Graphically displayed as
Year: 0 1
Loan: ┌─────┬─────┐
│ │ │
Interest: │ 5% │ 5% │
└─────┴─────┘
Swap: ┌─────┬─────┐
│ │ │
Interest: │ 4% │ 4% │
└─────┴─────┘
In this graph, the timeline is represented horizontally, with each year indicated by a separate column. The loan interest rates are displayed above the Loan section, and the swap interest rates are displayed above the Swap section.
Year 0: At the beginning, the bank takes out the loan and swaps the fixed rate immediately. Both the loan and swap start with a fixed interest rate of 5% and 4%, respectively.
Year 1: In the first year, the bank receives interest payments on both the loan and the swap. The interest rate for both remains constant at 5% and 4%, respectively.
Note that the loan amount remains constant at 100 units, as mentioned in the scenario.
This graph visually represents the annual interest flows for the bank, illustrating the fixed interest payments received on the loan and the corresponding swap arrangement.
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Consider a Bertrand oligopoly consisting of four firms that produce an identical product at a marginal cost of $200. Analysts estimate that the inverse market demand for this product is P=400−4Q. a. Determine the equilibrium level of output in the market. b. Determine the equilbrium market price. $ c. Determine the profits of each firm. $
Bertrand oligopoly is a situation in which the companies compete with each other by deciding on prices. In this oligopoly market.
There are four firms that produce an identical product at a marginal cost of $200. The inverse market demand for this product is given by the equation P = 400 - 4Q. We will solve this problem in three parts. Equilibrium level of output in the market.
Since the product produced by all the firms is identical, they will have to sell their products at the same price. In this case, since they compete with each other by setting the price, they will set the price equal to their marginal cost to maximize their profit. Therefore.
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answer the following questions for the current year: (a) by how much are interest payments higher if issuing the note? (b) by how much are dividend payments higher by issuing stock? (c) which alternative results in higher earnings per share? (enter your answers in dollars, not millions (i.e., $5.5 million should be entered as 5,500,000).) show less a. by how much are interest payments higher if issuing the note? not attempted b. by how much are dividend payments higher by issuing stock? not attempted c. which alternative results in higher earnings per share? not attempted
However, without the specific information about interest rates, dividend payments, and earnings per share, I won't be able to provide you with the exact amounts.
(a) When a company issues a note, it means they are borrowing money and will have to make interest payments on that loan. The amount by which interest payments are higher depends on the interest rate on the note and the amount borrowed. For example, if the company borrows $1 million at an interest rate of 5%, the interest payment would be $50,000 per year.
(b) When a company issues stock, it means they are selling shares of ownership in the company to investors. Dividend payments are a way for companies to distribute a portion of their profits to shareholders. The amount by which dividend payments are higher depends on the number of shares issued and the dividend per share. For example, if the company issues 1,000,000 shares and pays a dividend of $1 per share, the dividend payment would be $1,000,000.
(c) To determine which alternative results in higher earnings per share (EPS), we need to compare the impact of interest payments on earnings per share when issuing a note and the impact of dividend payments on earnings per share when issuing stock. EPS is calculated by dividing the earnings of the company by the number of outstanding shares. If the interest payments on the note reduce the earnings of the company, then EPS would be lower. Similarly, if the dividend payments reduce the earnings of the company, EPS would also be lower.
To provide a specific answer, we would need more information such as the company's earnings, the number of outstanding shares, and the specific terms of the note and the dividend.
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.- Each year a company receives $3.5 million, at the end of the year. For the first 3 years an interest rate of 8% will apply, for the last 2 years an interest rate of 11% will apply. a) What is the Future Value ? b) What is the Present Value?
a) Future ValueWe are supposed to find the future value of $3.5 million, at the end of the year. The interest rate for the first 3 years is 8%, and for the last 2 years, it's 11%.We'll use the Future Value formula to calculate it.
We'll use the Present Value formula to calculate it. The Present Value is the current worth of future cash flows after considering a rate of return over a specified period of time. It is calculated by discounting the future cash flows back to the present time using a discount rate.
Therefore, the formula for calculating the Present Value of a cash flow or investment at the beginning of n years can be written as:PV = FV/(1+r)nWhere:FV = $5,657,264.15r = Annual Interest Rate = 8% for the first 3 years, and 11% for the last 2 yearsn = 5 yearsThe formula gives us:PV = $5,657,264.15/(1+0.11)²/(1+0.08)³PV = $3,208,459.60Therefore, the present value of the company's money received after 5 years is $3,208,459.60.
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Toyochem Specialty Chemical Sdn Bhd purchases a compound that is then processed to yield three types of acids: Sulfuric acid, Acetic acid and Nitric acid. In January 2022, Toyochem purchased 10,000 gallons of the compound at a cost of RM280,000 and the company incurred joint production cost of RM40,000. Sales and production information for the month of January 2022 is as follows: (Note: round up all decimal points to two decimal points where applicable) Sulfuric acid and Acetic acid are sold to other chemical companies at the split off point. Nitric acid can be sold at the split off point or processed further into ammonia nitic for the manufacture of fertilizer. Required: Compute and allocate the total joint cost to three products using: a) Physical unit method. (3 marks) b) Sales-value at split of point. (3 marks) c) Net realizable value method. (3 marks)
To allocate joint cost using this method, we use the physical output of each product in proportion to the total physical output of all three products.
The formula for calculating this is: Joint cost allocation per unit = Joint cost / Total physical output Compute and allocate the total joint cost to three products using the physical unit method as follows:
Joint cost = RM 40,000 Total physical output = 10,000 gallons
(since all the three types of acids are produced from this quantity of compound)
Sulfuric acid output = 4,000 gallons Acetic acid output = 3,000 gallons
Nitric acid output = 3,000 gallons
Joint cost allocation per unit for sulfuric acid [tex]= 40,000 / 10,000 = RM[/tex] 4
Joint cost allocation per unit for acetic acid = 40,000 / 10,000 = RM 4
Joint cost allocation per unit for nitric acid = 4[tex]0,000 / 10,000 = RM[/tex]4
To allocate joint cost using this method, we use the relative sales value of each product at the split off point. The formula for calculating this is: Joint cost allocation per unit = Joint cost * (Relative sales value / Total relative sales value)Compute and allocate the total joint cost to three products using the sales-value at split of point method as follows:
Sulfuric acid sales value = RM 4 per gallon Acetic acid sales value = RM 6 per gallon
Nitric acid sales value at split off point = RM 5 per gallon
Total sales value at split off point = [tex]RM 4 + RM 6 + RM 5 = RM[/tex] 15
Joint cost allocation per unit for sulfuric acid = 40,000 * (4/15) = RM 10,667
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1 Employees earned $250,000,$26,775 was deducted for FICA and $62,000 for income taxes 2 Company recorded the emplover's share of FICA. 3 Company borrowed $100,00 n June 1, 2014, 6% interest. Note was due on May 31,2015 4 Prepare the adjusting entry to record interest owed at December 31, 2014. 5 Prepare the journal entry to record the interest and principal payments on May 31, 2015 6 On July 1,2014 , the company received $2,000 for one year's worth of services (retainer). 7 As of the December 31 , one half of the services were earned. 8 On June 30 th the remainder was earned.
1. The employees' earned $250,000; $26,775 was deducted for FICA, and $62,000 for income taxes. The employees' earned income is $250,000, while $26,775 is deducted for FICA (Federal Insurance Contributions Act) and $62,000 for income taxes.
2. The company recorded the employer's share of FICA. The employer's share of FICA (Federal Insurance Contributions Act) has to be recorded.
3. The company borrowed $100,000 on June 1, 2014, at 6% interest. The note was due on May 31, 2015.On June 1, 2014, the company borrowed $100,000 at 6% interest. The due date of the note is May 31, 2015.
4. Prepare the adjusting entry to record interest owed at December 31, 2014.The adjusting entry is as follows:
Interest Payable - $3,000 (calculated as $100,000 x 6% x 7/12)
Interest Expense - $3,000
5. Prepare the journal entry to record the interest and principal payments on May 31, 2015.
Interest - $6,000 (calculated as $100,000 x 6% x 12/12)
Notes Payable - $100,000
Interest Payable - $3,000
Cash - $109,000 ($100,000 + $6,000 + $3,000)
6. On July 1, 2014, the company received $2,000 for one year's worth of services (retainer).On July 1, 2014, the company received $2,000 as a retainer for one year's worth of services.
7. As of December 31, one-half of the services were earned. The following adjusting entry needs to be made on December 31, 2014:Unearned Revenue - $1,000 (calculated as $2,000 x 1/2)
Service Revenue - $1,0008. On June 30, the remainder was earned. The following journal entry is made on June 30:Unearned Revenue - $1,000Service Revenue - $1,000
Note: The company has earned the remaining half of the retainer, and the revenue needs to be recognized.
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A United States government agency received a favorable jury verdict of $180,500 in a lawsuit brought against a popular restaurant franchise. The agency sued on behalf of Penny, a restaurant manager who was discriminated against and forced to resign because of her hearing impairment. Which law did the restaurant violate? The Americans with Disabilities Act The Workplace Discrimination Act The Family \& Medical Leave Act HIPAA The Fair Labor Standards Act
The United States government agency has received a favorable jury verdict of $180,500 in a lawsuit brought against a popular restaurant franchise.
The agency sued on behalf of Penny, a restaurant manager who was discriminated against and forced to resign because of her hearing impairment.
The law that the restaurant violated is The Americans with Disabilities Act.
What is the Americans with Disabilities Act?
The Americans with Disabilities Act (ADA) of 1990 is a civil rights law that prohibits discrimination based on disability.
It protects the rights of individuals with disabilities in all areas of public life, including jobs, schools, transportation, and all public and private places that are open to the general public.
The ADA defines disability as a physical or mental impairment that substantially limits one or more major life activities, such as walking, seeing, hearing, speaking, learning, or working.
In Penny's case, she was discriminated against because of her hearing impairment, which is considered a disability under the ADA.
The ADA requires employers to provide reasonable accommodations for individuals with disabilities to perform their jobs.
Penny was forced to resign because her employer did not provide her with the necessary accommodations to do her job effectively because of her disability.
Conclusion In conclusion, the law that the restaurant violated is the Americans with Disabilities Act.
This law protects individuals with disabilities from discrimination in employment, public accommodations, transportation, telecommunications, and government services.
The restaurant failed to provide reasonable accommodations to Penny, which is a violation of the ADA.
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Consider a 529 (college savings) plan that will pay $20,000 once a year for a 4-year period (4 annual payments). The first payment will come in exactly 5 years (at the end of year 5) and the last payment in 8 years (at the end of year 8). a. What is the duration of the pension obligation? The current interest rate is 8% per year for all maturities. b. To generate the scheduled payments, the fund would like to invest the present value of the future payouts in bonds and match the duration of its obligation in part a). If the fund uses 5-year and 10-year zero-coupon bonds to construct its investment position, how much money (dollar amount) ought to be placed in each bond now? What should be the total face value (not current market value) of each zero-coupon bond held? c. Right after the fund made its investment outlined in part b), market interest rates for all maturities dropped from 8% p.a.to 7% p.a. Show that the investment position constructed in part b) can still fund (approximately) the future payments by showing that the fund’s net investment is close to 0 at the end of year 8 after making all the scheduled payments. Assume that interest rates will remain at 7% p.a. Any excess cash from the 5-year investment will be reinvested at 7% and any fraction of the 10-
year bonds held can be sold at the going market price at any time to fund the annual payments.
a. To find the duration of the pension obligation, we have to calculate the weighted average of all the payments. We use the following formula:[tex]$$D=\frac{\sum{t_i \times PVIF_i}}{\sum{PVIF_i}}$$[/tex] where [tex]$t_i$[/tex] is the time until each payment is received and [tex]$PVIF_i$[/tex]
is the present value interest factor for each payment.The PVIF for $i$ payment at an interest rate of 8% per year is given as:[tex]$$PVIF_i=\frac{1}{(1+0.08)^{t_i}}$$[/tex]
Therefore, the duration of the pension obligation,[tex]$D$, is:$$D=\frac{(5\times3.99)+(6\times3.53)+(7\times3.17)+(8\times2.85)}{3.99+3.53+3.17+2.85}=6.10\text{ years}$$[/tex]
Therefore, the duration of the pension obligation is 6.10 years. b. In this part, we need to find the amount of money that ought to be placed in each bond now. We use the following formula to calculate the present value of each payment.
[tex]$$PV_i=FV_i\times PVIF_i$$[/tex] where $FV_i$ is the future value of the $i$-th payment and $PV_i$ is the present value of the $i$-th payment.Using the given information, we get the present value of each payment as follows: [tex]$$PV_1=\frac{20000}{(1+0.08)^5}=12,411.10$$$$PV_2=\frac{20000}{(1+0.08)^6}=11,048.85$$$$PV_3=\frac{20000}{(1+0.08)^7}=9,868.68$$$$PV_4=\frac{20000}{(1+0.08)^8}=8,856.43$$[/tex] Now, let's find the weights for each zero-coupon bond using the following formula:$$w_i=\frac{PV_i}{V}$$where $V$ is the total present value of all the payments, which is:[tex]$$V=PV_1+PV_2+PV_3+PV_4=42,185.07$$[/tex]
Therefore, the weights for each bond are:[tex]$$w_{5\text{-year}}=\frac{PV_1+PV_2}{V}=0.5359$$$$w_{10\text{-year}}=\frac{PV_3+PV_4}{V}=0.4641$$[/tex] Now, we need to find the dollar amount that ought to be placed in each bond. Let's assume that the face value of the zero-coupon bond is $F$. Then, we can find the dollar amount that ought to be placed in each bond using the following formulas.
[tex]$$\text{Amount invested in 5-year bond}=(w_{5\text{-year}}\times V)\div PVIF_{5\text{-year}}}$$and$$[/tex] \text{Amount invested in 10-year bond}=(w_{10\text{-year}}\times V)\div PVIF_{10\text{-year}}}[tex]$$where $PVIF_{5\text{-year}}$ and $PVIF_{10\text{-year}}$[/tex] are the present value interest factors for the 5-year and 10-year zero-coupon bonds, respectively.Using the given information, we get:[tex]$PVIF_{5\text{-year}}=\frac{1}{(1+0.08)^5}=0.6806$$and$$[/tex] PVIF_{10\text{-year}}=\frac{1}{(1+0.08)^{10}}=0.4632$$Substituting these values in the above equations, we get the following amounts:$$\text{Amount invested in 5-year bond}=22,677.58$$and$$\text{Amount invested in 10-year bond}=23,313.49$$Now.
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Clouds Ltd. produces assembling machines. The company expected to have total overheads of E240,000 and to produce 4,000 assembling machines. The actual production equals 1,800 assembling machines and the actual fixed production overheads equal £190,000. Considering this information, which of the following statements is true? a. There is over-absorption of overheads of £108,000. b. There is under-absorption of overheads of £108,000 which increases profit. c. There is under-absorption of overheads £82,000. d. None of the answers is true.
Calculation of the overhead rate per machine: The overhead rate per machine-hour is calculated by dividing the total budgeted overhead costs by the total budgeted machine-hours for the year. The budgeted overhead cost of E240,000 will be divided by the expected machine hours of 4,000 hours for the year. Thus, the overhead rate per machine-hour is calculated as follows: E240,000 / 4,000 machine hours = E60 per machine hour
Calculation of the expected overhead cost for 1,800 machines: Using the calculated overhead rate per machine-hour of E60, we can find the expected overhead cost for the actual production level of 1,800 machines. The expected overhead cost is calculated as follows:
1,800 machine-hours x E60 per machine hour = E108,000
Now let's determine the under or over-absorption of the overheads: We'll calculate the difference between the expected overhead cost and the actual fixed production overheads. A firm with higher overheads than the expected overhead cost experiences over-absorption, whereas a firm with lower overheads than the expected overhead cost experiences under-absorption of overheads. We'll use the following formula to compute the over-absorption/under-absorption amount: Actual overhead cost - Expected overhead cost Now that we have actual fixed overheads of £190,000 and expected overheads of £108,000 for 1,800 machines, we can determine whether there is under-absorption or over-absorption of overheads.
Under absorption of overheads = Actual overheads - Expected overheads= £190,000 - £108,000= £82,000
Therefore, there is under-absorption of overheads £82,000.
Option (c) is correct.
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Hello...I would like a rebuttal to this answer. Thanks!
Enterprise funds are accounted for on a full accrual basis. Thus, they are accounted for similarly to businesses. Governmental funds, by contrast, are accounted for on a modified accrual basis. The arguments in favor of using the full accrual basis for accounting for enterprise funds include the following: • The full accrual basis of accounting (i.e., a measurement focus on all economic resources) captures all the resources and obligations associated with an activity, including capital assets and long-term obligations. It provides a complete picture of the entity's financial position and operating results. • The measurement focus on all economic resources is more consistent with the GASB's objectives that financial reporting should provide information to determine whether current-year revenues were sufficient to pay for current-year services and to assist users in assessing service efforts, costs, and accomplishments. • Full accrual accounting provides information on depreciation, an essential cost of operations. • Business-type accounting facilitates comparisons with similar private enterprises. The arguments against including the following: • Two separate measurement focuses and bases of accounting within the same set of financial statements are confusing and limit the usefulness of government-wide consolidated statements that purport to present an overview of the entity as an economic whole. • There are no clear-cut distinctions between business and non-business activities. Despite many similarities, government activities cannot — and should not — be compared to activities carried out in the private sector. A government should have sound political and economic reasons — other than merely earning a profit — for conducting a particular action in the public sector. If it does not, then the activity should be privatized. These reasons suggest that the activities should be assessed by criteria other than profits — the "bottom line" of business-type financial reports. • Insofar as the full accrual basis is superior to the modified accrual basis, it should be used to account for all government activities, not merely business-type activities. Indeed, the above arguments can be applied to governmental and enterprise funds.
The use of full accrual basis for accounting for enterprise funds is justified for several reasons. It provides a comprehensive view of the entity's financial position and operating results by capturing all resources and obligations, including capital assets and long-term obligations.
This measurement focus aligns with the objectives of financial reporting and facilitates comparisons with private enterprises. Additionally, full accrual accounting offers valuable information on depreciation, a crucial cost of operations.
However, there are arguments against using full accrual basis, such as the potential confusion and limited usefulness of combining two different measurement focuses within the same set of financial statements. Furthermore, government activities should not be solely compared to private sector activities, as they serve different purposes and require different assessment criteria.
The proponents of using full accrual basis for enterprise funds argue that it provides a comprehensive view of the financial position and operating results. By including all economic resources and obligations associated with an activity, such as capital assets and long-term obligations, the full accrual basis ensures that nothing is overlooked.
This approach aligns with the objectives of financial reporting set by the Governmental Accounting Standards Board (GASB) to determine whether current-year revenues were sufficient to cover current-year services and to assess service efforts, costs, and accomplishments.
Furthermore, full accrual accounting allows for the inclusion of depreciation, which is an essential cost of operations for enterprises. Another argument in favor of full accrual basis is that it facilitates comparisons with private enterprises. By using similar accounting methods, it becomes easier to benchmark performance and evaluate efficiency.
This is particularly relevant for business-type activities within the government that function similarly to private businesses. The ability to make meaningful comparisons helps in assessing the effectiveness and competitiveness of government-operated enterprises. However, there are counterarguments against the use of full accrual basis for all government activities.
One concern is the potential confusion and limited usefulness of having two separate measurement focuses and bases of accounting within the same set of financial statements. This can make it challenging to present an overview of the entity as an economic whole when different accounting principles are applied. It may also complicate the interpretation of financial information for users of the statements.
Moreover, the nature of government activities and their objectives differ from those of private businesses. Government actions are driven by political and economic considerations, rather than solely focusing on earning a profit.
Therefore, comparing government activities to private sector activities solely based on financial performance may not provide a complete understanding of their purpose and impact. It is argued that government activities should be assessed by criteria other than profits, as the "bottom line" of business-type financial reports, to account for their broader societal objectives.
While the full accrual basis offers advantages for accounting enterprise funds, there are valid arguments against its universal application across all government activities. The decision to use full accrual accounting should consider the need for comprehensive financial reporting, the comparability with private enterprises, and the distinctiveness of government activities and objectives.
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The use of full accrual basis for accounting for enterprise funds is justified for several reasons. It provides a comprehensive view of the entity's financial position and operating results by capturing all resources and obligations.
This measurement focus aligns with the objectives of financial reporting and facilitates comparisons with private enterprises. Additionally, full accrual accounting offers valuable information on depreciation, a crucial cost of operations.
However, there are arguments against using full accrual basis, such as the potential confusion and limited usefulness of combining two different measurement focuses within the same set of financial statements. Furthermore, government activities should not be solely compared to private sector activities, as they serve different purposes and require different assessment criteria.
The proponents of using full accrual basis for enterprise funds argue that it provides a comprehensive view of the financial position and operating results. By including all economic resources and obligations associated with an activity, such as capital assets and long-term obligations, the full accrual basis ensures that nothing is overlooked.
This approach aligns with the objectives of financial reporting set by the Governmental Accounting Standards Board (GASB) to determine whether current-year revenues were sufficient to cover current-year services and to assess service efforts, costs, and accomplishments.
Furthermore, full accrual accounting allows for the inclusion of depreciation, which is an essential cost of operations for enterprises. Another argument in favor of full accrual basis is that it facilitates comparisons with private enterprises. By using similar accounting methods, it becomes easier to benchmark performance and evaluate efficiency.
This is particularly relevant for business-type activities within the government that function similarly to private businesses. The ability to make meaningful comparisons helps in assessing the effectiveness and competitiveness of government-operated enterprises. However, there are counterarguments against the use of full accrual basis for all government activities.
One concern is the potential confusion and limited usefulness of having two separate measurement focuses and bases of accounting within the same set of financial statements. This can make it challenging to present an overview of the entity as an economic whole when different accounting principles are applied. It may also complicate the interpretation of financial information for users of the statements.
Moreover, the nature of government activities and their objectives differ from those of private businesses. Government actions are driven by political and economic considerations, rather than solely focusing on earning a profit.
Therefore, comparing government activities to private sector activities solely based on financial performance may not provide a complete understanding of their purpose and impact. It is argued that government activities should be assessed by criteria other than profits, as the "bottom line" of business-type financial reports, to account for their broader societal objectives.
While the full accrual basis offers advantages for accounting enterprise funds, there are valid arguments against its universal application across all government activities. The decision to use full accrual accounting should consider the need for comprehensive financial reporting, the comparability with private enterprises, and the distinctiveness of government activities and objectives.
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From the project plan, we that a project has a total budgeted cost of $983,112 and a project completion time of 18 weeks. At the moment, the project has been in a performing stage. At the end of week 8 , the project progress report shows that the project has consumed a total of $310,635, the project cumulative earned value is $285,084, and the project schedule performance index is 0.88. What is the value of the cost variance at the end of week 8?
The value of the cost variance at the end of week 8 is $28430.68.
According to the given data; The project total budgeted cost = $983,112
The project completion time = 18 weeks
The project is currently in the performing stage The project has consumed = $310,635
The project cumulative earned value = $285,084
The project schedule performance index = 0.88
So, we have to find the value of the cost variance at the end of week 8.
Here, we will use the cost variance formula:
COST VARIANCE (CV) = Earned Value (EV) - Actual Cost (AC) CV = EV - AC
And, Earned Value (EV) = (Percent completed) x (Total budget)
Earned Value (EV) = (285,084/983,112) x 100% = 29.00%
Actual Cost (AC) = $310,635
Cost Variance (CV) = EV - AC= (Percent completed) x (Total budget) - Actual cost CV = (29.00%) x ($983,112) - $310,635 = $28430.68
Therefore, the value of the cost variance at the end of week 8 is $28430.68.
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REASONS OF ITS OCCURANCE LAW ENFORCEMENT AFTER THE INCIDENT Convicted: K-G Spray-Pak Inc., 8001 Keele Street, Vaughan, Ontario, a manufacturer of aerosol products. Location: K-G Spray-Pak's plant located at 8001 Keele Street, Vaughan, Ontario. Description of Offence: A worker was injured after being struck by a moving lift truck being operated in reverse. Date of Offence: May 24, 2018 Date of Conviction: June 21, 2019.
K-G Spray-Pak Inc. was convicted after a worker was injured by a reversing lift truck at their facility.
Following an event that happened on May 24, 2018, K-G Spray-Pak Inc., an aerosol product manufacturer with headquarters in Vaughan, Ontario, was found guilty on June 21, 2019. At the K-G Spray-Pak facility on 8001 Keele Street, a lift truck traveling in reverse struck and wounded a worker, committing the offense. The fact that the corporation was convicted suggests that it was determined to be at fault for the tragedy, most likely as a result of a failure to follow the right safety procedures or training guidelines. Such occurrences highlight how crucial it is for law enforcement to hold businesses responsible for maintaining workplace safety and preventing mishaps that could endanger employees.
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on the route between Paradise Mountain and Calgary and (2) improvement of the road between Paradise Mountain and Calgary. costs. Information about the two alternatives is shown below. Complete parts (a) through (c). a. Compute the benefit-cost ratio of both alternatives. Is each individually viable? b. Using an incremental benefit-cost ratio approach, which of the two alternatives should be chosen? Improvement - New Buses) would be . The alternative should be chosen in either case. (Round to three decimal places as needed.) c. Compute the present worths of the two alternatives. Compare the decision based on present worths with the decisions based on benefit-cost. (Round to the nearest dollar as needed.)
On the route between Paradise Mountain and Calgary, compute the benefit-cost ratio of both alternatives. Improvement of the road between Paradise Mountain and Calgary.
On the route between Paradise Mountain and Calgary, the alternatives for the improvement of the road are given. The alternatives and their initial cost and benefits are given below. The benefit-cost ratios and present worth of the alternatives need to be computed. Calculation of Benefit-Cost Ratio.
Therefore, using an incremental benefit-cost ratio approach, Alternative 1 (Improvement) should be chosen. Calculation of Present Worth:
Present Worth = Annual Worth x Present Worth Factor
The annual worth factor can be computed using the formula:
[tex]PW(i%, N) = A [((1+i%)^N - 1) / (i% (1+i%)^N)][/tex]
The table for Present Worth Factor can be used to compute the annual worth factor for different discount rates and years: Present Worth Factor Table Alternative.
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April decided to deposit $7,000 into a CD that offers her an APR of 5.4 percent with quarterly compounding for 3 years. How much money will she have in this CD when it matures in 3 years?
The problem concerns determining how much money April will receive after depositing $7,000 into a CD offering her an annual percentage rate (APR) of 5.4% compounded quarterly for three years. To solve the problem, we will utilize the following formula:
[tex]A = P(1 + r/n)^nt[/tex]
where: A = the total amount accumulated after time t P = the principal amount (initial investment) r = the annual interest rate (as a decimal) n = the number of times the interest is compounded per year t = the number of years The information given in the problem is as follows:Principal amount (P) = $7,000 Annual interest rate (r) = 5.4%
Compounding frequency (n) = 4 times per year (quarterly)Time (t) = 3 years Substituting these values into the formula above, we have:A = $7,000(1 + 0.054/4)^(4 x 3)A = $7,000(1.0135)^12A = $7,000(1.4818)A = $10,373.03 Therefore, after three years, April will have $10,373.03 in the CD when it matures.
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What risk does a borrower take with an adjustable-rate mortgage?
With an adjustable-rate mortgage (ARM), borrowers take the risk of potential interest rate fluctuations. The monthly mortgage payments can increase or decrease based on market conditions. Borrowers must consider their ability to handle changing payments and future income prospects when opting for an ARM.
With an adjustable-rate mortgage (ARM), the borrower takes the risk of potential interest rate fluctuations. Unlike a fixed-rate mortgage, where the interest rate remains constant throughout the loan term, an ARM has an interest rate that adjusts periodically based on market conditions.
The specific terms of an ARM typically include an initial fixed-rate period, after which the interest rate is subject to change. The adjustment is usually based on a specified financial index, such as the U.S. Treasury rate or the London Interbank Offered Rate (LIBOR), plus a predetermined margin.
The risk for the borrower lies in the uncertainty of future interest rate movements. If interest rates rise, the borrower may experience an increase in their monthly mortgage payments, potentially making it more challenging to afford the loan. Conversely, if interest rates decrease, the borrower may benefit from lower payments.
The borrower's ability to manage fluctuations in interest rates, their financial stability, and their future income prospects are critical factors to consider when opting for an adjustable-rate mortgage.
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Sales = $260,000, depreciation = $25,000, interest paid = $45,000, net income = $60,000, taxable income is four times higher than taxes. What is cost of goods sold?
Below $17,000
Between $17,000 and $32,000
Between $32,000 and $47,000
Between $47,000 and $62,000
Between $62,000 and $77,000
Between $77,000 and $92,000
Between $92,000 and $117,000
Above $117,000
To calculate the cost of goods sold using the given data: Sales = $260,000 Depreciation = $25,000Interest Paid = $45,000Net Income = $60,000Taxable income is four times higher than taxes.
The cost of goods sold can be determined using the following equation: Cost of goods sold = Sales - Gross Profit The gross profit is calculated by subtracting all of the expenses from the sales and is determined by the following equation: Gross Profit = Sales - Cost of goods sold - Operating expenses - Depreciation - Interest paid.
To solve for cost of goods sold, first we need to solve for Gross Profit. By rearranging the above equation we get the following: Cost of goods sold = Sales - Gross Profit Gross Profit = Sales - Cost of goods sold - Operating expenses - Depreciation - Interest paid.
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Bob and Charles hold 300 shares each in FGT corporation. They are the only shareholders. Last year, Bob and Charles decided to set up a buy-sell agreement. FGT corporation decided to purchase a corporate insurance policy to fund the cross-purchase agreement. Which of the following is true? a) Buy-sell agreement is between the Bob and Charles. b) Buy-sell agreement is between Bob, Charles and FGT Corporation. c) Upon the death of Bob or Charlgs, the corporation receives the shares of the deceased from his estate in exchange of promissory notes. d) Bob and Charles are named beneficiary on the policy, The following would be considered as an occurrence to discharge a contract, except: a) Performance b) Disagreement c) Frustration d) Breach of a term
Option (b) is correct. A buy-sell agreement is a legally binding agreement between business owners. It is used to protect the remaining owners if one of them exits the business. In this case, Bob and Charles hold 300 shares each in FGT corporation. They are the only shareholders. Last year, Bob and Charles decided to set up a buy-sell agreement.
FGT corporation decided to purchase a corporate insurance policy to fund the cross-purchase agreement. Therefore, the buy-sell agreement is between Bob, Charles and FGT Corporation. Benefits of buy-sell agreements Buy-sell agreements have several advantages, including: Providing liquidity to the owners' estates. Enabling owners to retain control of the company. Preserving the value of the business. Protecting owners from business and personal conflicts.
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For an interest rate of 12% per month, determine the nominal and
effective rates (i) per quarter, and (ii) per year.
Given, Interest rate per month, r = 12% Nominal rate of interest: The nominal rate of interest is a simple rate of interest charged by a bank or lender on the amount borrowed.
It doesn't consider the effect of compounding over time, which means it is only based on the original principal and does not consider any interest earned on it. The formula to calculate the nominal interest rate is as follows:
Nominal rate of interest = r x n where r = interest rate per period n = number of periods
[tex]For per quarter: r = 12%/3 = 4% Number of periods in a year = 12/3 = 4[/tex]
Nominal rate of interest per quarter[tex]= r x n= 4% x 4= 16%[/tex]
[tex]For per year: r = 12%Number of periods in a year = 1[/tex]Nominal rate of interest per year [tex]= r x n= 12% x 1= 12%[/tex]
The effective rate of interest is a rate that takes into account the effect of compounding over time. It shows the actual amount of interest earned on an investment or charged on a loan over a period of time, and it is higher than the nominal rate of interest.
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You purchased 1,750 shares of Barrett Golf Corporation stock at a price of $37.09 per share. While you owned the stock, you received dividends otaling $.81 per share. Today, you sold your stock at a price of $41.22 per share. What was your total dollar return on the investment? Multiple Choice $6,866 $7,936 $8,645 $7,228 $8,291
The total dollar return on the investment when the 1,750 shares of Barrett Golf Corporation stock is $8,645. correct option is C
The total dollar return on the investment when the 1,750 shares of Barrett Golf Corporation stock were sold at a price of $41.22 per share after receiving dividends totaling $.81 per share and being purchased at a price of $37.09 per share is $8,645.Option C: $8,645.
What is Total Dollar Return?Total dollar return is the profit or loss made on an investment over a particular period of time, expressed in dollars. The formula for total dollar return is given below.
Total Dollar Return = (Ending Price - Beginning Price) + Dividends Paid During the period you owned the stock,
the dividend income you earned per share was $.81,
so you need to multiply it by the number of shares you bought. 1,750 is the number of shares purchased in this example;
therefore, total dividends are calculated as follows:
$0.81 × 1,750 shares = $1,417.50
The total dollar return on the investment is calculated by using the following formula:
Total Dollar Return = (Ending Price - Beginning Price) + Dividends Paid
Beginning Price: $37.09 per share
Ending Price: $41.22 per share
Total Dividends Paid: $1,417.50
Substitute the values into the formula.
Total Dollar Return = ($41.22 - $37.09) × 1,750 + $1,417.50Total Dollar Return = $7.13 × 1,750 + $1,417.50
Total Dollar Return = $8,645.50Therefore, the answer is $8,645.
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You want to have a maximum payment of $1000. Use Goal Seek to find what the APR has to be to achieve a $1000 payment, without changing any of the other variables. Do not edit the APR cell after running Goal Seek.
Goal Seek in Excel is used to discover a value that would produce a specific outcome. By using Goal Seek, one can easily determine the value needed to achieve the desired results.
Here, the objective is to determine the APR needed to achieve a payment of $1000, without changing any of the other variables. The following are the required measures to complete the task:
To begin, go to the Data tab and select What-If Analysis and then Goal Seek.
Select the cell that has the payment figure you desire ($1000) as the “Set Cell.”
Select the APR cell (the cell that has the formula that calculates the APR) as the “To Value.” Excel will give you the option to alter the value to meet your needs. Press Enter once you’ve selected the values and click OK.
Now you can see the APR needed to achieve a payment of $1000, and you didn't have to modify any of the other variables.
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1. Identify a channel intermediary - Brief background - Business
function - Business associates
One of the channel intermediaries is a distributor. A distributor is a business or an individual that acts as a middleman between a manufacturer and a consumer.
The primary objective of distributors is to maximize sales and revenue, so they often offer discounts and incentives to retailers. Distributors are associated with several business partners, including manufacturers, wholesalers, retailers, and customers. Distributors have to be knowledgeable about the products they are selling to provide technical support to retailers and end customers.
In summary, distributors play a vital role in the supply chain and can help manufacturers expand their reach to new markets. By outsourcing logistics and marketing functions to distributors, manufacturers can focus on their core competencies. Distributors can leverage their existing network of retailers to promote new products, which can be beneficial to manufacturers who do not have the same level of market penetration.
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Households and firms
According to the circular flow, which two groups interact with each other in the product market
According to the circular flow, the two groups that interact with each other in the product market are households and firms.
What is the Circular Flow Model?The circular flow model is a visual representation of the economy that shows the connection between different sectors of the economy. It explains how cash, goods, and services flow between households, companies, and governments.
What are Households and Firms?Households refer to the consumers of goods and services, while firms refer to the producers of goods and services. Households, which are made up of people who buy goods and services, provide labor to firms and consume goods and services from firms. Firms, on the other hand, employ individuals to produce and distribute goods and services, which are then sold to households in return for cash.
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Question 3 Joe has been asked to provide his last Form 941 return to his insurance provider. Where can he locate and view this return? a. Payroll Settings > Filings > Select Form b. Reports > Payroll Tax > Forms > Select Form c. Payroll Overview > Payroll Taxes > Forms > Select Form d. Taxes > Payroll Tax > Filings > Archived Forms > Select Form
Answer:The correct answer is option D. Taxes > Payroll Tax > Filings > Archived Forms > Select Form
Explanation:Form 941 is a quarterly tax return for U.S. employers to report on the federal income taxes, Social Security tax, and Medicare tax withheld from their employees’ wages.
Joe has been asked to provide his last Form 941 return to his insurance provider and he can locate and view this return by selecting the following: Taxes > Payroll Tax > Filings > Archived Forms > Select Form. The Payroll Tax Center allows QuickBooks Online Payroll and QuickBooks Full Service Payroll users to access and manage their payroll tax information.
They can find any forms related to payroll tax here. In the Filings section of the Payroll Tax Center, users can find tax returns filed for their company.
Additionally, they can access PDF copies of completed tax forms and filings for QuickBooks Online Payroll and Full Service Payroll customers.
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What is the future value of a series of $2,000 end-of-year 85,471 deposits into an IRA account paying 5% interest, over a period of 35 years? Use your financial calculator.
To calculate the future value of a series of deposits, we can use the formula for the future value of an ordinary annuity. The future value of the series of $2,000 end-of-year deposits over a period of 35 years at 5% interest is approximately $211,373.51.
To calculate the future value of a series of deposits, we can use the formula for the future value of an ordinary annuity:
Future Value = Payment × [(1 + Interest Rate)^(Number of Periods) - 1] / Interest Rate
In this case, the payment is $2,000, the interest rate is 5%, and the number of periods is 35 years. Plugging these values into the formula, we can calculate the future value:
Future Value = $2,000 × [(1 + 0.05)^(35) - 1] / 0.05
Using a financial calculator or spreadsheet, the future value can be calculated as $211,373.51.
Therefore, the future value of the series of $2,000 end-of-year deposits over a period of 35 years at 5% interest is approximately $211,373.51.
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1. Discuss the telephone technique you would use if you had to handle a large number of incoming calls (10 marks)
2. Written messages include letters, memoranda, circulars, reports, notices and many others. Each one of the above mentioned has its specific uses. Differentiate between memorandums and circulars. (15 marks
The most effective telephone technique for dealing with a large number of incoming calls is call management through friendly and direct answering techniques.
What are the effective communication channels?There are several channels for transmitting oral and written messages, such as telephone calls, whose service techniques should focus on greeting, identification and active listening.
Therefore, written messages such as memos are used in companies for direct communication with a large number of people, while circulars are used to reach the organization's internal and external public.
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When planning our social media strategy, we should first decide about the technology, then define our objectives. True False According to the principle, social interactions can take place in many formats flexibility "jab, jab, jab, right hook" replication interactivity openness
The statement, "When planning our social media strategy, we should first decide about the technology, then define our objectives," is False. While technology is an essential aspect of social media, it should not be the first consideration when planning a social media strategy. The first step should be to identify your goals and objectives, then determine which social media channels and tools are best suited to achieve those objectives.
When planning a social media strategy, it is essential to define clear goals and objectives. The goals and objectives should be specific, measurable, achievable, relevant, and time-bound. Once the goals and objectives are clear, you can then determine which social media channels and tools are best suited to achieve those objectives.
The principle of "jab, jab, jab, right hook" is a social media strategy that involves providing value to your audience before making an offer or asking for something in return. The principle emphasizes the importance of building a relationship with your audience before asking them to take action.
Social interactions can take place in many formats, including text, images, video, and audio. Flexibility, interactivity, and openness are essential aspects of social media that allow for a variety of formats and types of social interactions.
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Describe some ways that effective supply-chain partners build
and utilize mutual trust. How has the COVID-19 pandemic impacted
these relationships and required changes in strategies?
Answer in Detail
Effective supply-chain partners can develop and utilize mutual trust in several ways, which involve communication, transparency, and cooperation. This trust will benefit both parties in the supply chain, and it also minimizes the risk of failure or delay in the chain.
Trust can also facilitate long-term relationships between suppliers and their customers. Here are some ways effective supply-chain partners can build and use mutual trust:
Communication: Communication is crucial to establishing and building a mutual trust between partners in the supply chain. It is essential to establish a clear and consistent communication channel for suppliers and customers to share relevant information.
Transparency: Transparency helps in building trust and helps suppliers gain confidence in the customer. It allows for more transparency in the supply chain, making it easier to trace the origins of goods and services. Transparency requires both suppliers and customers to be open and honest about their business practices.
Cooperation: Cooperation is another essential component of effective supply chain partnerships. Suppliers and customers should be willing to work together to solve problems and help each other out. They should also be willing to share their knowledge, expertise, and resources to enhance the supply chain's overall performance. The COVID-19 pandemic has affected the supply chain industry in many ways.
In conclusion, mutual trust is essential in building effective supply chain partnerships. Trust can be built by communication, transparency, and cooperation. The COVID-19 pandemic has impacted these relationships, and businesses have had to adapt their strategies to maintain continuity and build trust in these uncertain times.
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Lando Corporation is a domestic company with two wholly owned subsidiaries. Michaels, CPA, has been engaged to audit the financial statements of the parent company and one of its subsidiaries and to serve as the group auditor. Thomas, CPA, has audited the financial statements of the other subsidiary whose operations are material in relation to the consolidated financial statements.
The work performed by Michaels is sufficient for serving as the group auditor and to report as such on the financial statements. Michaels has not yet decided whether to refer to the part of the audit performed by Thomas.
Identify and discuss two reporting requirements with which Michaels must comply in naming Thomas and referring to the work done by Thomas.
Two reporting requirements that Michaels, CPA, must comply with in naming Thomas and referring to his work are: 1. Disclosure of the identity of the other auditor: Michaels must disclose Thomas, CPA, as the auditor of the subsidiary whose operations are material in relation to the consolidated financial statements.
2. Description of the extent of the work performed by the other auditor: Michaels must provide information about the scope of Thomas' audit procedures and the reliance placed on his work in the overall audit of the group financial statements.
1. Disclosure of the other auditor's identity is necessary to provide transparency and allow stakeholders to understand the involvement of multiple auditors in the audit process.
2. Describing the extent of the work performed by the other auditor helps users of the financial statements assess the degree of reliance placed on that auditor's findings and conclusions. It provides insights into the division of responsibilities between the group auditor and the other auditor.
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Write a five-day study plan with SMART goals. From an MBA student's point of view, We should include classwork and outdoor activity for mental health time
A SMART goal is a goal that is Specific, Measurable, Achievable, Relevant, and Time-bound. Creating SMART goals is an effective way to stay focused and motivated while working towards achieving objectives.
Here is a five-day study plan with SMART goals, from an MBA student's point of view that includes classwork and outdoor activity for mental health time:Day 1: MondaySMART Goal: I will complete my finance homework by 4 pm, after which I will take a 20-minute walk to clear my head and rejuvenate my mind.
Time Management:9 am - 12 pm: Attend Finance class and participate actively.1 pm - 4 pm: Complete finance homework4 pm - 4:20 pm: Take a 20-minute walk.Day 2: TuesdaySMART Goal: I will spend 2 hours practicing my presentation skills, after which I will participate in a game of basketball to stay physically fit.Time Management:9 am - 12 pm: Attend Marketing class and take notes.1 pm - 4 pm: Practice presentation skills.
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Arthur crafts miniature chocolate dollhouses which he sells for $21 each. Arthur has calculated the break-even level of sales for his business at $1,730 of revenues. The dollhouses have a variable cost of $8 to produce per unit If Arthur sells 100 units, what are his total costs?
Arthur's total costs for selling 100 units would be $2,530.
To calculate Arthur's total costs, we need to consider both fixed costs and variable costs.
Fixed costs are costs that do not change with the level of production or sales. In this case, Arthur's fixed costs are the break-even level of sales, which is $1,730.
Variable costs, on the other hand, are costs that change based on the level of production or sales. Arthur's variable cost per unit is given as $8.
To find the total costs, we need to calculate the total variable costs and add them to the fixed costs.
Arthur sells 100 units of the dollhouses. So, the total variable costs for these 100 units would be 100 multiplied by the variable cost per unit, which is $8. This gives us a total variable cost of $800.
Now, let's add the total variable costs to the fixed costs. $800 + $1,730 = $2,530.
Therefore, Arthur's total costs for selling 100 units would be $2,530.
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A government's policy of redistributing income makes the income distributiona. more equal, distorts incentives, alters behavior, and makes the allocation of resources less efficient.b. more equal, distorts incentives, alters behavior, and makes the allocation of resources more efficient.c. less equal, distorts incentives, alters behavior, and makes the allocation of resources more efficient.d. less equal, distorts incentives, alters behavior, and makes the allocation of resources less efficient.Question 35The marketplace allocates resourcesa. to those desiring them least.b. efficiently.c. fairly.d. both efficiently and equitably.Question 36A typical worker’s normal or average income is calleda. the life cycle.b. in-kind transfers.c. transitory income.d. permanent income.
34. A government's policy of redistributing income makes the income distribution more equal, distorts incentives, alters behavior, and makes the allocation of resources less efficient. Hence, Option (A) is correct.
35. The marketplace allocates resources efficiently. Hence, Option (B) is correct.
36. A typical worker’s normal or average income is called permanent income. Hence, Option (D) is correct.
34. When a government implements a policy of income redistribution, it aims to make the income distribution more equal by taking from higher-income individuals or groups and transferring it to lower-income individuals or groups.
While this redistribution may address income inequality, it can have unintended consequences.
Thus, the unintended effects result from the redistribution of income and can hinder economic productivity and efficiency.
35. Through the forces of supply and demand, market participants determine the prices and quantities of goods and services, leading to an efficient allocation of resources based on consumer preferences and producer capabilities.
Thus, the marketplace allocates resources more efficiently than others.
36. A typical worker's normal or average income represents the expected long-term income that a worker can rely on and is based on factors such as education, skills, and experience.
Permanent income is distinguished from transitory income, which refers to temporary fluctuations in income due to factors like bonuses, overtime pay, or one-time windfalls.
Thus, permanent income is how a typical worker’s normal or average income is referred to.
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Question 34
A government's policy of redistributing income makes the income distribution
a. more equal, distorts incentives, alters behavior, and makes the allocation of resources less efficient.
b. more equal, distorts incentives, alters behavior, and makes the allocation of resources more efficient.
c. less equal, distorts incentives, alters behavior, and makes the allocation of resources more efficient.
d. less equal, distorts incentives, alters behavior, and makes the allocation of resources less efficient.
Question 35
The marketplace allocates resources
a. to those desiring them least.
b. efficiently.
c. fairly.
d. both efficiently and equitably.
Question 36
A typical worker’s normal or average income is called
a. the life cycle.
b. in-kind transfers.
c. transitory income.
d. permanent income.