We must determine the interest expenditure for the two-month span (November and December) based on the provisions of the promissory note in order to record the adjustment entry for interest for Eskimo Joe's on December 31, 2021.
Information disclosed: The promissory note's principal is $20.6 million. 9% interest rate Duration: November and December, two months. We can use the following calculation to determine the interest expense: Principal Amount x Interest Rate x Time = Interest Expense Interest costs come out to $20,600,000 x 9% x (2/12). Cost of Interest = $308,000 Let's now enter the interest adjusting entry for Eskimo Joe's: Date: 31st December 2021 Transaction Account Debit Credit Cost of Interest $308,000 308,000 dollars will be paid in interest. The $308,000 in interest costs is shown as an expense on the income statement, while an equal amount is shown as Eskimo Joe's must pay the accrued interest at the conclusion of the time period, which is represented by the interest payable. Please take note that the actual payment of interest will be made at maturity; this entry is merely for adjusting purposes at the end of the period.
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If the Raw Materials Inventory is very high and there are many material stock-outs the most likely cause is that the inventory of " C " items is very high. Select one: True False
False. High raw materials inventory and stock-outs may not be caused solely by high "C" item inventory.
High raw materials inventory and frequent material stock-outs can be attributed to various factors, not solely the inventory of "C" items. While an excess of "C" items can contribute to the problem, other factors like inaccurate demand forecasting, inefficient supply chain management, poor inventory control, or production inefficiencies may also play a significant role. It is crucial to conduct a comprehensive analysis of the inventory management practices and identify the root causes of the issues. By addressing these underlying causes and implementing appropriate measures such as improving demand forecasting, optimizing inventory control processes, and enhancing supply chain coordination, the organization can better manage raw materials inventory and reduce stock-outs.
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16. A bank has sold a loan so that it receives a fixed interest rate of 5%. The bank swaps that fixed rate immediately after taking out the loan via a swap. The fixed swap rate stands at 4%. We assume that the loan amount remains constant at 100 and that the interest is paid annually. Display graphically the annual interest flows that remain for the bank.
Graphically displayed as
Year: 0 1
Loan: ┌─────┬─────┐
│ │ │
Interest: │ 5% │ 5% │
└─────┴─────┘
Swap: ┌─────┬─────┐
│ │ │
Interest: │ 4% │ 4% │
└─────┴─────┘
In this graph, the timeline is represented horizontally, with each year indicated by a separate column. The loan interest rates are displayed above the Loan section, and the swap interest rates are displayed above the Swap section.
Year 0: At the beginning, the bank takes out the loan and swaps the fixed rate immediately. Both the loan and swap start with a fixed interest rate of 5% and 4%, respectively.
Year 1: In the first year, the bank receives interest payments on both the loan and the swap. The interest rate for both remains constant at 5% and 4%, respectively.
Note that the loan amount remains constant at 100 units, as mentioned in the scenario.
This graph visually represents the annual interest flows for the bank, illustrating the fixed interest payments received on the loan and the corresponding swap arrangement.
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What is the total liabilities immediately following a margin purchase of 50 shares at $80/ share given an initial margin of 50%. $4,000 $2,000 $1,000 not enough information to answer,
Therefore, the correct option is (B) $2,000. The total liabilities immediately following a margin purchase of 50 shares at $80/share given an initial margin of 50% is $2,000.
Given that an initial margin of 50% for the margin purchase of 50 shares at $80/share,
Total liabilities immediately following a margin purchase of 50 shares at $80/share given an initial margin of 50% can be calculated as follows:
Initial margin is 50%.
Therefore, the required margin
= Initial price of the stock × Initial Margin50% × ($80 × 50) = 0.5 × $4,000 = $2,000.
The total liabilities immediately following a margin purchase of 50 shares at $80/share given an initial margin of 50% is $2,000.
Therefore, the correct option is option (B) $2,000.
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A saving account earns an interest rate 14% per year. I need $632,558.34 to make a down payment on a house. I can save $10,700 per year. How long will it take me to accumulate the $632,558.34 ? (Do not round intermediate calculations. Round your answer to 2 decimal places. Use a financial calculator or Excel.) years
Given that the interest rate earned per year on the saving account is 14% and the target amount is 632,558.34.
To calculate the duration that will be needed to accumulate the required amount with a yearly saving of 10,700, we can apply the following formula:
FV = (PMT / I) × [(1 + I)ⁿ − 1]
Where,
PMT = 10,700 (yearly saving)
I = 14% = 0.14 (interest rate earned per year)
FV = 632,558.34 (target amount)
Let us calculate the number of years it will take to save the required amount using the above formula:
632558.34
= (10700 / 0.14) × [(1 + 0.14)^n − 1]632558.34 × 0.14 / 10700 + 1
= (1 + 0.14)^n1.010420186915887
= 1.14^n
Log both sides−1 = n × log 0.86n
= -0.00320305 / log 0.86≈ 23.25 years
it will take approximately 23.25 years to accumulate the required amount of 632,558.34 by saving 10,700 per year.
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Business Management
2 Explain why the Human resouroe function is considered as a secondary activity of the business. (5)
The human resource function is considered a secondary activity of the business because its primary function is to support the core activities of the business. Core activities are the main functions that are directly related to the production of goods or services. For example, in a manufacturing company, the core activities are the production of goods and services. The human resource function is a secondary activity that supports the core activities of the business.
The human resource function plays a vital role in any organization. It is responsible for recruiting and selecting employees, training and developing employees, managing employee relations, and providing support for organizational change. However, the human resource function is not a direct part of the production process. Instead, it supports the core activities of the business.
In many organizations, the human resource function is outsourced to third-party providers. This allows the organization to focus on its core activities and leave the human resource function to the experts. Outsourcing the human resource function can also help organizations save costs and improve efficiency.
In conclusion, the human resource function is considered a secondary activity of the business because it supports the core activities of the business. While it is a vital function, it is not a direct part of the production process.
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Traditionally the first step in the Purchasing Process is
helping the customers "recognize the need" Sometimes the
need is apparent and the customeris actively seeing a
solution. Sometimes the customer does not recognize they
have a need. For example, you may have insight about howa
market is evolving or you may understand there is a better
process (or product) that leads to improvements in their
business operations, True or False?
True. In the traditional purchasing process, the first step is helping customers "recognize the need." This step involves making customers aware of a need or a problem that they may have, even if they are not actively seeking a solution.
As mentioned, customers may not always recognize their own needs, and it is the role of the seller or marketer to create awareness and provide insights. This can be done by understanding market trends, identifying opportunities for improvement, and demonstrating how a particular product or process can enhance the customer's business operations.
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A surplus occurs when: more people want to buy a good than want to sell it. the quantity supplied is greater than the quantity demanded. workers are more productive than expected. a market is at equilibrium.
A surplus occurs when the quantity supplied in a market exceeds the quantity demanded at a given price.
It is a situation where there is an excess supply of a particular good or service. In this case, more goods are available in the market than consumers are willing to buy at the prevailing price. As a result, sellers are unable to sell all of their products, leading to a surplus. This can happen due to factors such as a decrease in consumer demand, an increase in production, or ineffective pricing strategies. A surplus often leads to price reductions as sellers try to encourage more purchases and reduce their excess inventory.
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choose the three factors that would lead a firm to buy externally rather than make a product or service.
The three factors that would lead a firm to buy externally rather than make a product or service are cost, expertise, and capacity.
Cost: External sourcing may be more cost-effective than internal production. For example, if the firm can buy the product or service at a lower price from an external supplier, it can save money on production costs, such as raw materials, labor, and overhead expenses. This cost advantage can make it more economical for the firm to buy externally. Expertise: External suppliers may have specialized knowledge and expertise in producing the product or service.
If the firm lacks the necessary skills or resources to develop the product or service internally, it may be beneficial to leverage the expertise of external suppliers. This can ensure higher quality, innovation, and efficiency in the final product or service. Capacity: External sourcing allows the firm to scale up production without investing in additional infrastructure or resources. If the firm experiences a sudden increase in demand or needs to meet a specific deadline, buying externally can provide the necessary capacity to meet customer requirements without interrupting internal operations.
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On July 1, Campus Stores Inc. is considering leasing a building and purchasing the necessary equipment to operate a retail store. Alternatively, the company could use the funds to invest in $1,500,000 of 2% U.S. Treasury bonds that mature in 15 years. The bonds could be purchased at face value. The following data have been assembled:
Line Item Description Amount
Cost of store equipment $1,500,000
Life of store equipment 15 years
Estimated residual value of store equipment $75,000
Yearly costs to operate the store, excluding
depreciation of store equipment $320,000
Yearly expected revenues—years 1-6 $400,000
Yearly expected revenues—years 7-15 $600,000
Required:
Question Content Area
1. Prepare a differential analysis as of July 1 presenting the proposed operation of the store for the 15 years (Alternative 1) as compared with investing in U.S. Treasury bonds (Alternative 2). If an amount is zero, enter "0". If required, use a minus sign to indicate a loss.
Differential Analysis
Operate Retail Store (Alt. 1) or Invest in Bonds (Alt. 2)
July 1
Line Item Description Operate Retail Store
(Alternative 1) Invest in Bonds
(Alternative 2) Differential Effects
(Alternative 2)
Revenues $Revenues $Revenues $Revenues
Costs: Costs to operate store Cost of equipment less residual value Profit (loss) Question Content Area
2. Based on the results disclosed by the differential analysis, should the proposal be accepted?
Yes. No
3. If the proposal is accepted, what would be the total estimated operating income of the store for the 15 years?
The differential analysis is a comparison between operating a retail store (Alternative 1) and investing in U.S. Treasury bonds (Alternative 2) over a 15-year period.
For Alternative 1, the yearly expected revenues are $400,000 for the first 6 years and $600,000 for the remaining 9 years. For Alternative 2, there are no revenues from investing in bonds, so the amount is 0. Costs to operate the store: The yearly costs to operate the store, excluding depreciation of store equipment, are $320,000. This amount is applicable for Alternative Cost of equipment less residual value: The cost of store equipment is $1,500,000, and the estimated residual value is $75,000.
If the profit from operating the retail store is higher, the company would generate more income by choosing Alternative The total estimated operating income of the store for the 15 years would be the sum of the yearly profits (revenues minus costs to operate the store) for Alternative You can calculate the total estimated operating income by adding up the yearly profits for each year of the 15-year period.
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if citizens of low-income countries produced msw at the same rate as those in high-income countries, what would be the combined total msw in millions of tons per year for the two categories of countries?
To estimate the combined total municipal solid waste (MSW) in millions of tons per year for low-income and high-income countries, we need specific data on their respective population sizes and average MSW production rates.
Without that information, we cannot provide an accurate calculation. However, it is worth noting that high-income countries generally have higher rates of MSW production due to factors such as higher consumption levels and more extensive infrastructure.
Low-income countries may produce less MSW per capita, but their growing populations could contribute to a significant overall amount. To obtain a precise estimation, data on population sizes and MSW production rates for both categories of countries would be necessary.
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This question is not complete, Here I am attaching the complete question:
If citizens of low-income countries produced msw at the same rate as those in high-income countries, what would be the combined total msw in millions of tons per year for the two categories of countries? Explain.
what does the aib system provide bank representatives to perform their job functionalities while users perform account transactions? cse 460
To secure a business license, you should contact your local business licensing bureau or the appropriate government agency responsible for issuing licenses in your jurisdiction.
The specific name and department may vary depending on your location. In most cases, it is the local government or municipality that handles business licensing. You can start by searching online for the government website of your city or town. Look for a section related to business or economic development, as they typically provide information on licensing requirements and procedures.
Alternatively, you can visit or call your local city hall, town hall, or county office and inquire about the process for obtaining a business license. They will guide you on the necessary steps, documentation, and fees involved.
It's important to note that the process and requirements can vary depending on your location and the type of business you intend to operate. Therefore, contacting the local business licensing bureau or the appropriate government agency directly will ensure you receive accurate and up-to-date information tailored to your specific circumstances.
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Please provide detail explanation for the below:-
1. Stimulus
2. Organism
3. Response
Please provide examples for related to airline industry.
in the context of the airline industry, stimuli can include factors like fuel prices, customer demand, competition, regulations, or technological advancements.
1. Stimulus: A stimulus refers to an external event or condition that triggers a response or reaction. It can be any sensory input, change in the environment, or action that elicits a response from an organism or system.
Example in the airline industry: In the airline industry, a stimulus could be an increase in fuel prices. When fuel prices rise, it becomes a significant cost factor for airlines, affecting their profitability and operational decisions. The increase in fuel prices serves as a stimulus that prompts airlines to respond by implementing fuel surcharges, optimizing flight routes, adopting fuel-efficient technologies, or adjusting ticket prices to offset the increased costs.
2. Organism: An organism refers to a living entity capable of carrying out basic life processes and responding to stimuli. It can be an individual, a group of individuals, or an organizational entity that possesses the characteristics of life, such as growth, reproduction, and response to the environment.
Example in the airline industry: In the airline industry, an organism could be an airline company itself. The airline company, as an organism, responds to various stimuli in its environment, such as changes in customer demand, market competition, government regulations, economic conditions, or technological advancements. The airline company adapts its strategies, operations, and services in response to these stimuli to ensure its survival and success in the industry.
3. Response: A response refers to the reaction or behavior exhibited by an organism or system in response to a stimulus. It is the outcome or action taken as a result of the stimulus.
Example in the airline industry: A response in the airline industry could be the introduction of new flight routes to cater to emerging market demands. If an airline identifies a growing market or an increase in passenger traffic from a specific region, it may respond by launching new flights to that destination. This response aims to capitalize on the market opportunity, attract more customers, and generate additional revenue for the airline.
Overall, in the context of the airline industry, stimuli can include factors like fuel prices, customer demand, competition, regulations, or technological advancements. Airlines, as organisms, respond to these stimuli by implementing various strategies, adjusting operations, introducing new services, or making other changes to adapt to the dynamic industry environment and achieve their business objectives.
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Which of the following statements is true? (A) Haley has an absolute advantage in making both products. (B) Serena has an absolute advantage in making both products. (C) Haley has an absolute advantage in making bracelets and Serena in making necklaces. (D) Haley has an absolute advantage in making necklaces and Serena in making bracelets.
To determine which statement is true, we need to consider the concept of absolute advantage. Absolute advantage refers to the ability of an individual, group, or country to produce a good or service more efficiently than others.
The statement that is true can be determined by comparing the production capabilities of Haley and Serena in making bracelets and necklaces.
Without information about their production capabilities, it is not possible to determine the absolute advantage in making both products for either Haley or Serena. Therefore, options (A) and (B) cannot be determined as true statements.
Option (C) states that Haley has an absolute advantage in making bracelets and Serena in making necklaces. This could be true if Haley can produce bracelets more efficiently than Serena, while Serena can produce necklaces more efficiently than Haley. However, we need more information about their production capabilities to confirm this.
Option (D) states that Haley has an absolute advantage in making necklaces and Serena in making bracelets. Similar to option (C), this could be true if their production capabilities align with this statement.
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Tenant enters into a lease with Landlord that requires Tenant to
pay $500.00 per month rent and to keep the property insured. The lease further
prohibits assignment by the tenant. After a couple of months Tenant decides to
move out and New Tenant moves in, without the knowledge or consent of
Landlord. Landlord finds out about the New Tenant when he receives New
Tenant's rent check, which he cashes without objection. New Tenant continues
to pay the rent and Landlord cashes each check. After a few months a fire
occurs in the building and Landlord discovers it was not insured. Landlord sues
Tenant and New Tenant for the value of the property because they failed to
keep it insured. Can Landlord recover from either? What are the rights and
liabilities of each party?
The Landlord cannot recover the value of the property from Tenant or New Tenant since he failed to demonstrate any damages caused by their respective breaches.
The lease forbids assignment by the Tenant, therefore, Tenant has breached the contract by transferring the rental property to another individual without the knowledge of the landlord. Tenant should be held responsible for the landlord’s inability to receive rent from him or her.
The landlord has no obligation to mitigate these damages by trying to find a new renter for the property. The breach of contract is sufficient cause for the landlord to sue Tenant for damages in a civil court.New Tenant should not be held accountable for the lack of insurance. When New Tenant took control of the property, he was not aware of the insurance requirement because the lease was between Landlord and Tenant.
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blank unemployment may sound like a desirable outcome, but it is not a reasonable or even a beneficial goal for an economy.
Blank unemployment may sound like a desirable outcome, but it is not a reasonable or even a beneficial goal for an economy.
Unemployment refers to the state of being without a job while actively seeking employment. In an ideal scenario, everyone who wants a job would have one, resulting in zero unemployment. However, achieving and maintaining zero unemployment is not practical or beneficial for several reasons.
Firstly, a certain level of unemployment is considered natural and even necessary in an economy. This is known as frictional unemployment, which occurs when individuals are transitioning between jobs or entering the labor force for the first time. Frictional unemployment reflects a dynamic labor market where people are constantly seeking better opportunities or career advancement. It allows for job matching, where workers can find the most suitable positions that align with their skills and preferences.
Moreover, another type of unemployment, known as structural unemployment, can persist even when the economy is performing well. Structural unemployment occurs due to long-term changes in the structure of industries and the mismatch between available jobs and workers' skills. Addressing structural unemployment requires retraining and matching workers with the evolving demands of the labor market, which takes time and effort.
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if government land is leased or sold for oil and coal exploration at lower-than-market rates, it is an example of a(n)
If government land is leased or sold for oil and coal exploration at lower-than-market rates, it is an example of a subsidy.
A subsidy is financial assistance provided by the government to support a specific industry or activity. In this case, the government is providing a subsidy by offering the land at a lower rate than what would normally be charged in the market.
This reduces the cost for companies involved in oil and coal exploration and incentivizes their participation in the industry.
By offering the land at lower-than-market rates, the government aims to encourage oil and coal exploration, which can have economic benefits such as job creation and increased energy production. However, it is worth noting that this practice can also have environmental implications, as it may lead to increased extraction of fossil fuels, contributing to climate change and other environmental concerns.
In summary, when government land is leased or sold for oil and coal exploration at lower-than-market rates, it is considered a subsidy. This is done to incentivize companies and promote economic activity, but it can have both positive and negative consequences.
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Complete question- If government land is leased or sold for oil and coal exploration at lower-than-market rates, it is an example of a(n)
a. earmark.
b. subsidy.
c. tax expenditure.
d. earned income tax credit.
midyear on july 31st, the chester corporation's balance sheet reported: total liabilities of $77.212 million total common stock of $3.810 million cash of $6.030 million retained earnings of $28.132 million. what were the chester corporation's total assets?
The Chester Corporation's total assets amount to $109.154 million. The total assets of the Chester Corporation can be determined by adding up the various components reported on the balance sheet.
To find the total assets, we need to consider the equation: Total Assets = Total Liabilities + Total Stockholders' Equity From the information given in the question, we know that the total liabilities are $77.212 million.
The total stockholders' equity consists of two parts: common stock and retained earnings. The common stock is reported as $3.810 million, and the retained earnings are reported as $28.132 million.
To find the total stockholders' equity, we add the common stock and retained earnings:
Total Stockholders' Equity = Common Stock + Retained Earnings
Total Stockholders' Equity = $3.810 million + $28.132 million
Total Stockholders' Equity = $31.942 million
Now, we can find the total assets by using the equation mentioned earlier:
Total Assets = Total Liabilities + Total Stockholders' Equity
Total Assets = $77.212 million + $31.942 million
Total Assets = $109.154 million
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Assume a company is preparing a budget for its first two months
of operations. During the first and second months it expects cash
sales of $34,500 and $38,000, respectively. It also expects credit
sal
If a business is planning its budget for the first two months of operations, it projects cash sales of $34,500 in the first month and $38,000 in the second.
The corporation anticipates credit sales during these two months in addition to cash sales. The inquiry, however, offers no exact details regarding the volume of credit sales or how they were distributed throughout the two months. Determining the anticipated volume of credit sales and how they will be distributed between the first and second months is crucial for creating an accurate budget.
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jae corp. completed the following transactions during year 2: issued 1,000 shares of $11 par common stock for $27 per share. repurchased 190 shares of its own common stock for $24 per share. resold 50 shares of treasury stock for $25 per share.
- Jae Corp. raised $27,000 by issuing 1,000 shares of common stock.
- It then spent $4,560 to repurchase 190 shares of its own common stock.
- Finally, it generated $1,250 by reselling 50 shares of its treasury stock.
Jae Corp. completed the following transactions during year 2:
1. Issued 1,000 shares of $11 par common stock for $27 per share:
- Jae Corp. issued 1,000 shares of its common stock at a par value of $11 per share.
- The shares were sold to investors for $27 per share.
- This means that Jae Corp. received a total of $27,000 ($27 x 1,000) from the sale of these shares.
2. Repurchased 190 shares of its own common stock for $24 per share:
- Jae Corp. bought back 190 shares of its own common stock from the market.
- The repurchase price was $24 per share, so the total cost of the repurchase was $4,560 ($24 x 190).
3. Resold 50 shares of treasury stock for $25 per share:
- After repurchasing 190 shares, Jae Corp. had 190 shares of treasury stock.
- Out of these, 50 shares were sold to investors at a price of $25 per share.
- The total amount received from this sale was $1,250 ($25 x 50).
To summarize the transactions:
- Jae Corp. raised $27,000 by issuing 1,000 shares of common stock.
- It then spent $4,560 to repurchase 190 shares of its own common stock.
- Finally, it generated $1,250 by reselling 50 shares of its treasury stock.
Overall, the company received more cash from the issuance of shares than it spent on the repurchase of its own stock.
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What is the best definition of outsourcing?
a. A contract to provide a foreign firm components of its supply chain.
b. An arrangement with a foreign business to create components of your supply chain.
c. A low-risk form of vertical FDI.
d. A kind of offshoring.
However, it is important for companies to carefully consider their outsourcing strategies to ensure that they are getting the best possible value for their money.
Outsourcing is a business practice that involves hiring an external party or firm to perform a task or service that is typically performed in-house.
It is the process of delegating work to another company, often in another country, in order to reduce costs and improve efficiency. This practice is commonly used by businesses to save money on labor costs or to gain access to specialized skills or expertise.
outsourcing is a powerful tool that can help businesses reduce costs, improve efficiency, and gain access to specialized expertise.
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What are the four stages of operational effectiveness and how does each stage relates to project monitoring systems?
Operational effectiveness refers to a management approach that improves the efficiency of operations to achieve better results and gain a competitive edge in the marketplace.
It is a continuous process that includes four stages, including: stage 1 - ad hoc, stage 2 - common approach, stage 3 - standardization, and stage 4 - optimization. Here is an in-depth explanation of each stage and how it relates to project monitoring systems.Stage 1 - Ad hocThis is the first stage of operational effectiveness where companies rely on individuals' knowledge and skills to complete tasks.
It is characterized by an inconsistent approach where each person has a unique way of doing things. Therefore, project monitoring systems are not standardized and, as a result, pose a challenge to evaluate progress. Stage 2 - Common ApproachThis stage is characterized by a common approach to processes where the company outlines standard operating procedures. Project monitoring systems are improved by defining a standard operating process, but they are still not entirely standardized.
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equal to its In third-degree price discrimination, to determine the total quantity produced, the firm sets its A. individual market margnal revenue; average total cost B. individual market marginal revenue; marginal cost C. overall marginal revenue, marginal cost D. overal marginal revenue; average total cost
Third-degree price discrimination is a market strategy in which the company charges different prices for the same goods or services in different markets.
In the production and pricing decision process, it is very important to understand the relationship between marginal cost, marginal revenue, and average total cost. In third-degree price discrimination, the firm sets its production level by equating marginal revenue with marginal cost.
This is because the objective of the firm is to maximize the total profits from all the markets in which it operates. The correct answer is individual market marginal revenue and marginal cost.
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Problem 6 - COST VOLUME ANALYSIS At Fraser Engineering, Eric is trying to decide whether to purchase a certain part or to have it produced internally. Internal production could use either of two processes. One would entail a variable cost per unit of $17, and an annual fixed cost of $200,000; the other would entail a variable cost of $14 and annual fixed costs of $240,000. Three vendors are willing to provide the part. Vendor A has a price of $20 per-unit for any volume up to 30,000 units. Vendor B has a price of $22-per-unit for demand of 1,000 units or less, and $18 per-unit for larger quantities. Vendor C offers a price of $21-per-unit for the first 1,000 units, and $19 for each additional unit. a. What is the correct formula to use to compare these options? (Marks: 2) b. Which options would be best for: (Marks: 6 ) i. 10,000 Units? ii. 20,000 Units? iii. 100,000 Units? c. What is the value in considering these option across three very different demand values ranging from 10,000 to 100,000 units? (Marks: 2)
Cost Volume Analysis is the process of determining the price for a product or service that will result in a certain level of sales volume. The formula used to compare the options in problem 6 is as follows:
[tex]Internal Production Cost = (Variable Cost per Unit × Quantity Produced) + Annual Fixed Cost[/tex]
[tex]Vendor Cost = Price × Quantity Purchased[/tex]
The best options for 10,000, 20,000, and 100,000 units are shown in the table below:
Cost Comparison of Vendor and Internal Production: Options Best option for 10,000 Units Best option for 20,000 Units Best option for 100,000 Units Internal Production using [tex]$14[/tex] variable cost per unit Internal Production using [tex]$14[/tex] variable cost per unitVendor A using [tex]$20[/tex] per unitVendor C using [tex]$19[/tex] per unitInternal Production using [tex]$14[/tex] variable cost per unitVendor A using [tex]$20[/tex] per unitVendor C using [tex]$19[/tex] per unitInternal Production using [tex]$17[/tex] variable cost per unitVendor C using [tex]$19[/tex] per unitVendor B for the first 1,000 units and Vendor C for 19 for each additional unit.
The value of considering these options across three very different demand values ranging from 10,000 to 100,000 units is to determine the optimal cost for each demand value.
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Managers at the Bank of Quebec are afraid that the bank will not have enough reserves at the end of the business day to meet withdrawals tomorrow. It currently has two options to borrow money overnight. First, it could borrow money from the Bank of Canada (BOC) at a rate of 0.95%. Second, it could borrow money from other banks at a rate of 0.25%. Using this information, answer the questions, 1. What is the overnight rate? overnight rate: 2. What is the bank rate? 9 bank rate: 3. What would happen to other short-term interest rates if the Bank of Canada increases its overnight rate targer? They would become irrelevant. They would decrease. They should remain unchanged. They would also increase.
Banks lend money to one another overnight at an interest rate known as the overnight rate. The bank rate is the percentage of loans and advances that the central bank charges private banks. Other short-term interest rates across the economy would probably rise as well if the Bank of Canada increased its overnight rate target. The correct option is D.
1. Banks lend money to one another overnight at an interest rate known as the overnight rate. It is normally determined by the central bank and is employed to control the money supply as well as the general level of interest rates in the economy.
2. The bank rate is the percentage of loans and advances that the central bank charges private banks. Serving as a standard for other interest rates in the economy, it is typically higher than the overnight rate.
3. Other short-term interest rates across the economy would probably rise as well if the Bank of Canada increased its overnight rate target. This is so because other borrowing expenses are measured against the overnight rate. The cost for banks to borrow money from the central bank increases when the central bank raises the overnight rate, which in turn affects the cost of borrowing for other financial institutions.
Thus, the ideal selection for 3 is D.
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Hilisong Inc. manufactures snowsuits. Hillsong is considering purchasing a new sewing machine at a cost of $2.45 million its existing machine was purchased five years ago at a price of $1.8 million; six months ago. Hilisong spent $55,000 to keep it operational. The existing sewing machine can be sold today for $241,293. The new sewing machine would require a one-time, $85.000 training cost. Operating costs would decrease by the following amounts for years 1 to 7 :
Year 1 $390,800
2 400,900
3 410,600
4 425,200
5 433,000
6 434,600
7 436,500
The new sewing machine would be depreciated according to the declining-balance method at a rate of 20%. The salvage value is expected to be $379,200. This new equipment would require maintenance costs of $97,100 at the end of the fitt year. The cost of capitalis 90 .
To determine whether Hilisong should purchase the new sewing machine or not, we need to compute the net present value of the new equipment and compare it with the cost of the equipment. The formula for computing the present value of the equipment is given by PV = FV / (1+r)nPV = present value of future cash flowsFV = future value of cash flowsr = discount rate (i.e. cost of capital)n = number of periods Using the above formula.
we can calculate the present value of the operating costs for the new equipment in each of the seven years, as follows-
Year 1: PV = $390,800 / (1 + 0.09)1 = $357,778.44.
Year 2: PV = $400,900 / (1 + 0.09)2 = $330,163.77.
Year 3: PV = $410,600 / (1 + 0.09)3 = $307,199.87.
Year 4: PV = $425,200 / (1 + 0.09)4 = $288,327.96.
Year 5: PV = $433,000 / (1 + 0.09)5 = $272,987.28.
Year 6: PV = $434,600 / (1 + 0.09)6 = $259,876.59.
Year 7: PV = $436,500 / (1 + 0.09)7 = $248,707.56.
The total present value of the operating costs for the seven years is $357,778.44 + $330,163.77 + $307,199.87 + $288,327.96 + $272,987.28 + $259,876.59 + $248,707.56 = $2,065,041.47The total cost of the new sewing machine is:$2,450,000 + $85,000 + $97,100 = $2,632,100.
Therefore, the net present value of the new equipment is:$2,065,041.47 - $2,632,100 = -$567,058.53Since the net present value is negative, it means that the project is not profitable and Hilisong should not purchase the new sewing machine.
Therefore, it is advisable for Hilisong to maintain the old machine since purchasing a new machine will lead to a loss of $567,058.53.
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Cyclical unemployment refers to a. the deviation of the actual unemployment rate from its natural rate. b. the portion of unemployment created by wages set above the equilibrium level. c. the changes in actual unemployment rate compared to a previous period. d. the deviation of structural unemployment from its frictional rate.
Cyclical unemployment refers to changes in the actual unemployment rate compared to a previous period. Cyclical unemployment is a kind of unemployment that arises as a result of fluctuations in the business cycle.
Cyclical unemployment occurs when a downturn in the economy causes a decrease in demand for labor, causing layoffs and, as a result, a rise in unemployment. When economic growth improves and businesses expand, cyclical unemployment decreases.
When the economy is in a recession, unemployment rises. Cyclical unemployment varies depending on the stage of the business cycle. When the economy is in a recession, cyclical unemployment is high, and when the economy is expanding, cyclical unemployment is low.
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a company issued 5-year, 7% bonds with a par value of $1,000,000. the market rate when the bonds were issued was 6.5%. the company received $1,010,000 cash for the bonds. using the straight-line method, the amount of recorded interest expense for the first semiannual interest period is:
The amount of recorded interest expense for the first semiannual interest period is $35,000.
To calculate the amount of recorded interest expense using the straight-line method, to determine the annual interest payment and then divide it by the number of interest periods in a year.
Given:
Par value of the bonds = $1,000,000
Market rate when the bonds were issued = 6.5%
Cash received for the bonds = $1,010,000
First, let's calculate the annual interest payment:
Annual interest payment = Par value of the bonds × Coupon rate
Coupon rate = 7% = 0.07
Annual interest payment = $1,000,000 × 0.07 = $70,000
determine the number of interest periods in a year. Since these are 5-year bonds, there 2 interest periods per year (semiannual).
calculate the recorded interest expense for the first semiannual interest period:
Recorded interest expense = Annual interest payment ÷ Number of interest periods in a year
Recorded interest expense = $70,000 ÷ 2 = $35,000
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Make recommendations to the CEO about actions to be taken to
improve the dividend yield, PE ratios and dividend payout
ratios?
To improve dividend yield, consider increasing dividend payments. To improve PE ratios, focus on increasing earnings or reducing stock price. To improve dividend payout ratios.
Improving dividend yield can be achieved by increasing the amount of dividends paid to shareholders. This can be done by boosting profitability or allocating a larger portion of earnings towards dividends. To enhance PE ratios, two approaches can be taken. First, focus on increasing earnings through strategies such as revenue growth, cost management, or expanding into new markets. Second, reducing the stock price can also improve the PE ratio, potentially attracting more investors. Dividend payout ratios can be improved by striking a balance between dividend payments and retained earnings. Analyze the company's financial position, growth prospects, and capital requirements to determine the optimal ratio that satisfies shareholders while ensuring reinvestment in the business for future growth. Regular review and adjustment of the payout ratio can help maintain a healthy dividend policy.
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A company that just paid a dividend of $2.05 per share, which is expected to grow 12.5% each year. the stock is currently selling for $65.90 per share. what is the companys cost of equity
The company's cost of equity is approximately 15.61%.
To calculate the cost of equity, we can use the dividend discount model (DDM) approach. The formula for the cost of equity using the DDM is as follows:
Cost of Equity = Dividend per Share / Current Stock Price + Growth Rate
Given the information provided:
Dividend per Share = $2.05
Current Stock Price = $65.90
Growth Rate = 12.5% or 0.125 (expressed as a decimal)
Plugging these values into the formula:
Cost of Equity = $2.05 / $65.90 + 0.125
Cost of Equity = 0.03106 + 0.125
Cost of Equity = 0.15606 or 15.61%
Therefore, the company's cost of equity is approximately 15.61%.
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Management has decided to reduce the number of staff in your department as a result of the current interest rate increase which is impacting the organizations bottom line. You feel your team is already stretched in terms of resourcing. Using models discussed in classroom propose how you intend to resolve this with management
By using models such as the McKinsey 7-S framework and the Lewin’s Change Management Model, it is possible to propose a strategy to resolve the challenge of reduced staff and stretched resources.
When faced with the challenge of a reduced staff and an already stretched team, there are several models that can be used to resolve this issue.
One such model is the McKinsey 7-S framework.
This model identifies seven elements that are essential for the success of an organization: Strategy, Structure, Systems, Shared values, Skills, Style, and Staff.
Using this model, it is possible to address the issue of reduced staff by focusing on the other elements.
For example, by restructuring the department, changing the systems and processes, and upskilling the remaining staff, it may be possible to offset the reduction in headcount.
Another model that can be used is Lewin’s Change Management Model.
This model identifies three stages of change: Unfreeze, Change, and Refreeze.
In this case, the unfreezing stage would involve presenting the case for why the reduction in staff may not be the best course of action, highlighting the potential risks to productivity, and presenting alternatives.
The change stage would involve implementing a plan to address the issue, such as the restructuring, systems change, and upskilling mentioned earlier.
The refreeze stage would involve embedding the changes into the organization's culture and systems to ensure that they are sustained over time.
In summary, by using models such as the McKinsey 7-S framework and Lewin’s Change Management Model, it is possible to propose a strategy to resolve the challenge of reduced staff and stretched resources.
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