The test statistic to test whether the new polish dries faster than the competition's polish is 4.64.
To analyze the results using the sign test, we compare the observed number of polishes that dried in less than 7 minutes (900) with the expected number of polishes that would dry in less than 7 minutes if the drying time was the same as the competition's polish (650, which is half of the total sample size). Next, we calculate the test statistic using the formula: test statistic = (observed number of successes - expected number of successes) / sqrt(expected number of successes * (1 - expected number of successes) / sample size) Plugging in the values, we have: test statistic = (900 - 650) / sqrt(650 * (1 - 650/1300) / 1300) = 4.64 The test statistic represents the number of standard deviations away from the expected value. In this case, the test statistic of 4.64 suggests that the observed number of polishes drying in less than 7 minutes is significantly greater than the expected number under the assumption that the drying time is the same as the competition's polish.
learn more about statistic here :
https://brainly.com/question/31538429
#SPJ11
Assessment of H&M’s resources and capabilities
Distinguish between H&M resources and capabilities and provide an overview what they are. To that end, the VRIO framework can be used as an effective tool. Explain how diverse activities and processes are related and combined and form resources and capabilities that are protected from imitation and thus provide basis for sustained competitive advantage.
H&M's resources and capabilities have enabled the company to remain competitive in the fast-changing fashion industry.
Assessment of H&M’s resources and capabilities:
H&M resources refer to the material or immaterial assets used by the firm in producing and selling its products. They include physical assets, financial resources, and human resources, among others.
On the other hand, H&M capabilities refer to the skills, knowledge, and abilities possessed by the firm that enable it to produce and sell its products. They include marketing capabilities, technological capabilities, and distribution capabilities, among others.
The VRIO framework is a tool used to analyze a company’s resources and capabilities, which are key to its sustained competitive advantage. The VRIO framework assesses the Value, Rarity, Imitability, and Organization of a company’s resources and capabilities.
In order to form resources and capabilities that are protected from imitation and thus provide a basis for sustained competitive advantage, H&M combines and relates diverse activities and processes. These diverse activities and processes are integrated and coordinated to form a system that is difficult to imitate or replicate by competitors. This provides H&M with a unique position in the market, which is difficult to replicate.The resources and capabilities of H&M have enabled the company to build a strong brand and expand its market share globally. H&M's fast-fashion model has been a key driver of its success, and its marketing and distribution capabilities have enabled it to quickly adapt to changing customer preferences. H&M's ability to source materials and manage its supply chain has also contributed to its competitive advantage.
To know more about the company, visit:
https://brainly.com/question/30572026
#SPJ11
Bramble Products needs to prepare their year-end financial statements. On December 31,2024 , the balance in Accounts Receivable was $730.000. An aging analysis of the accounts receivable indicated that $17,700 of the accounts receivable is expected to be uncollectible. (a) Prepare the adjusting entries to record estimated bad debt expense using the percentage of receivables approach for each independent assumption: i) Allowance for Doubtful Accounts has a credit balance of $3,400 before adjustment. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are outomatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry] ii) Allowance for Doubtful Accounts has a debit balance of $780 before adjustment. (If no entry is required, select "No Entry" for th account titles and enter 0 for the amounts. Credit occount titles are outomatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry.)
Date Accounts Debit Credit Dec. 31Bad debt expense 18,480 Allowance for doubtful accounts18,480
Assuming Allowance for Doubtful Accounts has a credit balance of $3,400 before adjustment, the adjusting entries to record estimated bad debt expense using the percentage of receivables approach are given below.
Adjusting entry: Adjusting entry would increase the estimated uncollectible accounts by $17,700 (=$730,000 × 2.4%) and decrease the balance in the allowance for doubtful accounts by $14,300 (=$3,400 - $17,700).
So, the adjusting entry to record the estimated bad debt expense is:
Date Accounts Debit Credit Dec. 31
Bad debt expense14,300 Allowance for doubtful accounts14, 300
Assuming Allowance for Doubtful Accounts has a debit balance of $780 before adjustment, the adjusting entries to record estimated bad debt expense using the percentage of receivables approach are given below.
Adjusting entry: Adjusting entry would increase the estimated uncollectible accounts by $17,700 (=$730,000 × 2.4%) and decrease the balance in the allowance for doubtful accounts by $18,480 (=$780 + $17,700).
So, the adjusting entry to record the estimated bad debt expense is:
Date Accounts Debit Credit Dec. 31Bad debt expense
18,480 Allowance for doubtful accounts18,480
To know more about Doubtful visit:
https://brainly.com/question/28820858
#SPJ11
For its No Interest for One Year sale, The Block Furniture advertises that customers pay nothing down and the balance may be paid by twelve equal monthly payments with no interest charges. The Block Furniture has an operating loan on which it pays interest at 9.85% compounded monthly. If The Block Furniture sells furniture in a cash transaction rather than on the special promotion, The Block Furniture can use the extra cash proceeds to reduce the balance on its loan, and thereby save on interest costs. What percentage discount for cash could The Block Furniture give and still be no worse off than receiving the full price under the terms of the sale?
Let the cash discount offered by The Block Furniture be "x".
To calculate the percentage discount for cash that The Block Furniture can give and still be no worse off than receiving the full price under the terms of the sale, we need to equate the cost of the furniture under the terms of the sale with that of the cost of the furniture in a cash transaction.
Let us assume that the price of the furniture is $1,200 on the terms of the sale. We can calculate the total cost of the furniture under the terms of the sale, as shown below:
Balance = $1,200 Monthly payment = 1,200 / 12 = $100 Interest charges = 0 ,Using the above information, we can find the actual cost of the furniture by using the formula for present value of an annuity:PV = PMT [(1 - (1 / (1 + r)n)) / r]wherePV = Present value of the annuityPMT = Periodic paymentn = Number of periodsr = Rate of interest / periods.
First , we need to calculate the present value of the monthly payments. We can assume that the first monthly payment is due immediately, so n = 11 (12 - 1).PMT = $100r = 9.85% / 12 = 0.820833%PV = 100 [(1 - (1 / (1 + 0.820833%)11)) / 0.820833%]PV = $1,022.18
The present value of the balance is simply the price of the furniture minus the present value of the monthly payments. PV (balance) = $1,200 - $1,022.18 = $177.82
The actual cost of the furniture in the special promotion is equal to the present value of the balance plus the cash price. Thus, the actual cost of the furniture in the special promotion is:$177.82 + $1,200 = $1,377.82
The amount that The Block Furniture would receive in a cash transaction is $1,200 - x. If The Block Furniture uses the extra cash proceeds to reduce the balance on its loan, then its new balance would be:$177.82 - ($1,200 - x) = x - $1,022.18.
If the Block Furniture wishes to be no worse off by selling furniture in a cash transaction rather than on the special promotion, then the new balance should be less than or equal to the original balance, i.e.:x - $1,022.18 ≤ $177.82x ≤ $1,200.
Therefore, the maximum cash discount that The Block Furniture could give and still be no worse off than receiving the full price under the terms of the sale is $1,200 - $1,200 = $0. The percentage discount for cash would be 0%. Answer: \boxed{0}.
Learn more about Percentage discount.
https://brainly.com/question/33627529
#SPJ11
Required information [The following information applies to the questions displayed below.] As of June 30, Year 1 , the bank statement showed an ending balance of $17,292. The unadjusted Cash account balance was $16,259. The following information is available: 1. Deposit in transit $2,365. 2. Credit memo in bank statement for interest earned in June: $20. 3. Outstanding check: $3,385. 4. Debit memo for service charge: $7. o. Record in general journal format the adjusting entries necessary to correct the unadjusted book balance. (If no entry is required for anansaction/event, select "No journal entry required" in the first account field.) Journal entry worksheet Note: Enter debits betore crecits.
In order to prepare the adjusting entries to correct the unadjusted book balance, the following journal entry must be prepared:
Journal Entry Worksheet
Account Title
Debit
Credit
Cash $15,244$985
Service charges$7
-$7
Deposit in Transit$2,365
-$2,365
Outstanding checks-$3,385
$3,385
Interest Income-$20
$20
How to determine?To determine the amount of cash at the end of the year, adjustments must be made. The unadjusted cash account balance was $16,259, but the bank statement showed an ending balance of $17,292, so the adjustments are as follows:
Deposit in transit is added to the bank balance as it is money that is expected to arrive and will eventually clear.
Outstanding checks must be deducted from the bank balance as they are checks that have already been written and sent but have yet to clear the bank account.
The service charge must be deducted from the book balance as it is a bank expense that has not been recorded in the books.
Interest income must be added to the book balance as it is a bank revenue that has not been recorded in the books.
To know more on Expenses visit:
https://brainly.com/question/29850561
#SPJ11
G!aspen ine coerates a chan of doughnut shops. The company is considering two possele expansion plans. Plan A would open eight smallor shops at a cost of S8,740, cco. Expected anfual net cashinfown are $1,450,000 with zano residual vilue at the end of ten years. Under Plan B, Glascoe would open throe larger shops at a cost of $8,440,000. This plan is expected to generafe net cosh infiows of 51,300,000 per year for ten years, the estimated sle of the properties. Estimated residual value is $925,000. Glascoe uses atraight-fine depreciasion and requires an anrital return of Bर in (Clck the icon to vow the present value factor table] (Cick the icon to view the presert value annuity tactor tablis) (Click tre ionn bo vow the future value factor table.) (Cick the icon to viow the future valien arnuly factor tatio? Read the ceakiterneras. Requirement 1. Compute the paptack period, the AFR, and the NPV of these two ptans. What are the theoghs and weaknesses of these capital budgeting modes? Hegen by computing the payback seriod for both plans. (Rnund your antwers to one decitar phace) Plon A (in youm) Plan 8 (in yaars) Requirements 1. Compule the paytsck period, the ARR, and the NPV of these two plans. What at the ufbengts and weaknesses of these captal budgering models? 2. Which expansion puan sheuld ciancoe choose? Why? 3. Estimash Plar A's IRR. How does the IRR compare with the conpany's requized rate of return?
This is higher than the company's required rate of return of 8%. As a result, Plan A would be considered a good investment.
Compute the payback period, the AFR, and the NPV of these two plans.
What are the strengths and weaknesses of these capital budgeting modes? Begin by computing the payback period for both plans.
Payback period for Plan A:
Since Glascoe needs to earn $8,740,000 on the initial investment of $8,740,000, payback period is obtained by adding the inflows until they are equal to the outflow:
$8,740,000 ÷ $1,450,000 per year = 5.97 years
Payback period for Plan B:
Since Glascoe needs to earn $8,440,000 on the initial investment of $8,440,000, payback period is obtained by adding the inflows until they are equal to the outflow:
$8,440,000 ÷ $1,300,000 per year = 6.49 years
ARR for Plan A:
ARR is computed by dividing the average net income by the average book value of the investment.
(average annual net income ÷ average investment) × 100% or
(average annual net income ÷ average annual net income + average annual depreciation) × 100%(1,450,000 ÷ (8,740,000 ÷ 2)) × 100% = 16.67%ARR for Plan B:(1,300,000 ÷ (8,440,000 ÷ 2)) × 100% = 15.42%NPV for Plan A:
NPV is computed by finding the present value of all cash inflows and outflows.
$1,450,000 (PVIFAn-10, 8%) + $1,450,000 (PVIFAn-9, 8%) + ... + $1,450,000 (PVIFAn-1, 8%) - $8,740,000 = $22,739.68NPV for Plan B:
$1,300,000 (PVIFA10, 8%) + $925,000 (PVIF10, 8%) - $8,440,000 = $1,331,712.12Strengths of payback period method:
It's easy to calculate and understand.
It emphasizes liquidity and reduces the risk of loss from uncertain future cash flows.
It's useful for assessing risk and uncertainty of future cash flows.
Weaknesses of payback period method:
It ignores the time value of money and the profitability of a project.
It ignores cash flows beyond the payback period.
It doesn't measure value or wealth creation.
A strength of the ARR method is that it accounts for time value of money, profitability, and risk.
The method is simple to use and understand.
Weaknesses of the ARR method include its emphasis on accounting earnings, which may not be reliable indicators of value or wealth creation. It is also difficult to assess risk and uncertainty under the ARR method.
NPV is the most reliable method because it takes into account the time value of money, profitability, and risk. The weakness of the NPV method is that it is difficult to understand, calculate, and interpret.
Which expansion plan should Glascoe choose? Why?
The expansion plan that Glascoe should choose is Plan B, the expansion of three larger shops at a cost of $8,440,000. It has a positive NPV of $1,331,712.12, which is higher than the NPV of Plan A. It also has a lower payback period of 6.49 years, which is less than the payback period of Plan A.
The ARR for Plan A is 16.67%, while the ARR for Plan B is 15.42%.
Therefore, Plan B is the most profitable investment.3. Estimate Plan A's IRR. How does the IRR compare with the company's required rate of return?
IRR for Plan A is approximately 18%.
This is higher than the company's required rate of return of 8%. As a result, Plan A would be considered a good investment.
To know more about NPV visit:
https://brainly.com/question/32153010
#SPJ11
what distributes goods and services to customers? group of answer choices outbound logistics inbound logistics logistics cradle to grave
Outbound logistics refers to the process of distributing goods and services from the company to the customers. The correct answer is a) Outbound logistics
Outbound logistics is the part of the supply chain management process that involves the distribution of goods and services to customers. It encompasses various activities such as order fulfillment, warehousing, packaging, transportation, and delivery.
The goal of outbound logistics is to ensure that products are efficiently and effectively delivered to customers in a timely manner. This involves coordinating logistics operations, managing inventory, and optimizing transportation routes to minimize costs and meet customer expectations.
Outbound logistics plays a crucial role in customer satisfaction as it directly impacts the timely availability of products and services, ensuring that they reach the intended customers in the right condition and at the right place. The correct option is a).
To know more about Outbound logistics:
https://brainly.com/question/32311524
#SPJ4
--The given question is incomplete, the complete question is given below " what distributes goods and services to customers? group of answer choices a, outbound logistics b, inbound logistics c, logistics cradle to grave "--
to help get the most money possible when you sell a car, disconnect the odometer after the first year of ownership.true or false?
The given statement is false because Disconnecting the odometer after the first year of ownership in an attempt to get the most money possible when selling a car is illegal and unethical.
The odometer is a vital component of a vehicle that measures and records the distance it has traveled. It provides crucial information about the car's usage and overall condition. When selling a used car, potential buyers rely on the odometer reading to assess the vehicle's value, determine its wear and tear, and make informed decisions.
Disconnecting the odometer or tampering with its readings is a dishonest practice that deceives potential buyers. It misrepresents the true mileage of the vehicle, leading to an inaccurate understanding of its actual condition and potentially inflating its value.
Engaging in odometer fraud can result in legal consequences, including fines and imprisonment, as well as severe damage to one's reputation. Additionally, it can lead to legal disputes and financial losses for the seller, as the buyer may take legal action to seek recourse.
When selling a car, it is important to maintain honesty and transparency. Providing accurate and complete information about the vehicle's history, including its mileage, helps build trust with potential buyers and ensures a fair transaction.
For more such questions on ownership visit:
https://brainly.com/question/30676719
#SPJ8
If a company's cost of capital is 15% and a large division's cost of capital is 10%, then discounting the division's cash flows at 15% would? A. Determine where the project plots in relation to the security market line B. Make the project look more attractive than it should be C. Be correct from a theoretical perspective D. Be incorrect and could cause the project to be erroneously rejected
The answer is: D. Be incorrect and could cause the project to be erroneously rejected.
What is the reason?Discount rate refers to the rate of return that an investor or firm requires from their investment to make it worthwhile.
It can also be regarded as the minimum rate of return a business expects to earn when investing in a project.
In this question, a company's cost of capital is given as 15% and a large division's cost of capital is given as 10%.
We cannot discount the division's cash flows at 15%. Instead, we should discount it at 10%.
This is because, while calculating the NPV of a project, it is necessary to discount the cash flows at the same rate as the cost of capital of the project. If the cost of capital of the project is 10%, then the cash flows must be discounted at 10%.
If we discount the division's cash flows at a higher rate than its cost of capital, which is 10%, then the calculated NPV will be lower than it should be.
This will lead to the project being erroneously rejected.
Hence, option D. Be incorrect and could cause the project to be erroneously rejected is the correct answer.
To know more on Investment visit:
https://brainly.com/question/14921083
#SPJ11
Which of the following is "something of value" that might be offered to FINAL CONSUMERS as part of the "price equation"? a.Sufficient margin to allow for profit. b.Push money. c.Competitive advantage. d.Branded merchandise. e.None of these is a good answer.
c) "Competitive advantage," refers to unique qualities or benefits that differentiate a product or service from competitors, offering added value to consumers and justifying the price.
The "price equation" refers to the factors that determine the final price of a product or service. Among the options provided, "Competitive advantage" is the most fitting answer as "something of value" that might be offered to final consumers. Competitive advantage refers to the unique qualities, features, or benefits that set a product or service apart from competitors in the marketplace. It can include aspects like superior quality, innovation, convenience, exceptional customer service, or unique features that meet customer needs better than alternatives.
By offering a competitive advantage, businesses aim to attract and retain customers by providing added value that justifies the price of their product or service. This advantage can make a consumer more likely to choose a particular brand over competitors, leading to increased sales and market share. Sufficient margins to allow for profit, push money (incentives to retailers or salespeople), and branded merchandise are also important considerations in pricing strategies, but they are not specifically part of the "price equation" for final consumers as described in the question.
learn more about Competitive advantage here:
https://brainly.com/question/24172778
#SPJ11
Bellingham Company produces a product that requires 2 standard direct labor hours per unit at a standard hourly rate of $16.00 per hour. If 5,600 units used 11,000 hours at an hourly rate of $16.64 per hour, what is the direct labor (a) rate variance, (b) time variance, and (c) cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Bellingham Company produces a product that requires 2 standard direct labor hours per unit at a standard hourly rate of $16.00 per hour.
If 5,600 units used 11,000 hours at an hourly rate of $16.64 per hour, The formula for calculating direct labor variance is as follows: Direct labor variance = Standard Rate (AH - SH) Where, AH = Actual hours SH = Standard hours(a) Rate Variance Standard Rate = $16.00 per hour Actual Rate = $16.64 per hour Rate Variance = Standard Rate - Actual Rate= $16.00 - $16.64= -$0.64 (Favorable)Therefore, the direct labor rate variance is $0.64 (Favorable).
Time Variance [tex]Standard time = 2 hours[/tex] per unit Standard hours for 5,600 units = 2 hrs per unit × 5,600 units= 11,200 hours Actual Hours = 11,000 hours Time variance = Actual hours - Standard hours= 11,000 hours - 11,200 hours= -200 (Unfavorable).
To know more about Company visit:
https://brainly.com/question/30532251
#SPJ11
quantitative problem: bellinger industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. both projects' after-tax cash flows are shown on the time line below. depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. bellinger's wacc is 10%. 01234 project a-1,000700365240290 project b-1,000300300390740 what is project a's payback? do not round intermediate calculations. round your answer to four decimal places.
Project A's payback period is approximately 3.2708 years.
To calculate the payback period for Project A, we need to determine the time it takes for the cumulative cash flows to equal or exceed the initial investment.The cash flows for Project A are as follows: -1,000, 700, 365, 240, 290.We will calculate the cumulative cash flows for each year:Year 0: -1,000Year 1: -1,000 + 700 = -300Year 2: -1,000 + 700 + 365 = 65Year 3: -1,000 + 700 + 365 + 240 = 305Year 4: -1,000 + 700 + 365 + 240 + 290 = 595The payback period is the time it takes for the cumulative cash flows to reach or exceed zero. In this case, it occurs in Year 3.To calculate the payback period, we can use the formula:Payback Period = Years before full recovery + (Remaining cash flow / Cash flow in the year after full recovery)In this case, the payback period is 3 + (305 / 240) = 3.2708 years (rounded to four decimal places).For more questions on payback
https://brainly.com/question/29511126
#SPJ8
Maria owns 75% and Christopher owns 25% of Cockatoo Corporation, a calendar year taxpayer. Cockatoo makes a $600,000 distribution to Maria on April 1 and a $200,000 distribution to Christopher on May 1. Cockatoo's current E & P is $120,000 and its accumulated E & P is $500,000. What are the tax implications of the distributions to Maria and Christopher?
Maria owns 75% and Christopher owns 25% of Cockatoo Corporation, a calendar year taxpayer. Cockatoo makes a $600,000 distribution to Maria on April 1 and a $200,000 distribution to Christopher on May 1. Cockatoo's current E & P is $120,000 and its accumulated E & P is $500,000.
The tax implications of the distributions to Maria and Christopher are as follows:
Tax implications of the distribution of $600,000 to Maria: It is first considered as a dividend for tax purposes. The amount of the dividend is $500,000 (accumulated E&P), and the rest is a return of capital, which reduces Maria's tax basis in Cockatoo Corporation.
The $500,000 dividend is treated as ordinary income for tax purposes. It will be taxed at the ordinary income tax rate. Therefore, it will be taxed at the tax rate of Maria.
Tax implications of the distribution of $200,000 to Christopher: It is also considered as a dividend for tax purposes. The amount of the dividend is $120,000 (current E&P), and the rest is a return of capital, which reduces Christopher's tax basis in Cockatoo Corporation.
The $120,000 dividend is treated as ordinary income for tax purposes. It will be taxed at the ordinary income tax rate. Therefore, it will be taxed at the tax rate of Christopher.
To know more about taxpayer visit:
https://brainly.com/question/5771472
#SPJ11
After reading the Clorox case study, please choose one of the brands discussed in the case study and explain its value proposition to a light, medium or dark green consumer. Please list one competitor doing a better job and why.
In the Clorox case study, one of the brands discussed is Brita, which offers water filtration products. The value proposition of Brita to a light, medium, or dark green consumer is its commitment to providing clean and safe drinking water while reducing the consumption of single-use plastic bottles.
Brita appeals to light green consumers by offering an affordable and convenient alternative to purchasing bottled water. By using Brita water filters, these consumers can enjoy clean and great-tasting water without contributing to plastic waste.
For medium green consumers who are more environmentally conscious, Brita's value proposition lies in its ability to reduce plastic waste. By using a Brita water filter, these consumers can significantly reduce their reliance on single-use plastic bottles, helping to minimize their carbon footprint.
Dark green consumers, who are highly committed to sustainability, value Brita for its focus on reducing plastic pollution and promoting sustainable living. Brita's products enable these consumers to have access to clean and safe drinking water while actively contributing to the reduction of plastic waste in the environment.
While Brita is a popular and trusted brand, one competitor that is doing a better job in addressing the needs of green consumers is Soma. Soma offers stylish and sustainable water filtration products that prioritize design, function, and environmental impact. Soma's value proposition to green consumers is not only centered around providing clean water but also emphasizing sustainable materials and eco-friendly packaging.
Soma's products are made from biodegradable materials such as coconut shells and plant-based plastics, which appeals to environmentally conscious consumers. Additionally, Soma's filters are 100% compostable, further highlighting their commitment to sustainability.
In comparison to Brita, Soma's emphasis on aesthetics, sustainable materials, and compostability gives them a competitive edge in capturing the attention of green consumers who value both style and environmental impact.
Overall, both Brita and Soma provide water filtration solutions with a focus on sustainability, but Soma's unique approach to design and use of eco-friendly materials has positioned them as a competitor that better caters to the needs of green consumers.
Know more about eco-friendly here:
https://brainly.com/question/14967142
#SPJ11
If good 1 is a Giffen good, then it follows that
a. The elasticity of demand of good 1 with respect to its own price is negative
b. The elasticity of demand of good 1 with respect to its own price is positive
c. The Engel curve for good 1 is negatively sloped
d. The demand curve for good 1 is negatively sloped
e. The elasticity of demand of good 1 with respect to income is positive
If good 1 is a Giffen good, then it follows that the elasticity of demand of good 1 with respect to its own price is positive. The answer is letter b.
A Giffen good is a product that, as its price rises, consumers' demand for it increases. Unlike ordinary goods, which experience a decline in demand as their prices rise, Giffen goods experience a rise in demand as their prices rise.The demand curve for a Giffen good slopes upward, and as the price of the good rises, the quantity demanded rises as well.
When the price of a Giffen good rises, people must reduce their consumption of other goods. As a result, they have less income available to spend on the Giffen good. Because the income effect outweighs the substitution effect, the quantity demanded rises despite the higher price of the Giffen good. Thus, the elasticity of demand of good 1 with respect to its own price is positive.
To know more about the demand, visit:
https://brainly.com/question/18550230
#SPJ11
which of the following would you expect to find on a monthly account statement?
On a monthly account statement, you would typically find the following information: Account Summary: This section provides a summary of your account, including the beginning and ending balances for the month.
Transactions can include deposits, withdrawals, purchases, fees, and interest earned. Account Activity: This section gives a detailed breakdown of the account activity during the month. It may include information on the types of transactions, their frequency, and any changes in account status. Interest Earned or Charged: If your account earns interest or incurs interest charges, this section will provide information on the interest amount earned or charged during the month.
Account Details: This section provides additional details about your account, such as your account number, account holder's name, contact information, and the terms and conditions of your account. However, the main purpose of the statement is to provide a comprehensive overview of your account activity and current financial status. I hope this explanation helps you understand what information you would typically find on a monthly account statement.
To know more about balances visit:
https://brainly.com/question/27154367
#SPJ11
Consider a firm's investment opportunity with a cost of $100,000 today and a benefit of $105,000 at the end of one year. If the interest is 10%. Will you accept this opportunity? Why?
2.) Use either compounding or discounting, show your answer for Q1.
3.) Why the financial calculator shows "-1,000" for PV?
4.) Why my calculation shows "Error"? Which of my input was wrong?
5.) I got "5" in my calculation. Do you think "5" will be the final answer to this question? Why or why not?
6.) An investor is considering an investment that will pay $2,270 at the end of each year for the next 10 years. He expects to earn a return of 12 percent on his investment, compounded annually. How much he will get at the end of year 10 if the investment returns are received at the beginning of each year?
7.) Walt is evaluating an investment that will provide the following returns at the end of each of the following years: year 1, $13,300; year 2, $10,800; year 3, $8,300; year 4, $5,800; year 5, $3,300; year 6, $0; and year 7, $13,300. How much should he pay if he expects to earn an annual return of 9 percent compounded monthly?
An investor is considering an investment that will pay $2,270 at the end of each year for the next 10 years. If the investment returns are received at the beginning of each year and the expected rate of return is 12% annually, the future value of annuity due is $40,323.52, if he expects to earn an annual return of 9% compounded monthly.
The formula for the future value of an annuity due is:FVAD = PMT * ((1 + r) * (((1 + r)^n - 1) / r))Where,FVAD = Future Value of Annuity Due PMT = Paymentr = Rate of Interest / Expected rate of return = Number of periods / yearsPlugging in the values in the formula,FVAD = $2,270 * ((1 + 0.12) * (((1 + 0.12)^10 - 1) / 0.12))= $31,161.31.
Therefore, the future value of the annuity due is $31,161.31.7) Walt is evaluating an investment that will provide returns of $13,300 at the end of year 1, $10,800 at the end of year 2, $8,300 at the end of year 3, $5,800 at the end of year 4, $3,300 at the end of year 5, $0 at the end of year 6 and $13,300 at the end of year 7.The present value of the uneven cash flows can be calculated using the discounted cash flow method.
The formula for the present value of an uneven cash flow is:PV = CF1 / (1 + r)^1 + CF2 / (1 + r)^2 + CF3 / (1 + r)^3 + ... + CFn / (1 + r)^nWhere,PV = Present Value of Uneven Cash FlowCF1, CF2, CF3, ..., CFn = Cash flows in year 1, year 2, year 3, ..., year n.r = Rate of interest / Expected rate of return. Plugging in the values in the formula,PV = $13,300 / (1 + (0.09 / 12))^1 + $10,800 / (1 + (0.09 / 12))^2 + $8,300 / (1 + (0.09 / 12))^3 + $5,800 / (1 + (0.09 / 12))^4 + $3,300 / (1 + (0.09 / 12))^5 + $0 / (1 + (0.09 / 12))^6 + $13,300 / (1 + (0.09 / 12))^7= $40,323.52Therefore, he should pay $40,323.52 if he expects to earn an annual return of 9% compounded monthly.
For more such questions on Annuity
https://brainly.com/question/14908942
#SPJ8
the capital investment each year in the united states usually part 2 a. decreases unless favorably taxed. b. increases. c. remains constant. d. decreases.
The capital investment each year in the United States usually part 2 a. decreases unless favorably taxed.
The capital investment each year in the United States typically follows a pattern of decreasing unless favorably taxed. Capital investment refers to the expenditure on long-term assets such as buildings, equipment, and infrastructure, which are crucial for economic growth and productivity. In an environment where capital is not incentivized or taxed unfavorably, businesses may be less motivated to invest, leading to a decrease in capital investment.
However, when capital investments are favorably taxed, such as through incentives like tax credits or deductions, businesses are encouraged to invest more. Favorable taxation policies can reduce the burden on businesses and provide financial incentives that promote investment in new ventures, expansion, and technological advancements. This, in turn, can lead to an increase in capital investment, driving economic growth and job creation
To learn more about investment , Click here:brainly.com/question/17252319
#SPJ11
Lannister Manufacturing has a target debt-equity ratio of 0.51. Its cost of equity is 18 percent, and its cost of debt is 10 percent. If the tax rate is 34 percent, what is the company's WACC?
13.44%
12.19%
10.45%
14.15% 14.86%
Holdup Bank has an issue of preferred stock with a $9 stated dividend that just sold for $94 per share. What is the bank's cost of preferred stock?
10.05%
9.00% 9.57%
9.19%
9.96%
Lannister Manufacturing has a target debt-equity ratio of 0.51, cost of equity is 18 percent, and its cost of debt is 10 percent. If the tax rate is 34 percent, then the company's WACC is 13.44 percent.
The formula for the weighted average cost of capital (WACC) is: WACC = (E/V x Re) + [(D/V x Rd) x (1 - T)] where: Re is the cost of equity Rd is the cost of debt E is the market value of the company's equity D is the market value of the company's debt V is the total value of the company (market value of equity + market value of debt)T is the corporate tax rate.
For Lannister Manufacturing, WACC = [(0.49 x 18%) + (0.51 x 10% x (1 - 34%))] x 100WACC = 13.44%Therefore, the answer is option A, 13.44%.
The cost of preferred stock is calculated as follows: Cost of preferred stock = Dividend / Price.
Since the bank has an issue of preferred stock with a $9 stated dividend that just sold for $94 per share, the bank's cost of preferred stock would be:
Cost of preferred stock = 9/94 Cost of preferred stock = 0.0957 or 9.57%.
Therefore, the answer is option C, 9.57%.
To know more about debt-equity ratio visit:
https://brainly.com/question/28391877
#SPJ11
How portfolio management service is useful? (400
words)
Portfolio management services are beneficial to both individuals and businesses with investment portfolios. Portfolio management services aid investors in achieving their long-term financial goals by providing them with an investment strategy that is tailored to their needs and objectives.
Portfolio managers assist investors in the selection of investments, monitoring their investments on a regular basis, and making investment decisions on their behalf. They aid in the development of a diversified investment portfolio, which reduces investment risk while still generating returns.
Professional portfolio management is a valuable service for investors who require assistance in making investment decisions. A portfolio manager may be able to assess an investor's investment objectives, risk tolerance, and time horizon, among other things, to create a personalized investment plan.
To know more about management visit:
https://brainly.com/question/32012153
#SPJ11
Dialysis machines are used for patients who have kidneys that don't work properly - without dialysis the patients would quickly die. They are expensive - costing about $100,000. Some patients can get a kidney transplant, which means they won't need dialysis any longer. A hospital in town has one dialysis machine that can run for 30 hours per week. As the boss of the hospital, you must decide who gets the treatment. There are a number of patients who require treatment and their needs are given below. Please list the patients you choose to save and why. Patient A: A 6-year-old child who needs 10 hours per week. They are awaiting a kidney transplant which is expected to occur in one year. Patient B: A 55-year-old man who needs 5 hours per week. He is married with grown-up children. Patient C: A 3-year-old child who will need dialysis indefinitely. Currently needs 4 hours per week. Patient D: A 78-year-old female, 4 hours per week. Patient E: A 7-year-old child, has three brothers and sisters, 4 hours per week. Patient F: An 8-year-old child, no brothers and sisters, 5 hours per week. Patient G: A 30-year-old female, two young children, 6 hours per week. Patient H: A 30-year-old male, two young children, 5 hours per week. Patient I: A 30-year-old male, no children, 4 hours per week. Patient J: A 45-year-old man with no children. Needs 6 hours per week but has a brother who will donate a kidney. This will take place in six months' time. Patient K: A 65-year-old man who requires 10 hours per week. As he is quite wealthy, he has promised to buy another dialysis machine for the hospital if he is still alive in one year's time. Decide how you will allocate the 30 hours, in order of preference. Please list the patients you choose to save and why.
Dialysis machines are essential for patients whose kidneys don't work properly. They are costly, and a hospital has one dialysis machine that can run for 30 hours per week. Given this, as a hospital boss, I would have to decide who should receive treatment.
Based on the patients' requirements, I would allocate the time as follows:
Patient A - A six-year-old child who requires 10 hours per week, as they await a kidney transplant in a year. They should be given the first preference.
Patient B - A 55-year-old married man with grown-up children who requires five hours per week. He should be given the sixth preference.
Patient C - A three-year-old child who will require dialysis indefinitely and needs four hours per week.
Patient D - A 65-year-old man who needs 10 hours per week. If he can purchase another dialysis machine for the hospital in a year, he should be given the second preference.
Patient E- A 45-year-old man who requires six hours per week and whose brother will donate a kidney in six months. He should be given the third preference.
Patient F- A 30-year-old woman with two young children who requires six hours of treatment per week. She should be given the fourth preference .
Patient G- A 30-year-old man with two young children who needs five hours of dialysis per week. He should be given the fifth preference. Patient H- An 8-year-old child with no siblings who requires five hours per week. She should be given the seventh preference.
To know more about essential visit :
https://brainly.com/question/30548338
#SPJ11
On March 1, you borrow $339,000 to buy a house. The mortgage rate is 6.75 percent APR compounded semi-annually. The loan is to be repaid in equal monthly payments over 20 years. The first payment is due on April 1. How much of the third payment applies to the principal balance
[Hint: You need to make amortization table up to 4 periods]? (Make timeline, write the formula that you are going to use, and if you use calculator to get final answer then show the sequence key entries)
Please answer this either by hand or with a finance calculator showing the entries, NO EXCEL PLEASE.
To answer this question, we will use the amortization table up to 4 periods. The given terms are as follows:
Loan amount = $339,000Mortgage rate = 6.75% APR compounded semi-annually
First payment due date = April 1
Payment is due monthly
Loan repayment period = 20 years
We know that the first payment is due on April 1. Hence, the timeline will start from this date. The timeline will be as follows:
We will find out the monthly payment using the following formula:
PV = PMT × [1 - (1 + r/n)^(-nt)] / (r/n)where
PV = present value
PMT = payment amount
r = annual interest rate
n = number of times interest is compounded per year
nt = total number of payments
Let's substitute the values in the above formula and calculate the monthly payment:
PV = -$339,000 (negative because it is a loan)
PMT = ?r = 6.75%
APR compounded semi-annually, so semi-annual rate = 6.75%/2 = 3.375%
n = 12 (as interest is compounded monthly)
nt = 20 years × 12 = 240 months
PMT = $2,428.84 (approx)
We can see from the above table that the third payment will be $2,428.84 and the amount of this payment that applies to the principal balance will be $531.50. Hence, $531.50 of the third payment applies to the principal balance.
To know more about amortization visit :
https://brainly.com/question/32732448
#SPJ11
Explain more detail about Interviewing and Use Case Diagram
Interviewing and Use Case Diagram are important concepts that are used in the field of software engineering and system analysis. Interviewing refers to the process of asking questions to stakeholders or end-users to obtain information and requirements that can help to create an effective system. A use case diagram is a graphical representation that is used to describe the interactions between a system and its users.
Interviewing: Interviewing is a vital tool in the field of system analysis. It is used to extract information about the system, its users, and their requirements. The interviewer asks questions that can help to identify the goals and objectives of the system. The interviewer can also use the information obtained from the interviews to create use cases and use case diagrams.
Use Case Diagram: A use case diagram is a graphical representation of the interactions between a system and its users. It is a high-level view of the system that shows the functionality of the system and its users. The diagram consists of actors, use cases, and relationships.
Actors are the entities that interact with the system. They can be users or other systems. Actors are represented by stick figures in the diagram.
Use cases represent the functionality of the system. They are the actions that the system performs to achieve its goals. Use cases are represented by ovals in the diagram.
Relationships represent the interactions between actors and use cases. They show the flow of information between the system and its users. Relationships are represented by arrows in the diagram.
In conclusion, Interviewing and Use Case Diagram are important concepts that are used in the field of software engineering and system analysis. Interviewing is the process of asking questions to stakeholders or end-users to obtain information and requirements that can help to create an effective system. A use case diagram is a graphical representation that is used to describe the interactions between a system and its users.
Learn more about Use Case Diagram from the given link:
https://brainly.com/question/12975184
#SPJ11
It is a market use to calculate a bond price with a yield. Actually, the current value of each flow (coupon or capital) that comes out of the bond is miscalculated in this way. Why is that? How does your answer change when the yield curve would be flat (so the interest rate is constant for each term).
The market use to calculate a bond price with a yield is known as the bond market. It is a tool used by investors to evaluate the value of a bond. When the yield curve is flat (so the interest rate is constant for each term), the calculation of the bond price with a yield is simplified.
The current value of each flow (coupon or capital) that comes out of the bond is miscalculated in this way because it does not take into account the time value of money. When the yield curve is flat (so the interest rate is constant for each term), the calculation of the bond price with a yield is simplified. The price of the bond will be equal to the sum of the present value of all future cash flows. This can be calculated using the following formula: PV = C / r + F / (1 + r)^n Where: - PV is the present value of the bond - C is the coupon payment - r is the interest rate - F is the face value of the bond - n is the number of years until maturity In a flat yield curve, the interest rate is the same for each term, so r can be used as a constant. This makes it easier to calculate the present value of each cash flow.
Learn more about Present value-
https://brainly.com/question/15904086
#SPJ11
The market use to calculate a bond price with a yield is known as the bond market. It is a tool used by investors to evaluate the value of a bond. When the yield curve is flat (so the interest rate is constant for each term), the calculation of the bond price with a yield is simplified.
The current value of each flow (coupon or capital) that comes out of the bond is miscalculated in this way because it does not take into account the time value of money. When the yield curve is flat (so the interest rate is constant for each term), the calculation of the bond price with a yield is simplified. The price of the bond will be equal to the sum of the present value of all future cash flows. This can be calculated using the following formula: PV = C / r + F / (1 + r)^n Where: - PV is the present value of the bond - C is the coupon payment - r is the interest rate - F is the face value of the bond - n is the number of years until maturity In a flat yield curve, the interest rate is the same for each term, so r can be used as a constant. This makes it easier to calculate the present value of each cash flow.
Learn more about Present value-
brainly.com/question/15904086
#SPJ11
. All of the following are true with respect to the auditor's consideration of information other than the audited financial report that are included in a client's annual report except:
A. the auditor must consider whether the other information is consistent with the information contained in the audited financial statements.
B. the auditor is under no obligation to perform audit procedures on this other information.
C. the auditor must perform audit procedures on this other information.
D. the auditor must request that material inconsistencies be corrected.
The option that is not true with respect to the auditor's consideration of information other than the audited financial report that is included in a client's annual report is "C. the auditor must perform audit procedures on this other information.In conclusion, Option C, the auditor must perform audit procedures on this other information, is not true.
"Explanation:Auditor's report is issued when the audit of financial statements is completed. In the annual report of a client, there is information other than audited financial statements. The auditor's consideration of other information included in an entity's annual report may increase the risk of liability to the auditor if there are material misstatements or inconsistencies in such information.The auditor's consideration of information other than audited financial statements are as follows:The auditor must consider whether the other information is consistent with the information contained in the audited financial statements.The auditor is under no obligation to perform audit procedures on this other information.The auditor must request that material inconsistencies be corrected.In conclusion, Option C, the auditor must perform audit procedures on this other information, is not true.
To know more about audit procedures visit:
https://brainly.com/question/32596592
#SPJ11
A case of entrepreneurship: Ben Cohen and Jerry Greenfield
Ben & Jerry's Homemade Holdings Inc., trading and commonly known as Ben & Jerry's, is an American company that manufactures ice cream, frozen yogurt, and sorbet. Founded in 1978 in Burlington, Vermont, the company went from a single ice cream parlor to a multi-national brand over the course of a few decades. It was sold in 2000 to multinational conglomerate Unilever operates as a fully owned subsidiary.
Please state your assumptions, where appropriate, in all the questions.
Discuss two criteria that you would evaluate whether a business is a case of successful entrepreneurship (viz. characteristics of entrepreneurship as distinguished from just another business). Hence explain whether Ben and Jerry is a case of successful entrepreneurship based on each of the criteria.
Please identify two personal attributes of the founders, Cohen and Greenfield, and evaluate how the personal attributes, respectively, were manifested in the establishment of the business.
Please explain the product and marketing strategies, respectively (i.e. two sets of strategies), Cohen and Greenfield had adopted to transform and develop the idea of an ice cream into an established international brand (viz. the process of developing an idea into an opportunity of a global product), and how the respective stages of the process were funded.
To fund their expansion into new markets, Ben & Jerry's relied on joint ventures and licensing agreements. They also took advantage of local resources and partnered with suppliers to reduce costs and minimize risks.
Criteria to evaluate the success of entrepreneurship:
There are two criteria that can be evaluated to determine if a business is a case of successful entrepreneurship; they are as follows:
Innovation: Successful entrepreneurship is determined by the extent to which entrepreneurs create new products or services. This criterion ensures that entrepreneurs have a deep understanding of their consumers and are eager to develop something that fulfills their needs.
Financial performance: Financial performance is another crucial component of successful entrepreneurship. Entrepreneurs must not only create novel goods and services, but they must also provide them at a competitive price to ensure that the business remains profitable and survives over time. Additionally, successful entrepreneurs must have the ability to manage finances effectively.
Ben & Jerry’s as a case of successful entrepreneurship:
Ben & Jerry's was established by two childhood friends, Ben Cohen and Jerry Greenfield, in 1978. The following are the two criteria that determine whether Ben & Jerry's is a case of successful entrepreneurship:
Innovation: Ben and Jerry established their ice cream company with a $12,000 investment and a vision to create high-quality ice cream products using only fresh, locally sourced ingredients. They focused on developing ice cream products that were new, unique, and creative in taste and texture. Their unique flavors such as Cherry Garcia and Chunky Monkey soon became a huge hit with customers, and they expanded the business to include other frozen treats such as sorbets and frozen yogurt. This demonstrates that the duo's creativity and innovation set their business apart from other ice cream companies, and it can be seen as a successful case of entrepreneurship.
Financial performance: Ben & Jerry's was not only innovative in terms of products but also in terms of business practices. They prioritized the satisfaction of their employees and put their profits back into the business to expand and improve their operations. The business grew at a tremendous rate and by the mid-1990s, it had sales of over $149 million.
To know more about the markets, visit:
https://brainly.com/question/31643570
#SPJ11
Management of Sycamore Home Furnishings is considering acquiring a new machine that can create customized window treatments. The equipment will cost $263,400 and will generate cash flows of $85,000 over each of the next six years. If the cost of capital is 12 percent, what is the MIRR on this project? (Round intermediate calculations to 4 decimal places, e.g. 15.1534 and final answer to 2 decimal places, e.g. 15.52%. Do not round factor values.)
Sycamore Home Furnishings is considering acquiring a new machine that can create customized window treatments. The equipment will cost 263,400 and will generate cash flows of $85,000 over each of the next six years. If the cost of capital is 12 percent,
what is the MIRR on this project?
MIRR stands for Modified Internal Rate of Return and is used to compare different investment projects of the same size but with different cash flows. It considers both the initial investment and the cash inflows and outflows over the life of the investment.
The first step in computing the MIRR is to calculate the future value of the cash inflows and outflows at the cost of capital rate, which is 12 percent for this project.
Using Excel’s FV function, the future value of the cash inflows and outflows is calculated for six years at a rate of 12 percent. image The terminal value, which is the value of all future cash inflows beyond the sixth year, is computed by multiplying the future value of the cash inflows in year six by (1 + cost of capital rate) raised to the power of the number of years beyond year six. image The total future value of the cash inflows and outflows is calculated by summing the future value of the cash inflows and outflows for each year, as well as the terminal value.
image The internal rate of return (IRR) is then calculated by finding the interest rate that equates the total future value of the cash inflows and outflows to zero. Using Excel’s IRR function, the IRR is calculated to be 18.79 percent. image Finally, the MIRR is computed by assuming that the cash inflows are reinvested at the cost of capital rate, which is 12 percent for this project.
Using Excel’s MIRR function, the MIRR is computed to be 15.13 percent. Therefore, the MIRR on this project is 15.13 percent.
To know more about treatments visit :
https://brainly.com/question/31799002
#SPJ11
You read in BusinessWeek that a panel of economists has estimated that the long-run real growth rate of the U.S. economy over the next five-year period will average 5 percent. In addition, a bank newsletter estimates that the average annual rate of inflation during this five-year period will be about 7 percent. What nominal rate of return would you expect on U.S. government T-bills during this period? Round your answer to two decimal places.
Real growth rate = 5%Inflation rate
= 7%Nominal growth rate = (1 + real growth rate) × (1 + inflation rate) - 1
= (1 + 0.05) × (1 + 0.07) - 1
= 0.1260 or 12.36% Therefore, the nominal rate of return on U.S. government T-bills is estimated to be 12.36% during this period.
The nominal rate of return on U.S. government T-bills is estimated to be 12.36% during this period.
T-bills (Treasury bills) are short-term securities issued by the U.S. Treasury.
The primary reason for issuing these securities is to manage the U.S. government's short-term borrowing needs. They are also used as a risk-free benchmark for other money markets instruments, such as certificates of deposit and commercial paper, and are regarded as risk-free investments.
A nominal rate of return is the total rate of return prior to the impact of inflation. The real rate of return, on the other hand, takes inflation into account and represents the rate of return in terms of purchasing power. T-bills are no exception to the nominal rate of return.
The real interest rate equals the nominal interest rate minus the inflation rate. If the nominal rate of return on T-bills is R, and the inflation rate is I, then:
The real rate of return = (1 + R) / (1 + i) - 1 We may use the data given to calculate the nominal interest rate on T-bills as follows:
Real growth rate = 5%Inflation rate
= 7%Nominal growth rate = (1 + real growth rate) × (1 + inflation rate) - 1
= (1 + 0.05) × (1 + 0.07) - 1
= 0.1260 or 12.36% Therefore, the nominal rate of return on U.S. government T-bills is estimated to be 12.36% during this period.
Learn more about Real growth rate from the given link
https://brainly.com/question/25849702
#SPJ11
The nominal rate of return expected on US government T-bills during the next five-year period with a long-run real growth rate of the US economy of 5% and an average annual rate of inflation of 7% will be -2%.This is because the nominal rate of return is equal to the sum of the real rate of return and the inflation rate.
Thus: N = R + I Where N = nominal rate of return, R = real rate of return, and I = inflation rate. R = N - IN = R - I
Since the real rate of return is the rate at which the economy is expected to grow, the real rate of return is 5%. Therefore, R = 5%. The inflation rate is given as 7%. Thus, I = 7%.
Therefore, N = R + I = 5% + 7% = 12%.
However, we are looking for the nominal rate of return on US government T-bills. T-bills are considered risk-free investments, so they have a lower nominal rate of return than other investments with higher risks.To find the nominal rate of return on US government T-bills, we need to subtract the risk premium, which is the difference between the expected rate of return on T-bills and the expected rate of return on other investments with higher risks. Suppose the expected rate of return on T-bills is 2%.
Then the risk premium would be 12% - 2% = 10%.Thus, the nominal rate of return expected on US government T-bills during the next five-year period would be 2% - 10% = -8%. Since the question asks for the answer to be rounded to two decimal places, the nominal rate of return expected on US government T-bills during the next five-year period would be -2%.
To know more about average visit :
https://brainly.com/question/24057012
#SPJ11
You are the CFO of "Magic Candles Inc." a public company with stocks traded at TSX. You are located in New Westminster, BC. The marketing team of your company has just come up with a new product strategy where the company needs to start producing candles from eco-friendly materials. The estimated investment into this new production is $1,000,000. The company has 1.0 debt/equity ratio. The book value of assets is $9,000,000. The CEO is very excited about this new endeavour and asked you to decide how you are going to finance it. The company does not have internal funds available and needs to use debt or equity financing. The financing should be attractive for investors and at the same time be the best option for the company. The options you are thinking about are 1. Issue bonds. 1,000 bonds with a face value of $1,000 and 8% semi-annual coupon with 5 years to maturity. You think that the bond can be priced in the market for $980. 2. Issue shares and place them at TSX. To finance the new product line, the company can issue 9,000 shares. The last dividend paid was $4.50, and the dividends are growing at a constant rate of 2.8%. 3. Take a loan for 5 years at 7% compounded semi-annually. Questions: 1. What is more attractive for investors: bonds or stocks? Provide calculations for each of the options. Additionally, discuss risk and reward in relation to these options as well as other advantages and disadvantages of debt and equity for an investor. 2. What is the best financing for the company? Remember that debt costs are expenses and are deducted before taxation. The company tax rate is 30%. Additionally, discuss the advantages and disadvantages of debt and equity for this company (capital structure and impact on cash flows). Provide calculations to support your argument.
1. What is more attractive for investors: bonds or stocks? Provide calculations for each of the options. Additionally, discuss risk and reward in relation to these options as well as other advantages and disadvantages of debt and equity for an investor.
Bond:Current Yield = (Coupon Payment / Market Price of Bond) × 1000 = (80 / 980) × 1000 = 8.16%Yield to Maturity = 8.72% (calculated using Excel's RATE function: RATE(10, 40, -980, 1000) x 2)Stock:Dividend yield = Last Dividend Paid / Current Market Price = 4.5 / x = 0.045 x = $100Dividend in Year 1 = 4.5 x (1 + 2.8%) = 4.632Dividend in Year 2 = 4.632 x (1 + 2.8%) = 4.765Dividend in Year 3 = 4.765 x (1 + 2.8%) = 4.900Dividend in Year 4 = 4.900 x (1 + 2.8%) = 5.037Dividend in Year 5 = 5.037 x (1 + 2.8%) = 5.177Pricing of shares would depend on market conditions and supply and demand for the shares.
The current market price is assumed to be the same as the par value. The estimated dividend growth rate of 2.8% is also an assumption based on past trends. The dividend growth rate may or may not continue at the same rate in the future. Therefore, a combination of debt and equity financing would be appropriate for the company. The company could issue bonds to finance part of the investment and use the proceeds to pay for part of the new product line. The company could issue shares to finance the remaining part of the investment. The use of a combination of debt and equity financing would reduce the financial risk of the company while keeping the cost of capital reasonable.
To know more about bonds visit:
https://brainly.com/question/29282058
#SPJ11
Which of the following equations would NOT be appropriate to use in a firm with risky debt?
A) rE=rU+(D/E) x (rU-rD)
B) rU=rD+(D/E) x (rU-rD)
C) rE= rU+(D/E) x rU
D) rU=[E/(E+D)]rE + [D/(E+D)]rD
C) rE= rU+(D/E) x rU would NOT be appropriate to use in a firm with risky debt.
Option C assumes that the cost of equity (rE) is equal to the risk-free rate (rU) plus the debt-to-equity ratio (D/E) multiplied by the risk-free rate. However, in a firm with risky debt, the cost of equity is influenced not only by the risk-free rate but also by the additional risk associated with the firm's debt. Therefore, Option C does not adequately account for the additional risk from the firm's debt and is not appropriate for a firm with risky debt. Options A, B, and D consider the impact of both risk-free and risk-adjusted rates in a more suitable manner.
Learn more about risky debt. here:
https://brainly.com/question/28138562
#SPJ11
As you have learned throughout the course, salespeople need to be ethical in their conduct in order to be successful long-term. Choose either the concept of "business ethics" or the concept of "corporate social responsibility" and write one paragraph (minimum 300 words) on what this concept means to you as a future sales professional and how you will apply this to your future career. If you utilise any external references, please cite them in APA format and use in-text citations as required.
As a future sales professional, I believe that corporate social responsibility is an essential concept to understand and apply to my future career. Corporate social responsibility (CSR) refers to a company's efforts to operate in an economically, socially, and environmentally responsible manner.
In other words, CSR requires companies to consider the impact of their actions on various stakeholders, including employees, customers, communities, and the environment.
To me, CSR means that businesses have a responsibility to make a positive impact on society beyond just their bottom line. As a sales professional, I believe that it is important to work for companies that prioritize CSR and to help communicate those efforts to customers.
This includes ensuring that the products or services being sold are produced ethically and sustainably, and that the company is actively working to minimize its impact on the environment.
Additionally, I believe that it is important for salespeople to be transparent with their customers about the company's CSR efforts. This includes sharing information about the company's supply chain, the materials used in production, and any certifications or labels that indicate sustainable or ethical practices. Salespeople should also be prepared to answer any questions that customers may have about the company's CSR efforts.
In order to apply the concept of CSR to my future career, I plan to seek out companies that prioritize this concept and are committed to making a positive impact on society.
I will also strive to be a knowledgeable and transparent sales professional, providing customers with accurate information about the company's CSR efforts. Additionally, I plan to stay up-to-date on industry trends and best practices related to CSR, so that I can provide the best possible service to my customers.
In conclusion, I believe that corporate social responsibility is an important concept for sales professionals to understand and apply to their future careers. By working for companies that prioritize CSR and being transparent with customers about these efforts, sales professionals can help make a positive impact on society and the environment.
learn more about sales professional
https://brainly.com/question/31015156
#SPJ11