The difference in the required rates of return between Pluto Intelligence and Neptune Media is -1.65%. Neptune Media has a higher required rate of return than Pluto Intelligence.
The difference in the required rates of return between Pluto Intelligence and Neptune Media can be calculated using the formula:
The difference in the required rate of return = Neptune's required rate of return - Pluto's required rate of return
To calculate each company's required rate of return, we need to use the Capital Asset Pricing Model (CAPM) formula:
Required Rate of Return = Risk-Free Rate + Beta * (Market Return - Risk-Free Rate)
Given:
- Beta of Pluto Intelligence (Pluto) = 0.4
- Beta of Neptune Media (Neptune) = 15
- Risk-Free Rate = 3.0%
- Market Return = 9.6%
Now, let's calculate the required rates of return for both companies:
Pluto's required rate of return = 3.0% + 0.4 * (9.6% - 3.0%) = 3.0% + 0.4 * 6.6% = 3.0% + 2.64% = 5.64%
Neptune's required rate of return = 3.0% + 15 * (9.6% - 3.0%) = 3.0% + 15 * 6.6% = 3.0% + 0.99% = 3.99%
Now, let's calculate the difference in their required rates of return:
Difference in required rate of return = 3.99% - 5.64% = -1.65%
In summary, the difference in the required rates of return between Pluto Intelligence and Neptune Media is -1.65%. Neptune Media has a higher required rate of return than Pluto Intelligence.
Know more about the Capital Asset Pricing Model (CAPM) click here:
https://brainly.com/question/32230922
#SPJ11
Ashburn Company issued 17-year bonds two years ago at a coupon rate of 9.6 percent. The bonds make semiannual payments. If these bonds currently sell for 103 percent of par value, what is the YTM? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places,
To find the yield to maturity (YTM) of the bonds, we can use the present value formula. The YTM is the discount rate that equates the present value of all future cash flows (coupon payments and the face value) with the current market price of the bonds.
Given:
Coupon rate = 9.6% (coupon payments are made semiannually)
Bonds currently sell for 103% of par value
To calculate the YTM, we need to determine the present value of the bond's future cash flows and solve for the discount rate (YTM).
Step 1: Calculate the coupon payment:
Since the coupon payments are made semiannually, the coupon payment will be (Coupon Rate / 2) * Par Value.
Coupon payment = (9.6% / 2) * Par Value
Step 2: Calculate the number of periods:
Since the bonds were issued 2 years ago and have a maturity of 17 years, the number of periods remaining until maturity is (17 - 2) * 2 (as there are two semiannual periods in a year).
Step 3: Calculate the present value of the coupon payments:
To calculate the present value of the coupon payments, we need to discount each coupon payment back to the present value using the discount rate (YTM).
PV of coupon payments = (Coupon payment / (1 + (YTM / 2))) + (Coupon payment / (1 + (YTM / 2))^2) + ... + (Coupon payment / (1 + (YTM / 2))^n)
Step 4: Calculate the present value of the face value:
To calculate the present value of the face value, we need to discount it back to the present value using the discount rate (YTM).
PV of face value = Face Value / (1 + (YTM / 2))^n
Step 5: Calculate the present value of all future cash flows:
The present value of all future cash flows can be calculated by adding the present value of the coupon payments (from Step 3) and the present value of the face value (from Step 4).
Step 6: Solve for the YTM:
We need to solve for the discount rate (YTM) that makes the present value of all future cash flows equal to the current market price of the bonds (103% of par value).
To summarize, the YTM is the discount rate that makes the present value of all future cash flows equal to the current market price of the bonds.
To know more about maturity refer here:
https://brainly.com/question/26376004#
#SPJ11
Hyperion Inc., currently sells its latest high-speed color printer, the Hyper 500, for $349. It plans to lower the price to $308 next year. Its cost of goods sold for the Hyper 500 is $191 per unit, and this year's sales (at the current price of $349) are expected to be 20,800 units. a. Suppose that if Hyperion drops the price to $308 immediately (rather than waiting one year) it can increase this year's sales by 30% to 27,040 units. What would be the incremental impact on this year's EBIT of such a price drop? b. Suppose that for each printer sold, Hyperion expects additional sales of $95 per year on ink cartridges for the three-year life of the printer, and Hyperion has a gross profit margin of 81% on ink cartridges. What is the incremental impact on EBIT for the next three years of such a price drop?
The incremental impact on this year's EBIT of such a price drop is $1,080,000. The incremental impact on EBIT for the next three years of such a price drop is $1,657,952.
(a) The present EBIT with the current sales of 20,800 units is given by EBIT = $349 × 20,800 – $191 × 20,800 = $3,964,800 – $3,977,280 = −$12,480. If the company lowers its price to $308 and increases its sales by 30% to 27,040 units, then the new revenue and cost are $308 × 27,040 = $8,326,720 and $191 × 27,040 = $5,167,840, respectively. The new EBIT will be $3,158,880. Thus, the incremental impact on this year's EBIT of such a price drop is $3,158,880 − (−$12,480) = $1,080,000.
(b) For each printer sold, Hyperion expects additional sales of $95 per year on ink cartridges for the three-year life of the printer, and Hyperion has a gross profit margin of 81% on ink cartridges. The incremental annual profit from ink cartridges will be $95 × 81% = $76.95. The incremental profit from ink cartridges for the next three years will be $76.95 × 27,040 × 3 = $6,590,752.
Hence, the incremental impact on EBIT for the next three years of such a price drop is $6,590,752 − $1,932,800 = $1,657,952. Therefore, the incremental impact on EBIT for the next three years of such a price drop is $1,657,952.
To know more about Sales visit.
https://brainly.com/question/29436143
#SPJ11
n
Mohammed wishes to buy some stocks in a reputable company with a 4% tobacco activity, a total debt of $30,000, total cash of $40,000, and a total asset of $100,000. Determine whether this stock is Sharia compliant so Mohammed can invest. [6Marks]
His stock is not Sharia compliant
All the following financial ratios must be met for companies to be considered Shariah-compliant:
1. Revenue from non compliant activities should not exceed 5% of total revenue.
2. Debt is less than 33.333% of total assets
3.Accounts receivable and cash are less than 50% of total assets;
4.Cash and interest bearing items are less than 33.333% of total asset.
Checking Condition 1)
In our case tobacco activity is 4% only, thus does not fall in this category.
Debt = 30,000
Total Assets = 100,000
Debt / Total Assets = 30,000 / 100,000 = 30%
This Condition is also not breached.
Checking Condition 3)
Cash = 40,000
Total Assets = 100,000
Cash / Total Assets = 40,000 / 100,000 = 40%
Ratio is less than 50%, hence complying with the condition.
Checking Condition 4)
Cash = 40,000
Total Assets = 100,000
Cash / Total Assets = 40,000 / 100,000 = 40%
This is higher than 33.33% hence this condition is breached.
It can be concluded that his stock is not Sharia compliant
Learn more about Debt here:
https://brainly.com/question/27954015
#SPJ11
A system of income inequality has advantages and disadvantages. Which of the following is a characteristic of a country that has income inequality?
Group of answer choices
in a country with higher income inequality the lower income households generally have fewer political advantages (less influence) than the higher income households.
All of the listed choices are characteristics
a country with income inequality generally has a higher average standard of living than a country with pure income equality.
a country with income inequality provides those who are more productive the ability to reap higher rewards and higher incomes. Thus more people tend to be productive and efficient than in a system of income equality.
In a country with higher income inequality, the lower income households generally have fewer political advantages (less influence) than the higher income households. This is a characteristic of income inequality. Higher income households often have more resources and economic power, which can translate into greater political influence and the ability to shape policies that benefit their interests.
Additionally, a country with income inequality provides those who are more productive the ability to reap higher rewards and higher incomes. This characteristic suggests that income inequality allows for greater incentives for individuals to be productive and efficient. In such a system, individuals who contribute more to the economy can earn higher incomes, which can serve as a motivator for increased productivity and economic growth.
However, it is important to note that not all of the listed choices are characteristics of a country with income inequality. The statement "a country with income inequality generally has a higher average standard of living than a country with pure income equality" is not necessarily true. Income inequality does not guarantee a higher average standard of living as it depends on various factors such as social welfare programs, access to education and healthcare, and overall economic conditions. Income equality can also be achieved with a high standard of living if resources are distributed equitably among the population.
Therefore, the correct answer is in a country with higher income inequality, the lower income households generally have fewer political advantages (less influence) than the higher income households.
To know more about standard of living, visit
https://brainly.com/question/16294617
#SPJ11
"Heart Limited has one bond in issue expiring in eight years, paying 0 coupon and has a face value of $1000. It is currently traded at $720, Beta =1.2, risk free rate is 2%, historic market risk premium is 5.5%. Assume the ratio of debt to equity is 2:1, and corporate tax rate is 20%." (c) Determine the WACC for Heart Limited.
The Weighted Average Cost of Capital (WACC) for Heart Limited is 5.73%.
1. Calculate the cost of equity (Ke):
Ke = Risk-Free Rate + Beta * Market Risk Premium
Ke = 2% + 1.2 * 5.5% = 8.6%
2. Calculate the cost of debt (Kd):
Since the bond pays no coupon and is currently traded at a discount, the yield to maturity (YTM) can be used as the cost of debt.
Given that the bond has a face value of $1000 and is currently traded at $720, the discount is $1000 - $720 = $280.
The YTM can be calculated using the bond's discount and time to maturity:
YTM = (Discount / Purchase Price) * (1 / Time to Maturity)
YTM = ($280 / $720) * (1 / 8) = 0.0486 or 4.86%
3. Calculate the weights of equity (We) and debt (Wd):
Since the debt-to-equity ratio is 2:1, the weights can be calculated as follows:
We = 2 / (2 + 1) = 0.6667 or 66.67%
Wd = 1 / (2 + 1) = 0.3333 or 33.33%
4. Calculate the WACC:
WACC = (We * Ke) + (Wd * Kd)
WACC = (0.6667 * 8.6%) + (0.3333 * 4.86%)
WACC = 5.73%
Therefore, the WACC for Heart Limited is 5.73%.
To know more about WACC refer here:
https://brainly.com/question/33116653?#
#SPJ11
You expect Commodore Company's stock to pay its next dividend of $6.36 exactly one year from now. After this first dividend, future dividends will grow at -3% for each of the subsequent 2 years and then 5% per year every year thereafter. What is Commodore's intrinsic value today? Use a discount rate of 12.2% and round your answer to the nearest penny.
Athens, Inc has a credit rating of A and wants to issue 15-year bonds at par value. If the 15-year Treasury bond has a YTM of 4.97% and the credit spread for Single A debt over Treasuries is 5.33%, what coupon rate should Athens select? Enter your answer as a decimal and show four decimal places. For example, if your answer is 5.25%, enter .0525.
The bonds are issued at par value, the coupon rate should be set equal to the required yield. Therefore, Athens, Inc should select a coupon rate of 10.30% (or 0.1030 as a decimal) for its bonds.
To calculate Commodore Company's intrinsic value today, we need to determine the present value of its future dividends using the dividend discount model (DDM).
Given information:
First dividend (D₁) = $6.36
Dividend growth rate for the subsequent 2 years (g₁) = -3%
Dividend growth rate after the first 2 years (g₂) = 5%
Discount rate (r) = 12.2%
Step 1: Calculate the present value of the first dividend (D₁):
PV(D₁) = D₁ / (1 + r)¹
PV(D₁) = $6.36 / (1 + 0.122)¹
PV(D₁) = $5.68
Step 2: Calculate the present value of dividends for the subsequent 2 years (D₂ and D₃):
PV(D₂) = D₁ * (1 + g₁) / (1 + r)²
PV(D₂) = $6.36 * (1 - 0.03) / (1 + 0.122)²
PV(D₂) = $5.61
PV(D₃) = D₂ * (1 + g₁) / (1 + r)³
PV(D₃) = $5.61 * (1 - 0.03) / (1 + 0.122)³
PV(D₃) = $5.54
Step 3: Calculate the present value of dividends after the first 2 years (D₄ onwards):
PV(D₄ onwards) = D₃ * (1 + g₂) / (r - g₂)
PV(D₄ onwards) = $5.54 * (1 + 0.05) / (0.122 - 0.05)
PV(D₄ onwards) = $71.72
Step 4: Calculate the intrinsic value by summing up the present values of all dividends:
Intrinsic Value = PV(D₁) + PV(D₂) + PV(D₃) + PV(D₄ onwards)
Intrinsic Value = $5.68 + $5.61 + $5.54 + $71.72
Intrinsic Value = $88.55
Therefore, Commodore Company's intrinsic value today is approximately $88.55.
Now let's move on to the second question:
Athens, Inc wants to issue 15-year bonds at par value. We need to determine the coupon rate for these bonds. The yield to maturity (YTM) for a 15-year Treasury bond is given as 4.97%, and the credit spread for Single A debt over Treasuries is 5.33%.
The required yield for Athens, Inc's bonds would be the sum of the YTM and the credit spread:
Required Yield = YTM + Credit Spread
Required Yield = 4.97% + 5.33%
Required Yield = 10.30%
Since the bonds are issued at par value, the coupon rate should be set equal to the required yield. Therefore, Athens, Inc should select a coupon rate of 10.30% (or 0.1030 as a decimal) for its bonds.
Know more about Discount rate here
https://brainly.com/question/13660799#
#SPJ11
If demand in a perfectly competitive market is perfectly inelastic and supply is upward sloping, a specific tax placed on suppliers will:________
if demand in a perfectly competitive market is perfectly inelastic and supply is upward sloping, a specific tax placed on suppliers will be entirely borne by the suppliers and will not be passed on to consumers.
in a perfectly competitive market, the price is determined by the intersection of the demand and supply curves. when demand is perfectly inelastic, it means that consumers are unresponsive to changes in price. this implies that regardless of the price, consumers will continue to purchase the same quantity of the product.
on the other hand, if the supply curve is upward sloping, it indicates that suppliers require higher prices to produce and supply larger quantities of the product. in this scenario, a specific tax placed on suppliers will increase their cost of production, leading to a shift in the supply curve upward.
since demand is perfectly inelastic, the quantity demanded remains unchanged, and consumers are unwilling to pay a higher price. suppliers, they cannot pass on the tax to consumers by increasing the price because demand is insensitive to price changes.
as a result, the specific tax will directly reduce the suppliers' profits or returns. the entire burden of the tax falls on the suppliers, and consumers do not experience any increase in price or change in quantity purchased.
it's important to note that this analysis assumes a perfectly competitive market with ideal conditions, such as perfect information and no barriers to entry or exit. in real-world markets, the impact of taxes can be more complex, and the burden may be shared between suppliers and consumers depending on the elasticity of demand and supply.
Learn more about purchase here:
https://brainly.com/question/31035675
#SPJ11
If you invest $10,000 today and another $10,000 a year from today, what will be the total value of your investments at the end of 10 years from today? Assume that your investments earn a 6% return.
Group of answer choices
$35,816.95
$34,803.27
$17,908.48
$16,894.79
The total value of the investment in 10 years from now, if you invest $10,000 today and another $10,000 a year from today, will be $216,097.12.
In the present case, let us assume that the annual compounding of the investment is done over 10 years, with a 6% return per annum.
In the first year, the investment will grow by 6% of $10,000 = $600. So the total investment at the end of the first year = $10,000 + $600 = $10,600
In the second year, there will be two investments - one of $10,000 and another of $10,600. Both will grow by 6%. Thus the investment at the end of the second year will be: $10,000 x 1.06 + $10,600 x 1.06 = $11,236
This way, we can calculate the investment at the end of every year up to the 10th year. At the end of the 10th year, the total investment will be $216,097.12.
Learn more about total value of the investment: https://brainly.com/question/30046644
#SPJ11
Radovilsky Manufacturing Company, in Hayward, Califomia, makes flashing lights for toys. The company operates its production facility 300 days per year. It has orders for about 11,500 flashing lights per year and has the capability of producing 95 per day. Setting up the light production costs $48. The cost of each light is $1.05. The holding cost is $0.15 per light per year. a) What is the optimal size of the production run? units (round your response to the nearest whole number).
Find the following:
A. Optimal Size of Production
B. Average Inventory
C.Average set up cost per year
D. Annual purchase cost of lights
The optimal size of the production run is 121 units, the average inventory is 60.5 units, the average setup cost per year is $4,528.10, and the annual purchase cost of lights is $12,075.
To calculate the optimal production run size, we can use the economic order quantity (EOQ) formula. The EOQ formula is given by:
EOQ = sqrt((2DS) / H)
Where:
D = Annual demand (11,500 units)
S = Setup cost per production run ($48)
H = Holding cost per unit per year ($0.15)
Plugging in the values, we get:
EOQ = sqrt((2 * 11,500 * 48) / 0.15) = 120.83
Rounding this to the nearest whole number, the optimal size of the production run is 121 units.
To find the average inventory, we can use the EOQ formula:
Average Inventory = EOQ / 2 = 121 / 2 = 60.5 units
The average setup cost per year can be calculated by multiplying the number of production runs per year by the setup cost:
Average Setup Cost per Year = Number of Production Runs * Setup Cost = 11,500 / 121 * 48 = $4,528.10
The annual purchase cost of lights can be calculated by multiplying the annual demand by the cost per light:
Annual Purchase Cost of Lights = Annual Demand * Cost per Light = 11,500 * $1.05 = $12,075
Therefore, the optimal size of the production run is 121 units, the average inventory is 60.5 units, the average setup cost per year is $4,528.10, and the annual purchase cost of lights is $12,075.
Learn more about economic order quantity here:
https://brainly.com/question/28136295
#SPJ11
In your groups create a short report (min 3 pages, no maximum) for Taylor Guitar that outlines your FINAL RECOMMENDATION for the network design of the company in Canada. Include your detailed recommendation as it relates to facility locations, key transportation routes, supply chain flow and all rationale for your decisions
In this report, we will recommend the network design for Taylor Guitars in Canada that will help it to achieve an efficient and effective supply chain flow.
Facility Location Taylor Guitars is currently operating in Canada with two warehouses, one in Toronto and the other in Vancouver. The warehouses are situated at the two extreme ends of the country, which makes the transportation of raw materials and finished goods from the manufacturer's facilities to these warehouses a complicated process. We recommend the company relocate the Vancouver warehouse to Edmonton, which is centrally located in Canada.
We suggest Taylor Guitars adopts a hybrid supply chain model. This model combines elements of both push and pull strategies to optimize the supply chain. This hybrid model is designed to be more flexible than a pure push or pull model. It will enable the company to reduce costs and improve service levels while providing greater agility to respond to changes in customer demand. Rationale We recommend these changes because they will streamline the supply chain network, which will ultimately lead to cost savings, improved delivery times, and increased customer satisfaction.
To know more about network design visit :
https://brainly.com/question/32003936
#SPJ11
TRUE/FALSE/MAYBE and EXPLAIN:
It is impossible for the total number of people employed and the
unemployment rate both to fall at the same time.
If the rate of job creation outpaces the growth of the labour force, more individuals can find employment, resulting in a decrease in both unemployment and an increase in the total number of people employed.
It is possible for the total number of people employed and the unemployment rate to both fall at the same time. This can occur when there is a decrease in the overall labour force, meaning fewer people are actively seeking employment. In such cases, even though the number of people employed may decrease, the unemployment rate can also decrease if the decrease in the labour force is proportionally larger. So, it is not impossible for both numbers to fall simultaneously.
That statement is not necessarily true. It is possible for the total number of people employed and the unemployment rate to both fall at the same time under certain circumstances.
When the total number of people employed decreases, it typically indicates a decline in the number of individuals who have jobs. However, if the labour force participation rate also decreases, meaning fewer people are actively seeking employment, the unemployment rate could still decrease even with a decline in the number of employed individuals.
Additionally, economic growth and improved job creation can lead to an increase in the total number of people employed while simultaneously reducing the unemployment rate. If the rate of job creation outpaces the growth of the labour force, more individuals can find employment, resulting in a decrease in both unemployment and an increase in the total number of people employed.
To know more about employment, visit:
https://brainly.com/question/17459074
#SPJ11
Wayne, Erin, Alan and Kirk are all ex-police officers and have decided to start a private security business. Due to tax and ownership issues and the obvious benefits associated with having limited liability, their lawyer recommends that they should register a company for the business. They agree and instruct their lawyer to register a company to be called WEAK Security Pty Ltd. It is agreed that Wayne, Erin, Alan and Kirk will each be allotted 100 ordinary shares in WEAK Security Pty Ltd. After the company is registered, they decide to employ Rodger as a receptionist in the office. Rodger is given strict instructions that he is not to enter into contracts on behalf of the company.
Wanda works in used car sales and a good friend of Rodger. Rodger tells Wanda about his new position at WEAK Security Pty Ltd . Wanda tells Rodger that she has been trying to sell a truck and it would be perfect for the security business. Wanda shows Rodger the truck and lets him drive it. Rodger agrees that the truck would be a great addition to the security business and thinks the price Wanda is asking is very reasonable. Rodger agrees to buy the truck on behalf of WEAK Security Pty Ltd.
Can Wanda rely on any of the assumptions in section 129 of the Corporations Act in order to enforce the contract against WEAK Security Pty Ltd?
Please use the PIRAC method to analyze the case. Is there any same type of case for referencing? Thankyou!!
Wayne, Erin, Alan and Kirk are all ex-police officers and have decided to start a private security business. Due to tax and ownership issues and the obvious benefits associated with having limited liability, their lawyer recommends that they should register a company for the business.
The PIRAC method to analyze the case of issue is the issue is whether Wanda can rely on any of the assumptions in section 129 of the Corporations Act to enforce the contract against WEAK Security Pty Ltd.
The principle refers to Section 129 of the corporations act deals with the assumption of authority. It states that a person dealing with a company in good faith can assume that the company's officers have the authority to bind the company in transactions within its ordinary course of business.
Application was given strict instructions not to enter into contracts on behalf of WEAK Security Pty Ltd. Therefore, Wanda cannot reasonably assume that Rodger had the authority to bind the company in the purchase of the truck.
Conclusion is Wanda cannot rely on the assumptions in section 129 of the Corporations Act because Rodger exceeded his authority by entering into the contract on behalf of WEAK Security Pty Ltd.
To know more about liability here,
https://brainly.com/question/28391469
#SPJ4
Question 1 (15 marks) Explain how the four (4) factors of the incentive intensity principle apply to: (i) (5 marks) A linear contract with one agent? (ii) (5 marks) A multitasking linear contract with subjective performance evaluation (SPE)? (iii) (5 marks) A linear contract with two (2) agents and with a relative performance evaluation (RPE)?
The incentive intensity principle aims to ensure that agents put forth the required effort to achieve the goals of the contract.
What are the 4 factors?The four factors of the incentive intensity principle are the sensitivity of the contract to effort, the agent's degree of risk aversion, the degree of substitution between effort and other inputs, and the degree of complementarity between effort and other inputs.
These four factors are applied differently depending on the contract type, as described below:
(i) Linear contract with one agent:
(ii) Multitasking linear contract with subjective performance evaluation (SPE):
(iii) Linear contract with two agents and with a relative performance evaluation (RPE):
The sensitivity of the contract to effort: The greater the sensitivity of the contract to effort, the higher the effort level will be.
The agent's degree of risk aversion: The higher the degree of risk aversion, the lower the agent's effort level.
The degree of substitution between effort and other inputs: The lower the degree of substitution, the higher the effort level.
The degree of complementarity between effort and other inputs: The higher the degree of complementarity, the higher the effort level.
To know more on contract visit:
https://brainly.com/question/984979
#SPJ11
The United States Declaration of Independence is grounded in
natural law.
Group of answer choices
True
False
The statement "The United States Declaration of Independence is grounded in natural law" is true.
The Declaration of Independence, a document written primarily by Thomas Jefferson, is a proclamation of individual rights that is grounded in the principles of natural law.
According to natural law theory, moral and ethical standards should be determined by the natural world rather than by divine law, human legislation, or cultural customs and norms. Natural law principles, as they relate to human rights and justice, are used in the Declaration of Independence.
To learn more about United States declaration of independence : https://brainly.com/question/472238
#SPJ11
Choose the step that is clearly out of order in the following schematic of a documentary credit transaction.
Importer's bank opens a letter of credit
The exporter loads the goods to a ship and obtains a bill of lading
A bill of exchange is accepted by the importer
The exporter receives payment in exchange for the bill of exchange and the bill of lading to the Exporter's bank.
Documents are sent to the importer's bank
Importer's bank collects payment from the importer and hands over the bill of lading
The importer collects the goods from the ship
The step that is clearly out of order in the schematic of a documentary credit transaction is:
The exporter receives payment in exchange for the bill of exchange and the bill of lading from the Exporter's bank.
In a typical documentary credit transaction, the exporter receives payment after the importer's bank collects payment from the importer and hands over the bill of lading. The correct sequence would be:
1. Importer's bank opens a letter of credit.
2. The exporter loads the goods to a ship and obtains a bill of lading.
3. Documents are sent to the importer's bank.
4. Importer's bank collects payment from the importer and hands over the bill of lading.
5. The exporter receives payment in exchange for the bill of exchange and the bill of lading from the Exporter's bank.
6. The importer collects the goods from the ship.
Therefore, the step "The exporter receives payment in exchange for the bill of exchange and the bill of lading to the Exporter's bank" is out of order in the given sequence.
To know more about documentary credit transaction here: https://brainly.com/question/29556092
#SPJ11
Case Study 9.1⚫ Leveraging Information Radiators to Trigger Corrective Action
Imran's sprints were underway. During the daily stand-ups, Imran was impressed with the progress his health information resource was making. However, looking at the niko-niko chart, he noticed that his health information resource was regu- larly choosing a negative emoticon to capture her mood. Imran attempted to be supportive by remarking how impressed he was with her rate of story point com- pletion. He asked if she was experiencing any impediments he could help alleviate, worrying that maybe the resource was not comfortable expressing them in the stand-up meeting. She replied that there was nothing impeding her at that time.
Imran noticed in the following days that his health information resource contin- ued to have a negative mood rating captured on the niko-niko chart. Returning to his office, Imran found his project director waiting for him. She had performed an earned value calculation and found that Imran's collection of modules was lagging behind.
Imran created an information radiator and confirmed that the health informa- tion module was lagging behind other modules, which was negatively impacting his overall collection of modules. Based on the burndown chart, it was unlikely health information would be able to achieve the sprint goal.
Imran decided to use a burnup chart. The burnup chart showed that his health information team was completing work at a faster rate than the majority of the team. Using the empirical data, Imran presented the information to his project director and the vendor product owner. The risk Imran had flagged had become an issue that required corrective action.
By capturing performance in a burnup chart, Imran was confident that the inability to achieve the sprint goal was not related to resource ability, but rather improper estimation of resources required.
Imran leveraged information radiators (niko-niko chart, burndown chart, and burnup chart) to identify and address issues in his project. He discovered that the health information module was lagging behind, leading to corrective action based on empirical data and improper resource estimation.
The case study highlights Imran's use of information radiators to trigger ive action in his project. Initially, he noticed that his health information resource consistently chose a negative emoticon on the niko-niko chart, indicating a negative mood. Despite offering support, the resource did not express any impediments during stand-up meetings. Imran then observed that the health information module was lagging behind other modules, impacting the overall progress.
Imran created an information radiator and confirmed the lagging status of the health information module using a burndown chart. However, he also discovered that the team assigned to this module was completing work at a faster rate than the majority of the team, as indicated by a burnup chart. Armed with this empirical data, Imran presented the information to his project director and the vendor product owner, highlighting the risk and the need for ive action.
Imran's use of the burnup chart provided clarity that the inability to achieve the sprint goal was not due to resource ability but rather improper estimation of required resources. This insight enabled Imran to address the issue effectively and work towards resolving the lagging module in order to meet project goals. By leveraging information radiators, Imran proactively identified and addressed performance issues, leading to improved project outcomes.
Learn more about progress here:
https://brainly.com/question/22899420
#SPJ11
Answer questions 1 through 8 based on retirement funding calculation using the 4-step annuity method.
Layla, age 43, currently earns $95,000. Her wage replacement ratio is 82 percent.
She expects that inflation will average 5 percent for her entire life expectancy. She expects to earn 8 percent on her investments and retire at age 67 (full retirement age), possibly living to age 90. Her Social Security retirement benefit in today's dollars is $15,500 per year, for retiring at full retirement age.
Questions 1 through 4: Calculate Layla's capital needed at retirement at age 67 and the amount she must save at the end of each year, assuming she has no current savings accumulated for retirement.
Questions 5 through 8: Calculate the present value of her benefits at ages 63, 67, and 70.
To determine the amount she must save at the end of each year, considering the expected rate of return, inflation rate, and the remaining years until retirement.
To calculate Layla's capital needed at retirement at age 67, we can use the wage replacement ratio. Multiply her current income of $95,000 by the replacement ratio of 82%.To know more about rate of return, visit:
https://brainly.com/question/17164328
#SPJ11
CC Rainger is a business to business distributor of MRO (maintain, repair and operate) products. They have more than 300 retail stores that they serve from a central warehouse. The company uses a 98% service level calculated on the proportion that can be satisfied directly from stock (demand fill rate). The cost for placing an order is $100 and the annual holding cost is 20%. They work 365 days/year.
Item propertyData valueLead time from supplier14 daysLead time to Retailer3 daysInternal price$25Daily demand75 unitsσ, Standard deviation during lead time103 unitsInventory carrying cost20 %
Tables that might be useful for answering the questions (click to open):
Normal Distribution function table
Service loss function table
1a. What is the Economic Order Quantity (EOQ)?
Enter the correct value in the input field. Round off to the closest 10 units.
units incorrect
1b. What Safety Stock level does the company need to reach the desired service level?
Enter the correct value in the input field. Round off to the closest 10 units.
units incorrect
1c. What Re-Order Point (ROP) level does the company need to reach the desired service level?
Enter the correct value in the input field. Round off to the closest 10 units, if needed.
The economic order quantity (eoq) is approximately 2,340 units.1b.
1a. the economic order quantity (eoq) can be calculated using the following formula:
eoq = √[(2 * annual demand * ordering cost) / holding cost]
given:
- annual demand: 75 units/day * 365 days = 27,375 units
- ordering cost: $100
- holding cost: 20%
plugging these values into the formula:
eoq = √[(2 * 27,375 * 100) / 0.2] = √(5,475,000) ≈ 2,340 units to determine the safety stock level, we need to calculate the standard deviation during the lead time (σl) using the formula:
σl = σ * √(lead time)
given:
- standard deviation during lead time (σl): 103 units
- lead time from supplier: 14 days
plugging these values into the formula:
σl = 103 * √(14) ≈ 435 units
next, we can use the service loss function table to find the corresponding value for a 98% service level, which is 2% service loss. from the table, we find that the value closest to 2% service loss is 2.05.
safety stock = σl * service loss factor
safety stock = 435 * 2.05 ≈ 892 units
Learn more about stock here:
https://brainly.com/question/31940696
#SPJ11
Making Business Decisions I
The Broadway Cafe needs to take advantage of e-business strategies if it wants to remain competitive. Create a document that discusses the many e-business strategies that The Broadway Cafe could use to increase revenue. Be sure to focus on the different areas of business such as marketing, finance, accounting, sales, customer service, and human resources.
PROJECT FOCUS:
Explain how understanding e-business can help you achieve success in each of these areas. A few questions you might want to address include:
What type of e-business would you deploy at The Broadway Cafe?
How can an e-business strategy help The Broadway Cafe attract customers and increase sales?
What types of metrics would you want to track on your e-business Web site?
How could you use an e-business strategy to partner with suppliers?
How could a portal help your employees?
Would you use Kiosks in the cafe?
An e-business strategy is a kind of business strategy that employs web-based technologies to complete various activities such as online sales, marketing, and customer service. The Broadway Cafe can use a variety of e-business techniques to increase revenue by being competitive.
An e-business approach should focus on various business areas such as finance, sales, customer service, marketing, and human resources.How understanding e-business can help you achieve success in each of these areas?Finance: An e-business approach will assist the company's finance department in lowering costs and maximizing revenue. It will enable the cafe to easily handle accounting procedures, inventory management, and financial planning.
Customer Service: An e-business approach will allow the cafe to provide better customer service, such as 24-hour customer support, online chat support, and a user-friendly ordering system, which will improve customer satisfaction and help the cafe attract more customers.Marketing: The Broadway Cafe could use an e-business strategy to market its brand through various online channels, such as social media, email marketing, SEO optimization, and so on.
To know more about marketing visit:
brainly.com/question/30033537
#SPJ11
Explain how an appreciation of the US$ can be expected to impact economic growth, interest rates and the stock market in the US.
An appreciation of the US dollar can be expected to impact economic growth, interest rates, and the stock market in the US as follows:
Economic Growth: When the US dollar appreciates, exports become more expensive, making them less competitive on the international market. As a result, foreign demand for US goods and services decreases, which might slow down economic growth.
Interest Rates: An appreciation of the US dollar can lead to lower interest rates. When foreign investors buy US dollars, they are also acquiring US Treasuries, which lowers bond yields and leads to lower interest rates in the US.
Stock Market: An appreciation of the US dollar can have a negative impact on the US stock market. When the dollar appreciates, US firms with international operations, such as those that rely on exports, may experience lower revenues and earnings, leading to lower stock prices. Furthermore, when the dollar appreciates, foreign investors find US investments less appealing, causing a drop in foreign investment.
An appreciation of the US dollar is a situation in which the US dollar's value rises relative to that of other currencies. As the US dollar appreciates, the economy's effects can be seen in several areas. Economic growth may be slowed due to less foreign demand for US products, interest rates may be lowered as more people buy US Treasuries, and the stock market may be negatively impacted by reduced revenues and foreign investment.
Learn more about foreign investment: https://brainly.com/question/16943043
#SPJ11
How COVID-19 has affected the Food/Daily Essentials markets in
Bangladesh? Use economic concepts such as demand, supply,
elasticity, and graphs in explaining your answer.
COVID-19 has affected the food/daily essentials markets in Bangladesh by shifting the supply and demand curves, causing changes in price and quantity sold. The pandemic has caused a decrease in demand for some goods and an increase in demand for others. Additionally, the pandemic has caused supply chain disruptions, which have caused shortages of some goods and an oversupply of others.
The demand for food/daily essentials in Bangladesh has been affected by COVID-19. The pandemic has caused a decrease in demand for some goods and an increase in demand for others. For example, the demand for meat, poultry, and fish has decreased due to fears of contamination. On the other hand, the demand for dry food items like rice, pulses, oil, sugar, etc has increased due to the hoarding mentality of the consumers, which led to a surge in demand and price hikes.
The pandemic has also affected the supply chain of food/daily essentials in Bangladesh. The restrictions on movement and transportation have disrupted the supply chain of these goods, leading to shortages of some goods and oversupply of others. This has caused a shift in the supply curve, leading to changes in the price and quantity sold.
As a result of the pandemic, the market for food/daily essentials in Bangladesh has become more elastic. This means that changes in price are more likely to cause a change in the quantity demanded. Consumers are more sensitive to price changes because of the economic downturn and their low-income level.
Graphs can be used to illustrate the impact of COVID-19 on the food/daily essentials market in Bangladesh. The supply and demand curves can be used to show the shift in these curves due to the pandemic. The graph can show the effect of the shift on the equilibrium price and quantity. In addition, the price elasticity of demand can be illustrated on the graph to show the impact of price changes on the quantity demanded.
Learn more about price elasticity of demand: https://brainly.com/question/30704413
#SPJ11
5. Explain how this statement can be true: "A long call position offers potentially ited gains if the underlying asset's price rises but a fixed, maximum loss if the bo ing asset's price drops to zero
The statement is true because a long call position gives the holder the right, but not the obligation, to buy the underlying asset at a predetermined price (strike price) within a specific time period (expiration date).
When the price of the underlying asset rises, the long call position allows the holder to benefit from the price increase. The potential gains are unlimited because the underlying asset's price can continue to rise, and the holder can exercise the call option to buy the asset at the lower strike price and then sell it at the higher market price.
On the other hand, the maximum loss for a long call position is limited to the premium paid for the option. If the price of the underlying asset drops to zero or remains below the strike price at expiration, the holder can simply choose not to exercise the option, allowing it to expire worthless. In this case, the loss is limited to the premium paid for the call option.
Therefore, a long call position offers potentially unlimited gains if the underlying asset's price rises, but a fixed, maximum loss if the underlying asset's price drops to zero.
To know more about options trading refer here:
https://brainly.com/question/17137755?#
#SPJ11
sarah U=100x0.5 y0.5
Jani U=50x0.4 y0.6
Px= 10
Py= 20
Current output
x= 58
y=36
sarah income I=600
Jani income I=700
1. Calculate MRS for sarah and jani.
2. calculate the quantities of x and y used by
MRS for Sarah is higher than Jani, indicating she is willing to give up more y for an additional unit of x. Sarah uses 34.55x and 26.54y, while Jani uses 23.37x and 28.44y.
1. To calculate the Marginal Rate of Substitution (MRS) for Sarah and Jani, we can use the formula:
MRS = (MUx / MUy)
where MUx is the marginal utility of x and MUy is the marginal utility of y.
For Sarah, we have:
MUx = (dU/dx) = 50x^(-0.5)y^(0.5) = 50(58)^(-0.5)(36)^(0.5) ≈ 8.21\
MUy = (dU/dy) = 50x^(0.5)y^(-0.5) = 50(58)^(0.5)(36)^(-0.5) ≈ 2.74
MRS of Sarah = MUx / MUy = 8.21 / 2.74 = 2.99
For Jani, we have:
MUx = (dU/dx) = 40x^(-0.6)y^(0.4) = 40(58)^(-0.6)(36)^(0.4) ≈ 6.04\
MUy = (dU/dy) = 40x^(0.4)y^(-0.6) = 40(58)^(0.4)(36)^(-0.6) ≈ 5.07
MRS of Jani = MUx / MUy = 6.04 / 5.07 = 1.19
Therefore, Sarah has a higher MRS than Jani, indicating that she is willing to give up more y for an additional unit of x than Jani.
2. To calculate the quantities of x and y used by Sarah and Jani, we can use the formula:
MRS = Px / Py
For Sarah, we have:
MRS = Px / Py = 10 / 20 = 0.5
Substituting the value of MRS and the given income, we get:
Px / Py = MUx / MUy\
10 / 20 = 50x^(-0.5)y^(0.5) / 50x^(0.5)y^(-0.5)\
y / x = (10 / 20) \* (58)^(0.5) / (36)^(0.5)\
y / x ≈ 0.77
Substituting the value of y / x in the budget equation, we get:
Px \* x + Py \* y = I\
10 \* x + 20 \* (0.77x) = 600\
x ≈ 34.55\
y ≈ 26.54
Therefore, Sarah uses approximately 34.55 units of x and 26.54 units of y.
For Jani, we have:
MRS = Px / Py = 10 / 20 = 0.5
Substituting the value of MRS and the given income, we get:
Px / Py = MUx / MUy\
10 / 20 = 40x^(-0.6)y^(0.4) / 40x^(0.4)y^(-0.6)\
y / x = (10 / 20) \* (58)^(0.4) / (36)^(0.6)\
y / x ≈ 1.22
Substituting the value of y / x in the budget equation, we get:
Px \* x + Py \* y = I\
10 \* x + 20 \* (1.22x) = 700\
x ≈ 23.37\
y ≈ 28.44
Therefore, Jani uses approximately 23.37 units of x and 28.44 units of y.
To know more about budget, click here:
brainly.com/question/31952035
#SPJ11
Consider a European put option and a European call option on a \( \$ 40 \) nondividend-paying stock. Both options have 6 months remaining and both have a \( \$ 35 \) strike price. The risk-free intere
a. The no-arb price for the call option is approximately $11.176. b. The call option is in-the-money, and the put option is out-of-the-money. Under the no-arb condition, the call option is more expensive. c. An arbitrageur would buy the underpriced call option and short sell the stock. d. The no-arb price for the put option is approximately $5.824. e. An arbitrageur would sell the overpriced put option and buy the underlying stock.
a. To calculate the no-arbitrage price for the call option, we can use the put-call parity relationship:
Call Price - Put Price = Stock Price - Strike Price * e^(-r * T)
Given that the market price of the put is $6, the stock price is $40, the strike price is $35, the risk-free interest rate is 5% (or 0.05), and the time to expiration (T) is 6 months (or 0.5 years), we can plug in these values:
Call Price - $6 = $40 - $35 * e^(-0.05 * 0.5)
Solving for the Call Price:
Call Price = $40 - $35 * e^(-0.05 * 0.5) + $6 ≈ $11.176
Therefore, the no-arbitrage price for the call option is approximately $11.176.
b. The call option is in-the-money if the stock price is above the strike price, and the put option is in-the-money if the stock price is below the strike price. In this case, since the stock price is $40 and the strike price is $35, the call option is in-the-money and the put option is out-of-the-money. Under the no-arbitrage condition, the call option should be more expensive than the put option.
c. If the quoted market price of the call option is $9, an arbitrageur would likely take the following actions:
Buy the underpriced call option: The arbitrageur would buy the call option at the market price of $9, taking advantage of the lower price.
Short sell the stock: The arbitrageur would borrow and sell the underlying stock at the current stock price of $40.
By buying the call option and short selling the stock, the arbitrageur would create a synthetic long position in the stock, which would be equivalent to buying the stock itself. This strategy allows the arbitrageur to profit from the underpriced call option and the expectation that the stock price will increase.
d. To calculate the no-arbitrage price of the put option when the quoted market price of the call is $9, we can use the put-call parity relationship:
Put Price = Call Price - Stock Price + Strike Price * e^(-r * T)
Given that the market price of the call is $9, the stock price is $40, the strike price is $35, the risk-free interest rate is 5% (or 0.05), and the time to expiration (T) is 6 months (or 0.5 years), we can plug in these values:
Put Price = $9 - $40 + $35 * e^(-0.05 * 0.5)
Solving for the Put Price:
Put Price = $9 - $40 + $35 * e^(-0.05 * 0.5) ≈ $5.824
Therefore, the no-arbitrage price for the put option is approximately $5.824.
e. If the quoted market price of the put option is $6, an arbitrageur would likely take the following actions:
Sell the overpriced put option: The arbitrageur would sell the put option at the market price of $6, taking advantage of the higher price.
Buy the underlying stock: The arbitrageur would buy the underlying stock at the current stock price of $40.
By selling the put option and buying the stock, the arbitrageur would create a synthetic long position in the stock, which would be equivalent to buying the stock itself. This strategy allows the arbitrageur to profit from the overpriced put option and the expectation that the stock price will increase.
At time T, the arbitrageur would exercise the put option if the stock price is below the strike price and deliver the stock to fulfill the option contract. However, if the stock price is above the strike price, the arbitrageur would let the put option expire worthless.
These actions allow the arbitrageur to take advantage of the overpriced put option and generate risk-free profits.
To know more about interest :
https://brainly.com/question/29451175
#SPJ11
Complete Question :
Consider a European put option and a European call option on a $40 nondividend-paying stock. Both options have 6 months remaining and both have a $35 strike price. The risk-free interest rate is 5% CCAR. a. The market price of the put is $6. Calculate the no-arb price for the call. b. Which of the options is in-themoney? Which is out-of-the-money? Under the no-arb condition, is the call or the put more expensive? c. Describe the likely actions of an arbitrageur now and at time T if the quoted market price of the call is $9. d. Now as assume the quoted market price of the call is $9.00. Calculate the no-arb price of the put. e. Describe the likely actions of an arbitrageur now and at time T if the quoted market price of the put is $6.
A critical examination of the possible types of employee reactions to the proposed change, again using the key theory {The theory is Kirkpatrick’s reactions to change (2001) – positive, negative and mixed and the other model is Carnall’s coping cycle (2003)} to underpin the discussion and giving consideration to the different types of employees employed by Eagle Air.
A critical examination of the possible types of employee reactions to the proposed change at Eagle Air can be conducted using Kirkpatrick's reactions to change (2001) and Carnall's coping cycle (2003).
Kirkpatrick's theory suggests that employees can have positive, negative, or mixed reactions to change. Positive reactions may include enthusiasm, motivation, and excitement about the proposed change. Negative reactions may manifest as resistance, fear, and skepticism towards the change. Mixed reactions may involve a combination of positive and negative emotions.
Carnall's coping cycle provides a framework to understand how employees adapt to change. It consists of four stages: denial, resistance, exploration, and commitment. In the denial stage, employees may refuse to acknowledge the need for change.
When examining the types of employees employed by Eagle Air, it is important to consider their individual characteristics, experiences, and attitudes. Different employees may respond differently to the proposed change based on factors such as their job role, level of expertise, and personal circumstances.
By utilizing these theories, Eagle Air can gain insights into the potential reactions and coping mechanisms of their employees, enabling them to plan and implement the proposed change effectively.
To know more about coping cycle, refer to the link:
https://brainly.com/question/1661815#
#SPJ11
Strategic Management
-How can a decision maker identify strategic factors in a
corporation’s external international environment? Your
answer shouldn't exceed 120 words.
Decision makers can gain a comprehensive understanding of the external international environment and identify the critical strategic factors that will shape the corporation's success in the global market.
A decision maker can identify strategic factors in a corporation's external international environment through the following steps:
Environmental scanning: Conduct a thorough analysis of the global market, considering political, economic, social, technological, and legal factors.
Competitor analysis: Assess the competitive landscape, including the strengths, weaknesses, opportunities, and threats posed by rival firms operating internationally.
Market research: Gather information about customer preferences, trends, and demands in various international markets.
Stakeholder analysis: Identify key stakeholders such as governments, regulatory bodies, suppliers, and partners, and evaluate their influence and impact on the corporation's international operations.
PESTEL analysis: Examine the political, economic, social, technological, environmental, and legal factors affecting the corporation's international environment.
Know more about global market here
https://brainly.com/question/13314215#
#SPJ11
Nina is able to select her weekly work hours. When a new bridge opened, it cut one hour off Nina’s total daily commute to work. Show on a graph the impact of this change on the budget constraint. Suppose that Nina did not change her weekly hours. Does Nina's labor supply curve slope upward, bend backward, or is it vertical? Show on a graph
When the new bridge opened, Nina's budget constraint shifted to the right in a parallel fashion, indicating an increase in the amount of available time for either work or leisure (excluding commuting time).
The graph the impact of this change on the budget constraint.This shift in her constraint created an income effect, allowing her to have the option to work more and consume more leisure. Since both income and leisure are considered normal goods, an increase in income leads to an increase in the quantity demanded for both.
In this scenario, the only way for Nina's income to increase is by working more hours. Therefore, we can conclude that her extra hour per day, gained from the shorter commute, is divided between allocating more time to work and enjoying more leisure. Consequently, Nina chooses to work more hours in response to the increased availability of time.
Based on this analysis, the labor supply curve for Nina would be upward sloping, indicating that as her wage rate increases, she would be willing to supply more labor by working additional hours.
Read more on labor supply curve here https://brainly.com/question/29450818
#SPJ1
The President of the United States semiconductor corporation made this statement in the companies annual report: "United's primary goal is to increase the value of the common stockholders equity overtime". Later in the report the following announcements were made:
A: The company contributed $1.5 million to the symphony orchestra in San Francisco, it’s headquarters city.
B: United is pending $5 million to open a new plant in Mexico. no revenues will be produced by the plant for four years, so earnings will be depressed during this period versus what they would have been had the company not open the new plant.
C: The company is increasing its relative use of debt. Assets were formally financed with 35% debt and 65% equity; henceforth, the financing mix will be 50-50
D. The company uses a great deal of electricity and its manufacturing operations, and it generates most of this power itself. United plans to utilize nuclear fuel rather than coal to produce electricity in the future.
E: The company has been paying out half of its earnings as dividends and retaining the other half. Henceforth, it will pay only 30% as dividends.
These measures were indicative of the company’s commitment not just to the shareholders but also to a broader set of social and environmental responsibilities.
The President of the United States semiconductor corporation's statement in the annual report that “United's primary goal is to increase the value of the common stockholders equity overtime” displayed the focus on the stock price and shareholder value.
To achieve this, the company made a few key announcements that enabled it to not just increase equity value long-term, but also meet its potential socially and environmentally. The first announcement that it contributed $1.5 million to the symphony orchestra in its headquarters city, San Francisco, showed its commitment to meet social and environmental responsibilities and integrate cultural and artistic aspects into its corporate life. This showed that it was aware of its role in the larger community and gave it a public image boost.
The second announcement that it was pending $5 million to open a new plant in Mexico was indicative of its commitment to increase its geographical presence and in turn its market share. Even though the plant will not produce any revenues for a period of four years, this commitment was necessary for the company’s long-term prospects.
The third announcement that the company was increasing its relative use of debt and converting its financing mix from 35/65 debt/equity to a 50/50 ratio reflected an update in its financial strategy. The company was taking on more risk in an effort to increase long-term returns for its stockholders equity. The fourth announcement that United planned to switch from coal to nuclear fuel to produce electricity was in line with its environmental commitments. The company was aware of the energy it was using and was making a conscious decision to switch to an emission-free fuel source.
Finally, the fifth announcement that the company will pay out only 30% of its earnings as dividends rather than 50% showed its focus on financial mobilization for the company’s long-term rewards. This indicated that United was being more strategic with its finances and planning for the future. In conclusion, all of these announcements were aimed at increasing the value of the common stockholders equity for the company in the long run.
Hence, these measures were indicative of the company’s commitment not just to the shareholders but also to a broader set of social and environmental responsibilities.
Know more about semiconductor here
https://brainly.com/question/33275778#
#SPJ11
Compare and contrast the use of government spending changes versus tax changes as a means of influencing the course of the economy. Is one or the other preferable in specific situations? Imagine for a moment that you have two roommates, who each have opposing viewpoints on nearly everything, including politics and economics. Taylor is adamant that the best way to manage the economy is through tax changes, while Morgan insists that it’s better to adjust the economy through government spending. What would a Neoclassical economist say? What would a Keynesian economist say? Which roommate do you agree with, and why? Find a news article to help support your opinion. Summarize the article and include the link to in your response.
A neoclassical economist would argue that tax changes are preferable to government spending changes for influencing the course of the economy.
On the other hand, a Keynesian economist would advocate for government spending as a more effective tool. Personally, I align with the neoclassical economist's viewpoint, as tax changes provide greater flexibility and efficiency in economic management.
While government spending can stimulate demand in the short term, it can lead to long-term inefficiencies and potential crowding out of private investment. Tax changes, on the other hand, can incentivize productive behavior, encourage savings and investment, and provide individuals and businesses with more control over their resources.
To learn more about Keynesian Economist, click on:
brainly.com/question/31531057
#SPJ11
BU 7 . In scenario 1, assume that COGS is 75% of sales (which means your profit margin will be 25% on every widget you sell). The first scenario assumes that no change occurs, either in reduction in costs, or, in sales revenues. We'll call this first scenario the "as is" or, "the status quo scenario." Your sales revenue in scenario 1 is $600 million. In scenario 2, you reduce the original COGS from, 75% to 65% (through improvements in purchasing and procurement). You had to spend money (on new software, etc.) to reduce your purchasing costs and so your S&A increased by $2.0 million. Remember that in scenario 2 you don't increase your sales at all---so your sales revenues stay the same (no change from scenario 1), as do your Promotional Expenses (don't change from scenario 1) In scenario 3, you increase promotional expenses by 15% (from a starting point of $35 million), resulting in a 25% increase in annual sales revenues. S&A costs increase by $5 million. Your purchasing costs do not decrease (i.e., COGS stays the same as it was in scenariol at 75%). Scenario 1 Annual sales: $600 million. S COGS: million Gross Profit $150 million Promotional Expenses Scenario 2 $600 million S $ million million Scenario 31 S $ million million million C T Promotional Expenses $35 million Sales/Administration $5 million Total profit before taxes: million Jad $35 million million million $ million million million 3 Point Question: Based on the scenarios presented above, what implication can be drawn from the above problem?
Based on the scenarios presented above, the following implications can be drawn from the given problem:Scenario 1 Annual sales: $600 million. S COGS:
million Gross Profit $150 millionPromotional Expenses $35 millionSales/Administration $30 millionTotal profit before taxes: $85 millionScenario 2Annual sales: $600 million.S COGS: million.Gross Profit: $210 millionPromotional Expenses: $35 millionSales/Administration: $32 millionTotal profit before taxes: $143 millionScenario 3Annual sales: $750 millionS COGS: millionGross Profit: $187.5 millionPromotional Expenses: $40.25 millionSales/Administration: $37 millionTotal profit before taxes: $110.25 million.
The scenario provided in the problem indicates that there are three different scenarios that are presented in order to analyze the company's financial performance and progress.The first scenario is the 'as-is' or the status quo scenario where there are no changes in the reduction of costs and sales revenues.The second scenario is where the company reduces the original COGS from 75% to 65% through improvements in purchasing and procurement, but the sales revenue remains the same.
The third scenario shows an increase of 15% in promotional expenses from a starting point of $35 million, resulting in a 25% increase in annual sales revenues. However, the purchasing costs remain the same.In conclusion, Scenario 2 results in the highest gross profit, while Scenario 1 yields the lowest. Therefore, it is important for the company to reduce COGS by purchasing more efficiently.
To know more about revenues visit:
brainly.com/question/4051749
#SPJ11