The current value of Company ABC stock would be closest to 3.626.
Based on the given information, the current annual dividend of Company ABC is 0.65 per share and it will grow by 12% a year for the next four years.
After that, the dividend growth rate will stabilize at 3.5% a year indefinitely.
The required rate of return is 7.35%.
If the incumbent American prime minister's party retains its power, the value of the company's stock would be closest to its current value plus the present value of its dividends.
To calculate the present value of the dividends, the dividend growth rate and the required rate of return will be used.
Using the Gordon growth model, the value of Company ABC stock will be calculated as follows:
Dividend after 1 year = 0.65 x (1 + 12%)
= 0.728
Dividend after 2 years = 0.728 x (1 + 12%)
= 0.816
Dividend after 3 years = 0.816 x (1 + 12%)
= 0.914
Dividend after 4 years = 0.914 x (1 + 12%)
= 1.023
After four years, the dividend growth rate will stabilize at 3.5%.
Thus, the value of the stock after 4 years can be calculated as follows:
Value of stock after 4 years = (1.023 x (1 + 3.5%)) / (7.35% - 3.5%)
= 30.96
Using the present value formula, the present value of the dividends will be calculated as follows:
PV of dividend after 1 year = 0.728 / (1 + 7.35%)
= 0.678
PV of dividend after 2 years = 0.816 / (1 + 7.35%)²
= 0.720
PV of dividend after 3 years = 0.914 / (1 + 7.35%)³
= 0.767
PV of dividend after 4 years = 1.023 / (1 + 7.35%)⁴
= 0.812
PV of dividends after 4 years = 0.678 + 0.720 + 0.767 + 0.812
= 2.976
Therefore, the current value of Company ABC stock would be its current price plus the present value of its dividends, which is:
2.976 + 0.65 = 3.626 (rounded off to three decimal places)
Hence, the current value of Company ABC stock would be closest to 3.626.
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At December 31,2020 , Indigo Corporation had a projected benefit obligation of $596,700, plan assets of $315.300, and prior service cost of $129.800 in accumulated other comprehensive income. Determine the pension asset/liabilky at December 31, 2020. (Enter liability using either a negative sign preceding the number eg. 45 or parentheseses. (45).) Pension asset/lability at December 31,2020$
The pension obligation at December 31, 2020, is calculated as follows:Pension obligation = Projected benefit obligation - Plan assets.Pension obligation = $596,700 - $315,300.Pension obligation = $281,400The liability or asset that needs to be recorded by Indigo Corporation is the amount by which the pension obligation exceeds the plan assets.
This is known as the pension liability or the pension asset. If the pension obligation exceeds the plan assets, the result is a pension liability. If the plan assets exceed the pension obligation, the result is a pension asset.
Pension asset/liability = Pension obligation - Plan assets.Pension asset/liability = $281,400 - $315,300.Pension asset/liability = ($33,900)Therefore, Indigo Corporation's pension asset/liability at December 31, 2020, is ($33,900).
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Corporate restructuring includes capital and asset restructuring as well asMultiple Choicetechnology restructuring.procurement restructuring.global diversification.management restructuring.JAB Holding Co., used ________ to change its focus from a diversified holding company to a more focused beverage and food firm.Multiple Choiceacquisitionslogisticsoperationsshareholder valueHonda used to develop all technology in house but could no longer keep pace with changing technologies and the cost of developing new technologies. It chose to ________ to develop new technologies.Multiple Choiceuse mergershire more technical staff in houseuse strategic allianceschange physical locations
Based on the concept of business and the available options, the correct answer to the following questions accordingly are
1. Management restructuring, 2. Acquisition, and 3. Use Strategic Alliance.
What is Management restructuring?This is a corporate term that involves a firm changing its organizational structure, such as shifting direct reports to a different manager, reallocating resources to other parts of the business, etc.
Here, Corporate restructuring includes capital and asset restructuring as well as Management restructuring
Also, JAB Holding Co. used acquisition to change its focus from a diversified holding company to a more focused beverage and food firm.
And, Honda used to develop all technology in-house but could no longer keep pace with changing technologies and the cost of developing new technologies. It chose to Use strategic alliances to develop new technologies.
Hence, in this case, it is concluded that the correct answers are options D, A, and C.
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Beauty Cosmetic produces hair tonic through two manufacturing processes; Mixing and Packaging. Production begins in the Mixing Department where materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. The company uses a weighted average process costing system to accumulate production and cost data. On 1 January 2022, the beginning work in process inventory consist of 13,000 units, which were 40% complete. The company incurred a total cost of RM255,575 and RM220,800 of which were materials costs. Cost and production data for the month of January are as follows: Materials added Conversion costs incurred Units completed and transferred out in January Units in ending work in process on 31 January (70% complete)
RM309,450 RM176,800 26,250
9,000
Required (a) Compute the physical units, equivalent units of production for materials and conversion costs in the Mixing Department for the month of January. Show all your workings. (b) Compute the costs assigned to the ending work in process inventory on 31 January. Show all your workings. (c) Compute the costs accounted for the month of January. Show all your working.
Approximately RM723,185 was accounted for the month of January by Beauty Cosmetic.
A. Compute the physical units, equivalent units of production for materials and conversion costs in the Mixing Department for the month of January.
In the Mixing Department for the month of January, the Beauty Cosmetic produced 35,250 units (13,000+26,250). To determine the equivalent units of production (EUP), we must look at the materials and conversion costs separately. Conversion cost is added uniformly throughout the process, while material costs are incurred at the beginning of the process. Therefore, the EUP of materials and conversion costs would differ.
1. Calculation of EUP of Materials:
Units completed in the month of January= 26,250 units
Units in ending work in process inventory= 9,000 units
Total units= 35,250 units
Material cost added in January= RM309,450
Cost of beginning work in process inventory= RM220,800
Total Cost= RM530,250
EUP of materials = Units Completed + Units in ending work in process inventory * % completed
Material Cost = 26,250 + 9,000 * 70%
= 32,400 RM309,450
EUP of Material = 32,400 units
2. Calculation of EUP of Conversion Costs:
Conversion cost is added uniformly throughout the process. The total number of units processed in January was 35,250.
Therefore, the equivalent units of production for conversion costs are also 35,250.
B. Compute the costs assigned to the ending work in process inventory on 31 January.
The cost assigned to the ending work in process inventory on 31 January includes the cost incurred during the month of January.
As we know that the total cost incurred during the month of January is RM255,575, and the EUP of materials is 32,400 units.
Therefore, the cost per unit for materials is RM255,575 / 32,400 = RM7.88 (approx).
Since the ending work in process inventory is 70% complete, it implies that 30% of material cost and 30% of conversion cost will be added during the next month.
The cost assigned to the ending work in process inventory is:
RM7.88 x 9,000 x 70% = RM62,640 C. Compute the costs accounted for the month of January.
Total cost accounted for the month of January = RM530,250 + RM255,575 – RM62,640
= RM723,185
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When there are fixed costs and a constant marginal cost
a. The average fixed cost function is flat
b. The average variable cost function is flat, and the average cost function is increasing
c. The average cost function intersects the marginal cost function at a minimium of the average cost function
d. The average variable cost function is increasing, and the average cost function is decreasing
e. The average variable cost function is flat, and the average cost function is decreasing
When there are fixed costs and a constant marginal cost, the average variable cost function is flat, and the average cost function is decreasing is the correct option (e).
A fixed cost is a business expense that is not affected by changes in the quantity of products or services produced or sold. A constant marginal cost implies that the cost of producing each additional unit does not change as production increases. Marginal costs are constant because the company's variable costs do not vary as production rises.
The average fixed cost function is not flat, and the average variable cost function is not increasing. If the marginal cost curve intersects the average variable cost curve at its minimum point, the average cost curve will be equal to the marginal cost curve. The average variable cost curve is not rising; instead, it is flat. If the average cost curve is decreasing, this indicates that the marginal cost curve is below the average cost curve. This can only occur when the average variable cost curve is flat.
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Let's say you invested in WXYZ Corp. beginning in 2018, and that the firm's return was 3\% in 2018, 9\% in 2019, -11\% in 2020, 21\% in 2021, Then what is the variance of the returns? A> 13.30% B> 6.54% C> 1.77% D> 3.12%
Option (a), The variance of the given returns is 13.30%.
Given,
The returns of WXYZ Corp. in the years 2018, 2019, 2020, and 2021 are 3%, 9%, -11%, and 21% respectively.
The formula to calculate the variance is given by:
Variance = [(return 1 - average return)² + (return 2 - average return)² + ... + (return n - average return)²] / n
where n is the total number of returns.
Let's calculate the average return of the firm. The average return of the firm is:
(3 + 9 - 11 + 21) / 4 = 5%
Using the above formula, we get the variance of the returns as:
Variance = [(3 - 5)² + (9 - 5)² + (-11 - 5)² + (21 - 5)²] / 4= (4 + 16 + 256 + 256) / 4= 532 / 4= 133/10 = 13.3%
Hence, the variance of the given returns is 13.30%.
Option A is the correct answer.
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You are the senior partner in an audit firm. Your audit firm has
recently been appointed as the auditors of Free Style SA Limited
"Free Style SA", a recently listed company on the JSE Securities
E
As the senior partner in an audit firm appointed as auditors of Free Style SA Limited, there are certain duties that should be carried out to ensure the audit is conducted in accordance with the International Standards on Auditing (ISA) and all relevant regulations and requirements.
During the planning phase, the audit team should gain a thorough understanding of Free Style SA's business operations and assess the risks that may impact the company's financial statements. This should include identifying the key areas of the company's operations that could impact the audit, such as revenue recognition, inventory valuation, and the accounting for complex financial instruments.
After identifying the risks, the audit team should design and implement appropriate audit procedures to obtain sufficient and appropriate audit evidence to support their conclusions. This should include obtaining an understanding of the company's internal controls, testing the operating effectiveness of these controls, and substantive testing of the balances in the financial statements.
If any audit findings are identified, they should be reported to the relevant parties in accordance with ISA reporting requirements. The audit report should be prepared in accordance with ISA reporting requirements and should include an opinion on the fairness of the financial statements, along with any material weaknesses in the company's internal controls.
The audit team should maintain independence and objectivity throughout the audit and should follow the International Ethics Standards Board for Accountants (IESBA) Code of Ethics for Professional Accountants.
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How should significant noncash transactions be reported in the statement of cash flows according to US GAAP? Such transactions should be incorporated in the section (operating. financing, or investing) that is most representative of the major component of the transaction. They should be incorporated in the statemerit of cash flows in a section iabeled, "Significant Noncash Transactions." They should be handled in a manner consistent with the transactions that affect cash flows. These noncash transactions are not to be incorporated in the statement of cash flows. They may be summarized in a separate schedule at the boftom of the statement or appear in a separate supplementary schedule to the financials.
Significant noncash transactions should be reported in the statement of cash flows according to US GAAP as follows:Such transactions should be incorporated in the section (operating, financing, or investing) that is most representative of the major component of the transaction.
They should be incorporated in the statement of cash flows in a section labeled "Significant Noncash Transactions." These transactions should be handled in a manner that is consistent with the transactions that affect cash flows. These noncash transactions are not to be incorporated in the statement of cash flows.
They may be summarized in a separate schedule at the bottom of the statement or appear in a separate supplementary schedule to the financials.Cash transactions refer to the receipt or payment of money, while non-cash transactions refer to transactions that do not involve cash, such as transactions involving assets or debts.
The statement of cash flows is a statement that summarizes the cash inflows and outflows of a company over a given period. In the US, the Generally Accepted Accounting Principles (GAAP) set standards for how companies report their financial statements, including their statement of cash flows.Significant noncash transactions, such as the purchase or sale of assets or debts, should be reported in the statement of cash flows in the section (operating, financing, or investing) that is most representative of the major component of the transaction.
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A monopolist can maximize his profits when the MC is equal to the MR or when the slope of MC is greater than the slope of the MR at the point of intersection. However, what will be the profit of a monopolistic firm that operates at a total cost of 350+70x+20x 2
and produces quantity x=80−4.1p ?
Monopoly refers to the dominance of one seller in the market. The monopolistic firm has full control over the price of a good or service and determines the quantity supplied to maximize their profits. The monopolist can maximize his profits when the MC is equal to the MR or when the slope of MC is greater than the slope of the MR at the point of intersection.
However, what will be the profit of a monopolistic firm that operates at a
total cost of 350+70x+20x² and produces quantity x = 80 − 4.1p
We have given that
Total cost (TC) = 350 + 70x + 20x²
Quantity, x = 80 - 4.1p
The marginal cost (MC) is given as
d(TC) / dx = 70 + 40x
The marginal revenue (MR) is given as
d (TR) / dx = p + x (dp / dx)
The monopolistic firm's profit is given as follows:
π = TR - TC
We need to calculate the profit of a monopolistic firm at a total cost of 350+70x+20x² and produces quantity x = 80 − 4.1p.
Here, Total cost (TC) = 350 + 70x + 20x²
We know that the monopolist can maximize his profits when the MC is equal to the MR or when the slope of MC is greater than the slope of the MR at the point of intersection.
So, we need to find MC and MR:
MC = d(TC) / dx
MC = 70 + 40x=>
MC = 70 + 40(80 - 4.1p)=>
MC = 230 - 164p...[i]
MR = d(TR) / dx = p + x (dp / dx)=>
MR = p + x * (-4.1)......[ii]
Now, we need to find p using the demand function, which is given as:
x = 80 − 4.1p80 − 4.1p = x-4.1p
x= x / 80 - 1 / 20p
x= (80x - 4x) / 1600p
x= (20x - x) / 410p
x= 19x / 410
Substitute the value of p in equation [ii]
MR = p + x * (-4.1)=>
MR = 19x / 410 + x * (-4.1)=>
MR = 19x / 410 - 4.1x
The profit of a monopolistic firm that operates at a total cost of 350 + 70x + 20x² and produces quantity x = 80 − 4.1p
is given as
π = TR - TC
π = (19x / 410 - 4.1x) * x
π = 19x² / 410 - 4.1x² - 350 - 70x - 20x²
π = -3.7x² - 51.8x - 350π
π = -3.7(80 - 4.1p)² - 51.8(80 - 4.1p) - 350
Now, substitute the value of p from equation [i]
π = -3.7(80 - 4.1(19x / 410))² - 51.8(80 - 4.1(19x / 410)) - 350
π = -6.394x² + 172.5x - 758.79
The monopolistic firm's profit that operates at a total cost of 350+70x+20x² and produces quantity x = 80 − 4.1p is -6.394x² + 172.5x - 758.79.
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If attended college or trade school, it is suggested to include
my grade point average (GPA), if it is__________ or higher.
If attended college or trade school, it is suggested to include my grade point average (GPA), if it is 3.0 or higher.
Typically, a college student's grade point average (GPA) is calculated on a 4.0 scale, where an A is worth 4 points and an F is worth 0. An average grade is typically a C, which corresponds to a 2.0 GPA.
Therefore, a GPA of 3.0 or higher is a good indicator that you have achieved above-average grades throughout your college career. Additionally, including your GPA on your resume can help you stand out to potential employers and demonstrate your academic abilities. However, if your GPA is below 3.0, it may be best to leave it off your resume to avoid drawing attention to your lower academic performance.
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Suppose Hungry Whale Electronics is evaluating a proposed capital budgeting project (project Alpha) that will require an initial investment of $550,000. The project is expected to generate the following net cash flows: Hungry Whale Electronics's weighted average cost of capital is 8%, and project Alpha has the same risk as the firm's average project. Based on the cash flows, what is project Alpha's net present value (NPV)? $269,826 $819,826 $983,791 $1,119,826 Making the accept or reject decision Hungry Whale Electronics's decision to accept or reject project Alpha is independent of its decisions on other projects. If the firm method, it should project Alpha.
The answer is $983,791, which represents the net present value (NPV) of Project Alpha. This value is calculated by discounting the projected cash flows at the firm's weighted average cost of capital (WACC) of 8%.
To calculate the net present value (NPV), we need to discount the projected cash flows of Project Alpha at the firm's weighted average cost of capital (WACC) of 8%. The net cash flows are not provided in the question, so it is not possible to calculate the exact NPV. However, based on the options given, the closest value to the NPV of $983,791 is $819,826. Therefore, the correct answer is $983,791.
Regarding the decision to accept or reject Project Alpha, the information provided in the question suggests that Hungry Whale Electronics should evaluate Project Alpha independently of its decisions on other projects. If the firm follows a capital budgeting method that accepts projects with positive NPV, and if project Alpha has a positive NPV (as calculated in the previous step), the firm should accept project Alpha.
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You are a security advisor to a medium-sized company in the financial industry. In recent months, they have a willingness to increase their level of resilience, especially regarding their capability to respond appropriately to a detected cybersecurity incident. Regarding their responsiveness, they have confirmed to you that:
They have documented an information security response plan that is updated frequently
The internal roles and responsibilities regarding this plan are clear
With the last incidents that involved third party service provider, there was some confusion as to who from the service provider should be contacted to manage the incident
They also had some difficulty in obtaining data from detection systems and analyzing it to determine what as the cause of the incident
However, once the incident was understood, they had good capabilities to prevent the expansion and mitigate the effects of the incident
The CEO of the company would like you to assess their posture regarding the Respond function with the NIST Cyber Security Framework that was suggested by the board of directors.
Provide 3 recommendations to the CEO, considering the information provided above.
For each recommendation, provide a reference to a specific category or subcategory of the NIST CSF.
Learning outcomes being met through this assessment
Apply the NIST CSF to a given context
Steps to complete the assignment
Read the description of the assignment in this document.
Use the NIST CSF available at https://www.nist.gov/cyberframework/framework
Identify and document 3 recommendations and their references to the NIST CSF
For each recommendation, provide an explanation of how the company should go about implementing your recommendation.
Upload your Word document to myCourses.
Evaluation Criteria
Correct identification of recommendations
Correct references to NIST CSF
Valid explanations
As the company had some confusion as to who from the service provider should be contacted to manage the incident, it is recommended to define clear and concise communication protocols with third-party service providers.
1. Define clear and concise communication protocols with third-party service providers
Relevant NIST CSF extract: "Response activities are conducted in accordance with established response plans and procedures, which address the steps to take during the response, mitigation, and recovery from an incident."
The communication protocols will help in ensuring that the service providers are made aware of the incident and any potential response or remediation that may be needed. This can help avoid confusion and reduce delays in the incident response process. The communication protocols should be reviewed and updated periodically to ensure that they remain effective.
2. Improve the detection systems and data analytics capabilities
Relevant NIST CSF extract: "The information system and assets are monitored to identify cybersecurity events and verify the effectiveness of protective measures."
The company had some difficulty in obtaining data from detection systems and analyzing it to determine the cause of the incident. Therefore, it is recommended to improve the detection systems and data analytics capabilities. This can be done by ensuring that the detection systems are configured correctly and are capable of detecting the latest threats. Data analytics capabilities can be improved by using advanced data analytics tools and techniques to analyze the data collected by the detection systems. This will help in identifying the root cause of the incident and in preventing similar incidents from occurring in the future.
3. Regularly conduct incident response training and awareness programs for all staff
Relevant NIST CSF extract: "Response plans and procedures are executed and maintained to ensure timely response to detected cybersecurity events."
The company had good capabilities to prevent the expansion and mitigate the effects of the incident once it was understood. However, to ensure a timely and effective response to detected cybersecurity events, it is recommended to regularly conduct incident response training and awareness programs for all staff. This will help ensure that all staff members are aware of their roles and responsibilities in the incident response process and are able to carry out their duties effectively. Regular training can also help in identifying any gaps or weaknesses in the incident response plan and procedures, which can be addressed to improve the overall response capability of the organization.
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On April 1, Crane Travel Agency Inc. was established. These transactions were completed during the month. 1. Stockholders invested $30.800 cash in the company in exchange for common stock. 2. Paid $810 cash for April office rent. 3. Purchased office equipment for $3,840 cash. 4. Purchased $280 of advertising in the Chicago Tribune, on account. 5. Paid $580 cash for office supplies. 6. Perfoed services worth $11,500. Cash of $4,000 is received from customers, and the balance of $7.500 is billed to customers on account. 7. Paid $510 cash dividend. 8. Paid Chicago Tribune amount due in transaction (4). 9. Paid employees' salaries $1,240. 10. Received $7,500 in cash from customers billed previously in transaction (6).
Stockholders invested $30,800 cash in the company in exchange for common stock. As a result, the company's cash account will increase by $30,800.Paid $810 cash for April office rent. Rent is an expense of the company, so the cash account will be decreased by $810.Purchased office equipment for $3,840 cash.
The office equipment is an asset of the company, so it will increase by $3,840. The cash account will be decreased by $3,840.Purchased $280 of advertising in the Chicago Tribune, on account. The accounts payable account will increase by $280.Paid $580 cash for office supplies. Office supplies are an asset of the company, so it will increase by $580. The cash account will be decreased by $580.
Performed services worth $11,500. Cash of $4,000 is received from customers, and the balance of $7,500 is billed to customers on account. The service revenue account will increase by $11,500. The cash account will increase by $4,000. The accounts receivable account will increase by $7,500.Paid $510 cash dividend. As dividends are a distribution of the earnings of the company, the retained earnings account will decrease by $510. The cash account will be decreased by $510.
Paid Chicago Tribune amount due in transaction (4). The accounts payable account will decrease by $280. The cash account will be decreased by $280.Paid employees' salaries $1,240. Salaries are an expense of the company, so the cash account will be decreased by $1,240.Received $7,500 in cash from customers billed previously in transaction (6). The cash account will increase by $7,500, and the accounts receivable account will decrease by $7,500.
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You are preparing a free cash flow analysis for Jensen Corporation. The net working capital charge for year three of a five-year cash flow proforma is derived from? A. The difference in net working capital between year two and year one B. The difference in current assets between year two and year one C. The difference in net working capital between year three and year two D. Current assets in year four less current liabilities in year three
The answer to the question is-C. "The difference in net working capital between year three and year two."
What does it entail?The net working capital charge for year three of a five-year cash flow proforma is derived from the difference in net working capital between year three and year two.
Free cash flow is defined as the cash available after expenditures required to keep a business working (Capital Expenditures).
Companies use free cash flow to estimate cash flow available to shareholders, reduce debt, and make new investments.
How to calculate the free cash flow?
Free cash flow is calculated as:
Free Cash Flow = Operating Cash Flow - Capital Expenditures
Where,
Operating Cash Flow = EBIT + Depreciation - Taxes
What is net working capital?
Net working capital is the amount by which current assets exceed current liabilities. It's an important financial metric used to assess a company's short-term liquidity.
It represents the cash that a business may spend on operations or investments if it is in good financial condition.
Hence, option c. is correct.
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. Which of the following is the statement of the Heckscher-Ohlin Theorem? A country has a comparative advantage in the good that makes relatively intensive use of that country's relatively abundant factor. A change in output prices will lead to more-than-proportional changes in the opposite direction in the prices of inputs used intensively in the good's production. Opening trade will equalize factor prices across countries. A change in output prices will lead to more-than-proportional changes in the same direction in the prices of inputs used intensively in the good's production. A change in output prices will lead to less-than-proportional changes in the same direction in the prices of inputs used intensively in the good's production.
The Heckscher-Ohlin Theorem states that countries specialize in and export goods that use their abundant factors of production.
The statement of the Heckscher-Ohlin Theorem is as follows: "A country has a comparative advantage in the good that makes relatively intensive use of that country's relatively abundant factor." This means that a country will specialize in producing and exporting goods that require a larger amount of the factor of production it has in abundance. For example, if a country has a large amount of skilled labor, it will specialize in industries that require skilled labor. The theorem suggests that countries will trade based on their factor endowments, with each country exporting goods that use its abundant factors and importing goods that use its scarce factors. The Heckscher-Ohlin Theorem forms the basis of the modern theory of international trade and explains the patterns of trade observed in the world economy.
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________________ defined a stream of equal cash flows arriding at a regular interval and ending after a specified time period.
The term that fits the definition given in the question is Annuity.An annuity can be defined as a stream of equal cash flows arriving at a regular interval and ending after a specified time period.
The cash flows may be received in the form of regular payments that can be made quarterly, monthly, or annually.An annuity can be of two types: ordinary annuity and annuity due. In an ordinary annuity, the payments are made at the end of each period, while in an annuity due, the payments are made at the beginning of each period.An example of an annuity is a mortgage payment. Every month, a homeowner pays the same amount to the mortgage lender for a specified period of time. This is an annuity because it is a stream of equal payments arriving at a regular interval and ending after a specified time period.
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Which statement(s) is/are true regarding a qualified profit sharing plan?
1. The plan design can operate to contribute more than 25% of an employee's covered compensation.
II. The sponsor of the plan generally must make a profit to make a contribution into the plan.
III. Forfeitures in profit sharing plans can be allocated to remaining employees as long as they do not exceed the annual limits calculation.
IV. Forfeitures in profit sharing plans can be used to reduce future contributions.
A. III only.
B. III and IV only.,
C. I, III and IV only.
D. All of the above.
Among the given options, the statement(s) that is/are true regarding a qualified profit sharing plan are: C. I, III and IV only.An explanation of each of the true statements is given below:
I. The plan design can operate to contribute more than 25% of an employee's covered compensation .Qualified profit sharing plans are types of retirement plans. It operates to contribute more than 25% of an employee's covered compensation. This can be done only if the plan design permits such a contribution.
III. Forfeitures in profit sharing plans can be allocated to remaining employees as long as they do not exceed the annual limits calculation.When an employee terminates employment before becoming entitled to the entire amount of employer contributions to their qualified profit-sharing plan account, their forfeited balance can be reallocated to the remaining participants in the plan, as long as the amount doesn't exceed certain annual limits.
IV. Forfeitures in profit sharing plans can be used to reduce future contributionsForfeitures may be applied to reduce future employer contributions to the plan. This is one of the alternatives available to plan sponsors, which may be beneficial in several situations.
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In Maldonia in 2019, checkable deposts cwned by indlviduals and businesses were $634 ballion, M1 was $1,304 balion; currency held by individuals and businesses was \$662 bilkon, savings deposits were $3,169 billion, smali time deposits were $810; and money market funds and other deposits were $796 billion. Calculate teaveler's checks in creulation 1 Maldonia in 2019 . Calculate M2 in Maldonia in 2019 In Maldonia in 2019, traveli's checks in circulation were 3 bilion. Mr in Maldonia in 2019 was? balion.
In Maldonia in 2019, the traveler's checks in circulation were 3 billion. The check able deposits owned by individuals and businesses were 634 billion, M1 was 1,304 billion.
The currency held by individuals and businesses was 662 billion, savings deposits were 3,169 billion, small time deposits were 810 billion, and money market funds and other deposits were 796 billion.Now, to calculate M2, we will add up all of these values:
M2 = currency + traveler's checks + checking deposits + savings deposits + small-denomination time deposits + retail money market mutual fund shares
[tex]M2 = $662 billion + $3 billion + $634 billion + $3,169 billion + $810 billion + $796 billionM2[/tex]
[tex]= $6,074 billion.[/tex].
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1. You just received an inheritance of $2,500,000 but the restriction is that you need to invest the funds in a diversified investment portfolio.
Using what you have learned in this class, develop a stock investment portfolio for yourself that consists of investing in six different mutual funds, with the allocation of how much you would invest in each one (for a total investment of 50% of $2,500,000). Note: no more than 50% of your portfolio can be invested in mutual funds - the remainder should be invested in individual stocks.
Write a summary of the portfolio (with exhibits) including a brief discussion of each stock or mutual fund choice and why you chose each of the six mutual funds to invest in.
The inheritance of 2,500,000 has to be invested in a diversified investment portfolio. The objective is to invest 50% of the amount in six different mutual funds and the remainder in individual stocks.
Hence, to develop a stock investment portfolio for oneself, it is essential to conduct comprehensive research and analysis to understand the individual stocks and mutual funds' potential returns and risks In this case, six different mutual funds have to be chosen to invest 50% of the amount. Following is the portfolio summary:
Dodge & Cox Stock Fund (DODGX) - 15% of the portfolio
American Funds Capital World Growth and Income Fund (CWGIX) - 10% of the portfolio
Vanguard Real Estate Index Fund (VGSLX) - 10% of the portfolio
Fidelity Contrafund (FCNTX) - 7.5% of the portfolio
T. Rowe Price Blue Chip Growth Fund (TRBCX) - 5% of the portfolio
Fidelity Select Technology Portfolio (FSPTX) - 2.5% of the portfolio
Investing in Individual StocksThe remainder of the amount has to be invested in individual stocks. It is essential to diversify the investment portfolio with different sectors and companies to minimize the risk. The following individual stocks have been chosen:
Amazon (AMZN) - 10% of the portfolio
Microsoft (MSFT) - 7.5% of the portfolio
Johnson & Johnson (JNJ) - 7.5% of the portfolio
Procter & Gamble (PG) - 5% of the portfolio
Berkshire Hathaway (BRK.B) - 5% of the portfolio
Visa (V) - 5% of the portfolio.
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Imagine that the interbank AUD / USD exchange rate was 0.8062 / 0.7995 and the five-month forward margins on the AUD were -93 / -90.
a) Do you think the AUD was selling at a forward premium or a forward discount to the USD? Explain.
b) Calculate the outright five-month forward quote.
c) Using the direct bid quotation, find the annualised forward premium or discount on the AUD.
a) AUD was selling at a forward discount to the USD since the five-month forward margins on the AUD were negative (-93 / -90).
Here, the five-month forward margins on the AUD were negative (-93 / -90), which implies that the AUD is selling at a forward discount to the USD. So, the answer is AUD was selling at a forward discount to the USD.
b)For AUD/USD, the spot rate is 0.8062/0.7995;
the outright five-month forward quote is Spot + forward margin
= (0.8062 + (-93/10000))/ (0.7995 + (-90/10000))
= 0.7977/0.7906
= 1.0091/1
This is the outright five-month forward quote.
c) Annualised forward premium or discount= (Forward points ÷ Spot rate) x (12 ÷ Number of months)
Forward points = Direct bid outright forward rate - Direct bid outright spot rate
For AUD/USD, the outright five-month forward quote is 1.0091/1 and the spot rate is 0.8062/0.7995.
Outright forward rate = 1.0091
Direct bid outright spot rate = 0.8062/0.7995 = 1.0087
So, Annualised forward premium or discount= (0.0004 ÷ 1.0087) x (12 ÷ 5)= 0.0095 x 2.4= 0.0228 or 2.28%.
Hence, the answer is 2.28%.
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Where do businesses sell their securities?.
One of the most popular and convenient ways for firms to sell their shares is through brokerages.
Typically, brokerage houses charge a fee or commission in exchange for their services. Due to continuously declining commission costs, discount brokerages are becoming more and more well-liked among investors. Similar to big supermarkets, these brokerages give investors a wide range of options at affordable prices.
The majority of the labor must be done by investors, though. The selling of securities by companies can also be accomplished through banks, direct investor sales, stock exchanges, investment bankers, and private placement.
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Describe a current governmental or political issue or problem of importance in the United States.
• Address the various sides of the current issue and draw personal conclusions based on analysis of the issue.
• Demonstrate an understanding of its complexities.
• Present an informed evaluation of the evidence and the different viewpoints surrounding the topic.
• Compare and contrast the different viewpoints of the sources cited, taking into account position limits. Analyze and question your sources’ assumptions.
One of the major issues of importance in the United States at present is immigration, which is regarded as a contentious political issue. Immigrants are individuals who move to another country to work or reside in it, and this has been going on in the United States for decades.
Immigration has been recognized as one of the most pressing problems that the US government has to address since it impacts the nation in various ways. The immigration issue has its origins in the belief that immigrants pose a risk to the country's national security, social stability, and economic prosperity.
In addressing the various sides of the current immigration issue, it is important to understand its complexities. While there are two sides to the issue, it is believed that the issue can only be resolved through a combination of political and social action. The different sides of the immigration issue include people who support tougher immigration laws and those who believe that illegal immigrants should be granted amnesty.
There are numerous viewpoints on immigration in the United States, which include economic, social, and political viewpoints. Supporters of tough immigration laws believe that immigrants take jobs away from American workers, reduce wages, and put a strain on public services such as healthcare and education. They also believe that immigrants pose a risk to national security and public safety.
On the other hand, those who support amnesty for illegal immigrants believe that it is not possible to deport all illegal immigrants and that they should be allowed to stay in the United States and given a chance to become citizens.
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A firm's stock returns for the past four year were 18%, 16, 10.5% and 6.5%. Given this information, calculate the standard deviation of the reutrns
10.46%
9.46
8.46
5.24%
5.59
"""an invest ment or portfolio with a beta of 1 suggest is (highly correlated/not correlated/negatively correlated) with market returns
Or
That the investment or portfolio beta equals the risk free rate """
The security market line, within the first quadrant of a graph, begins at which point?
Asset of portfolio required return=?
Beta=?
The risk free rate?
Standard deviation of returns: 14.36%
Beta of 1 suggests highly correlated with market returns. SML starts at risk-free rate in first quadrant.
To calculate the standard deviation of the returns, we need to follow these steps:
1. Calculate the average return (mean) of the given returns:
Average return = (18% + 16% + 10.5% + 6.5%) / 4 = 12.75%
2. Calculate the deviation of each return from the average:
Deviations = (18% - 12.75%, 16% - 12.75%, 10.5% - 12.75%, 6.5% - 12.75%)
= (5.25%, 3.25%, -2.25%, -6.25%)
3. Square each deviation:
Squared deviations = (5.25%^2, 3.25%^2, -2.25%^2, -6.25%^2)
= (0.0276, 0.0106, 0.0051, 0.0391)
4. Calculate the average of the squared deviations (variance):
Variance = (0.0276 + 0.0106 + 0.0051 + 0.0391) / 4 = 0.0206
5. Take the square root of the variance to get the standard deviation:
Standard deviation = √0.0206 = 0.1436 or 14.36%
Therefore, the correct answer for the standard deviation of the returns is 14.36%.
Regarding the second question, an investment or portfolio with a beta of 1 suggests that it is highly correlated with market returns. A beta of 1 means that the investment tends to move in line with the overall market. If the market goes up by a certain percentage, the investment is expected to increase by a similar percentage, and vice versa.
The security market line (SML) is a graphical representation of the relationship between an asset's expected return and its beta. In the first quadrant of the SML graph, the line starts at the risk-free rate of return. The risk-free rate represents the return an investor can expect to earn on an investment with zero risk, such as a government bond. It serves as the starting point for measuring the expected return of assets or portfolios based on their systematic risk (beta).
In summary, the SML starts at the risk-free rate in the first quadrant of the graph, and an investment or portfolio with a beta of 1 suggests it is highly correlated with market returns.
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What is meant by the ‘mandates’ for central bank policy? What are typical single, dual and multiple mandates. What has been the Fed policy in the past and more recently? What are the issues regarding Fed independence, policy instruments and time lags, high employment goals, (types of unemployment), financial market stability, foreign exchange rate stability?
A mandate in Central Bank policy refers to the broad objective or goals the central bank is required to achieve or the fundamental principles that direct its operations. Central banks all around the world have mandates given to them by their respective governments or by laws passed by their parliaments. The mandates can be Single, Dual or Multiple, depending on the structure of the government and the role of the central bank in that economy.A Single Mandate refers to when the central bank is mandated to target only one objective.
It is mostly used in economies where the inflation rate is of great importance. Dual mandates refer to when the central bank has two targets. The first target is usually to keep inflation at a certain level, and the second target is usually employment or growth. A Multiple Mandate refers to when the central bank is given more than two targets.
For example, a central bank can be mandated to ensure the stability of the financial sector, the growth of the economy, and maintain price stability.The Federal Reserve (Fed) policy in the past had a Dual mandate that is to maintain full employment and keep prices stable. The Fed's current policy, however, has an added mandate of ensuring the stability of the financial system.
The issue of Fed independence arises when the central bank is not free to make its own decisions and policies. If the government is dictating the policies, the central bank's independence is compromised, which can lead to issues in the economy. The policy instruments and time lags refer to the use of different policies to affect the economy, and the amount of time it takes to have the desired effect. High employment goals are the different types of unemployment that need to be taken into account when making policies to help reduce unemployment.
These types of unemployment include structural, frictional, and cyclical unemployment. Financial market stability refers to the stability of the financial sector and the ability of the sector to withstand shocks.
Foreign exchange rate stability refers to the stability of the exchange rate and the impact that fluctuations in the exchange rate can have on the economy.
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Joey are 55 year old taxpayer receives $20,500 in
wages she has no income the maximum contribution she may make to
her 401k plan in 2022 is
A taxpayer who is 55 years old can make a catch-up contribution to their 401(k) plan in addition to their standard contribution limit.
The standard limit for 2022 is $20,500, but the catch-up limit is $6,500, making the maximum contribution amount $27,000.Therefore, in 2022, Joey, who is a 55-year-old taxpayer and earns $20,500 in wages and has no other income, can contribute up to $27,000 to her 401k plan.
The additional $6,500 is a catch-up contribution that is available to people over the age of 50 who want to save more for retirement.In general, 401(k) plans are tax-deferred retirement accounts. Contributions to a 401(k) plan are made on a pre-tax basis, which means that the money is taken out of an employee's paycheck before taxes are applied.
This reduces an employee's taxable income, which can result in a lower tax bill.
The money that is contributed to a 401(k) account grows tax-free until it is withdrawn. Once the money is withdrawn, it is taxed as ordinary income at the individual's marginal tax rate.
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super speedy delivery services has the collected the following information about operating expenditures for its delivery truck fleet for the past five years: year miles operating costs 2016 55,000 $195,000 2017 70,000 $210,000 2018 50,000 $180,000 2019 65,000 $205,000 2020 85,000 $225,150 what is the best estimate of total operating expenses for 2021 using the high-low method based on total expected miles of 60,000?
The best estimate of the total operating expenses for 2021 using the high-low method based on total expected mileage of 60,000 will be $77,400.
To estimate the total operating expenses for 2021 using the high-low method, we need to determine the variable cost per mile and use it to calculate the estimated operating expenses for the expected total miles of 60,000.
First, we need to identify the high and low points from the given data;
High point:
Year: 2020
Miles: 85,000
Operating costs: $225,150
Low point;
Year: 2018
Miles: 50,000
Operating costs: $180,000
Next, we can calculate the variable cost per mile using the high and low points:
Variable cost per mile = (High operating costs - Low operating costs) / (High miles - Low miles)
= ($225,150 - $180,000) / (85,000 - 50,000)
= $45,150 / 35,000
= $1.29 (rounded to two decimal places)
Now, we can estimate the total operating expenses for 2021;
Estimated operating expenses for 2021 = Variable cost per mile * Total expected miles
= $1.29 × 60,000
= $77,400
Therefore, the best estimate of total operating expenses for 2021 using the high-low method based on a total expected mileage of 60,000 is $77,400.
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falis try 1,5 percentage points, the real riskfree rate remains constant, the required retum on the markat falls to yosale, and all bectas remain canstant. After all of these changes, what will be the
The question refers to the changes that occur in the financial market under some conditions. These conditions include a change in the falis try percentage, a constant real risk-free rate, a decrease in the required return on the market, and constant bectas. The question asks for the change that occurs as a result of all of these changes.
When the falis try percentage decreases by 1.5%, it means that the cost of borrowing in the market has reduced. As a result, companies will be encouraged to borrow more money. This will lead to an increase in the supply of funds in the market, which will decrease the required return on the market. However, since the real risk-free rate remains constant, the decrease in the required return on the market will lead to a decrease in the nominal risk premium. The nominal risk premium is the difference between the required return on the market and the real risk-free rate.
Now, we know that the decrease in the nominal risk premium will decrease the required return on the market, but we don’t know by how much. Since the required return on the market falls to yosale, it means that the new required return on the market will be lower than the previous required return on the market. The amount of decrease in the required return on the market will depend on the previous required return on the market.
If the previous required return on the market was 15%, then a decrease of 1.5% will lead to a new required return on the market of 13.5%. However, if the previous required return on the market was 20%, then a decrease of 1.5% will lead to a new required return on the market of 18.5%.Finally, since all bectas remain constant, it means that the changes that occurred in the market have not affected the risk associated with the companies.
The required return on the companies will remain constant.
Answer: The new required return on the market will be lower than the previous required return on the market, but the amount of decrease will depend on the previous required return on the market. The required return on the companies will remain constant.
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Which of the following statements are True? Select all correct answers
Direct moves are profitable when there are strong economies of density.
In many to many cases, the focus is on aggregating high volume lanes.
Consolidated moves always need to go through a hub for sorting.
Establishing a hub incurs initial setup cost but later reduces transportation-related costs enabling higher LOS.
Sub-set/Sub-assembly of a product being sold individually along with the main product comes under economies of scope.
None of the above unanswered
Direct moves are profitable when there are strong economies of density. This statement is not necessarily true. While direct moves can be profitable in some cases, it depends on various factors such as the specific industry, transportation costs, and economies of density.
In many to many cases, the focus is on aggregating high volume lanes. This statement is generally true. In many-to-many cases, where there are multiple origins and destinations, the focus is often on aggregating high volume lanes. By consolidating shipments from multiple sources and distributing them to multiple destinations, transportation costs can be minimized and efficiency can be improved. Consolidated moves always need to go through a hub for sorting. This statement is not true. Consolidated moves can go through a hub for sorting, but they can also bypass a hub and be directly transported to the destination. It depends on the specific logistics strategy and the requirements of the supply chain.
Establishing a hub incurs initial setup cost but later reduces transportation-related costs enabling higher LOS. This statement is generally true. Establishing a hub in a supply chain incurs initial setup costs, such as infrastructure development and operational expenses. However, in the long run, it can help reduce transportation-related costs by consolidating shipments, optimizing routes, and improving efficiency. This can lead to higher levels of service (LOS) by ensuring timely and cost-effective delivery. Sub-set/Sub-assembly of a product being sold individually along with the main product comes under economies of scope.
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Seasons Hospital uses the ollowance method to occount for its uncollectible accounts. It has the following baiances on December 31 belore any adjusting entries: Accounts Receivable =$100,000. Allowonce for Uncollectible Accounts =$1.000 (credit) The hospital estimates uncollectible accounts to be 25% of accounts receivable. What year-end adjustment (adjusting entry) shouid be made for uncollectible accounts? 2950
The journal entry to record the year-end adjustment for uncollectible accounts would be Debit Bad Debt Expense = $24,000 and Credit Allowance for Uncollectible Accounts = $24,000.
Explanation: The accounts receivable of Seasons Hospital before adjustment was $100,000.
The hospital has to adjust the allowance for uncollectible accounts by considering the estimated uncollectible accounts
to be 25% of the accounts receivable.
The amount of allowance for uncollectible accounts after adjustment = 100,000 × 25% = $25,000
Allowance for uncollectible accounts before adjustment = $1,000
The year-end adjustment in the allowance account should be: $24,000 ($25,000 - $1,000)
Increase in the allowance account = $24,000
Increase in the allowance account would also increase the bad debt expense account by the same amount.
The year-end adjusting entry is: Debit Bad Debt Expense = $24,000
Credit Allowance for Uncollectible Accounts = $24,000
Thus, the journal entry to record the year-end adjustment for uncollectible accounts would be Debit Bad Debt Expense
= $24,000 and Credit Allowance for Uncollectible Accounts = $24,000.
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Test Company projected the following unit sales for the next five quarters.
Unit sales
Year 1, Quarter 1
1,000
Year 1, Quarter 2
1,200
Year 1, Quarter 3
1,500
Year 1, Quarter 4
2,000
Year 2, Quarter 1
1,000
The company’s policy is to have 25% of the following quarter’s projected sales in ending finished goods inventory. The beginning inventory in Year 1 is expected to satisfy the inventory policy.
Each unit required 2 lbs. of direct materials. Projected direct materials cost is $5.00 per lb. The company’s policy is to have 20% of the following quarter’s production needs in ending raw materials inventory. The beginning inventory in Year 1 is expected to satisfy the inventory policy.
Q1. Determine the total units to be produced in Year 1.
Note: Give your answer using commas. Do not include the word "units."
The expected unit sales for each quarter must be added up, and the ending finished products inventory must be taken into consideration, to arrive at the total number of units to be produced in Year 1.
Quarter 1 of Year 1: 1,000 unitsQuarter 2 of Year 1: 1,200 units
Quarter 3 of Year 1: 1500 unitsQuarter 4 of Year 1: 2000 units
We aggregate the anticipated unit sales together with 25% of the anticipated sales for the upcoming quarter as ending finished products inventory to determine the total units to be produced.
1,000 + 1,200 + (1,500 + 25% of 2,000) = 1,000 + 1,200 + (1,500 + 500) = 1,000 + 1,200 + 2,000 = 4,200 units are the total units to be produced in Year 1.Thus, 4,200 units must be produced in total during Year 1
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Select all that are correct. Under Sarbanes-Oxley, the audit committee of the Board of Directors Is chaired by the Firm's Chief Executive Officer Is chaired by the firm's Chief Financial Officer Is limited to outside Board members Must include a Board member well versed in finance or accounting Must include only Board members who are independent of the Company and its Management (no related party transactions)
Under Sarbanes-Oxley, the audit committee of the Board of Directors must include a Board member well versed in finance or accounting and only Board members who are independent of the Company and its Management (no related party transactions).
The committee is not required to be chaired by the firm's Chief Executive Officer or the Chief Financial Officer.
Under the provisions of Sarbanes-Oxley, the audit committee of the Board of Directors plays a crucial role in overseeing the financial reporting process and ensuring the integrity of the company's financial statements.
While the committee is not required to be chaired by the firm's Chief Executive Officer or the Chief Financial Officer, it must include a Board member who has expertise in finance or accounting. This member provides financial expertise and knowledge to effectively fulfill the committee's responsibilities.
Additionally, the audit committee is required to consist of only Board members who are independent of the Company and its Management. Independence is crucial to ensure objectivity and impartiality in the oversight of financial reporting and auditing processes.
It helps prevent conflicts of interest and ensures that the committee members act in the best interests of the company and its shareholders.
Therefore, under Sarbanes-Oxley, the audit committee of the Board of Directors must include a Board member well versed in finance or accounting and only Board members who are independent of the Company and its Management, while there are no requirements for the committee to be chaired by the firm's Chief Executive Officer or the Chief Financial Officer.
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