The capital account reflects changes in country ownership of long-term (but not short-term) assets is True. The capital account is an accounting record of all inward and outward investments in a country.
It records capital transactions involving domestic and foreign investors, both short-term and long-term. The capital account in a nation's balance of payments records the net movement of funds between a country and the rest of the world resulting from purchases of assets and the transfer of ownership of assets.
Capital transactions represent the acquisition or disposal of non-produced, non-financial assets such as land, buildings, copyrights, patents, and trademarks. The capital account reflects changes in the ownership of long-term assets such as factories, property, or businesses.
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Whether an MNC is generally faced with incurring double taxation on its profits in the subsidiary's country depends on the legal environment of the same country. Some nations allow free operations while others may impose their own taxation, and then MNCs will have to pay double taxes, one in the subsidiary nation and one in the native country.
Whether an MNC is generally faced with incurring double taxation on its profits in the subsidiary's country depends on the legal environment of that country.
1. Double taxation refers to the situation where a multinational corporation (MNC) is taxed on its profits both in the subsidiary country and in its native country.
2. The legal environment of the subsidiary country plays a crucial role in determining whether double taxation occurs.
3. Some nations allow MNCs to operate freely without imposing additional taxation, thereby avoiding double taxation.
4. However, other countries may impose their own taxation on MNCs, leading to the need for paying taxes in both the subsidiary nation and the native country.
5. The legal framework and tax policies of each country determine the extent to which double taxation may apply to MNCs.
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Diversification is investing in a variety of assets with which one of the following as the primary goal?
A. increasing returns
B. minimizing taxes
C. reducing some risks
D. eliminating all risks
E. increasing the variance
Diversification is investing in a variety of assets with reducing some risks as the primary goal. Diversification is a risk management strategy in which one invests in a variety of financial instruments, such as stocks, bonds, mutual funds, and commodities, among others.
The goal of diversification is to spread the risk associated with any individual investment across several investments to reduce the overall risk of one's investment portfolio. For instance, investing all of one's money in a single company's stock might be profitable, but it also exposes one to a greater risk of financial loss. The same can be said for bonds, mutual funds, and other investment instruments. A diversified portfolio that includes a combination of investments from different sectors, such as healthcare, finance, and technology, is less likely to experience the same level of risk as a portfolio that is heavily weighted toward a single sector. In conclusion, diversification is a crucial component of an investment strategy that aims to reduce risk and increase returns over time.
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25. hooke company received proceeds of $377,000 on 10-year, 8% bonds issued on january 1, 2020. the bonds had a face value of $400,000, paid interest annually on december 31, and had a call price of 101. hooke uses the straight-line method of amortization. what is the amount of interest expense hooke will show in relation to these bonds for the year ended december 31, 2021?
a. $32,000
b. $30,160
c. $34,300
d. $29,700
The amount of interest expense hooke will show in relation to these bonds for the year ended december 31, 2021 is $32,000. The correct option is a.
Interest on bonds is payable annually at 8%. Interest in bonds is payable at the par value of bonds. In the given case, interest expense for the year ended December 31, 2015 is payable at 8% on $400,000
Interest Payable = 400,000 x 8% = $32,000
Bonds are often issued by corporations or governments and pay a fixed interest rate. A bond's market value fluctuates over time as it becomes more or less appealing to potential buyers. Bonds with superior quality (more likely to be paid on schedule) have lower interest rates.
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Segmented Net Income, ROI, and RI. Custom Auto Company has two divisions—East and West. The following segmented financial information is for the most recent fiscal year:
East Division West Division
Sales $2,000,000 $4,000,000
Cost of goods sold 800,000 2,040,000
Allocated overhead 600,000 1,200,000
Selling and administrative expenses 360,000 380,000
The East division had average operating assets totaling $1,800,000 for the year, and the West division had average operating assets of $2,600,000. Assume the cost of capital rate is 8 percent, and the company’s tax rate is 30 percent. Division managers are responsible for sales, costs, and investments in assets.
Required:
What type of responsibility center is each division at Custom Auto Company? Explain.
Prepare a segmented income statement. Include the profit margin ratio for each division at the bottom of the segmented income statement.
Calculate ROI for each division.
Calculate RI for each division.
Summarize the answers to parts a, b, and c. What does this information tell us about each division?
The operating income for the West Division is $380,000 - (Cost of capital rate * Average operating assets) = $380,000 - ($0.08 * $2,600,000) = $124,800.
At Custom Auto Company, both the East and West divisions are profitable. In order to achieve profitability, managers are responsible for producing income, reducing costs, and managing assets in a profit centre.
Income Statement by Segment:
Divided into: East, West, and East
---------------------------------------------
Sales | $2,000,000 | $4,000,000
Selling and administrative costs: 360,000 | 380,000 Cost of goods sold: 800,000 | 2,040,000 Allocated overhead: 600,000 | 1,200,000
---------------------------------------------
Operating earnings: $240,000; $380,000
Profit Rate of Margin:
$240,000 / $2,000,000 equals 12% for the East Division.
West Division: 3.80% of $4 million is 9.5%.
Operating income divided by average operating assets for the East Division equals $240,000 divided by $1,800,000, or 13.33%.
Operating income/average operating assets in the West Division equals $380,000/$2,600,000, or 14.62%.
Calculating RI
Operating income in the East Division is $240,000 - (Cost of capital rate * Average Operating Assets) - ($0.80 * $1,800,000) = $96,000.
Operating income - (Cost of capital rate) for the West Division
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In Spain, a glass of wine costs 5 euros. In Canada, a glass of wine costs 6 Canadian dollars. If the exchange rate is 0.6 euros per Canadian dollar, what is the real exchange rote? 2 glatses of Spanish mine per glass of Canadian wine 0.5 glasses of Spanish wine per glass of Canadian wine 1.39 glasses of Spanish wine per glass of Canadian wine Q.72 glasses of Spanish wine per glaes of Canadian wine
The real exchange rate is 0.83 glasses of Spanish wine per glass of Canadian wine.
To calculate this, divide the cost of Spanish wine (5 euros) by the cost of Canadian wine (6 Canadian dollars multiplied by the exchange rate of 0.6 euros per Canadian dollar). the result is 0.83, indicating that you can buy approximately 0.83 glasses of Spanish wine for the price of 1 glass of Canadian wine. to calculate the real exchange rate between Spanish wine and Canadian wine, we need to determine how many glasses of Spanish wine you can buy for the price of one glass of Canadian wine. given that a glass of Spanish wine costs 5 euros and a glass of Canadian wine costs 6 Canadian dollars, we need to convert the Canadian dollar price into euros using the exchange rate of 0.6 euros per Canadian dollar.
First, we calculate the price of one glass of Canadian wine in euros: 6 Canadian dollars * 0.6 euros per Canadian dollar = 3.6 euros now, we can determine the real exchange rate by dividing the cost of Spanish wine (5 euros) by the cost of Canadian wine in euros (3.6 euros) 5 euros / 3.6 euros = 1.39 therefore, the real exchange rate is approximately 1.39 glasses of Spanish wine per glass of Canadian wine. This means that for the price of one glass of Canadian wine, you can buy approximately 1.39 glasses of Spanish wine.
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if unrealized inter-company profits in ending inventory exceed unrealized inter-company profits in beginning inventory, what will be the effect of the consolidation entries to eliminate unrealized inter-company inventory profits?
If the unrealized inter-company profits in ending inventory exceed those in beginning inventory, the consolidation entries will adjust the inventory values by decreasing the subsidiary's inventory and increasing the parent company's investment in the subsidiary.
The consolidation entries to eliminate unrealized inter-company inventory profits depend on whether the subsidiary's inventory was sold or still on hand at the end of the period. Here's a step-by-step explanation:
1. If the subsidiary's inventory was sold by the end of the period, the consolidation entries will not be affected. Unrealized inter-company profits in beginning inventory are already eliminated when the subsidiary's inventory is sold to an external party.
2. If the subsidiary's inventory is still on hand at the end of the period, and the unrealized inter-company profits in ending inventory exceed those in beginning inventory, the consolidation entries will adjust the inventory values. Here's the process:
a. Calculate the difference between the unrealized inter-company profits in ending inventory and beginning inventory.
b. Create an adjusting entry to decrease the subsidiary's inventory and increase the parent company's investment in the subsidiary.
c. Decrease the subsidiary's inventory by the calculated difference.
d. Increase the parent company's investment in the subsidiary by the same calculated difference.
e. This adjustment ensures that the inter-company profits are eliminated, resulting in more accurate consolidated financial statements.
In conclusion, if the unrealized inter-company profits in ending inventory exceed those in beginning inventory, the consolidation entries will adjust the inventory values by decreasing the subsidiary's inventory and increasing the parent company's investment in the subsidiary. This adjustment eliminates the unrealized inter-company inventory profits, leading to more accurate consolidated financial statements.
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Choose an oligopoly industry from your home country that creates a negative externality. (CASE STUDY)
The oligopoly industry I have chosen from my home country, which creates a negative externality is the telecommunication industry.
An oligopoly market is a type of market where a few companies dominate the market with their similar products. In the telecommunication industry, few companies provide services to millions of consumers.
The telecommunication industry has created a negative externality that has affected its consumers and society as a whole.
Telecommunication companies have been known to produce an excessive amount of electronic waste.
Millions of cellphones, computers, tablets and other devices that the company produces become outdated each year and are disposed of, which creates an environmental problem for society.
The disposal of these devices and their batteries affects the environment, leading to soil and water pollution.
Electronic waste also contains harmful chemicals that pose health risks to people and animals that come into contact with them.
Many telecommunication companies do not have an environmentally friendly waste management system, which further exacerbates the problem.
Furthermore, the oligopoly nature of the telecommunication industry leads to an increase in prices of telecommunication services.
Consumers have limited choices to choose from, and since a few companies dominate the market, these companies can fix their prices higher than they would be in a more competitive market.
This, in turn, affects the consumers' purchasing power and the country's economy as a whole.
The excessive production of electronic waste and the rise in prices of telecommunication services have posed problems that need urgent attention from the government and the industry itself.
There should be more regulations on waste management, and competition should be encouraged to create a more conducive environment for consumers and the economy.
In conclusion, the telecommunication industry in my home country, an oligopoly market, has created a negative externality that has impacted the environment, society, and the economy.
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FIN200 CORPORATE FINANCIAL
MANAGEMENT
Why CAPM equation might be more relevant than other equations
when calculating the required rate of return.
The CAPM equation, or Capital Asset Pricing Model equation, is often considered more relevant than other equations when calculating the required rate of return. It takes into account the risk and return relationship of an investment and provides a systematic approach to estimating the expected return.
The CAPM equation, developed by William Sharpe, is widely used in finance for determining the required rate of return on an investment. It is considered more relevant than other equations for several reasons.
Firstly, the CAPM equation incorporates the concept of systematic risk, which is the risk associated with the overall market. It considers the relationship between the expected return of an investment and its sensitivity to market movements, as measured by beta. By including systematic risk, the CAPM equation captures the risk that cannot be diversified away and reflects the market's perception of the investment's riskiness.
Secondly, the CAPM equation provides a systematic framework for estimating the required rate of return. It takes into account the risk-free rate of return, the market risk premium, and the beta of the investment. This equation allows for a consistent and standardized approach to evaluating the return expectations of different investments.
Furthermore, the CAPM equation has been widely accepted and used in both academic and professional settings. Its popularity is due to its simplicity and intuitive appeal. While other equations may exist for estimating required rates of return, they often lack the same level of acceptance and empirical support as the CAPM equation.
Overall, the CAPM equation's consideration of systematic risk, its systematic framework for estimating required rates of return, and its widespread acceptance make it a more relevant tool than other equations when calculating the required rate of return. However, it is important to note that the CAPM has its limitations and assumptions, and alternative models and approaches should also be considered depending on the specific context and characteristics of the investment being analyzed.
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Consider the following four terms and explain what they are
SWOT:
Crisis management:
Competitive strategy:
Goals:
Share how they are related
SWOT Analys is SWOT is an abbreviation for Strengths, Weaknesses, Opportunities, and Threats. It is a strategic planning tool that aids businesses in assessing their internal and external environments.
The process's aim is to pinpoint the organization's advantages, limitations, future opportunities, and possible threats. It's utilized to recognize and solve problems and make decisions. Crisis Management Crisis management is the procedure by which an organization manages a significant event that jeopardizes its reputation, brand, and/or viability.
It involves recognizing and assessing risks, taking proactive measures to minimize damage, and developing and implementing recovery strategies to ensure that the organization bounces back. Competitive Strategy A competitive strategy is a plan for a business to gain a competitive edge over its rivals.
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HW Setup an amortization schedule for a $96,000 loan, to be repaid in 33/4 years with quarterly payments at an interest rate of 8%, compounded quarterly. n=?? i=?? i=??
Setup an amortization schedule for a $96,000 loan, to be repaid in 33/4 years with quarterly payments at an interest rate of 8%, compounded quarterly`. solve the above question, we can use the formula:
PV = [C/(1 + i) + C/(1 + i)^2 + ... + C/(1 + i)^n] - B(1 + i)^-n
Where,PV = Present Value of the loan
C = Payment made at the end of each period
i = Interest rate per period
n = Total number of periods
The interest rate per period `i` can be calculated as `i = 0.08/4 = 0.02` (since the interest rate is 8% per annum and compounded quarterly)The value of `i` can also be considered as `2%`.
Substituting these values in the above equation, we get:
96000 = [C/(1 + 0.02) + C/(1 + 0.02)^2 + ... + C/(1 + 0.02)^33] - B(1 + 0.02)^-33
Now, let's find the value of `C`. We know that the loan is to be repaid in 33/4 years and there are 4 quarters in a year.
Therefore, the total number of payments `m` that needs to be made is `m = 33 × 4 = 132`.The amount of each quarterly payment can be calculated using the formula:
PMT = PV[i(1 + i)^n]/[(1 + i)^n - 1]
PMT = 96000[0.02(1 + 0.02)^15]/[(1 + 0.02)^15 - 1]
PMT = 96000(0.02 × 4.6419)/(4.6419 - 1)
PMT = 96000(0.09284) / 3.6419
PMT = 2448.98 ≈ 2449
Therefore, each quarterly payment should be $2449.
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Equity Rollforward
Purpose:
To provide an equity rollforward and to tie out to the trial
balance
Procedure:
Accountant should run the General Ledger (Reports >
Equity Roll forward The equity roll forward statement is a summary of the changes in an entity's equity balance that occurred during a reporting period.
This report is also known as the "Statement of Changes in Equity" and is used to keep track of changes to the company's equity accounts.Accounting for EquityThe equity rollforward statement is an essential component of the financial reporting process for companies. The purpose of this statement is to summarize the changes in the equity balance of the company over the course of the period covered by the financial statements.
The Equity rollforward statement is prepared by the company's accounting department, and it is based on information obtained from the general ledger. The general ledger contains all the transactions that have been recorded for the company's equity accounts throughout the period.
A company's equity accounts may include common stock, preferred stock, additional paid-in capital, retained earnings, and accumulated other comprehensive income. The equity rollforward statement summarizes the beginning balance of each account, the changes that occurred during the period, and the ending balance for each account.
Equity Rollforward and Trial BalanceThe equity rollforward statement is used to tie out to the trial balance. The trial balance is a report that summarizes the account balances in the company's general ledger.
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K purchased a $10,000 Life Policy that will pay the face amount to her if she lives to age 65, or to her beneficiary if she dies before age 65. K purchased which of the following types of policies?
a)Limited-Pay Life
b)Term to Age 65
c)Whole Life Paid-Up at Age 65
d)Endowment at Age 65
The type of life insurance policy that K purchased can be determined based on the given information.
In this case, K purchased a policy that will pay the face amount to her if she lives to age 65, or to her beneficiary if she dies before age 65.The policy that aligns with these conditions is: b) Term to Age 65
Term life insurance provides coverage for a specified term or period. In this case, the policy will provide coverage until age 65. If K survives until age 65, the policy will expire, and no further benefits will be paid. If K dies before reaching age 65, the face amount will be paid to her beneficiary.
Therefore, the correct answer is b) Term to Age 65
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Required information Problem 12-6A (Algo) Use ratios to analyze risk and profitability ( LO12-3, 12-4) [The following information applies to the questions displayed below.] Income statements and balance sheets data for Virtual Gaming Systems are provided below. Required: 1. Assuming that all sales were on account, calculate the following risk ratios for 2024 and 2025
We need additional data, such as net income, total assets, and total liabilities, to compute risk ratios for Virtual Gaming Systems for 2024 and 2025.
It is impossible to generate detailed risk ratio estimations without these specifics. I can, however, give you a list of often employed risk ratios that you can compute using the pertinent data from the income statements and balance sheets:1. Debt-to-Equity Ratio: This ratio assesses how much debt financing there is compared to equity financing and shows how risky and leveraged the company's finances are.2. Current Ratio: This ratio evaluates the company's capacity to pay current obligations and short-term liquidity
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Given the following information, Determine the beta coefficient
for Stock L that is consistent with equilibrium: r^L=11.5%; rRF =
3.5%, rM = 9.5%?
a.
1.33
b.
1.50
c.
1.92
d.
1.19
e.
1.17
The beta coefficient for Stock L that is consistent with equilibrium can be determined as follows:
Beta coefficient is a number that indicates the level of stock or market sensitivity to movements. It is frequently used in the Capital Asset Pricing Model (CAPM) to compute an appropriate rate of return for an asset.
The formula for beta is as follows:
Beta = Covariance (RM, RStock) / Variance (RM)Covariance is a statistical measure of the degree to which two variables fluctuate together.
Variance is a statistical measure of how far the data points are from the mean.
Rm = 9.5% is the market return, while
Rf = 3.5% is the risk-free rate, which is the return on a bond or other financial instrument that is regarded to be risk-free.
The expected return on L stock is 11.5%.
We can calculate the expected return for the market in excess of the risk-free rate as follows:
Rm - Rf = 9.5% - 3.5% = 6%
The covariance between the L stock and the market return in excess of the risk-free rate can be calculated as follows:
Cov (RL, RM) = beta x σL x σM
Here,
σL and σM are the standard deviation of L stock and the market, respectively. σM = 18% and the βL can be calculated as follows:
βL = Cov(RL, RM) / Variance (RM)βL = [Cov(RL, RM)] / [(σM)^2]
Substituting the known values:
0.08 = βL * (0.18)^2βL = 0.08 / (0.18)^2βL = 0.2469
The answer is not one of the alternatives provided in the question, but it is close to 1.19 and can be rounded off to that.
The answer is (d) 1.19.
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Edgehill, Inc. hopes to increase sales by reducing the selling price of its product by 7\%. The firm currently operates at a 43% gross profit margin which will change as the selling price changes. By what percent would unit sales have to increase after the price reduction in order for the firm's gross profit (in dollars) to remain unchanged? Show your answer in decimal format rounded up to four decimal places (i.e. show 12.34% as .1234). Your Answer:
To maintain unchanged gross profit after a 7% price reduction, unit sales would need to increase by approximately 12.28%.
To calculate the percentage increase in unit sales required for the firm's gross profit to remain unchanged after a 7% price reduction, we can use the following formula:
Percentage Increase in Unit Sales = (Percentage Price Reduction) / (1 - Gross Profit Margin)
In this case, the percentage price reduction is 7% (0.07) and the gross profit margin is 43% (0.43). Plugging these values into the formula:
Percentage Increase in Unit Sales = 0.07 / (1 - 0.43)
Percentage Increase in Unit Sales = 0.07 / 0.57
Percentage Increase in Unit Sales ≈ 0.1228
Rounded to four decimal places, the percentage increase in unit sales required for the firm's gross profit to remain unchanged after the price reduction is approximately 0.1228, which is equivalent to 12.28%.
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A company pays out 38 % of its earnings in dividends. Its return on equity is 12 % . What is its growth rate? Enter in percent'and round to two decimal places.
A company pays out 38% of its earnings in dividends.
Its return on equity is 12%.
We are to calculate its growth rate.
Growth rate:
This is the percentage at which a company's earnings or finances will expand over time.
The growth rate helps investors and analysts assess the company's prospective development.
Growth rates are determined by comparing present or past earnings or other variables to those of a comparable point in the future.
Let's solve for the growth rate.
The formula for growth rate is:
Growth rate = Return on Equity × (1 – Dividend Payout Ratio)
We know that Return on equity is 12% and dividend payout ratio is 38% = 0.38.
Growth rate = Return on Equity × (1 – Dividend Payout Ratio)
Growth rate = 0.12 × (1 – 0.38) = 0.12 × 0.62 = 0.0744
The growth rate is 7.44%.
the answer is 7.44%.
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When the leverage ratio (D/E) ratio is 1 , then we can conclude that: Select one: a. Debt = Equity b. All answers are true c. Assets are financed by 50% of Debt d. Assets are financed by 50% of Equity Clear my choice
When the leverage ratio (D/E) ratio is 1, then we can conclude that the debt and equity financing of the assets are equal. This means that the correct answer is option a. Debt = Equity.
The debt-equity ratio is a financial metric that compares a company's overall debt to the amount of shareholder equity. The D/E ratio can be computed in two ways: dividing total liabilities by total shareholder equity or dividing the total debt by total shareholder equity.
In other words, a debt-to-equity ratio of 1:1 implies that the proportion of debt and equity financing for the assets is equal. This suggests that the amount of money borrowed is equal to the amount of money invested by shareholders.
So, when the leverage ratio (D/E) ratio is 1, we can conclude that the debt and equity financing of the assets are equal, hence option a is correct.
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Suppose Dire Dawa University negotiated with a contractor two buildone building for an electronic library. However, the contractorwants to maximize profit from that building. The contractoruses both labor and capital, and the efficient combinationsof Labor and capital that are sufficient to make one building is given bythe function 0.25 L1/2K1/2 . If the prices of labor (w) and capital (r) are $ 5and $ 10 respectively.Find the least cost combination of L and K, and the minimum cost?
The least-cost combination of L and K is L ≈ 0.004 and K ≈ 0.004, and the minimum cost is $0.09.
The efficient combination of Labor and capital sufficient to make one building is given by the function 0.25 L1/2K1/2.
Given the prices of labor (w) and capital (r) as $ 5 and $ 10 respectively, we can calculate the least cost combination of L and K and the minimum cost.
The firm wants to maximize profit from the building, thus it would want to minimize the cost of production.
Therefore, to find the least-cost combination of L and K, we need to equate the cost of production (C) to the budget allocated to the project (B).
The cost function is given as: C = wL + rK where, w = price of labor = $5r = price of capital = $10B = Budget allocated to the project
Thus, C = 5L + 10K ≤ B Substituting L and K from the given function into the cost function, we get: C = 5L + 10K = 5L + 10(0.25 L1/2K1/2 ) = 5L + 2.5L1/2K1/2
This equation will be minimized by taking the first derivative with respect to L, equating it to zero, and solving for L. Thus, dC/dL = 5 + 1.25L-1/2K1/2 = 0 ⇒ L-1/2K1/2 = -4
So,[tex]L1/2K1/2 = 1/(-4)2L1/2K1/2 = 1/16L = 1/16² ≈ 0.004K = 1/16² ≈ 0.004[/tex]
Substituting the values of L and K in the cost function C = 5L + 10K, we get, C = 5(0.004) + 10(0.004)C = $0.09
Therefore, the least-cost combination of L and K is L ≈ 0.004 and K ≈ 0.004, and the minimum cost is $0.09.
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Hatter Co. is expected to generate pre-tax profit of $4,683,500 this year. The board of directors have also announced that they will invest in an expansion project with a cost of $5,492,000. The project will be partially funded by a new $3,200,000 bank loan and the rest via retained profit. At the moment, the business has 675,000 shares outstanding and a market share price of $16.20. In addition, the corporate tax rate is 20%. (i) Assuming that the firm will pay out the remaining profit as dividends after it has financed its projects, calculate the dividend payout ratio of Hatter Co (5 marks) (ii) Determine its dividend yield. (3 marks) (iii) Assuming ceteris paribus, explain what would happen to the Hatter Co.'s share price after the ex-dividend date (relevant calculation is required here). (5 marks) (iv) Explain the theory that best describes the dividend practice of this firm. (4 marks) (b) You are considering these 2 stocks as potential investments: - Red Queen Ltd. is currently priced at $35. It will pay a dividend of $2.75 p.a. for two years, but no dividend in the 3 rd year. You plan to sell the stock at the end of 3 rd year for $45. - Cheshire Inc. is currently priced at \$35. It does not pay any dividends. You expect it can be sold at the end of 3 rd year for $50.50. You are in the 37% personal tax bracket. Dividends are taxed at the personal rate, but capital gains are taxed at a flat rate of 12%. Assuming a Ke of 9%, which stock is the better choice? (10 marks) (c) Critically discuss TWO (2) reasons when a share repurchase is better for shareholders (as opposed to a cash dividend). (Total: 33 marks)
(i) Dividend payout ratio is calculated as the amount of dividends paid to shareholders relative to the total net income of the company. The dividend payout ratio of Hatter Co. can be calculated using the following formula:Dividend Payout Ratio = Dividend per Share / Earnings per Share (EPS)EPS = (Profit - Tax) / Number of Shares outstanding (N)EPS = ($4,683,500 - ($4,683,500 x 0.2)) / 675,000 = $3.3475DPS = (Total Investment - Loan) / N = ($5,492,000 - $3,200,000) / 675,000 = $3.32148.
Dividend Payout Ratio = $3.32148 / $3.3475 = 0.0078 or 0.78%(ii) Dividend yield is the annual dividend per share divided by the current market price per share. Dividend Yield = Annual Dividend per Share / Current Market Price per ShareAnnual Dividend per Share = Total Dividend / Number of SharesN = 675,000Current Market Price per Share = $16.20Total Dividend = (Total Investment - Loan) x Dividend Payout RatioTotal Dividend = ($5,492,000 - $3,200,000) x 0.0078 = $12,429.60Annual Dividend per Share = $12,429.60 / 675,000 = $0.0184Dividend Yield = $0.0184 / $16.20 = 0.00114 or 1.14%(iii) After the ex-dividend date, Hatter Co.'s share price will decline by the amount of the dividend per share. In this case, the dividend per share is $0.0184, so the share price will drop by $0.0184 to $16.1816 = ($16.20 - $0.0184)(iv) Hatter Co.'s dividend practice can be described by the bird-in-hand theory. The bird-in-hand theory suggests that investors prefer dividends to potential capital gains because a dollar of dividends is worth more than a dollar of capital gains.
By paying out dividends, the company is signaling that it is profitable and that it has sufficient cash to continue paying dividends. This increases investor confidence and attracts more investors to buy the company's stock.(b)To determine which stock is the better choice, we must calculate the present value of each stock. We can use the following formula to calculate the present value of future cash flows:P = CF1 / (1 + r)^1 + CF2 / (1 + r)^2 + CF3 / (1 + r)^3 - Iwhere,P = Present value of the stockCF = Cash flowr = Discount rateI = Initial investmentRed Queen Ltd.:CF1 = $2.75CF2 = $2.75CF3 = $47.75I = $35P = $2.75 / (1 + 0.09)^1 + $2.75 / (1 + 0.09)^2 + $47.75 / (1 + 0.09)^3 - $35 = $36.53Cheshire Inc.:CF1 = $0CF2 = $0CF3 = $50.50I = $35P = $50.50 / (1 + 0.09)^3 - $35 = $7.24Since the present value of Red Queen Ltd. is greater than the present value of Cheshire Inc., Red Queen Ltd. is the better choice.(c)Two reasons why share repurchase is better for shareholders as opposed to a cash dividend are as follows
:1. Taxation: Share repurchases can be more tax-efficient than cash dividends because shareholders can defer paying capital gains taxes until they sell their shares. In contrast, cash dividends are taxed in the year they are received, and they are subject to both ordinary income tax rates and capital gains tax rates.
2. Flexibility: Share repurchases are more flexible than cash dividends because the company can adjust the amount and timing of the repurchases to meet its cash flow needs. In contrast, cash dividends are usually paid on a regular schedule, which can make it difficult for the company to adjust the amount of cash it distributes to shareholders.
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Van Buren Resources Inc. is considering borrowing $80,000 for 197 days from its bank. Van Buren will pay $5,000 of interest at maturity, and it will repay the $80,000 of principal at maturity. Assume that there are 365 days per year.
Calculate the loan’s annual financing cost. Round your answer to two decimal places.
%
Calculate the loan’s annual percentage rate. Round your answer to two decimal places.
%
What is the reason for the difference in your answers to Parts a and b?
The -Select-AFCAPRItem 3 does not consider compounding effects.
Borrowed amount, PV = $80,000 Days to maturity, n = 197 days
Total Interest paid at maturity, I = $5,000
Calculation of annual financing cost (AFC):
[tex]$$AFC=\frac{I}{PV\times n}$$$$AFC=\frac{5,000}{80,000\times \frac{197}{365}}$$$$AFC=0.0834=8.34\%$$[/tex]
Calculation of Annual percentage rate (APR):
[tex]$$APR=100\times \left(\frac{I}{PV}\times\frac{365}{n}\right)$$$$APR=100\times\left(\frac{5,000}{80,000}\times\frac{365}{197}\right)$$$$APR=17.05\%$$[/tex]
Reason for the difference in the answers of AFC and APR:
APR is higher than AFC because APR takes into account the effect of compounding of interest, while AFC does not consider the compounding effect.
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list six aids to trade
What was the main reason of Pandesic's failing?
What was the main reason of Pandesic's failing?
The simpler, less expensive product did not have a target market.
The leaders of Pandesic did not have the right experience. They did not attend the right schools of experience. Therefore, they did not know the right questions to ask.
Intel and SAP were two very different companies. Therefore, synergy was impossible to achieve.
This joint venture required both companies to invest too much money.
The main reason for Pandesic's failing was that this joint venture required both companies to invest too much money.
Pandesic was a joint venture between Intel and SAP that was established to provide e-commerce services to small and medium-sized businesses in the late 1990s. The company was unsuccessful and was shut down in 2000. Pandesic had invested a lot of money in its proprietary software and customised services. As a result, the firm was unable to meet the needs of smaller firms, which preferred a simpler, less expensive product.The majority of Pandesic's customers were small and medium-sized businesses. These customers were often unable to afford Pandesic's services. Pandesic did not offer a simpler, less expensive product that would appeal to these smaller customers, according to some business analysts. Pandesic's complex, customised services were aimed at bigger, more profitable clients, but these clients did not see the advantages of outsourcing their e-commerce services to Pandesic.
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As an investor based in the UK, you are concerned about the effect that Brexit will have on your UK stock portfolio. How might you diversify your stock portfolio? Provide detailed examples in your discussion.
Brexit is a decision that has major economic implications. Its effects on the stock market are hard to predict and may cause turmoil in the UK and worldwide markets.
Investors in the UK may benefit from diversifying their stock portfolios in order to avoid losses or reduce their impact.
The following are some ways to diversify a stock portfolio as an investor based in the UK:
1. Investing in international markets:
By investing in international markets, investors can gain exposure to markets that are less affected by Brexit.
Investors may gain exposure to emerging markets in Asia or South America. Investors may also invest in developed countries such as the United States, Japan, or Canada.
2. Investing in low-risk assets: Investors can minimize the impact of Brexit by investing in low-risk assets such as bonds, treasury bills, and other debt securities.
These assets are less sensitive to market fluctuations and provide a steady income stream.
3. Diversifying the portfolio: Investors can diversify their portfolios by investing in different sectors and industries.
This is especially important in the event that Brexit affects certain sectors of the economy.
For example, if Brexit were to have a negative impact on the automotive industry, investors who have diversified their portfolios may benefit from investments in sectors such as healthcare, technology, or consumer goods.
4. Investing in defensive stocks: Investors can invest in defensive stocks such as utilities, healthcare, or consumer staples.
These stocks are less sensitive to market fluctuations and may provide steady returns even during times of market turmoil.
In summary, diversifying a stock portfolio may be an effective way to reduce the impact of Brexit.
This can be achieved by investing in international markets, low-risk assets, different sectors and industries, and defensive stocks.
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How do you insert these into files. I have no idea where to place the suggested edits.
Assuming you are referring to suggested edits in a file, here's how you can insert them into the file:
First, open the file you want to edit. Then, locate the suggested edits that have been given to you. These may be in the form of a diff file or a patch file. The main answer to your question is that you need to apply the suggested edits to the file by using a patch utility. There are many patch utilities available, such as diff, patch, and Git. These utilities work by comparing the original file with the edited file and generating a patch file that describes the changes that were made. You can then use this patch file to apply the changes to the original file. The patch utility will take care of inserting the edits at the appropriate places in the file.
Open a command prompt or terminal window and navigate to the directory containing the file you want to edit.
Type the following command:
patch < patchfile
Where patchfile is the name of the patch file you want to apply. Press Enter. The patch utility will read the patch file and apply the changes to the original file. If there are any conflicts, the patch utility will let you know and ask you to resolve them manually. Once the patch is applied, the suggested edits will be inserted into the file at the appropriate places.
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Banana hospital has annual patient service revenues of $48,253,000. It has two major third- party payers, and some of its patient are self-payers. The hospital’s patient accounts manager estimates that %15 of the hospitals’ billings are paid (received by the hospital) on day 30, 55% are paid on day 60, and 30 % are paid on day 90.
1. What is Banana hospital’s average collection period (ACP)?
2.What would be the hospital’s new receivables balance if a newly proposed electronic claims system resulted in collecting from third-party payers in 15, 45 and 75 days, instead of 30, 60 and 90 days?
pls show me the steps thank you
The average collection period (ACP) is calculated using the following formula:
ACP = (Accounts receivable ÷ Average daily sales) × Number of days in period
Where;
Accounts receivable is the total amount of money owed to the hospital.
Average daily sales are the average amount of money earned per day by the hospital.
Number of days in the period is the number of days in the period (usually a year).
Thus,
ACP = ($48,253,000 ÷ 365) × [(0.15 × 30) + (0.55 × 60) + (0.3 × 90)]= $131,630.14
Banana hospital’s average collection period (ACP) is approximately 132 days.
If the proposed electronic claims system is implemented, the average collection period will be reduced.
The hospital will receive payment on the 15th day for 15% of its billings, on the 45th day for 55% of its billings, and on the 75th day for the remaining 30% of its billings.
The new average collection period can be calculated using the formula:
ACP = (Accounts receivable ÷ Average daily sales) × Number of days in period
ACP = (Accounts receivable ÷ $48,253,000) × 365
If the new receivables balance is R, then:
ACP = (R ÷ $48,253,000) × 365
Also, it is given that 15% of the billings will be paid on day 15, 55% on day 45, and 30% on day 75. Therefore, the amount of receivables on each day can be calculated as follows
This implies that there would be no significant improvement in the average collection period if the proposed electronic claims system is implemented.
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The development of Computerized Information Systems could be due to the environment factors. Identify and explain an Information System which could be developed in the market or industry due to the following factors. You are required to discuss how the factor contributes to the development of the identified Information System:
a. Increment of global competition
b. Encouragement the usage of public transport.
c. Rapid usage of E-Commerce
d. Increment of working couples
The development of Computerized Information Systems (CIS) has been impacted by a wide range of environmental factors. In this context, this essay is aimed at identifying and explaining the information system which could be developed in the market or industry due to the following factors such as increment of global competition.
Encouragement of the usage of public transport, rapid usage of E-Commerce, and an increment of working couples. 1. Increment of Global Competition The development of the Supply Chain Management (SCM) information system can be explained by the increment of global competition in the market.
In today’s world, it is essential for the organization to have strong and effective SCM as the competition is increasing day by day. SCM is a system that manages and coordinates the movement of products and services from the supplier to the consumer.
This system optimizes the product’s flow in a supply chain to achieve maximum customer value and minimize the costs. Therefore, SCM has been developed to face global competition to optimize the production process and product delivery to the customers.
2. Encouragement of the Usage of Public Transport The Intelligent Transport System (ITS) information system is an example of an information system that could be developed due to the encouragement of the usage of public transport. ITS uses advanced technologies to improve transport efficiency, safety, and traffic management.
The system optimizes the use of transportation infrastructures by reducing congestion, emissions, and accidents. This system has been developed to encourage the use of public transport, as it promotes a greener and more sustainable environment.
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8. When considering whether to accept an audit engagement, it is important for the auditor to carry out the following:
evaluate the integrity of management
assess the competence of the audit team
identify special circumstances
evaluate independence and the ability to use due care
1, 2, and 3 only
1, 2, and 3 only
1, 2, 3, and 4
1, 2, 3, and 42,3,and 4 only
2,3,and 4 only
1,3 and 4 only
1, 2, 3, and 4 are the appropriate responses. When choosing whether to accept an audit engagement, the auditor will take all of these actions into account. The auditor should take the following actions when deciding whether to accept an audit engagement:
1. Assess the management team's honesty, morals, and reputation in order to determine its level of integrity. It is crucial to confirm that management is firmly committed to accurate financial reporting. 2. Evaluate the audit team's competence: The auditor must determine whether the audit team has the abilities, expertise, and knowledge required to carry out the engagement successfully. As a result, the audit will be carried out with the necessary level of skill. 3. Identify any unusual circumstances: The auditor should take into account any distinctive or complicated characteristics of the engagement that might call for extra resources or knowledge. This takes into account elements like legal or regulatory obligations, issues unique to the industry or significant alterations to the business.4. Assess independence and the capacity to exercise appropriate care. Independence is essential for upholding impartiality and objectivity throughout the audit. The auditor is required to determine whether there are any conflicts of interest or limitations on their independence. The auditor should also make sure they have the tools, knowledge, and time needed to conduct the audit with due care. 1, 2, 3, and 4 are the appropriate responses. When choosing whether to accept an audit engagement, the auditor will take all of these actions into account.
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: As a professional engineer, you are required to demonstrates application of knowledge and understanding of the impact of engineering activity on the society, economy, industrial and physical environment, cultural and address issues by analysis and evaluation to manage risk. [20]
As a professional engineer, it is crucial to apply knowledge and understanding of how engineering activities impact society, the economy, the industrial and physical environment, and cultural aspects. This includes analyzing and evaluating these impacts to effectively address issues and manage risks associated with engineering projects.
Professional engineers have a responsibility to assess the consequences of their engineering activities across various domains. They need to consider the societal impact by ensuring their projects align with public needs, safety, and well-being. Evaluating the economic implications involves conducting cost-benefit analyses and assessing the project's contribution to the economy.
Furthermore, engineers must address the industrial and physical environment by mitigating adverse effects on natural resources, minimizing pollution, and promoting sustainability. Cultural considerations involve respecting cultural heritage, diversity, and inclusivity in engineering designs and implementations.
Through analysis and evaluation, engineers identify potential risks associated with their projects and implement strategies to manage and mitigate those risks effectively. By demonstrating these competencies, professional engineers ensure that their work aligns with societal values, promotes sustainable development, and effectively manages risks.
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While examining the books and records in the general and administrative expense account of X Ltd., you came across the following contribution to the registered pension plan made by the Company on behalf of two key employees for the year ended December 31st.2021:-
Registered Pension…………………..Employment
Plan compensation,2021
President……………………………………..$15,000……………………………………….$180,000
Vice President……………………………….$14,000………………………………………..$ 95,000
The pension plan is a defined contribution(money purchase)plan. The contribution shown were matched by equal contribution made by the employees. Reconciling accounting income to to Division B income, you discover that the following portion of RPP contribution should be disallowed from being expensed by the X Ltd for tax purposes for the year ended December 31st.2021:-
a. $NIL
b. $13070
c. $10,000
d. $11,690
Disallowed portion of Registered Pension Plan contribution for tax purposes is $11,690. So option d is the correct one.
The amount that should be disallowed for the X Ltd. for tax purposes for the year ended December 31st, 2021 is $11,690.
Since the pension plan is a defined contribution (money purchase) plan, the contribution indicated was matched by an equal contribution made by the employees.
Let us determine the annual maximum pensionable earnings for 2021.
For 2021, the annual maximum pensionable earnings is $61,600.
Therefore, the maximum contribution for 2021 is 18% of $61,600 or $11,088.
However, as shown in the question, the president's contribution is $15,000 and the vice president's contribution is $14,000, which together total $29,000.
Therefore, for the president, the disallowed portion would be $15,000 - $11,088 = $3,912.
For the vice president, the disallowed portion would be $14,000 - $11,088 = $2,912.
The sum of $3,912 and $2,912 is $11,690.
Therefore, the amount that should be disallowed for the X Ltd. for tax purposes for the year ended December 31st, 2021 is $11,690, which is option D.
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the following annual costs are associated with three new extruder machines being considered for use in a styrofoam cup plant:
The annual costs associated with the three new extruder machines being considered for use in a styrofoam cup plant need to be provided in order to give a clear and concise answer.
To determine the costs associated with the three extruder machines, we would need to know the specific costs involved. This could include the purchase price of each machine, the cost of installation, any maintenance or repair costs, and any additional operating expenses. Once we have these costs, we can calculate the total annual cost for each machine by adding up all the expenses. This will give us a clear understanding of the financial implications of each machine.
Additionally, it's important to consider the expected lifespan of the machines and their potential productivity. A more expensive machine may have a longer lifespan and higher productivity, resulting in lower costs in the long run.Ultimately, the decision on which extruder machine to choose will depend on the specific costs associated with each machine and the long-term benefits they provide.
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