The combination of the efficient set of portfolios with a riskless lending and borrowing rate results in the capital market line which shows that all investors will invest in a combination of the riskless asset and the tangency portfolio.
The Capital Market Line is a line that shows the correlation between the expected returns of an asset and the level of risk involved, assuming that there are no capital restrictions or capital market irregularities. It shows the portfolio selection of the risk-free assets and risk assets.
It is a straight line passing through the intersection of the y-axis and the efficient frontier and is tangential to the efficient frontier.
The portfolio that includes the risk-free asset and the portfolio of risky assets tangent to the Capital Market Line (CML) is the Tangency Portfolio. The CML depicts a linear positive relationship between risk and return. All investors have the same inclination towards the tangent portfolio on the CML.
The tangency portfolio is a mixture of the risk-free asset and a single market portfolio that represents all the financial assets. Therefore, it is a feasible portfolio that includes all of the available securities and the risk-free asset.
In other words, the tangency portfolio is one of the best combinations of the risk-free asset and the market portfolio that is expected to provide the highest risk-adjusted return.
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The auditing firm of Samuels, Muir, Malcolm and Associates is recruiting persons to be a part of the audit team, to audit the books of several of its audit clients. Applications were received from qualified auditors and recent university graduates. The partners are concerned that the panel of interviewers must pay careful attention to the qualifications of applicants, and diligence must be carried out to ensure that short listed applicants are conforming to the Code of Ethics for Auditors.
During the process of interviewing the applicants, the panel discovered that Nardia Sinclair, a qualified auditor, was a recent employee of one the firm’s audit client and that she was employed by the client as its Chief Financial Officer. It was also discovered that Dexanne McDonald, a recent university graduate, had a 25% shareholding in a company that the auditing firm, of Samuels, Muir, Malcolm and Associates will be auditing. The members of the panel were impressed with these two candidates and would want to offer them employment but are concerned about the prevailing issues.
Assuming that you were one of the panalists conducting the interview, provide plausible reasons why you would advise the entire panel of interviewers to eith make or not to make a job offer to Nordia Sinclair and Dexanne McDonald.
If I were one of the panelists conducting the interview, I would advise the entire panel of interviewers not to make a job offer to Nardia Sinclair and Dexanne McDonald. The reason for this is that both candidates have issues that may lead to a conflict of interest and possibly result in ethical breaches.
Nardia Sinclair was a Chief Financial Officer of one of the audit client's firm. She may have access to sensitive financial information that she could use to influence the audit in favor of her previous employer. This situation poses a significant threat to the auditor's independence, which is one of the fundamental principles of the code of ethics for auditors. The auditor must be independent and free from any influence from the client, whether it is financial or otherwise.
The panel should not make a job offer to Nardia Sinclair and Dexanne McDonald due to the potential ethical threats that they pose to the auditing firm. Instead, the firm should continue its recruitment process and consider other qualified candidates who do not pose any threats to the firm's independence or objectivity.
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1. What can companies do to create more of a focus on TSI?
2. How can companies achieve higher margins and higher
valuations through implementing TSI?
To create more focus on Total Shareholder Impact (TSI), companies can develop a comprehensive TSI strategy, measure and report TSI performance, engage stakeholders, embed TSI in decision-making, and foster a culture of TSI.
1. To create more focus on Total Shareholder Impact (TSI), companies can take the following actions:
a) Develop a comprehensive TSI strategy: Companies need to integrate TSI considerations into their overall strategic planning process. This involves identifying key stakeholders, understanding their interests, and aligning business objectives with TSI goals.
b) Measure and report TSI performance: Companies should establish metrics and measurement frameworks to track and assess their impact on various dimensions of TSI. This includes financial, social, and environmental performance indicators. Regular reporting and transparency can help create accountability and demonstrate commitment to TSI.
c) Engage stakeholders: Actively engaging with stakeholders, including customers, employees, investors, communities, and regulators, is crucial. Companies should seek feedback, address concerns, and involve stakeholders in decision-making processes related to TSI.
d) Embed TSI in decision-making: TSI considerations should be integrated into decision-making processes across the organization. This involves assessing the potential TSI impacts of various options and selecting alternatives that optimize TSI outcomes.
e) Foster a culture of TSI: Companies can promote a culture that values and prioritizes TSI by incorporating it into their mission, vision, and values. Leadership commitment, employee training, and incentives aligned with TSI goals can help drive the desired culture.
2. Companies can achieve higher margins and higher valuations through implementing TSI by:
a) Improving operational efficiency: By optimizing resource utilization, reducing waste, and increasing productivity, companies can lower costs and improve profit margins. This includes energy efficiency initiatives, waste reduction programs, and process optimization to minimize environmental impact while enhancing financial performance.
b) Enhancing brand reputation and customer loyalty: Companies that prioritize TSI can build a strong brand reputation by demonstrating responsible business practices, ethical behavior, and commitment to environmental and social considerations. This can attract customers who value sustainability and generate customer loyalty, leading to higher sales and margins.
c) Accessing new markets and revenue streams: Implementing TSI strategies can open doors to new markets and business opportunities. For example, companies that develop environmentally friendly products or services can tap into the growing demand for sustainable solutions, attracting environmentally conscious consumers and creating revenue growth potential.
d) Mitigating risks and improving long-term resilience: By proactively addressing environmental and social risks, companies can reduce the potential for costly regulatory fines, legal liabilities, or reputational damage. Moreover, embedding TSI practices can enhance long-term business resilience by adapting to changing market dynamics and stakeholder expectations.
e) Attracting investors: Investors increasingly consider TSI factors when evaluating companies. By effectively implementing TSI strategies and demonstrating strong performance across financial, social, and environmental dimensions, companies can attract investors who seek sustainable and responsible investment opportunities. This can result in higher valuations and access to capital.
Overall, companies that prioritize TSI can create a competitive advantage, achieve sustainable growth, and drive both financial and non-financial value creation.
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For each of the scenarios below indicate what will happen to the equilibrium price and quantity of the underlined product. Then, explain how the change occured (what shifted and which direction).
Scenario 1: Due to a viral outbreak, consumer incomes decrease. This leads to a decrease in the demand for new cars. Equilibrium price and quantity of new cars are underlined products.Due to a viral outbreak, consumer incomes decrease. This leads to a decrease in the demand for new cars. The equilibrium price and quantity of new cars are the underlined products.In this case, due to a decrease in the demand for new cars, the equilibrium price and quantity of new cars will decrease. A decrease in demand leads to a leftward shift in the demand curve. This leads to a new equilibrium where the price and quantity of new cars will be lower than the previous equilibrium price and quantity. Therefore, the equilibrium price and quantity of new cars will decrease due to a decrease in demand.
Scenario 2: A new technology for producing bicycles is developed. This leads to a decrease in the cost of production of bicycles. Equilibrium price and quantity of bicycles are underlined products.A new technology for producing bicycles is developed. This leads to a decrease in the cost of production of bicycles. A decrease in the cost of production leads to a leftward shift in the supply curve. This leads to a new equilibrium where the price of bicycles will be lower than the previous equilibrium price, and the quantity of bicycles will be higher than the previous equilibrium quantity.
Therefore, the equilibrium price of bicycles will decrease, and the equilibrium quantity of bicycles will increase due to a decrease in the cost of production.
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Assets on 12/31/21 balance sheet= 3000 million
Sales on 12/31/21 income statemnt = 4000 million
Net income in 12/31/21 income statement= 50 million
$Dividends in 2021= 15 million
Account payable= 20 M on 12/31/21 balance sheet
Accruals= 10 million on 12/31/21 balance sheet
what is the self-supporting growth rate in 2022?
Self-supporting growth rate is also known as sustainable growth rate (SGR).
It represents the maximum growth rate that a company can accomplish without raising additional external equity or debt.
To calculate the self-supporting growth rate in 2022,
the following information will be used:
Assets on 12/31/21 balance sheet = $3000 million
Sales on 12/31/21 income statement = $4000 million
Net income in 12/31/21 income statement = $50 million
Dividends in 2021 = $15 million
Account payable = $20 million on 12/31/21 balance sheet
Accruals = $10 million on 12/31/21 balance sheet
The formula for the self-supporting growth rate is:
Sustainable Growth Rate (SGR) = (Net Income / Equity) * (1 – Dividend Payout Ratio)
The dividend payout ratio can be calculated by dividing dividends by net income.
DPR = Dividends / Net Income
DPR = 15/50DPR = 0.3
Substitute the values in the SGR formula.
SGR = (50/2980) * (1 - 0.3)
SGR = (0.01678) * (0.7)
SGR = 0.011746 or 1.17%
The self-supporting growth rate in 2022 is 1.17%.
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A company considering culture when marketing a product in a foreign country would want to be sure that promotional messages _______, _______, and _______. (Select three)
a. convey the intended meaning
b. do not disrupt the balance of trade
c. reflect the country's social values
d. are translated correctly
e. consider consumer income
When a company considers culture when marketing a product in a foreign country, they would want to be sure that promotional messages: a. convey the intended meaning, c. reflect the country's social values, and d. are translated correctly.
These three factors are crucial for effective cross-cultural marketing:
a. Conveying the intended meaning: It is essential for promotional messages to accurately convey the intended meaning to the target audience in the foreign country. Cultural nuances, language differences, and local customs should be taken into account to ensure that the message resonates appropriately.
c. Reflecting the country's social values: Promotional messages should align with the social values and cultural norms of the foreign country. Understanding and respecting the cultural context is important to avoid any misunderstandings or offense that may arise from conflicting values.
d. Translating correctly: Accurate translation of promotional messages is critical to ensure that the intended message is effectively communicated. Translation should go beyond literal conversion of words and consider cultural and linguistic nuances to maintain the desired impact and avoid any misinterpretation.
While factors such as the balance of trade and consumer income (b and e) are important considerations in international marketing, they are not specifically related to the cultural aspect of marketing in a foreign country.
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In recent years the M2 multiplier has been approximately 3. If
the Federal Reserve adds $10 billion into the banking system, by
how much does M2 expand? $_________ billion
The formula for calculating M2 is M2 = M1 + savings deposits + money market funds + certificates of deposit + other time deposits. The M2 money supply increased to $19.2 trillion in 2020 from $15.6 trillion in 2010. So, if the Federal Reserve adds $10 billion into the banking system, M2 will expand by $30 billion.
M2 is the broadest money supply indicator that the Federal Reserve releases. The M2 money supply includes all of the components of the M1 money supply (cash, checking deposits and other liquid deposits) as well as "near money." Near money refers to savings deposits, money market securities, and other time deposits.
These assets are less liquid than M1 and not as suitable as exchange mediums but can be quickly converted to cash or checking deposits.
M2 = M1 + savings deposits + money market funds + certificates of deposit + other time deposits.
If the Federal Reserve adds $10 billion into the banking system, it will generate more than $30 billion in economic activity, therefore, M2 will expand by $30 billion. This is because the banking system uses the $10 billion to make loans, which increases the money supply in the economy, leading to economic expansion.
Moreover, the expansion in the M2 money supply is dependent on the banking system's ability to create additional money through lending. The money multiplier is a concept that quantifies how many dollars of deposits are created for every dollar of reserves added to the banking system. The Federal Reserve uses various monetary policy tools to manipulate the money supply to support economic growth and stability.
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What challenges posed by it being a member of BRICS and what
possible challenges will it pose to South African economy if SA
exit BRICS?
BRICS is an acronym for Brazil, Russia, India, China, and South Africa. These countries were established as emerging economies with large markets and significant growth potential.
South Africa joined BRICS in 2011, becoming the organization's newest member. Challenges posed by it being a member of BRICS: Although being a member of BRICS has various benefits, such as trade and investment, it has also posed several challenges for South Africa. One such issue is the slow pace of reforms.
South Africa faces significant structural issues such as low growth, high unemployment, and inequality, which are exacerbated by a shortage of appropriate skills. As a result, South Africa has been accused of being the group's weakest link due to its comparatively smaller economy, insufficient infrastructure, and inadequate skill levels compared to the other members.
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When the Fed tightens U.S. monetary policy, domestic interest rates ______, making U.S. assets relatively more attractive to foreign investors, and ______ the equilibrium exchange rate.
When the Fed tightens U.S. monetary policy, domestic interest rates rise making U.S. assets relatively more attractive to foreign investors and increasing the equilibrium exchange rate.
How does the tightening of U.S. monetary policy affect the econoomy?When the Federal Reserve (the Fed) tightens U.S. monetary policy, it typically takes actions to reduce the money supply and increase interest rates. This tightening is achieved through measures such as increasing the target federal funds rate or reducing the amount of money in circulation through the sale of Treasury securities.
As a result of these actions, domestic interest rates rise. When interest rates increase, it becomes more expensive for businesses and individuals to borrow money which can have a dampening effect on economic activity.
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Delays, congestion, long TSA lines at crucial transit hubs, and canceled flights have plagued summer travel. Choose one of the organizations or companies that you believe has most negatively impacted this issue. Then create a PR plan for the organization or company you chose to improve its reputation.
i) Make a Public Relations Campaign for the company or organization and include specific references to the actual organization in your answer.
a. What is your strategy? Why? You must reference the text and the lectures. 4 points
b. What is your tactic? Why? You must reference the text and the lectures. 4 points
c. Write the first two paragraphs of a message used in your communications tactic. 8 pts
d. How will you measure your campaign’s effectiveness?
a) Strategy:
The chosen organization for the PR campaign is a hypothetical airline company called "AirLink." The strategy is to acknowledge the issues faced by travelers and demonstrate a commitment to addressing and resolving them. By taking responsibility and showcasing proactive measures, AirLink aims to rebuild trust and improve its reputation. This strategy aligns with the principles of crisis communication, as discussed in the lectures, where transparency, empathy, and action are crucial for mitigating negative perceptions.
b) Tactic:
The chosen tactic for the PR campaign is a multi-channel communication approach, utilizing both traditional and digital platforms. This includes issuing press releases, conducting media interviews, leveraging social media channels, and implementing a customer feedback mechanism. This tactic aims to reach a wide audience, ensure consistent messaging, and provide a platform for customers to voice their concerns and suggestions.
c) Message for communications tactic:
"Dear Valued AirLink Passengers,
At AirLink, we understand the frustration and inconvenience you have experienced during your summer travels. We want to sincerely apologize for the delays, congestion, long TSA lines, and canceled flights that have impacted your journeys. We recognize that these issues have tarnished our reputation and disrupted your plans, and we take full responsibility for the shortcomings.
We have already begun implementing measures to address the root causes of these problems, including increasing staffing levels, enhancing our infrastructure, and collaborating closely with airport authorities to streamline security processes. We understand that actions speak louder than words, and we are dedicated to regaining your trust by delivering on our promises."
d) Measurement of campaign effectiveness:
To measure the effectiveness of the PR campaign, the following key performance indicators (KPIs) will be tracked:
1 ) Customer satisfaction surveys:
Conduct regular surveys to gauge the perception and satisfaction levels of AirLink passengers. This will provide quantitative data on whether the campaign has improved their perception of the company.
2 ) Social media engagement:
Monitor social media platforms for sentiment analysis and engagement metrics such as likes, shares, comments, and mentions. Increased positive sentiment and higher engagement indicate a positive response to the campaign.
3 ) Media coverage and sentiment analysis:
Track media coverage of AirLink and analyze sentiment to assess whether the coverage has shifted from negative to neutral or positive. Increased positive media coverage demonstrates the effectiveness of the campaign in changing public perception.
4 ) Operational metrics:
Continuously monitor and analyze operational data, such as on-time performance, flight cancellations, and customer complaints. Improvement in these metrics over time will indicate the success of the campaign in addressing the issues faced by travelers.
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An automobile manufacturing plant produced 34 vehicles today: 15 were vans, 7 were motorcycles, and 12 were trucks. (Each vehicle falls into only one of these categories.) Plant managers are going to select two of these vehicles for a thorough inspection. The first vehicle will be selected at random, and then the second vehicle will be selected at random from the remaining vehicles. What is the probability that two motorcycles will be selected?
Do not round your intermediate computations. Round your final answer to three decimal places.
(If necessary, consult a list of formulas.)
x
The probability of selecting two motorcycles is approximately 0.035.
To calculate the probability, we divide the number of favorable outcomes (selecting two motorcycles) by the total number of possible outcomes.
In this case, there are 7 motorcycles out of 34 vehicles. When selecting the first vehicle, the probability of choosing a motorcycle is 7/34. After selecting the first motorcycle, there are 6 motorcycles left out of the remaining 33 vehicles. The probability of selecting a motorcycle as the second vehicle, given that the first vehicle was a motorcycle, is 6/33.
To find the probability of both events occurring, we multiply the probabilities together:
P(Two motorcycles) = (7/34) * (6/33) ≈ 0.035
Therefore, the probability of selecting two motorcycles is approximately 0.035.
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an amortized discount is computed annually when a bond is issued for other than its face value. for a bond issued at a discount, how will this component change under the effective interest method as the bond approaches maturity?
Under the effective interest method, the amortized discount component of a bond issued at a discount will decrease as the bond approaches maturity.
When a bond is issued at a discount, it means that its initial selling price is lower than its face value. The discount represents the difference between the face value of the bond and its selling price. Under the effective interest method, the discount is amortized or spread out over the life of the bond. This means that each year, a portion of the discount is gradually reduced and added to the interest expense on the income statement.
As the bond approaches maturity, the remaining discount gradually decreases because it is being amortized over a shorter period of time. This reduction in the amortized discount is reflected in the interest expense, which decreases over time.To summarize, the amortized discount component of a bond issued at a discount decreases under the effective interest method as the bond approaches maturity.
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to set up a performance management system that supports the organization's goals, employees need to understand what they must do to contribute to a goal achievement.
To set up a performance management system that supports the organization's goals, employees need to understand what they must do to contribute to goal achievement.
Clear communication of performance expectations is crucial for employees to align their efforts with organizational goals. They should have a clear understanding of the specific tasks, responsibilities, and performance standards that are expected of them to contribute to goal attainment.
By providing employees with well-defined objectives and targets, they can have a clear direction and focus their efforts on the most critical activities. This includes setting SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals that are aligned with the organization's overall objectives. When employees understand what is expected of them, they can better prioritize their tasks, allocate resources effectively, and work towards achieving the desired outcomes.
Additionally, regular feedback and performance discussions play a vital role in supporting employees' understanding of their contribution to goal achievement. Managers should provide ongoing feedback, recognize accomplishments, and address areas for improvement. This feedback loop helps employees gauge their progress, make necessary adjustments, and stay motivated in their pursuit of organizational goals.
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Assuming a contribution margin of 60 percent, what sales would be necessary to break even (that is, maintain the current total contribution) on the 12 percent across-the-board price reduction? Refer to Financial Analysis of Marketing Tactics: Price Decrease in Appendix 3: Marketing by the Numbers to learn how to perform this analysis. 1-15. What absolute increase and percentage increase in sales does this represent?
To calculate the sales necessary to break even after a 12% across-the-board price reduction, we can use the contribution margin. Assuming a contribution margin of 60%, the break-even sales can be determined. Additionally, we can determine the absolute increase and percentage increase in sales resulting from this break-even point.
To maintain the current total contribution despite a 12% price reduction, the break-even sales volume needs to be calculated. The contribution margin is the ratio of contribution (revenue minus variable costs) to revenue. Assuming a contribution margin of 60%, the break-even sales can be determined by dividing the fixed costs by the contribution margin. This break-even sales volume represents the amount of sales needed to cover all costs and maintain the current total contribution.
To determine the absolute increase and percentage increase in sales resulting from the break-even point, we need to compare it to the initial sales level. The difference between the break-even sales and the initial sales represents the absolute increase, while the percentage increase can be calculated by dividing the absolute increase by the initial sales and multiplying it by 100.
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Consider a Cournot duopoly with two firms, i = 1,2. Each company has a cost of production c(qi) = 10qi. The market demand function is P = 130−Q, Q = q1 +q2. Consider an infinitely repeated version of this game, where in each period each company decides to collude or not to collude. When it chooses collusion, a company produces half of the monopoly level of output. When it chooses no collusion, a company produces the Cournot level of output. Prove that, for some value of the discount factor δ, there is a profile of strategies that is a subgame perfect equilibrium.
To prove that there is a subgame perfect equilibrium (SPE) in the infinitely repeated version of the Cournot duopoly game with collusion, we need to show that there exists a strategy profile that satisfies the conditions of SPE.
In this game, each firm can choose between collusion or no collusion in each period. When collusion is chosen, a firm produces half of the monopoly level of output. When no collusion is chosen, a firm produces the Cournot level of output.
To construct an SPE, we need to find a strategy profile that induces firms to collude and maintain collusion over time. One possible strategy profile is "Collude in every period."
In the repeated game, the threat of punishment can sustain collusion. If a firm deviates from collusion and produces the Cournot level of output, the other firm can punish it by also producing the Cournot level of output, resulting in lower profits for both firms compared to colluding. This threat of punishment acts as a deterrent against deviation.
To support the collusion strategy, we need to introduce a discount factor δ, representing the firms' patience or future value of profits. With a sufficiently high discount factor, the firms prioritize long-term profits over short-term gains from deviation.
By setting an appropriate discount factor δ, we can ensure that the "Collude in every period" strategy profile is a subgame perfect equilibrium. This strategy induces collusion and sustains it over time by considering the long-term benefits of cooperation.
Therefore, there exists a value of the discount factor δ that makes the "Collude in every period" strategy profile a subgame perfect equilibrium in the infinitely repeated Cournot duopoly game with collusion.
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external forces of change require organizations to be much more nimble and responsive
External forces of change are often unpredictable and uncontrollable. Organizations that are unable to respond to these changes will not survive. As such, organizations must be much more nimble and responsive to succeed in today's fast-paced environment.
External forces of change can come from a variety of sources, such as technology, competition, government regulations, and economic conditions. Technological advancements have made it possible for companies to develop new products and services faster than ever before, leading to increased competition and a need for constant innovation.Government regulations can also change quickly, affecting how companies operate.
Economic conditions, such as recessions or inflation, can also impact a company's bottom line and require quick action.Organizations must be prepared to adapt to these external forces of change in order to remain competitive. This means that they need to be agile and flexible in their operations. This can involve changing processes, products, or services quickly to respond to market conditions.
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Ziercher executives anticipate a growth rate of 8 percent for the company's common stock. The stock is currently selling for $45.87 per share and pays an end-of-year dividend of $1.67. What is your expected rate of return if you purchase the stock for its current market price of $45.87?
Expected Rate of Return: A rate of return is a ratio of the profit earned on an investment to the amount of the investment made.
The formula for the expected rate of return is given below: Expected Rate of Return
= (Dividend per Share/Market Price per Share) + Growth Rate of Dividend The expected rate of return for the given company can be calculated as follows: Given, Current Market Price of Stock
= $45.87Dividend per Share
= $1.67Growth Rate of Dividend
= 8%Expected Rate of Return
= ?The expected rate of return for the given company is calculated as follows: Expected Rate of Return
= (Dividend per Share/Market Price per Share) + Growth Rate of Dividend
= ($1.67/$45.87) + 8%
= 0.036 + 0.08= 0.116 or 11.6%Therefore, the expected rate of return if you purchase the stock for its current market price of $45.87 is 11.6%.
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please answer it asap
An investment project costs $14,900 and has annual cash flows of $3,700 for six years. a. What is the discounted payback period if the discount rate is zero percent?
b. What is the discounted payback period if the discount rate is 3 percent? b. What is the discounted payback period if the discount rate is 3 percent?
c. What is the discounted payback period if the discount rate is 21 percent?
When the discount rate is 0 percent, the discounted payback period is calculated by dividing the initial investment cost by the annual cash inflow.
Thus, the discounted payback period can be calculated as follows:
Payback period = Cost of the investment / Annual cash inflow= $14,900 / $3,700= 4 years.
the discounted payback period is 4 years when the discount rate is 0 percent.
When the discount rate is 3 percent,
the discounted payback period is calculated using the formula:
DPP = Year before full recovery + (Unrecovered cost at the beginning of the year / Cash flow during the year)Year 0: -$14,900
As the unrecovered cost is negative, full recovery occurs in year 3.
the discounted payback period when the discount rate is 21 percent is 3 years.
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alculate the price earnings ratio, PEG ratio, dividend rate, and dividend payout ratio for each of the Ilowing companies. Will each ratio consistently rank the companies from "best" to "worst" perform
We would want precise financial data for each company in order to rate them from "best" to "worst" performance based on numerous ratios. I can, however, describe each ratio's calculation and broad meaning.
1. The price-to-earnings ratio (P/E ratio) is determined by dividing the market price per share by the earnings per share (EPS). It shows how highly the market values a company in relation to its earnings. If all else is equal, a lower P/E ratio typically indicates a better value investment. However, since different industries can have different average ratios, it's crucial to compare P/E ratios within the same industry. 2. PEG Ratio: This valuation metric combines the P/E ratio and expected earnings growth rate of a company. By dividing the P/E ratio by the earnings growth rate, it is computed. A stock's PEG ratio can be used to determine if it is overvalued or undervalued in light of its growth potential. Generally speaking, a lower PEG ratio is better because it indicates better value in relation to growth potential. 3. Dividend Rate: The dividend rate is calculated by dividing the annual dividend payment per share by the share's market price. Dividends are used to indicate the return on investment. Income-seeking investors may find a higher dividend rate to be appealing because it often denotes a larger dividend return on investment. 4. Dividend Payout Ratio: To determine the dividend payout ratio, divide the earnings per share by the annual dividends per share. It exhibits percentage of earnings distributed as dividends. A higher payout ratio denotes a greater distribution of earnings to shareholders, whereas a lower ratio signals a corporation maintains more money for expansion or other objectives. You would need to analyse these ratios for each company in order to rate them, taking into account their unique circumstances, industry standards, and investor preferences. In general, favourable performance can be indicated by reduced P/E and PEG ratios, greater dividend rates, and a suitable dividend payment ratio, but a thorough study would require individual financial data for each company.
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how will you help them to work together to fix the issues? focus on relationships-spend more time getting to know each employee. help them to see that both groups have important roles in meeting the company goals and bring them together to accomplish them. rely on my position power to make work assignments and then reward or punish the groups based on their results. focus on clarifying roles and task requirements and then provide rewards or punishments based on performance.
To help employees work together to fix issues and foster better relationships, it is important to focus on several key steps.Spend more time getting to know each employee: By investing time in building relationships with each individual, you can develop a better understanding of their strengths, weaknesses, and motivations.
This will enable you to create an environment that encourages collaboration and mutual respect. Help them see the importance of both groups' roles: It is essential to communicate the significance of each group's contributions towards meeting company goals. Emphasize that both groups have valuable skills and perspectives that, when combined, can lead to better outcomes. Encourage open dialogue and the sharing of ideas to foster a sense of unity.
Bring the groups together: Organize team-building activities or collaborative projects that involve members from both groups. This will allow them to work together towards a common goal, helping to break down barriers and build stronger relationships. Encourage open communication, active listening, and empathy during these activities.
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True or False Questions 1. Management decisions involving product pricing, product mix, and cost control depend on accurate product cost information (The or False) 2. A manufacturer uses machine hours to allocate overhead cost to products. Budgeted information for the current year follows. Budgeted overhead costs \$108,800 Budgeted machine haurs 1,280MH Overhead cost of $21.25 is allocated to a job thatuses 4 machine hours (The or False) 3. The usefuelness of a single plantwide overhead rate depences on two assumptions 1. overhead costs change with the allocation base and 2. ell products use sverhead cost in the Same proportion (Tur F) 4 A company sells headphones for $45 per unit Fxed costs tofal \$162,000 and variable costs are $18 per unit. The company's break even point in dollars is $270,000 (Twe or False)
1. Product pricing, product mix, and price control decisions require correct product cost information: True.
2. A manufacturer allocates overhead costs to items using machine hours. The following is budgeted facts for the current fiscal year. Overhead costs are budgeted at $108,800. The budgeted machine runs for 1,280 minutes. A $21.25 overhead cost is assigned to a job that requires 4 machine hours: false
3. The efficiency of a single plantwide overhead rate is determined by two assumptions. 1. overhead costs vary with the allocation base, and 2. all goods use the same share of overhead expenses: True
4 A firm charges $45 per unit for headphones. The fixed expenses are $162,000, while the variable costs equal $18 per unit. In terms of dollars, the company's break even point is $270,000: False
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(a) Provide some examples of everyday practical application of a key microeconomics principle from Econ1001 that you've learned about in class (Concepts include opportunity cost, elasticity, marginal costs / benefits) (b) How does the gift economy differ from the exchange economy?
a) key microeconomic principles from Econ1001 are pointed.
b) gift economy and exchange economy are explained.
(a) Some of the everyday practical applications of key microeconomic principles from Econ1001 that you can find around you are as follows:
Opportunity cost: Every day when you decide to do something or buy something, you need to give up something else as a result. This is called the opportunity cost. For example, if you choose to go to a movie, the opportunity cost might be that you cannot play a game.Elasticity: Elasticity is a principle that shows how sensitive one variable is to changes in another. For example, if the price of a product increases, then the demand for that product might decrease as people might choose to buy a cheaper substitute product. Marginal cost/benefit: Marginal cost is the cost of producing one more unit of a product, and marginal benefit is the benefit derived from consuming one more unit of a product. This principle is used by businesses to make decisions about whether or not to produce more of a product.(b) The gift economy is different from the exchange economy in the following ways:
Gift economy: In the gift economy, goods and services are given away for free, and there is no expectation of receiving something in return. This type of economy is often based on social relationships and can be seen in small, tight-knit communities.Exchange economy: In the exchange economy, goods and services are traded for money or other goods and services. This type of economy is based on market transactions and is typically used in modern societies.Know more about the microeconomic principles
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Johnson, Inc., a U.S.-based MNC, will need 10 million Thai baht on August 1. It is now May 1. Johnson has negotiated a non-deliverable forward contract with its bank. The reference rate is the baht’s closing exchange rate (in $) quoted by Thailand’s central bank in 90 days. The baht’s spot rate today is $.02. If the rate quoted by Thailand’s central bank on August 1 is $.022, Johnson will ________ $__________.
A) pay; 20,000
B) be paid; 20,000
C) pay; 2,000
D) be paid; 2,000
E) none of the above
If the rate quoted by Thailand’s central bank on August 1 is $.022, Johnson will pay $20,000.The correct answer is A) pay; 20,000.
A non-deliverable forward (NDF) contract is a financial agreement used to hedge foreign exchange risk. In this case, Johnson, Inc., a U.S.-based multinational corporation (MNC), needs 10 million Thai baht on August 1. To protect against potential exchange rate fluctuations, Johnson has negotiated an NDF contract with its bank.
The NDF contract's settlement will be based on the reference rate, which is the baht's closing exchange rate quoted by Thailand's central bank in 90 days. The spot rate, which is the current exchange rate, is given as $0.02.
If the rate quoted by Thailand's central bank on August 1 is $0.022, it means that the Thai baht has appreciated against the U.S. dollar. In this scenario, Johnson, Inc. will have to pay the bank the predetermined amount in U.S. dollars based on the agreed exchange rate.
Payment amount = Amount in baht × Exchange rate
Payment amount = 10,000,000 baht × $0.002 = $20,000
Hence, the correct answer is A) pay; $20,000.
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What is the yield to call for a corporate bond selling for $1,120 that matures in 30 years, has a 12 percent coupon rate, pays interest semi-annually, is callable in 6 years, and has a call price of $1,000?
The yield to call for a corporate bond is the return an investor receives if they hold the bond until it is called by the issuer. The formula for calculating yield to call is similar to that of yield to maturity (YTM), but instead of calculating the return until maturity, it is calculated until the call date.
The yield to call can be found using a financial calculator or Excel. Given that a corporate bond is selling for 1,120 that matures in 30 years, has a 12 percent coupon rate, pays interest semi-annually, is callable in 6 years, and has a call price of 1,000,
The following are the steps to calculate its yield to call:
Step 1: Find the bond's present value.
Bond's PV = (C ÷ 2) x [1 – (1 + r ÷ 2)^(-n x 2)] + (F ÷ (1 + r ÷ 2)^(n x 2))
where
C = annual coupon payment,
F = face value,
r = semi-annual interest rate, and
n = number of semi-annual periods.
Bond's PV = (60 ÷ 2) x [1 – (1 + 0.06 ÷ 2)^(-30 x 2)] + (1,000 ÷ (1 + 0.06 ÷ 2)^(30 x 2))
= 1,120.04
Step 2: Determine the total yield to call using the following formula:
Total Yield to Call = [(C + (F – P) ÷ n) ÷ (F + P) ÷ 2] + [((F – P) ÷ 2n) ÷ ((F + P) ÷ 2)]
where P = bond's present value, n = number of years until the bond is called.
Total Yield to Call = [(60 + (1,000 – 1,120.04) ÷ 24) ÷ (1,000 + 1,120.04) ÷ 2] + [((1,000 – 1,120.04) ÷ (2 x 6)) ÷ ((1,000 + 1,120.04) ÷ 2)] = 5.11%
The yield to call for a corporate bond selling for 1,120 that matures in 30 years, has a 12 percent coupon rate, pays interest semi-annually, is callable in 6 years, and has a call price of 1,000 is 5.11%.
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what is a primary reason why some small businesses resist the opening of large chain retailers like walmart or home depot
One primary reason why some small businesses resist the opening of large chain retailers like Walmart or Home Depot is their fear of competition.
Small businesses are the backbone of many countries' economies. These small businesses are frequently referred to as the backbone of the economy. They are responsible for the majority of job creation and economic activity. However, with the advent of large chain retailers, small businesses have been greatly threatened, resulting in resistance from some small businesses.
In this context, one primary reason why some small businesses resist the opening of large chain retailers like Walmart or Home Depot is their fear of competition. Small businesses are concerned that these large chain retailers will provide an unfair advantage, allowing them to undercut local pricing and potentially drive small businesses out of operation.
Many small businesses do not have the resources to compete with large corporations. Large corporations have the financial resources to invest in research and development, marketing, and advertising. This investment allows them to gain a competitive advantage over small businesses. The entrance of a large chain retailer like Walmart into a town frequently leads to the closure of small businesses.
Additionally, Walmart's influence extends beyond its direct suppliers to include local suppliers. Small businesses that supply to Walmart frequently experience a decrease in profit margins, which can have a detrimental impact on their business operations.
In addition, Walmart frequently utilizes its market power to force suppliers to lower prices, reducing supplier profit margins even further. These factors result in resistance from small businesses when large chain retailers attempt to enter their communities.
In conclusion, the fear of competition from large corporations is the primary reason why small businesses resist the opening of large chain retailers like Walmart or Home Depot. They are concerned that the chain will be able to undercut their prices and drive them out of operation, leading to the closure of their businesses.
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On August 31, 2021, Carla Vista Company had a cash balance per its books of $27,680. The bank statement on that date showed a balance of $17,110. A comparison of the bank statement with the Cash account revealed the following. 1. The August 31 deposit of $17,570 was not included on the August bank statement. 2. The bank statement shows that Carla Vista received EFT deposits from customers on account totalling $1,990 in August. Carla Vista has not recorded any of these amounts. 3. Cheque #673 for $1,030 was outstanding on July 31. It did not clear the bank account in August. All of the cheques written in August have cleared the bank by August 31, except for cheque #710 for $2,330, and #712 for $2,340. 4. The bank statement showed on August 29 an NSF charge of $621 for a cheque issued by R. Dubai, a customer, in payment of their account. This amount included an $10 service charge by Carla Vista's bank. The company's policy is to pass on all NSF service charges to the customer. 5. Bank service charges of $24 were included on the August statement. 6. The bank recorded cheque #705 for $105 as $150. The cheque had been issued to pay for freight out on a sale. Carla Vista had correctly recorded the cheque. CARLA VISTA COMPANY Bank Reconciliation August 31, 2021 $17110 Prepare the necessary adjusting entries on August 31. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Which of the following is classified in the most persuasive evidence of government control?A.
Government has the power to establish or amend the policies that the organization uses to manage, such as those relating to accounting, personnel, compensation, collective bargaining or deployment of resources.B. Government has the power to approve the business plans or budgets for the organization and require amendments, either on a net or line-by-line basis.C. Government has the power to provide significant input into the appointment of members of the governing body of the organization by appointing a majority of those members from a list of nominees provided by others or being otherwise involved in the appointment or removal of a significant number of members.D.
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Suppose that, the next day, the Apex Company finds striking
employees of the DYNO Company picketing the Apex Company plant
because it is a supplier of DYNO Company. What are the rights of
Apex Company
If the Apex Company finds striking employees of the DYNO Company picketing the Apex Company plant because it is a supplier of DYNO Company, its rights are as follows:
The rights of Apex Company would be that it cannot be legally liable for the disputes that are between the DYNO company and its employees. DYNO Company does not have the legal right to engage in the secondary boycotts.
The picketing of Apex Company is a way of forcing them to stop doing business with the DYNO Company. However, Apex Company has the legal right to refuse to end business relations with DYNO Company.
They are under no legal obligation to comply with the request that DYNO Company made through its employees.The DYNO Company’s employees are within their legal right to strike against their employer.
Nonetheless, they are breaking the law if they engage in activities such as trying to induce Apex Company to stop doing business with their employer. This is an illegal secondary boycott.
The Apex Company has the legal right to contact the law enforcement agencies to take action against the DYNO Company’s employees.
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The ICS Marketing Department wants to increase subscriptions to its "Trident" product bundle which includes telephone, cable television, and Internet services. The Marketing Department gathered information about current customers, and whether or not they currently subscribe to the Trident bundle. Current customers might subscribe to only one or two of the services offered, and ICS would like to upgrade such customers to the Trident bundle.
Marketing staff designed a 5-question survey for customers who currently do not subscribe to the Trident bundle. One of the questions posed in the survey was: "Would you consider subscribing to the Trident bundle if a discount was offered?"
Out of 500 households selected for the survey, several households chose not to participate, could not be contacted after repeated attempts, or had telephone numbers that were not in service. An Excel file has been provided to you in Blackboard, containing the results for this survey question (see Case Assignment #3 Data.xlsx, tab SURVEY).
(a) Prepare a confidence interval for the proportion of all current households which would subscribe to the Trident bundle if a discount was offered. Use a confidence level of 95%. [8 marks]
(b) Briefly comment on the marketing implications these results might have for ICS. [2 marks]
To prepare a confidence interval for the proportion of all current households that would subscribe to the Trident bundle if a discount was offered, we need to use the provided survey data and calculate the confidence interval using a confidence level of 95%.
First, locate the data for the survey question "Would you consider subscribing to the Trident bundle if a discount was offered?" in the provided Excel file.Calculate the sample proportion (p-hat) by dividing the number of "Yes" responses by the total number of survey responses.Next, calculate the standard error (SE) using the formula: SE = sqrt((p-hat * (1 - p-hat)) / n), where n is the total number of survey responses.Using a confidence level of 95%, find the critical value (Z) associated with that confidence level. For a two-tailed test, the critical value is approximately 1.96.Finally, calculate the confidence interval using the formula: Confidence Interval = p-hat ± (Z * SE).(b) The marketing implications of these results for ICS depend on the obtained confidence interval. The confidence interval represents a range of values within which the true proportion of all current households that would subscribe to the Trident bundle if a discount was offered is likely to fall.
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A company has a beta of 4.5. If the market return is expected to be 14 percent and the risk-free rate is 7 percent, what is the company's risk premium?
Multiple Choice
7.0 percent
25.5 percent
31.5 percent
38.5 percentq
The company's risk premium can be calculated by subtracting the risk-free rate from the expected market return and then multiplying it by the company's beta. In this case, the risk-free rate is 7 percent, and the expected market return is 14 percent. The company's beta is given as 4.5.
To calculate the risk premium, we first subtract the risk-free rate (7%) from the expected market return (14%) to obtain the market risk premium, which is 7% (14% - 7% = 7%).
Next, we multiply the market risk premium by the company's beta (4.5) to determine the company's specific risk premium.
Risk Premium = Market Risk Premium * Beta
Risk Premium = 7% * 4.5
Risk Premium = 31.5%
Therefore, the company's risk premium is 31.5 percent, which is the amount of return expected above the risk-free rate based on the company's level of systematic risk (as measured by beta) in relation to the overall market.
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The company's risk premium can be calculated by subtracting the risk-free rate from the expected market return and then multiplying it by the company's beta. In this case, the risk-free rate is 7 percent, and the expected market return is 14 percent. The company's beta is given as 4.5.
To calculate the risk premium, we first subtract the risk-free rate (7%) from the expected market return (14%) to obtain the market risk premium, which is 7% (14% - 7% = 7%).
Next, we multiply the market risk premium by the company's beta (4.5) to determine the company's specific risk premium.
Risk Premium = Market Risk Premium * Beta
Risk Premium = 7% * 4.5
Risk Premium = 31.5%
Therefore, the company's risk premium is 31.5 percent, which is the amount of return expected above the risk-free rate based on the company's level of systematic risk (as measured by beta) in relation to the overall market.
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The economists of Tri Manka who just learned about a newly formed pharmaceutical cartel in the country suggest doing nothing about it. This is because cartels are more profitable for the industry and will charge a lower price and produce more output. cartels are illegal and will be eventually caught. individual cartel members may find it profitable to cheat on agreements and there is a good possibility the cartel woon't hold for too long. Nicole just inherited a farm that operates in a purely competitive industry. Nicole wants to know about the potential profitability of the company. From the economic perspective, she can expect economic profits to persist in the long run if consumer demand is stable. economic losses in the long run because of cut-throat competition. that in the short run, the farm may incur economic losses or earn economic profits, but in the long run, only normal profits are expected. there will be economic profits in the long run but not in the short run, Gbay enjoys being a monopolist in the online retailing business in a country of South Nordia. Expected economic profits for Gbay: are always zero because consumers prefer to buy from competitive sellers. may be positive or negative depending on market demand and cost conditions. are usually negative because of government price regulation. are always positive because the monopolist is a price-maker. The fabor demand curve: is perfectly elastic at the going wage rate. slopes downward because of diminishing marginal productivity. slopes downward because of diminishing marginal utility. slopes downward because the elasticity of demand is always less than unity.
According to the economists of Tri Manka who have learned about a newly formed pharmaceutical cartel in the country, they suggest doing nothing about it.
This is because cartels are more profitable for the industry and will charge a lower price and produce more output. This statement is not true because cartels are illegal and will be eventually caught. Individual cartel members may find it profitable to cheat on agreements and there is a good possibility the cartel won't hold for too long.
The potential profitability of a company can be determined by the economic perspective. As Nicole just inherited a farm that operates in a purely competitive industry, she wants to know about the potential profitability of the company. From an economic perspective, she can expect that in the short run, the farm may incur economic losses or earn economic profits, but in the long run, only normal profits are expected.Gbay enjoys being a monopolist in the online retailing business in a country of South Nordia.
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Explain why customers sometimes get a "good deal" on a product. Think about the behavioral aspects of consumption and/or your knowledge of supply and demand to answer the question.
Customers sometimes get a "good deal" on a product due to different reasons that can be explained based on behavioral aspects of consumption and/or knowledge of supply and demand. When it comes to supply and demand, it may result in lower prices if the supply of a product is high and the demand is low.
This makes it harder for suppliers to sell their products, and they will, therefore, reduce prices to attract customers. On the other hand, if the demand is high and the supply is low, suppliers will raise their prices since they know that customers will still be willing to pay for the product because it is in high demand. Thus, supply and demand play a significant role in determining product prices.
As for behavioral aspects, customers may get a good deal on a product for different reasons. For example, a company may launch a new product, and they want to introduce it to the market. They may offer discounts and promotions to attract customers and get them to try the new product. Another reason may be that the product is nearing its expiration date or season, and the company wants to get rid of its remaining stock. They may offer discounts or sales to encourage customers to buy the product before it goes off the shelf.
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