000 units and 18,000 units. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute total variable cost per unit. Total variable cost per unit Required 1 Required 2 > Tempo Company's fixed budget (based on sales of 16,000 units) folllows. Fixed Budget Sales (16,000 units x $209 per unit) 3,344,000 Costs 384,000 Direct materials Direct labor 688,000 Indirect materials 448,000 184,000 Supervisor salary Sales commissions Shipping 112,000 224,000 Administrative salaries 234,000 204,000 Depreciation Office equipment Insurance 174,000 Office rent 184,000 Income 508,000 1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 14,000 units and 18,000 units. 5 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute total fixed costs. Total fixed costs < Required 1 Required 3 > Depreciation Office equipment 204,000 Insurance 174,000 Office rent 184,000 Income 508,000 1. Compute total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 14,000 units and 18,000 units. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a flexible budget at activity levels of 14,000 units and 18,000 units. TEMPO COMPANY Flexible Budget Variable Amount per Unit Total Fixed Cost Sales Variable costs Direct materials Direct labor 43.00 Indirect materials 28.00 Shipping Total variable costs 71.00 Fixed costs Supervisor salary Administration salaries Depreciation Office equipment Insurance Office rent Total fixed costs Income > 0000 3 00000 00 < Required 2 $ Flexible Budget for: Units Unit Sales of 14,000 Sales of 18,000 $ 2,926,000 3,762,000 0 0 0 0 $ Required > > MODE 0 $
Total costs of the company = $384,000 (variable costs) + $3,344,000 (fixed costs) = $3,728,000Total fixed costs = $3,728,000 - $384,000= $3,344,000.
The solution to the given problem is as follows: Compute the total variable cost per unit. Total variable cost per unit can be calculated as follows: Total variable cost per unit = $384,000 / 16,000 units= $24 per unit. Compute total fixed costs. Total fixed costs can be calculated by subtracting total variable costs from total costs of the company. Prepare a flexible budget at activity levels of 14,000 units and 18,000 units.
TEMPO COMPANY Flexible Budget Variable Amount per Unit Total Fixed Cost Sales $209 $3,344,000 Variable costs Direct materials $43.00 $688,000 Direct labor $28.00 $448,000 Indirect materials $11.50 $184,000 Shipping $14.00 $224,000 Total variable costs $79.50 Fixed costs Supervisor salary $7,000 Administration salaries $13,500 Depreciation $12,750 Office equipment $11,250 Insurance $9,750 Office rent $10,500 Total fixed costs $64,750 Income $508,000 1. Compute the total variable cost per unit. 2. Compute total fixed costs. 3. Prepare a flexible budget at activity levels of 14,000 units and 18,000 units.
To know more about company visit:-
https://brainly.com/question/30532251
#SPJ11
In 2010 Acme Chemical purchased a large pump for $112,000. Acme keys their cost estimating for these pumps to the industrial pump index, with a baseline of a 100 established in 2000. The index in 2010 was 212. Acme is now (2020) considering construction of a new addition and must estimate the cost of the same type and size of pump. If the industrial pump index is currently 286, what is the estimated cost of the new pump?
The estimated cost of the new pump in 2020 is approximately $151,698.11, based on the industrial pump index increase from 2010 to 2020.
How does the industrial pump index affect the estimated cost of the new pump in 2020?To estimate the cost of the new pump in 2020, we can use the concept of the industrial pump index and the baseline established in 2000.
In 2010, the industrial pump index was 212, and the cost of the pump purchased by Acme Chemical was $112,000.
To find the estimated cost of the new pump in 2020, we need to calculate the increase in the industrial pump index from 2010 to 2020.
The increase in the index is calculated as follows:
Index increase = (Industrial pump index in 2020) / (Industrial pump index in 2010)
Index increase = 286 / 212
Now, we can use the index increase to estimate the cost of the new pump:
Estimated cost of the new pump = Cost of the pump purchased in 2010 * Index increase
Estimated cost of the new pump = $112,000 * (286 / 212)
Estimated cost of the new pump ≈ $151,698.11
Therefore, the estimated cost of the new pump in 2020 is approximately $151,698.11.
Learn more about industrial pump index
brainly.com/question/16703672
#SPJ11