Steven and a friend incorporated a company with RM2 issued share capital and each holds an RM1 share. They have no intention to increase the paid-up capital of the company soon until the company is fully operationalized with the successful application of a franchise license in Active Water. They have asked you to invest money in their company through a loan capital with a promising return of 10%. Explain whether you will lend money to Steven and his friend’s company. (30 marks)
Please give more explanation, will give you a vote!!!

Variable costs change in direct proportion to changes in the level of activity or volume of production.

Fixed costs remain the same regardless of changes in activity or production volume. Mixed costs have both fixed and variable components. None of these costs are costs that cannot be classified as variable, fixed, or mixed. To determine the cost behavior, it is important to analyze the relationship between the cost and the level of activity. If the cost varies with the level of activity, it is a variable cost.

If the cost remains the same regardless of changes in the level of activity, it is a fixed cost. If the cost has both fixed and variable components, it is a mixed cost. By analyzing the behavior of each cost in the table, it can be determined whether they are variable, fixed, mixed, or none of these.

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As the price of a good 1 rises, the consumer will experience a desire to consume a different bundle, a decrease in utility, and a southwesterly movement on indifference map. Therefore, the correct answer is "All of the above."

A consumer is an individual or entity that purchases and consumes goods or services to satisfy their needs and wants. In the context of economics, consumers play a central role in driving demand and influencing the market. They make choices and decisions based on factors such as price, quality, preferences, and budget constraints. Consumers are an integral part of the economic system as their spending patterns and behavior impact the overall production, distribution, and allocation of resources in the market.

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Answer: The impact of the government sector on GDP and aggregate expenditure would depend on the level of government spending and taxation. Government spending can contribute to aggregate expenditure, thereby increasing GDP. Conversely, taxation can reduce household disposable income, which may lead to a decrease in consumption and overall aggregate expenditure.

Explanation:

A. In an open economy without a government sector, the level of GDP and aggregate expenditure would be determined by the total spending by households (consumption), businesses (investment), and foreign entities (exports minus imports). The formula for aggregate expenditure is AE = C + I + (X - Z), where C represents consumption, I represents investment, X represents exports, and Z represents imports.

B. When the economy becomes an open economy with a government sector, the introduction of government spending and taxation would impact the level of GDP and aggregate expenditure. Government spending is typically represented as G in the aggregate expenditure equation.

The impact of the government sector on GDP and aggregate expenditure would depend on the level of government spending and taxation. Government spending can contribute to aggregate expenditure, thereby increasing GDP. Conversely, taxation can reduce household disposable income, which may lead to a decrease in consumption and overall aggregate expenditure.

Overall, the effect of the government sector on GDP and aggregate expenditure would be determined by the specific policies implemented, the magnitude of government spending and taxation, and how individuals and businesses respond to these changes.

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The example provided is related to [(d) Both (a) and (b)] considering how other areas of business interface with human resources and whether the data could be calculated from existing system data.

The example given involves the use of production or sales data by HR for performance appraisal or compensation purposes. The question asks whether this example is related to considering how other areas of business interface with human resources (option a) or considering if the data could be calculated from data already in the system (option b).

The example illustrates both aspects. Firstly, it highlights how HR interacts with other areas of the business, specifically production or sales, by utilizing their data for performance appraisal or compensation processes. This demonstrates the integration and collaboration between HR and other departments in utilizing relevant information for HR-related decisions.

Secondly, the example suggests that the production or sales data would likely be provided from a non-HR module or system, indicating the consideration of whether the data can be calculated from existing system data. This implies the examination of data availability and integration between systems to streamline processes and avoid duplicating efforts.

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Here is the complete question:

Production or sales data may be used by HR as part of a performance appraisal or compensation process, but they would likely be provided from a non-HR module or system. This example is related to (a) consider how other areas of business interface with human resources (b)consider if it could be calculated from data already in the system

a. (b) only

b. Neither (a) nor (b)

c. (a) only

d. Both (a) and (b)

The estimated intrinsic value of BQAR using the residual income model is approximately -$6,957.42.      

(a) To estimate BQAR's cost of equity using the CAPM model, we need the risk-free rate, the market risk premium, and the company's equity beta.

Risk-free rate = 4%

Market risk premium = 8%

Equity beta (β) = 0.75

Using the CAPM formula:

Cost of Equity = Risk-Free Rate + (Equity Beta * Market Risk Premium)

Cost of Equity = 4% + (0.75 * 8%)

Cost of Equity = 4% + 6%

Cost of Equity = 10%

Therefore, BQAR's cost of equity is estimated to be 10%.

(b) To calculate BQAR's residual income for each year from 2009 to 2013, we need to subtract the equity charge from the net income. The equity charge is calculated by multiplying the book value of equity at the beginning of the year by the cost of equity.

Book value of equity on January 1, 2009 = $60,000

Cost of equity = 10%

Residual Income = Net Income - Equity Charge

Residual Income 2009 = -$3,600 - ($60,000 * 10%) = -$3,600 - $6,000 = -$9,600

Residual Income 2010 = -$1,040 - ($60,000 * 10%) = -$1,040 - $6,000 = -$7,040

Residual Income 2011 = $10,736 - ($60,000 * 10%) = $10,736 - $6,000 = $4,736

Residual Income 2012 = $8,928 - ($60,000 * 10%) = $8,928 - $6,000 = $2,928

Residual Income 2013 = $10,978 - ($60,000 * 10%) = $10,978 - $6,000 = $4,978

To estimate the intrinsic value of the company using the residual income model, we can sum up the present value of the future residual incomes:

Intrinsic Value = Residual Income 2009 / (1 + Cost of Equity)^1

+ Residual Income 2010 / (1 + Cost of Equity)^2

+ Residual Income 2011 / (1 + Cost of Equity)^3

+ Residual Income 2012 / (1 + Cost of Equity)^4

+ Residual Income 2013 / (1 + Cost of Equity)^5

Discount rate = Cost of Equity = 10%

Intrinsic Value = -$9,600 / (1 + 10%)^1

+ (-$7,040) / (1 + 10%)^2

+ $4,736 / (1 + 10%)^3

+ $2,928 / (1 + 10%)^4

+ $4,978 / (1 + 10%)^5

Calculating the present value for each year and summing them:

Intrinsic Value ≈ -$8,727.27 + (-$5,038.84) + $3,342.15 + $1,879.28 + $2,587.26

Intrinsic Value ≈ $-6,957.42

Therefore, the estimated intrinsic value of BQAR using the residual income model is approximately -$6,957.42.

(c) The current stock price is $10.50 per share, and there are 10,000 shares outstanding. To evaluate Sullivan's claim that the stock is undervalued, we can compare the intrinsic value per share with the current stock price.

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Understanding these differences is important for businesses as it affects their operations, marketing strategies, pricing models, and customer experiences.

Examples of high goods content products:

Automobiles: Automobiles have a high goods content as they consist of tangible components such as the chassis, engine, tires, and various mechanical parts. The majority of the value and utility of an automobile comes from its physical goods.

Furniture: Furniture is another example of a high goods content product. It includes items such as sofas, tables, chairs, and beds that are primarily made up of physical materials. The quality and design of the materials used in furniture greatly contribute to its value.

Examples of low goods content products:

Consulting services: Consulting services, such as management consulting or financial advisory services, have minimal goods content. The primary value is derived from the expertise and knowledge of the consultants rather than tangible products. The deliverables are typically reports, recommendations, and strategic plans.

Examples of products with an equal amount of goods and services:

Restaurants: Restaurants offer a combination of goods (food and beverages) and services (serving, ambiance, customer service). While the food and drinks are tangible goods, the overall dining experience, including the atmosphere, waitstaff service, and customer interaction, constitutes the service component.

Sustainability refers to the practice of meeting present needs without compromising the ability of future generations to meet their own needs. It involves considering environmental, social, and economic factors to create a balanced and resilient system.

The three perspectives of sustainability are:

Environmental perspective: This perspective focuses on minimizing negative environmental impacts and preserving natural resources. Organizations that adopt environmental sustainability practices aim to reduce pollution, conserve energy, promote renewable resources, and implement waste management strategies. For example, a manufacturing company may invest in energy-efficient machinery and implement recycling programs to minimize its carbon footprint.

Social perspective: The social perspective of sustainability emphasizes the well-being and fair treatment of individuals and communities. Organizations with a social sustainability focus prioritize factors such as labor rights, community engagement, diversity and inclusion, and fair trade practices.

Economic perspective: The economic perspective of sustainability emphasizes the long-term viability and profitability of an organization. It involves sustainable financial practices, including responsible resource allocation, cost management, and long-term planning.

These perspectives of sustainability have a significant impact on organizations as they influence decision-making, resource allocation, and stakeholder relationships. By adopting sustainable practices, organizations can enhance their reputation, attract environmentally and socially conscious customers, reduce costs, and contribute to a more sustainable future.

Goods and services are two distinct categories in the realm of economic exchange. Goods refer to tangible, physical products that can be seen, touched, and consumed. Services, on the other hand, are intangible actions or tasks performed by individuals or organizations to satisfy the needs or wants of others. Here are four key differences between goods and services:

Production and Consumption: Goods are typically produced first and then consumed or used by the customer. They can be manufactured, packaged, and stored before being purchased. Services are often produced and consumed simultaneously.

Perishability: Goods are generally non-perishable or have a longer shelf life. They can be stored and sold at a later time. In contrast, services are perishable and cannot be stored or inventoried. Once a service is not utilized during its available time, it cannot be saved or resold.

Customization: Goods are usually standardized and mass-produced. While there may be some variation in color, size, or design, goods are generally produced with uniformity.

Understanding these differences is important for businesses as it affects their operations, marketing strategies, pricing models, and customer experiences. Organizations that offer both goods and services need to consider the unique characteristics of each category to effectively meet customer demands and deliver value.

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True . The statement is true that the cost of education, professional athletes' pay, and medical services rise faster than the rate of goods and services because their average productivity has remained the same.

The statement is true because the cost of education, professional athletes' pay, and medical services are based on specialized skills and knowledge which are not affected by the same factors that impact the productivity of other goods and services. Therefore, the prices for these services rise faster than the rate of inflation.

The cost of education, professional athletes' pay, and medical services are often cited as examples of goods and services whose prices rise faster than the rate of inflation. This is because these goods and services are based on specialized skills and knowledge that are not easily replicated or affected by the same factors that impact the productivity of other goods and services. For example, the cost of education continues to rise because the demand for skilled labor continues to increase, while the supply of highly skilled workers remains relatively constant. This results in higher prices for educational services. Similarly, the pay for professional athletes continues to rise because the demand for entertainment continues to increase, while the number of highly skilled athletes remains relatively constant. This results in higher prices for professional sports services.

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The size of the labor force in this fictional economy is 110, the unemployment rate in this fictional economy is approximately 18.18%.

(1) To determine the size of the labor force, we need to sum up all the individuals who are either employed or actively seeking employment.

Labor Force = Full-time Employment + Part-time Employment + Part-time Job Seekers + Unemployed

Labor Force = 50 + 25 + 15 + 20

Labor Force = 110

(2) The unemployment rate is calculated by dividing the number of unemployed individuals by the labor force and multiplying the result by 100 to express it as a percentage.

Unemployment Rate = (Unemployed / Labor Force) * 100

Unemployment Rate = (20 / 110) * 100

Unemployment Rate ≈ 18.18%

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The journal entry for the issuance of 690 shares of $2 par value common stock and 330 shares of $100 par value preferred stock for a lump sum of $135,800 when the market price of the common shares and preferred shares is $140 each can be prepared.

The issuance of stock for a lump sum involves allocating the total lump sum amount to the respective stock classes based on their par value and market value.

To prepare the journal entry, we need to determine the allocation of the lump sum amount to common stock and preferred stock based on their par value and market price.

The par value of the common stock is $2, and the par value of the preferred stock is $100. The market price of both the common and preferred shares is $140 each.

First, we calculate the total par value for the common stock: 690 shares * $2 par value = $1,380.

Next, we calculate the total par value for the preferred stock: 330 shares * $100 par value = $33,000.

Now, we need to allocate the remaining amount to the common and preferred stock based on their market prices.

The total lump sum amount is $135,800. We subtract the total par value of both stock classes from the lump sum amount: $135,800 - ($1,380 + $33,000) = $101,420.

To allocate the remaining amount, we need to determine the ratio between the market price of each stock class and the total market price:

Common stock market price / Total market price = $140 / ($140 + $140) = 0.5

Preferred stock market price / Total market price = $140 / ($140 + $140) = 0.5

Now, we can allocate the remaining amount to each stock class:

Common stock: 0.5 * $101,420 = $50,710

Preferred stock: 0.5 * $101,420 = $50,710

The journal entry to record the issuance would be as follows:

Cash $135,800

Common Stock $50,710

Preferred Stock $50,710

Paid-in Capital in Excess of Par - Common $650

Paid-in Capital in Excess of Par - Preferred $50,000

The cash account is debited for the total lump sum amount received. The common stock and preferred stock accounts are credited for their respective par values. The remaining amount is allocated to paid-in capital in excess of par for each stock class.

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To compute Tesla's share risk premium, we need to subtract the risk-free rate of return from the market return and then multiply it by Tesla's beta.

Market Return = 12%

Risk-Free Rate = 2.5%

Beta = 1.8

Share Risk Premium = (Market Return - Risk-Free Rate) * Beta

Share Risk Premium = (12% - 2.5%) * 1.8

Share Risk Premium = 9.5% * 1.8

Share Risk Premium ≈ 17.1%

Therefore, the share risk premium for Tesla Inc is approximately 17.1%. So, the correct answer is c) 17.1 percent.

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Answer:

In allocating water to salmon habitat, the answer would be:

(1) agriculture loses out.

(2) This allocation exemplifies the economic principle of opportunity cost.

Explanation:

Allocating water to salmon habitat means diverting water from agricultural use, which can have negative implications for agricultural activities. The water that is allocated to the environment for salmon habitat cannot be used for irrigation or other agricultural purposes, resulting in a loss for the agriculture sector.

This allocation decision showcases the principle of opportunity cost, which states that when resources are limited, choosing to allocate them to one purpose means forgoing alternative uses. In this case, the opportunity cost of allocating water to salmon habitat is the potential agricultural output or productivity that could have been achieved if the water was used for irrigation or other agricultural needs.

They are anadromous, which means they are born in freshwater streams, migrate to the ocean to feed and grow, and return to their natal streams to spawn.

The life cycle of Chinook salmon is complex, involving several distinct stages. After hatching from eggs in freshwater streams, the young fish, called fry, spend several months feeding and growing before migrating downstream to the ocean. They spend one to five years in the ocean, depending on their size and the availability of food, before returning to freshwater to spawn.

During spawning, the female Chinook salmon excavate a nest in the streambed, called a redd, where they deposit their eggs. The male then fertilizes the eggs, and both parents die soon after. The eggs hatch in the spring, and the cycle begins again.

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The correct formula to calculate the inflation rate from one year to the next is:

Inflation Rate = [(P₂ - P₁) / P₁] × 100

where:

P₁ represents the price level in the initial year

P₂ represents the price level in the subsequent year

The inflation rate is a measure that indicates the percentage change in the general level of prices for goods and services over a specific period of time, typically a year. It reflects the rate at which the purchasing power of a currency is eroded due to rising prices.

By subtracting the initial price level (P₁) from the subsequent price level (P₂), and dividing the result by the initial price level (P₁), we obtain the relative change in prices. Multiplying this value by 100 gives us the percentage change, which represents the inflation rate.

Option b: (P₂ - P₁) × 100 is the correct formula for calculating the inflation rate.

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The concept of the total product is a marketing strategy that covers the full spectrum of a product's advantages and disadvantages in order to fulfil consumers' needs and wants. The total product concept can be described as the combination of all features that come with a product.

In this article, we will examine the significance of the total product concept in terms of financial services such as mortgage and house loans for first-time home buyers. Financial services are necessary for people who want to buy homes but do not have the financial means to do so. Mortgages and house loans are two of the most popular and widely used financial services.

In terms of the total product concept, these financial services must have specific features to meet the requirements of first-time home buyers. This includes both the tangible and intangible benefits offered. Tangible benefits would include the rate of interest offered, repayment period, down payment, and prepayment options. Intangible benefits would include the ability to make additional payments, customer service, and ease of application.

All these features are important for first-time buyers in choosing their financial services, as they are the determining factors of the perceived value of the product. Consequently, when financial institutions are offering mortgages and house loans, they must consider these features as important factors that contribute to the total value of the product. Therefore, understanding and meeting the needs of first-time home buyers is essential for financial institutions to retain their customers and remain competitive.

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The above statement indicates that the cash book of Bridal Services was balanced on 31st May, and its closing balance was RM 1,440.

Payments made during the month of May totaled RM 23,280, and receipts for the same month were RM 22,660.

During the month of May 2020:

Payments totaled RM23,280.

Receipts totaled RM22,660.

The balance brought forward (b/d) from the previous period was RM2,060.

The closing balance (c/d) at the end of May 2020 was RM1,440.

So, the net cash balance for the month of May was negative RM 620 (i.e., payments less receipts).Therefore, this is the answer more than 100 characters.

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The correct option is A. To determine the price for each type of client, we need to find the quantity where the marginal cost (MC) equals the inverse demand equation for each type.

For Type A:

MC = P = 100 - 6Q

16 = 100 - 6Q

6Q = 100 - 16

6Q = 84

Q = 14

Substituting the quantity back into the inverse demand equation:

P = 100 - 6(14)

P = 100 - 84

P = 16

Therefore, for Type A clients, the price should be $16 per user.

For Type B:

MC = P = 86 - 3.5Q

16 = 86 - 3.5Q

3.5Q = 86 - 16

3.5Q = 70

Q = 20

Substituting the quantity back into the inverse demand equation:

P = 86 - 3.5(20)

P = 86 - 70

P = 16

Therefore, for Type B clients, the price should also be $16 per user.

B. To calculate the total producer surplus, we need to find the area between the marginal cost curve and the demand curve for each type and sum them.

For Type A:

Producer Surplus A = (1/2) * (P - MC) * Q

Producer Surplus A = (1/2) * (16 - 16) * 14

Producer Surplus A = 0

For Type B:

Producer Surplus B = (1/2) * (P - MC) * Q

Producer Surplus B = (1/2) * (16 - 16) * 20

Producer Surplus B = 0

Total Producer Surplus = Producer Surplus A + Producer Surplus B

Total Producer Surplus = 0 + 0

Total Producer Surplus = 0

C. The pricing strategy mentioned will not be incentive compatible because it allows buyers who purchase 10 or more units to pay a lower price per unit ($51) compared to the regular price of $58 per unit. This creates a price discrepancy that may incentivize buyers to split their purchases into multiple transactions of fewer than 10 units to take advantage of the lower price. Therefore, the pricing strategy does not align incentives for buyers to make their optimal purchasing decisions.

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To calculate the activity-based overhead rates using the data provided, we need to divide the estimated overhead for each activity cost pool by its corresponding cost driver.

Employee training:

Activity-Based Overhead Rate = Estimated Overhead / Expected Use of Cost Drivers

Employee training overhead rate = $213,000 / $1,775,000

Direct labor dollars:

Activity-Based Overhead Rate = Estimated Overhead / Expected Use of Cost Drivers

Direct labor dollars overhead rate = $1,196,000 / $579,000

Typing and secretarial:

Activity-Based Overhead Rate = Estimated Overhead / Expected Use of Cost Drivers

Typing and secretarial overhead rate = $2,500 / 60,000

Computing:

Activity-Based Overhead Rate = Estimated Overhead / Expected Use of Cost Drivers

Computing overhead rate = $800 / 27,000

Facility rental:

Activity-Based Overhead Rate = Estimated Overhead / Expected Use of Cost Drivers

Facility rental overhead rate = $146,000 / 40

Travel (Direct):

Activity-Based Overhead Rate = Estimated Overhead / Expected Use of Cost Drivers

Travel overhead rate (Direct) = $56,000 / 25,300

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Prompt Truck Company, a large trucking company operating in the United States, utilizes the units-of-production (UOP) method to depreciate its trucks.

The UOP method allocates depreciation expense based on the number of units produced or the mileage driven by the trucks. As the trucks are used for transportation services, the UOP method provides a more accurate representation of their wear and tear based on their actual usage. This method aligns the depreciation expense with the revenue generated by the trucks, as it reflects the wear and tear incurred in proportion to the units produced or mileage driven.By utilizing the UOP method, Prompt Truck Company can accurately allocate the depreciation expense of its trucks.

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The lack of or inadequate welfare packages for employees not only limits their social and organizational conditions but also affects team spirit and the overall moral framework within the workplace.

Full-time employees should be entitled to a living wage, good working conditions, leave allowances, and vacations. However, the actual availability and benefits of these provisions in the workplace often fall short.

To promote sustainable output, employers should be more innovative in addressing welfare concerns. This can serve as an incentive and motivate workers to exert extra effort. Upgrading skills is also crucial for enhancing welfare in the workplace.

Studies have shown the importance of staff welfare on organizational productivity. Employees' awareness of welfare elements and the relationship between the working environment, morale, and productivity have been examined. Competitive and market-related salaries have been identified as motivators for improved performance.

There is a need for administrative commitment from employers to implement welfare measures and political will from regulators to ensure compliance and performance. The World Economic Forum has emphasized the significance of workers' welfare and incentives as priorities for employers to enhance morale and productivity.

The concepts of well-being, welfare, utility, and quality of life are interconnected and central to various aspects of society. Evaluating policies based on a quality-of-life model can help understand their impact beyond economic outcomes.

Studies have shown that companies with high-quality work-life experiences exceptional growth and profitability. Collaboration between accountants and behavioral scientists is recommended to improve the understanding and implementation of quality-of-work-life initiatives.

In the context of welfare reform, research has indicated that issues such as battering and traumatic stress can complicate the transition from welfare to work. Addressing these challenges is crucial to ensure successful welfare reform and support individuals in their journey towards self-sufficiency.

Overall, addressing welfare concerns and improving the quality of life for workers requires a multi-faceted approach involving legislation, implementation, collaboration, and a focus on sociocultural aspects. By prioritizing employee welfare, organizations can foster a more productive and inclusive work environment.

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Yes, you can say "SHE BOUGHT ME BRUNCH OF FOOD WHEN SHE TRAVELLED IN INDO. IT'S SO TOUCHING" if you want to tell about an international friend who bought you food and expressed their gratitude for a gift.

You could elaborate on the circumstances and how the gesture made you feel.

For example, you could say: "During my friend's trip to Indonesia, she treated me to brunch as a way of expressing her gratitude for a gift I had given her. Her kind gesture not only provided me with a delicious meal but also made me feel appreciated and valued as a friend. It was a touching moment that I will always remember." It provides additional information and personal insight into the situation.

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Short selling is a trading technique used by speculators who believe that the price of a stock or security will decline in the future.

It entails selling borrowed securities and repurchasing them at a lower price, profiting from the price difference. A speculator who wants to profit from a short sale borrows stock from a broker and sells it on the market with the expectation that the price will decline before the stock must be returned to the broker. In this case, you want to take advantage of the fall in IOI's share price from RM 8 to RM 6.50 by short selling 5 lots of IOI'S share from the broker. Each lot consists of 100 shares. If the price of an IOI's share falls to RM 6.50, the profit would be as follows: Net Profit = [(Initial selling price - Final buying price) × Total number of shares sold] - Interest on borrowed shares. Initially, the total amount of shares borrowed will be 5 lots × 100 shares/lot = 500 shares. Initial Selling price of IOI's shares = RM 8Final Buying price of IOI's shares = RM 6.50Therefore, Net Profit = [(RM 8 - RM 6.50) × 500] - Interest on borrowed shares = RM 750

The net profit earned would be RM 750 if the price of IOI's share falls to RM 6.50 in three days time. This would be a profitable trade for the speculator.

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The relegation of a football team from Tier 3 to Tier 4 in the English league has implications for the labor market of the club's professional footballers.

The relegation of a football team from Tier 3 to Tier 4 implies a decline in the team's performance and a subsequent decrease in spectator attendance. This reduction in attendance directly affects the club's revenue and financial capacity to invest in professional footballers. Using a partial equilibrium diagram for the labor market, we can observe the impact on the demand for and wages of the club's professional footballers.

The diagram will show a leftward shift in the demand curve for players, indicating a decrease in demand due to the lower financial resources available to the club. As a result, the equilibrium wage rate for professional footballers in the club is likely to decline. This means that players may face lower wages and potentially reduced job opportunities as the club adjusts to its new financial situation.

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a) Cost of goods sold: 44,820 OMR; Ending inventory value: 14,700 OMR (calculated using the Weighted Average Method with periodic inventory system).

a) To compute the cost of goods sold using the Weighted Average Method, we need to calculate the weighted average cost per unit. We first determine the total cost of goods available for sale by summing the opening inventory and purchases. Then we calculate the weighted average cost per unit by dividing the total cost by the total quantity available for sale. Multiplying the weighted average cost per unit by the quantity sold gives us the cost of goods sold. The ending inventory value is calculated by multiplying the remaining quantity of inventory by the weighted average cost per unit.

b) Journal entries:

- January 6:

  Inventory - Dr: 78,400 OMR

  Accounts Payable - Cr: 78,400 OMR (record the purchase of 4,700 units at 16 OMR per unit)

- January 11:

  Inventory - Dr: 56,000 OMR

  Accounts Payable - Cr: 56,000 OMR (record the purchase of 3,500 units at 16 OMR per unit)

- January 12:

  Inventory - Dr: 79,900 OMR

  Accounts Payable - Cr: 79,900 OMR (record the purchase of 4,700 units at 17 OMR per unit)

- January 20:

  Inventory - Dr: 32,400 OMR

  Accounts Payable - Cr: 32,400 OMR (record the purchase of 1,800 units at 18 OMR per unit)

- January 22:

  Inventory - Dr: 28,500 OMR

  Accounts Payable - Cr: 28,500 OMR (record the purchase of 1,500 units at 19 OMR per unit)

- January 9:

  Cost of Goods Sold - Dr: 23,800 OMR

  Inventory - Cr: 23,800 OMR (record the sale of 1,400 units)

- January 14:

  Cost of Goods Sold - Dr: 40,000 OMR

  Inventory - Cr: 40,000 OMR (record the sale of 2,500 units)

- January 24:

  Cost of Goods Sold - Dr: 8,400 OMR

  Inventory - Cr: 8,400 OMR (record the sale of 700 units)

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The complete question is: CASE NO#2- PERIODIC INVENTORY SYSTEM - INVENTORY VALUATION METHODS

Pardo, a chain of "general merchandise stores" and the largest of its type in UAE. The company follows the Perpetual Inventory System. The company furnishes the following information for the month of January 2022: (Please find attached)

You are required to compute:

a) The amount of Cost of goods sold and Ending Inventory Value based on Weighted Average Method using periodic inventory system.

b) Prepare the Journal entries based on Weighted Average Method using periodic inventory system.

The term that fits in the blank is 'Accounts Receivable.'

The accounts receivable of a company is a record of the outstanding payments due from its clients for services or goods delivered but not yet billed or paid for. They are usually the amounts owed to a business by its customers and arise from sales or services provided on credit. The credit accounts that a company offers and the way it handles them are crucial because they are essentially providing interest-free loans to their clients. Companies need to ensure that they have a well-defined credit policy and the proper controls and procedures in place to handle their accounts receivable appropriately. Methods of Invoicing: Invoice generation: They should have a well-defined process for invoicing to make sure that all sales made are appropriately documented and recorded in the company's books. Invoice management: A company should have a method of monitoring its invoice process to ensure that it is effectively and efficiently processing its invoices and addressing issues that may occur, such as late payments. Accounts receivable automation: Automating the process of generating and sending invoices can save a lot of time and help improve the accuracy of records. Methods of Collecting Past-due accounts: Collection letters: A company can send a collection letter to its clients, asking for payment or requesting that the clients contact the company to make payment arrangements. Third-party collections: If the company is unable to collect the amount owed from the client, it may hire a third-party collections agency to collect the payment on its behalf. Legal action: If all other collection attempts have failed, the company can take legal action against the client to recover the unpaid amount. In summary, a company’s accounts receivable are an indication of how it manages its credit accounts, including methods of invoicing and collecting past-due accounts.

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The improvement in production technology leads to an increase in the supply of ABC food products, shifting the supply curve to the right.

The rise in income levels of the population results in an increase in demand for ABC, shifting the demand curve to the right as well. The equilibrium price will depend on the magnitude of the changes in supply and demand, but it is expected to decrease if the increase in supply outweighs the increase in demand or increase if the increase in demand is larger than the increase in supply. A diagram illustrating the initial equilibrium, the rightward shift in supply, and the rightward shift in demand can provide a visual representation of these changes.

In the diagram, the supply curve will shift to the right, indicating an increase in supply. The demand curve will also shift to the right, reflecting an increase in demand. The new equilibrium price will be determined at the intersection of the new supply and demand curves. The extent of the price change will depend on the relative magnitude of the shifts in supply and demand.

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The amount of accumulated depreciation on each bus at December 31, 2020 is $267,900

FJU Co. purchased land, a building, and equipment for a total cost of $540,000. The property was appraised and fair values were determined to be $200,000 for the land, $400,000 for the building, and $300,000 for the equipment. The journal entry for recording the purchase of the property by FJU Co. is as follows:

Assets Debit Credit

Land $200,000

Building $400,000

Equipment $300,000

Cash $540,000

Total $540,000

For calculating the accumulated depreciation, we have to first calculate the depreciation expense for each year using different methods as given below:

For Bus 1: The straight-line method will be used. Hence, depreciation expense per year will be

($96,000 - $6,000)/5 = $18,000

Depreciation expense for 2018 = $18,000

Depreciation expense for 2019 = $18,000

Depreciation expense for 2020 = $18,000

Total accumulated depreciation at the end of 2020 = $18,000 x 3 = $54,000

For Bus 2: The double-declining balance method will be used. Hence, the depreciation rate will be

2/4 = 50%.

Depreciation expense for 2018 = $140,000 x 50% = $70,000

Depreciation expense for 2019 = ($140,000 - $70,000) x 50% = $35,000

Depreciation expense for 2020 = ($140,000 - $70,000 - $35,000) x 50% = $17,500

Total accumulated depreciation at the end of 2020 = $70,000 + $35,000 + $17,500 = $122,500

For Bus 3: The sum-of-the-years’-digits method will be used. Depreciation expense per year will be 4 + 3 + 2 + 1 = 10. Depreciation expense for 2019 = $92,000 x 4/10 = $36,800

Depreciation expense for 2020 = $92,000 x 3/10 = $27,600

Total accumulated depreciation at the end of 2020 = $36,800 + $27,600 = $64,400

For Bus 4: The units-of-activity method will be used. Depreciation expense per unit of activity will be ($60,000 - $6,000)/120,000 = $0.45

Depreciation expense for 2019 = $0.45 x 24,000 = $10,800

Depreciation expense for 2020 = $0.45 x 36,000 = $16,200

Total accumulated depreciation at the end of 2020 = $10,800 + $16,200 = $27,000

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(a) In a binomial model, the possible asset prices at maturity T = 1 can be calculated by applying the up and down factors to the initial price. Given that the asset price can increase or decrease by 10% at the end of each semester, we can calculate the possible asset prices as follows:

If the asset price increases by 10%, the new price is 100 EUR * (1 + 0.10) = 110 EUR.

If the asset price decreases by 10%, the new price is 100 EUR * (1 - 0.10) = 90 EUR.

Therefore, the possible asset prices at maturity T = 1 are 110 EUR and 90 EUR.

(b) To calculate the present value of a European put option with a strike price of 100 EUR at T = 1, we need to discount the potential payoff at maturity using the risk-free interest rate. In this case, the risk-free interest rate is 0.04 p.a. (simple interest). The put option will have a payoff of the difference between the strike price and the asset price if the asset price is below the strike price at maturity.

If the asset price is 90 EUR, the put option payoff is 100 EUR - 90 EUR = 10 EUR.

If the asset price is 110 EUR, the put option payoff is 0 EUR (since the asset price is above the strike price).

To calculate the present value, we discount the potential payoffs using the risk-free interest rate. The present value of the put option is the sum of the discounted payoffs.

Please note that without the specific details about the timing of the cash flows and the exact interest rate calculation method, a precise calculation cannot be provided. The provided information serves as a general illustration of the approach to pricing options in a binomial model.

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Option (C), If households, businesses, and government buy more than businesses have produced, then the total expenditures are greater than total production.

When the total expenditure is greater than the total production, it leads to a situation of overspending. Households, businesses, and government can spend only the amount that is available. But when they spend more than what is available, it creates an imbalance in the economy. It means that there is not enough production to support the level of spending that is taking place.

As a result, businesses would have to increase their production to meet the rising demand. This can be achieved by using existing inventories or increasing their capacity to produce. However, if businesses are unable to do so, then the economy would experience a decline in output. Therefore, the correct answer is C. Total expenditures are greater than total production.

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To determine the standard price (SP) per pound of direct materials, we can use the direct materials quantity variance formula:

Direct Materials Quantity Variance = (Actual Quantity - Standard Quantity) x Standard Price

Given that the direct materials quantity variance is $1,600 unfavorable, and the company used 4,600 pounds of direct materials instead of the budgeted 4,000 pounds, we can plug these values into the formula:

$1,600 = (4,600 - 4,000) x Standard Price

Simplifying the equation:

$1,600 = 600 x Standard Price

To find the standard price, we divide both sides of the equation by 600:

Standard Price = $1,600 / 600

Calculating this:

Standard Price = $2.67 per pound

Therefore, the standard price (SP) per pound of direct materials is $2.67.

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a. 4.65% compounded semiannually: The formula for effective annual interest rate (EAR) is:

EAR=(1+R/m)^m – 1

where R is the nominal annual interest rate and m is the number of compounding periods per year.

To find the effective annual interest rate for 4.65% compounded semiannually, we can use the above formula:

EAR=(1+R/m)^m – 1

EAR=(1+0.0465/2)^2 – 1

EAR=(1.02325)^2 – 1

EAR=0.0477 or 4.77%

The formula for effective annual interest rate (EAR) is:

EAR=(1+R/m)^m – 1

where R is the nominal annual interest rate and m is the number of compounding periods per year.

a. 4.65% compounded semiannually

To find the effective annual interest rate for 4.65% compounded semiannually, we can use the above formula:

EAR=(1+R/m)^m – 1

EAR=(1+0.0465/2)^2 – 1

EAR=(1.02325)^2 – 1

EAR=0.0477 or 4.77%

Thus, the effective annual interest rate is 4.77%.b. 13.45% compounded quarterly

To find the effective annual interest rate for 13.45% compounded quarterly, we can use the same formula:

EAR=(1+R/m)^m – 1

EAR=(1+0.1345/4)^4 – 1

EAR=(1.033625)^4 – 1

EAR=0.1447 or 14.47%

Thus, the effective annual interest rate is 14.47%.

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The statement "Entrepreneurs who get funding rarely keep total control" is true to some extent. In most cases, entrepreneurs have to give up a certain degree of control when they receive funding from venture capitalists (VCs), angel investors, or other sources.

The reasons why this happens and explore the extent to which entrepreneurs lose control of their companies when they receive funding.

Firstly, when entrepreneurs seek funding from VCs, they usually have to give up a percentage of their equity in the company. VCs invest in startups with the expectation of earning a return on their investment, which means they want to own a portion of the company's future profits.

This equity stake gives VCs a say in how the company is run, as they become partial owners of the business. VCs also have a financial interest in the company's success and may push the founders to pursue certain growth strategies or exit plans. This can lead to a loss of control for the entrepreneur.

Secondly, when entrepreneurs receive funding, they often have to give up board seats to the investors.

Board seats give investors a direct role in the management of the company. They can influence the company's direction by voting on key decisions like hiring a new CEO, raising additional funding, or pursuing an acquisition.

Finally, entrepreneurs who receive funding may also have to give up control over the day-to-day operations of the company. They may need to hire additional staff or executives to manage the growth of the business.

This can lead to a loss of control as the entrepreneur becomes less involved in the company's operations and decision-making process.

In conclusion, entrepreneurs who receive funding do indeed give up some degree of control over their companies.

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