The Average Fixed Cost is GHC 600 / x - 5.05x / 2.
Given that, The marginal cost function of a product is given by dc/dx = 100 - 10x - 0.1x where x is the output.
In order to obtain the average fixed cost, we need to follow these steps: Step 1: Find the Total cost function by integrating the marginal cost function.
To find the Total cost function, integrate the marginal cost function with respect to x.dc/dx = Cx
Where C is the constant of integration [tex]Total Cost (C) = ∫ (dc/dx) dx= ∫ (100 - 10x - 0.1x) dx= 100x - 5x² - 0.05x² / 2 + K[/tex]Where K is the constant of integration.
Step 2: Find the value of constant K using the given information.
The Average Fixed Cost (AFC) is given as GHC 500. This implies that when output is zero, the total cost is GHC 500.
Total Cost (C) = [tex]100x - 5x² - 0.05x² / 2 + K[/tex] When x = 0, C = 500
Substituting the given values in the above equation we get,
[tex]500 = 100 * 0 - 5 * 0² - 0.05 * 0² / 2 + KK = 500[/tex]
Step 3: Find the Average Fixed Cost The total cost function with the value of constant K.
Total Cost (C) = 500 = 100 * 0 - 5 * 0² - 0.05 * 0² / 2 + KK = 500
Average Fixed Cost [tex](AFC) = C / x= (100x - 5.05x² / 2 + 500) / x= 100 - 5.05x / 2 + 500 / x= 600 / x - 5.05x / 2[/tex]
Therefore, the Average Fixed Cost is GHC 600 / x - 5.05x / 2.
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Manipulating CAPM Use the basic equation for the capital asset pricing model (CAPM) to work 6ach of the following problems. a. Find the required retum for an asset with a beta of 1.75 when the risk-free rate and market return are 8% and 10%, respectively. b. Find the risk-free rafe for a firm with a required retuin of 13.796% and a bota of 1.35 when the market return is 12%. c. Find the market return for an asset with a required return of 19.278% and a beta of 1.46 when the risk-free rate is 9%. d. Find the beta for an asset with a required return of 16.134% when the risk-free rate and market return are 3% and 9.6%, respectively.
The Capital Asset Pricing Model (CAPM) is a financial model that enables the calculation of expected returns on a risky asset by taking into account the risk-free rate, the expected return on the market, and the asset's beta. The CAPM equation is as follows:
Required Return = Risk-Free Rate + Beta × (Market Return - Risk-Free Rate)
To solve each of the following problems using the basic CAPM equation, follow the instructions below:
a. Find the required return for an asset with a beta of 1.75 when the risk-free rate and market return are 8% and 10%, respectively.
Required Return = 8% + 1.75 × (10% - 8%) = 11.5%
Therefore, the required return for the asset is 11.5%.
b. Find the risk-free rate for a firm with a required return of 13.796% and a beta of 1.35 when the market return is 12%.Rearranging the CAPM equation:
Risk-Free Rate = (Required Return - Beta × (Market Return - Risk-Free Rate)) / 1
Risk-Free Rate = (13.796% - 1.35 × (12% - Risk-Free Rate)) / 1
Risk-Free Rate = 4.796%
Therefore, the risk-free rate for the firm is 4.796%.
c. Find the market return for an asset with a required return of 19.278% and a beta of 1.46 when the risk-free rate is 9%.Rearranging the CAPM equation:
Market Return = (Required Return - Risk-Free Rate) / Beta × 1
Market Return = (19.278% - 9%) / 1.46 × 1
Market Return = 12.03%
Therefore, the market return for the asset is 12.03%.
d. Find the beta for an asset with a required return of 16.134% when the risk-free rate and market return are 3% and 9.6%, respectively. Rearranging the CAPM equation:
Beta = (Required Return - Risk-Free Rate) / (Market Return - Risk-Free Rate)
Beta = (16.134% - 3%) / (9.6% - 3%)
Beta = 1.68
Therefore, the beta for the asset is 1.68.
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You see that 5-Y YTM is 4% p.a. You expect that the interest rate between time 5 and time 6 will be 11%. (the 1-year forward rate, 5 years from now). Compute the EXACT 6-Y YTM.
Please enter your answer as %. E,g, if your answer is 2.45%, please enter 2.45
The present value of the bond is given by the formula,[tex]PV = (C1 / (1 + r1)^1) + (C2 / (1 + r2)^2) + ... + (Cn / (1 + rn)^n) + (FV / (1 + rn)^n)[/tex],where PV is the present value of the bond, C is the coupon payment, r is the yield to maturity, and FV is the face value or the principal.The exact 6-Y YTM is 11%.
Using the same formula, we can find the yield to maturity for a bond when all its other variables are given.5-Y YTM = 4%.The coupon payment is not given, but it is not required to calculate the yield to maturity. The bond's present value can be assumed as $100, which is the face value of most bonds.PV = $100 (assumption),C1 = coupon paymentr1 = 4% (given),C2 = coupon paymentr2 = 11% (given)
The bond has a 1-year forward rate of 11% between year 5 and year 6, which means the yield to maturity for the bond in year 6 will be the same as the forward rate from year 5 to year 6.6-Y YTM = 11%.Therefore, the exact 6-Y YTM is 11%.
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List and explain one advantage of being a last-mover
A last-mover refers to a company that enters a market later than other established businesses. The advantages of being a last-mover include an in-depth understanding of the market and the ability to create a superior product. Another advantage is the ability to learn from previous competitors' mistakes and reduce the risks associated with market entry.Last-movers can capitalize on the weaknesses of earlier entrants and outperform them by innovating and improving existing products. Last-movers are more likely to take risks because they have a greater understanding of the market's dynamics and are better equipped to take advantage of emerging trends.
As a result, the last-mover may outperform earlier entrants by creating a superior product that satisfies consumers' needs and preferences. In addition, the last-mover can use new technologies and market knowledge to produce a more efficient product or service than earlier entrants. Last-movers may have a higher level of success because they can benefit from the previous entrants' marketing campaigns, which have raised the market's awareness.
As a result, they have less of a marketing burden and can invest more time and resources in product development. They can use the experience of earlier entrants to create an effective marketing strategy that capitalizes on their competitors' shortcomings. Last-movers can benefit from a lower cost of production because they can adopt new technologies to improve efficiency and reduce costs.
As a result, they can price their products more competitively and offer more value to customers. They can also benefit from economies of scale by ramping up production when demand is high. As a result, they can reduce their costs and increase their profit margins.The last-mover can benefit from an established market, and it is easier for them to get funding from investors because they have lower start-up costs. They can use the knowledge and experience of earlier entrants to create a better product and have a higher likelihood of success. They can capitalize on the weaknesses of earlier entrants and outperform them by innovating and improving existing products. In conclusion, the last-mover can benefit from the knowledge, experience, and market awareness of earlier entrants to create a superior product and succeed in the market.
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Which would be an appropriate action in the Plan Schedule Management process? Decide on how you will implement changes to the project schedule Define the tasks involved in the project schedule Define
Plan Schedule Management is the process of developing, coordinating, and documenting the project schedules. It is an essential process for any project as it defines the entire time framework within which the project is expected to be completed. This process is responsible for setting up the groundwork for creating a detailed project schedule.
There are several appropriate actions involved in the Plan Schedule Management process, including defining the tasks involved in the project schedule, determining the order of execution for each task, and how long it will take to complete each task.
One of the most crucial activities is to define the project schedule. It involves defining the project's scope, objectives, deliverables, and milestones. This information is then used to create a timeline for the project. This timeline will be used to manage the project's progress and ensure that it is completed on time and within budget.
Another appropriate action in the Plan Schedule Management process is deciding on how you will implement changes to the project schedule. It is important to have a plan for dealing with changes to the schedule. This plan should include the process for requesting changes, the criteria for approving changes, and the communication process for notifying stakeholders of the changes.
Finally, it is important to ensure that all stakeholders are involved in the Plan Schedule Management process. This includes identifying stakeholders, defining their roles and responsibilities, and ensuring that they have input into the development of the project schedule. This will help to ensure that the project schedule is realistic and achievable and that all stakeholders are aware of the project's timeline and progress.
In conclusion, the Plan Schedule Management process is critical to the success of any project. The appropriate actions in this process include defining the tasks involved in the project schedule, deciding on how you will implement changes to the project schedule, and ensuring that all stakeholders are involved in the process.
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Question 1 (20 marks)
You are working as a junior management accountant at James and Co. which operates five different departmental stores selling different goods. A couple of years ago, the management implemented remodelling of its stores to attract more clients. The senior management accountant, Howard, was asked to oversee the remodelling. James offered Howard a bonus based on sales growth and profitability. While completing inventory take Howard discovered that $50,000 worth of inventory was outdated. Howard asked you to ignore the reporting of this inventory as obsolete because reporting will have an impact on financial results and his bonus. Howard offered a small percentage of his bonus as a reward.
Required:
State and justify the fundamental principles, as provided by the Chartered Institute of Management Accountants (CIMA) Code of Ethics1, which are being jeopardized if you accept the offer from senior management accountant. Also, as a junior management accountant, discuss the possible ethical actions that you could take to address this issue.
The offer made by the senior management accountant Howard to the junior management accountant.
To ignore the reporting of outdated inventory is a violation of the ethical code of conduct established by the Chartered Institute of Management Accountants (CIMA).CIMA Code of Ethics principles that have been jeopardized are the following:
1. Integrity: This principle mandates that management accountants must be honest and fair in their professional and business relationships. Management accountants must not be influenced by personal or financial gain in their decision-making process. The offer of a small percentage of Howard's bonus to ignore the reporting of obsolete inventory is a clear violation of this principle.
2. Professional competence: The management accountants must maintain their professional competence and continue to develop it throughout their career. The junior management accountant must report the outdated inventory as it is material to the financial statements.
3. Confidentiality: This principle states that management accountants must maintain the confidentiality of sensitive information obtained during the course of their professional work. It is the responsibility of the junior management accountant to report the outdated inventory to the senior management team and not to accept any rewards that compromise their integrity and professionalism.
Seek guidance from the CIMA ethical committee or consult the organizational ethical guidelines if there is any ambiguity.
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Kirklin Clinic is evaluating a project that costs $63,200 and has expected net cash inflows of $12,000 per year for eight years. The first inflow occurs one year after the cost outflow, and the project has a cost of capital of 12%. What is the project's payback?
The payback period is 5.267 years, which means that it will take around 5.27 years for the project to recover the cost.
Payback period is a capital budgeting method for estimating the time that it takes to recover the cost of an investment project. It is computed by dividing the cost of the investment by the expected annual net cash inflows.
A payback period is a short-term capital budgeting method that only considers the time required to recover the initial investment. The payback period is calculated by dividing the initial cost of the project by the annual cash flows.
Given data
Cost of the project = $63,200
Net cash inflows = $12,000
Life of the project = 8 years
Cost of Capital = 12%
Formula to calculate Payback Period is,
Payback Period = Cost of Project / Annual Cash Flows
Net cash flows for the first 7 years will be 7 × $12,000 = $84,000. The cash inflow for the last year will be less than $12,000 because it would have happened in the middle of the year. Therefore, the total cash inflow for eight years will be $90,000 ($84,000 + cash inflow for the eighth year).
Payback Period = $63,200/$12,000
Payback Period = 5.267 years
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True or False:
Employee compensation in the form of health insurance is currently subject to personal taxation, making it less desirable for people to get health insurance provided by their employer and more desirable for them to purchase it from a private insurance company.
Employee compensation in the form of health insurance is currently subject to personal taxation, making it less desirable for people to get health insurance provided by their employer and more desirable for them to purchase it from a private insurance company.
What is employee compensation?
Employee compensation is the sum of all the pay, rewards, benefits, and other payments given to a worker in return for their services.
For people in the United States, employer-based health insurance has long been the norm.
In other words, the vast majority of employees receive health insurance as a part of their employment package.
Is employee compensation for health insurance subject to personal taxation?
No, employee compensation for health insurance is not subject to personal taxation,
as it is considered a nontaxable fringe benefit.
If an employer provides health insurance as a fringe benefit to their staff, the employer's share of the premium is completely deductible, and the employee's share is pre-tax.
As a result, health insurance provided by an employer is far more desirable than private insurance purchased by the individual.
What is the ACA, and what effect does it have on employee compensation?
The Affordable Care Act (ACA) was implemented in order to decrease the number of uninsured Americans.
The ACA is a federal statute that was enacted in 2010.
It mandates that certain employers provide health insurance to their employees and that individuals obtain health insurance coverage or pay a fee.
The ACA has had an effect on employee compensation by requiring certain employers to provide health insurance to their workers.
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Wayford Distributors has $40 million in bonds outstanding that carry a 12 percent coupon rate paid annually. These bonds have 10 years to maturity and a call premium of 3 percent. As the yield on current bonds is 10 percent the company is considering refunding their bonds. A new issue would require $1.5 million in underwriting costs. In addition, an overlap period of one month is anticipated, during which time money market rates would be 8 percent. The company’s tax rate is 40 percent.
Wayford Distributors has $40 million in bonds outstanding that carry a 12 percent coupon rate paid annually. These bonds have 10 years to maturity and a call premium of 3 percent.
As the yield on current bonds is 10 percent the company is considering refunding their bonds. A new issue would require $1.5 million in underwriting costs. In addition, an overlap period of one month is anticipated, during which time money market rates would be 8 percent. The company’s tax rate is 40 percent.
The yield on the current bonds is 10%. The underwriting costs for a new issue would be $1.5 million. Money market rates during the overlap period would be 8%. The company’s tax rate is 40%.
The refunding of the bond will depend on whether the total savings generated from the refunding exceeds the refunding cost. In this case, the total savings from the refunding can be calculated using the following formula:
Total Savings = (Current bond annual interest - New bond annual interest) * (1 - Tax rate) * Number of years until maturity
Let us calculate the total savings from the refunding of the bond:
Current bond annual interest = $40 million x 12% = $4.8 million
New bond annual interest = $40 million x 10% = $4 million
Total Savings = ($4.8 million - $4 million) * (1 - 0.4) * 10
Total Savings = $1.2 million * 0.6 * 10
Total Savings = $7.2 million
The total savings from the refunding is $7.2 million.
The refunding cost is $1.5 million.
The total amount of the bond outstanding is $40 million.
The call premium is 3%.
Since the yield on current bonds is 10 percent and the money market rates during the overlap period would be 8%, the net present value (NPV) of the refunding can be calculated using the following formula:
NPV = Total Savings / (1 + Yield of current bonds / 2) ^ (2 * Number of overlap periods) - Refunding cost / (1 + Call premium / 2) ^ Number of years until call
NPV = $7.2 million / (1 + 10% / 2) ^ (2 * 1 / 12) - $1.5 million / (1 + 3% / 2) ^ 10
NPV = $7.2 million / 1.05 ^ (1 / 6) - $1.5 million / 1.015 ^ 10
NPV = $6.69 million - $1.34 million
NPV = $5.35 million
Since the NPV of the refunding is positive, the refunding of the bond is beneficial to the company. Thus, Wayford Distributors should refund the bonds.
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Which of the following statements about the internal audit is true?
A. The role of the internal audit function in the public sector is essentially the same as that in the private sector.
B. The internal audit function is part of the organization and therefore does not need to remain independent of management.
C. The internal audit function focuses on internal controls, particularly those over financial reporting.
D. The role of the internal audit function in the public sector is significantly different from that in the private sector.
The right response is C. The adage "The internal audit function focuses on internal controls, particularly those over financial reporting" is accurate.
An essential part of any organisation is internal audit, which offers unbiased evaluations of the risk management, internal control, and operational procedures. Internal controls, including those relating to financial reporting, are a common area of attention for internal audit, even if the role of internal audit may differ between the public and private sectors.The reliability and correctness of financial information are among the factors that internal auditors must consider when examining the efficiency and effectiveness of internal controls. They are essential in making sure that financial reporting procedures adhere to relevant rules and regulations and that financial statements are trustworthy.
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In a small open economy with a flexible exchange rate, the "crowding-out effect on investment" will further expand aggregate demand increases brought about by expansionary fiscal policy, while the "crowding out effect on net exports" will reduce aggregate demand will further expand aggregate demand increases brought about by expansionary fiscal policy, while the "crowding out effect on net exports" will even further expand aggregate demand will have an offsetting effect on aggregate demand increases brought about by expansionary fiscal policy, while the "crowding-out effect on net exports" will further reduce aggregate demand will have an offsetting effect on aggregate demand increases brought about by expansionary fiscal policy, while the "crowding-out effect on net exports" will further expand aggregate demand Assume the typical consumer basket consists of 10 shirts and 2 watermelons. The base year is 2015 . What is the consumer price index for 2018 based on the following data? 100 109 140
In a small open economy with a flexible exchange rate, the "crowding-out effect on investment" will further expand aggregate demand increases brought about by expansionary fiscal policy, while the "crowding-out effect on net exports" will reduce aggregate demand.
This will have an offsetting effect on aggregate demand increases brought about by expansionary fiscal policy, while the "crowding-out effect on net exports" will further reduce aggregate demand. This is because when fiscal policy leads to an increase in demand in an economy, the interest rates rise, which in turn leads to a reduction in investment. This effect is known as the crowding-out effect on investment.
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B12) In an economy the commercial banks choose to hold 15 per cent of deposits in the form of cash reserves. The general public chooses to hold an amount of notes and coin in circulation equal to 25 percent of its bank deposits. The stock of high-powered money in the economy is £20 million. (20marks) a) What is the value of the money multiplier? Show how you obtained this figure. b) What is the size of the money stock if both public and banks are holding their desired amounts of cash? Show how you obtained this figure. c) Suppose that the banks now choose to hold 10 per cent of deposits as cash, but the public also changes its cash holdings to 20 per cent of its bank deposits. Now what is the value of the money multiplier? Show how you obtained this figure. d) What is now the size of 'equilibrium' money stock? Show how you obtained this figure.
(a) The money multiplier is 6.25. (b) The size of the money stock is £125 million. (c) The new money multiplier is 5. (d) The equilibrium money stock size is £100 million.
(a) The money multiplier can be calculated by dividing 1 by the reserve ratio. In this case, the reserve ratio is 15%, so the money multiplier is 1/0.15 = 6.25.
(b) To determine the size of the money stock when both the public and banks hold their desired amounts of cash, we multiply the stock of high-powered money (£20 million) by the money multiplier (6.25). Therefore, the money stock size is £20 million x 6.25 = £125 million.
(c) If the banks choose to hold 10% of deposits as cash and the public changes its cash holdings to 20% of bank deposits, we need to recalculate the money multiplier. The new reserve ratio is 10%, giving a money multiplier of 1/0.10 = 10. However, the public's cash holdings ratio is now 20%, so the effective money multiplier is adjusted by multiplying it by 0.20. Thus, the new money multiplier is 10 x 0.20 = 5.
(d) To find the equilibrium money stock size, we multiply the stock of high-powered money (£20 million) by the new money multiplier (5). Therefore, the equilibrium money stock size is £20 million x 5 = £100 million.
Note: The calculations provided are based on the information given in the question, assuming no other factors or variables affect the money supply in the economy.
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Suppose you are interested in buying a 1.5% semi-annual coupon treasury bond maturing in exactly 10 years. You think appropriate discount rate for this bond (aka yield to maturity or YTM) is 3%. How much should you pay for this bond if its par value is $1,000?
The present value of a bond, which is its price, is determined by the discounted value of the cash flows that the bond generates. The price of a bond is determined by the present value of the stream of cash flows it generates, and this is determined by the appropriate discount rate for that bond or the yield to maturity (YTM).
A bond is a debt security that is issued by companies, municipalities, and governments to raise capital. It is a type of loan in which an investor lends money to the bond issuer in exchange for a stream of future payments, known as interest coupons, and the return of principal at maturity.The Yield to Maturity (YTM) is the rate of return that an investor would receive if they held a bond until it matures and receive all the coupon payments and principal repayment.
The coupon rate is the rate of interest that is paid on the face value of a bond. It is usually expressed as an annual percentage rate (APR).A 1.5% semi-annual coupon Treasury bond maturing in exactly ten years is being considered for purchase. The bond has a par value of 1,000. If the YTM is 3%,
Semi-annual coupon payment = 1.5% × 1,000 / 2 = 7.50
Yield to maturity = 3% / 2 = 1.5%
Periods until maturity = 10 years × 2 = 20
Price = 7.50 (PVIFA1.5%,20) + 1,000 (PVIF1.5%,20)= 533.91 + 376.89= 910.80
Therefore, if the YTM is 3%, an investor should pay 910.80 for the bond.
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Fill in the blanks to complete the passage about monetary policy and fiscal policy. Drag word(s) below to fill in the blank(s) in the passage. Monetary policy and fiscal policy are two different tools used by to influence the economy. Monetary policy concerns using the national to affect the economy, while fiscal policy uses and expenditures in the government's money supply state and local governments outlays taxes the federal government budget
Both monetary policy and fiscal policy are important tools used by governments to influence the economy. While they use different methods, they share the same goal of promoting economic growth, stability, and full employment.
Monetary policy and fiscal policy are two different tools used by governments to influence the economy. Monetary policy concerns using the national money supply to affect the economy, while fiscal policy uses taxes and government spending to accomplish the same goals.
Both monetary policy and fiscal policy are used to promote economic growth, stability, and full employment. However, they use different methods to achieve their goals. Monetary policy involves the manipulation of interest rates and the supply of money in the economy by the central bank, which in the United States is the Federal Reserve System.
The Federal Reserve can adjust interest rates to make it easier or harder for individuals and businesses to borrow money. When interest rates are low, borrowing becomes cheaper, and people are more likely to buy goods and services, which stimulates the economy. Conversely, when interest rates are high, borrowing becomes more expensive, which can lead to a slowdown in economic growth.
Fiscal policy, on the other hand, involves the government's use of taxes and spending to influence the economy. When the government spends money, it injects money into the economy, which can stimulate economic growth. Conversely, when the government reduces its spending or raises taxes, it removes money from the economy, which can slow down economic growth. Fiscal policy can be used to influence the allocation of resources in the economy by increasing or decreasing government spending in certain areas.
For example, if the government wants to promote job growth, it may increase spending on infrastructure projects or provide tax incentives to businesses that create new jobs.
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excludable, people have an incentive to be free riders. b) not excludable, people do not have an incentive to be free riders. c) not excludable, people have an incentive to be free riders. d) excludable, people do not have an incentive to be free riders.
Because public goods are a. excludable, people have an incentive to be free riders.
Do excludable public goods encourage free ridership?Excludable public goods are goods or services that can be restricted to certain individuals or groups, meaning that access can be limited to those who are willing to pay or meet certain requirements.
In the case of excludable public goods, people have an incentive to be free riders. This is because individuals can choose not to contribute or pay for the public good knowing that they can still benefit from it without incurring any costs.
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On January 1, 2022, Liberty Bank issues 5500,000,6%, five-year bonds, with interest payable on July 1 and January 1.5 Since the market interest rate is 5%, the bonds seli for 5521,830 . Requirement 1: This bond will sell at a Recuirement 2: For the issue date and first semi-annual period, complete the table below and show your calculations in the workspace provided.
Requirement 1: This bond will sell at a premium. This is because the market interest rate is lower than the coupon rate on the bonds (6%). Requirement 2:
Calculation of bond price:
Calculation of Present value of principal:
FV = $500,000,
r = 2.5% (5%/2),
n = 10 (5 x 2)
Semi-annual coupon = 6%/2 = 3%
PMT = $15,000
PV = $500,000/(1+0.025)10
= $379,179.33
Calculation of Present value of annuity:
PMT = $15,000,
r = 2.5%,
n = 10PV
=[tex]$15,000 x [(1-1/(1+0.025)10)/0.025][/tex]
PV = $132,650.92
Calculation of bond price:
Price = PV of annuity + PV of principal
Price = $132,650.92 + $379,179.33
Price = $511,830.25
On the first interest payment date, the interest will be calculated on the face value of the bond.
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Discuss how Karl Marx's contributions influence contemporary economics b. Briefly discuss two of the following points on Karl Mark theory of economics I. labour theory of value II. surplus value III. surplus product IV. exploitation
Karl Marx's contributions to economics have had a profound impact on contemporary economic thought. Marx is well-known for his contributions to the field of political economy, as well as his critical analysis of capitalism.
In this essay, I will discuss how Marx's contributions have influenced contemporary economics, and then briefly discuss two of his key concepts: the labour theory of value and the theory of surplus value.
Marx believed that capitalism was a fundamentally flawed system that was destined to fail. He argued that capitalism was built on the exploitation of workers, who were forced to sell their labour for less than its actual value.
Marx's labour theory of value was a key concept in his critique of capitalism. According to Marx, the value of a commodity is determined by the amount of labour that went into producing it.
According to Marx, surplus value is the difference between the actual value of a worker's labour and the amount they are paid for it. This surplus value is then used by the capitalist to generate profits.
His critique of capitalism has led to a greater understanding of the flaws inherent in the system, and his labour theory of value and theory of surplus value have helped to shape modern economic theory.
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Which of the following is the greatest drawback of using subsequent collections evidence only by a deposit slip as an alternative procedure when responses to positive accounts receivable confirmations are not received?
A. Checking of subsequent collections can never be used as an alternative auditing procedure
B. By examining a deposit slip only, the auditor does not know whether the payment is for the receivable at the balance sheet date or a subsequent transaction
C. A deposit slip is not received directly the auditor
D. A customer may not have made a payment on a timely basis
Option B. By examining a deposit slip only, the auditor does not know whether the payment is for the receivable at the balance sheet date or a subsequent transaction
The greatest drawback of using subsequent collections evidence only by a deposit slip as an alternative procedure when responses to positive accounts receivable confirmations are not received is option B: By examining a deposit slip only, the auditor does not know whether the payment is for the receivable at the balance sheet date or a subsequent transaction.
Here's a step-by-step explanation:
1. When an auditor is unable to receive responses to positive accounts receivable confirmations, they may use subsequent collections evidence as an alternative procedure to verify the accuracy of the accounts receivable balance.
2. Subsequent collections evidence refers to examining the payments received after the balance sheet date to determine if they relate to the accounts receivable balance.
3. However, relying solely on a deposit slip to gather subsequent collections evidence has a significant drawback.
4. The deposit slip provides information about the total amount of cash deposited, but it does not provide details about which specific invoices or transactions the payments correspond to.
5. As a result, the auditor cannot determine whether the payment recorded on the deposit slip is for the receivable at the balance sheet date or for a subsequent transaction.
6. This lack of specificity creates uncertainty and makes it challenging for the auditor to accurately assess the validity and completeness of the accounts receivable balance.
7. Option B correctly identifies this drawback by stating that by examining a deposit slip only, the auditor does not know whether the payment is for the receivable at the balance sheet date or a subsequent transaction.
To summarize, the greatest drawback of using subsequent collections evidence only by a deposit slip as an alternative procedure when responses to positive accounts receivable confirmations are not received is the inability to determine whether the payment recorded on the deposit slip is for the receivable at the balance sheet date or a subsequent transaction. This lack of specificity creates challenges in accurately assessing the validity and completeness of the accounts receivable balance.
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Suppose you manage the local Scoopy's ice cream parlor. In addition to selling ice-cream cones, you make large batches of a few flavors of milkshakes to sell throughout the day. Your parlor is chosen to test the company's "Made-for-You" system. This new system enables patrons to customize their milkshakes by choosing different flavors. Customers like the new system and your staff appear to be adapting, but you wonder whether this new made-to-order system is as efficient as the old system in which you just made a few large batches. Efficiency is a special concern because your performance is evaluated in part on the restaurant's efficient use of materials and labor. Your superiors conside efficiency variances greater than 5% to be unacceptable. You decide to look at your sales for a typical day. You find that the parlor used 390 pounds of ice cream and 72 hours of direct labor to produce and sell 2,000 shakes. The standard quantity allowed for a shake is 0.2 pounds of ice cream and 0.03 hours of direct labor. The standard costs are $1.50 per pound for ice cream and $8 per hour for labor. Requirements 1. Compute the efficiency variances for direct labor and direct materials. 2. Provide likely explanations for the variances. Do you have reason to be concerned about your performance evaluation? Explain. 3. Write an APA format memo to Scoopy's national office explaining your concern and suggesting a remedy.
1. The efficiency variances for direct labor and direct materials is $144.
2. The deviation is within the management-established acceptable range of 5%.
The price variance for direct materials is favorable, while the efficiency variance for direct materials is also favorable.
The price variance for direct labor is unfavorable, while the efficiency variance for direct labor is also unfavorable.
However, the efficiency variance for direct labor is within the acceptable limit of 5% set by the management.
1. Computation of Efficiency Variances for Direct Labor and Direct Materials
Price variance = (actual quantity – standard quantity) x standard price
Price variance = (390 pounds – 2000 shakes x 0.2 pounds) x $1.50
Price variance = -$90
Favorable price variance, since the actual cost is lower than the standard cost
Efficiency variance = (actual quantity – standard quantity) x standard price
Efficiency variance = (390 pounds – 2000 shakes x 0.2 pounds) x $1.50
Efficiency variance = -$90
Favorable efficiency variance, since the actual quantity used is less than the standard quantityDirect Labor
Price variance = (actual hours – standard hours) x standard rate
Price variance = (72 hours – 2000 shakes x 0.03 hours) x $8
Price variance = $144
Unfavorable price variance, since the actual cost is higher than the standard cost
Efficiency variance = (actual hours – standard hours) x standard rate
Efficiency variance = (72 hours – 2000 shakes x 0.03 hours) x $8
Efficiency variance = $144
Unfavorable efficiency variance, since the actual quantity used is more than the standard quantity
2. Likely Explanations for VariancesThe price variance for direct materials is favorable because the actual cost is lower than the standard cost.
The efficiency variance for direct materials is also favorable because the actual quantity used is less than the standard quantity.
The price variance for direct labor is unfavorable because the actual cost is higher than the standard cost.
The efficiency variance for direct labor is also unfavorable because the actual quantity used is more than the standard quantity.
A possible explanation for the favorable efficiency variance for direct materials is that customers may have chosen fewer flavors, resulting in lower material usage.
A possible explanation for the unfavorable price variance for direct labor is that labor costs have increased.
A possible explanation for the unfavorable efficiency variance for direct labor is that the staff may not have been used efficiently.
The efficiency variance for direct labor is unfavorable, which means that the actual quantity used is more than the standard quantity.
However, the variance is within the acceptable limit of 5% set by the management.
Therefore, there is no reason to be concerned about the performance evaluation.
3. Memo to Scoopy's National OfficeDate:
To: Scoopy's National OfficeFrom:
ManagerSubject: Efficiency Variance for Made-to-Order SystemWe have recently implemented the Made-to-Order system in our ice cream parlor, which allows customers to customize their milkshakes.
While the system has been well-received by our customers, we are concerned about the efficiency of the system in comparison to our previous system.
In order to evaluate the system's efficiency, we analyzed our sales for a typical day. We found that the parlor used 390 pounds of ice cream and 72 hours of direct labor to produce and sell 2,000 shakes.
The standard quantity allowed for a shake is 0.2 pounds of ice cream and 0.03 hours of direct labor.
The standard costs are $1.50 per pound for ice cream and $8 per hour for labor.Based on our analysis, we have computed the efficiency variances for direct labor and direct materials.
We believe that the unfavorable variances for direct labor may be due to inefficiencies in staffing or labor costs. We suggest that the management evaluate the system to ensure that it is being used efficiently.
Additionally, we recommend training the staff on how to use the system effectively.
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(Table: Peanut Butter and Jelly Economy). How much of the increase in nominal GDP between 2018 and 2019 was due to inflation?a. 31.25%.
b. 18.75%.
c. 12.5%. d. 4%.
31.25% is the increase in nominal GDP between 2018 and 2019 due to inflation. Thus, option A is appropriate.
GDP determines the monetary value of the consumable final items and services produced in a country over a specific time period (for example, a quarter or a year). It considers each item wholly produced within a nation's boundaries.
Gross domestic product (GDP) is a financial measure of the total market value of all finished goods and services produced during a specific time period. The government and a single nation most frequently use GDP to gauge the strength of its economies.
Thus, option A is correct.
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Your boss made a purchase and paid immediately by a handwritten cheque, what should you do?
O Enter the cheque in a Manual Payment batch and print and post the cheque
O Create a System Generated Payment batch and print and post the cheque
O All the above
O None of the abov
If your boss made a purchase and paid immediately by a handwritten cheque, then you should enter the cheque in a Manual Payment batch and print and post the cheque. Therefore, option A "Enter the cheque in a Manual Payment batch and print and post the cheque" is the correct option.
A manual payment batch is a collection of payments entered manually for various vendors or payees. It enables you to quickly make payments and keep track of all transactions. Manual payments must be entered, reviewed, and accepted before being made. A manual payment batch is created to accommodate one-time or infrequent payments. The manual payment batch function can be accessed by going to Accounts Payable > Transactions > Manual Payment Batch. A batch can be added to the system by clicking on the plus sign in the upper right corner of the page. The accounts payable (AP) department maintains a manual payment batch, which is used to record outgoing checks in the event of payment by check. This batch is used to monitor who was paid, how much, and when. Therefore, when your boss makes a purchase and pays immediately with a handwritten check, you should enter the check in a manual payment batch.
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The rale of teium roquired by imvestors in the market for owning a bond is callod the: A. corpon. 13. face value. C. maturity. 13. yicld to maturity. rafo. 36. A hond with a face salse of $1.000 that selts for \$1.GMO in the markser is called a bond. A. par ralaw 16. discoun t c. promium 13. Reto coapon 1. Ploating rate 37. A bond with a face value of 51.000 that sells for less than 51,000 in the market is called a hocend. A. par 15. disivoun t C. fteminam 13. 7cra coupsn!? 1. Aoatifig rale 38. Whick onc of thesc combinations of wond ratings feprisents a crossorer situation? th. BสB. Baa B. H13: Ha C Bs, B D. Bua; HB
The role of the premium required by investors in the market for owning a bond is called the yield to maturity. Bond Yield Yield, in the case of bonds, refers to the return that an investor receives on the bond.
The yield of a bond changes with a change in its price. A bond yield is basically the amount of return a bondholder can expect to make if the bond is held until maturity. Bond yields are typically expressed as a percentage of the bond's market price. Bond ratings.
The ratings that are given to bonds are based on their creditworthiness. These ratings are given by the rating agencies and are used by investors to assess the risk associated with the bond. Cross-over bonds The combination of bond ratings that represents a cross-over situation is Baa and Ba.
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the terms "annual campaign," "the annual-giving program" and "the annual fund" all mean the same thing. a) true b) false
False as The terms "annual campaign," "the annual-giving program," and "the annual fund" are often used interchangeably, but they do not mean exactly the same thing.
Annual campaign is a fundraising effort that is typically conducted once a year. It may be a single event or a series of events, and it is designed to raise a specific amount of money.
Annual-giving program is a more general term that refers to all of the fundraising activities that an organization conducts during the course of a year. This includes annual campaigns, but it also includes other fundraising activities, such as monthly giving, planned giving, and corporate sponsorships.
Annual fund is a specific type of annual-giving program that is designed to provide general operating support for an organization. It is typically funded by a combination of individual donors, foundations, and corporations.
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how can a government achieve efficient outputt when it regilates the price charged by natural monopoly
To achieve efficient output when regulating the price charged by a natural monopoly, the government can employ various strategies. Here are a few approaches that can be used Price caps: The government can set a maximum price that the natural monopoly can charge for its goods or services.
Cost-based pricing: The government can require the natural monopoly to set its prices based on the actual costs of production, including a fair rate of return on investment. This approach prevents the monopoly from charging excessive prices and encourages efficiency in cost management. Profit regulation: Instead of directly regulating prices, the government can regulate the profit level of the natural monopoly. By setting limits on the monopoly's profit margin, the government ensures that it operates efficiently and does not earn excessive profits at the expense of consumers.
Performance-based regulation: The government can tie the pricing of the natural monopoly to its performance metrics. For example, the monopoly's prices could be linked to its efficiency in reducing costs, improving service quality, or meeting specific performance targets. This incentivizes the monopoly to operate efficiently and provide better services to consumers. Price discrimination controls: The government can prohibit the natural monopoly from engaging in discriminatory pricing practices, where it charges different prices to different customers for the same product or service. This promotes fairness and prevents the monopoly from exploiting its market power. It's important to note that the government should carefully consider the specific market conditions and regulatory objectives when choosing the appropriate pricing regulation strategy.
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A nationwide motel chain is considering locating a new motel in Bigtown, USA. The cost of building a 150-room motel (excluding furnishings) is $5.3 million. The firm uses a 12-year planning horizon to evaluate investments of this type. The furnishings for this motel must be replaced every four years at an estimated cost of $1, 900, 000 (at k = 0, 4, and 8). The old furnishings have no market value. Annual operating and maintenance expenses for the facility are estimated to be $110, 000. The market value of the motel after 12 years is estimated to be 15% of the original building cost. Rooms at the motel are projected to be rented at an average rate of $45 per night. On the average, the motel will rent 60% of its rooms each night. Assume the motel will be open 365 days per year. MARR is 7% per year. Using an annual-worth measure of merit, is the project economically attractive? Investigate sensitivity to decision reversal for the following three factors: (1) capital investment, (2) MARR, and (3) occupancy rate (average percent of rooms rented per night). To which of these factors is the decision most sensitive? Assume that the market value remains constant at the amount used in part a. Graphically investigate the sensitivity of the AW to changes in the above three factors. Investigate changes over the interval plusminus 40%. On your graph, use percent change as the x-axis and AW as the y-axis.
The project's economic attractiveness can be evaluated using the annual-worth measure of merit. The annual-worth method converts all costs and benefits to equivalent annual amounts, allowing for easier comparison. Let's calculate the annual worth of the project to determine its economic attractiveness.
First, let's calculate the annual costs and benefits associated with the project:
1. Initial investment cost: The cost of building the motel is $5.3 million.
2. Furnishings replacement cost: The cost of replacing furnishings every four years is $1,900,000 at k = 0, 4, and 8.
3. Annual operating and maintenance expenses: The estimated annual cost is $110,000.
4. Market value after 12 years: The market value is estimated to be 15% of the original building cost, which is $5.3 million.
Next, let's calculate the annual revenue generated by the motel:
1. Average room rate: The projected average room rate is $45 per night.
2. Occupancy rate: The motel is projected to rent 60% of its rooms each night.
3. Number of operating days per year: The motel will be open 365 days per year.
Now, we can calculate the annual revenue:
Annual revenue = Average room rate * Occupancy rate * Number of operating days per year * Number of rooms
Annual revenue = $45 * 0.6 * 365 * 150
Now, let's calculate the annual worth of the project by subtracting the annual costs from the annual revenue:
Annual worth = Annual revenue - Annual costs
Annual costs = Initial investment cost + Furnishings replacement cost + Annual operating and maintenance expenses
Annual worth = Annual revenue - (Initial investment cost + Furnishings replacement cost + Annual operating and maintenance expenses)
Now that we have calculated the annual worth, we can compare it to the minimum attractive rate of return (MARR) of 7% per year to determine if the project is economically attractive. If the annual worth is greater than or equal to zero, the project is economically attractive. Otherwise, it is not economically attractive.
To investigate sensitivity to decision reversal for the three factors (capital investment, MARR, and occupancy rate), we can graphically analyze the changes in annual worth over a plus-minus 40% interval for each factor. By changing each factor by +/- 40% and calculating the resulting annual worth, we can plot the percent change in each factor on the x-axis and the resulting annual worth on the y-axis.
By analyzing the graph, we can determine which factor has the most significant impact on the project's annual worth and sensitivity to decision reversal.
In summary, to determine if the project is economically attractive, we calculate the annual worth of the project and compare it to the MARR. We can also investigate the sensitivity of the annual worth to changes in capital investment, MARR, and occupancy rate by graphically analyzing the changes in annual worth over a plus-minus 40% interval for each factor.
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Discuss the two main research approaches in identify which research approach is applicable to the coca-cola company to address the research objectives
The two main research approaches are quantitative research and qualitative research. The research approach applicable to the Coca-Cola Company to address the research objectives is quantitative research.
The two main research approaches are quantitative research and qualitative research. Quantitative research is a systematic approach in which data is collected through surveys, questionnaires, and structured interviews, and analyzed using statistical methods. The goal of this approach is to measure numerical data and relationships between variables. Quantitative research provides statistical analysis and data which allows researchers to make inferences from their research findings.
Qualitative research, on the other hand, is a more exploratory approach that focuses on gaining insights and understanding of phenomena through interviews, observations, and focus groups. It seeks to provide an in-depth understanding of human behavior and the reasons behind it. The data obtained from this approach is non-numerical and is analyzed using thematic analysis.
The research approach applicable to the Coca-Cola Company to address the research objectives is quantitative research. Coca-Cola Company is a multinational corporation that deals with the production and distribution of non-alcoholic beverages. The research objectives of the company could be to determine customer satisfaction, the effectiveness of promotional activities, and product demand, which requires statistical data and analysis.
Quantitative research will provide the Coca-Cola Company with numerical data and statistical analysis that can be used to make inferences from their research findings. In conclusion, the research approach that is applicable to the Coca-Cola Company to address the research objectives is quantitative research.
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opal earned 7.0 percent in her savings account. if she is in the 27 percent tax bracket, what is her after-tax savings rate of return?]\
Opal's after-tax savings rate of return is 5.1%.The, Opal's after-tax savings rate of return is 5.1%. This represents the actual return she will earn on her savings after accounting for taxes.
Opal's before-tax savings rate of return is 7.0%. Since she is in the 27% tax bracket, she will be taxed on her earnings. To calculate her after-tax savings rate of return, we need to subtract the tax amount from her before-tax rate of return. The tax amount is calculated by multiplying her before-tax rate of return (7.0%) by her tax rate (27%).
Tax amount = 7.0% * 27% = 1.89%
After-tax savings rate of return = Before-tax rate of return - Tax amount = 7.0% - 1.89% = 5.1%
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Byron owned stock in Blossom Corporation that he donated to a museum (a qualified charitable organization) on June 8 this year. What is the amount of Byron's deduction assuming that he had purchased the stock for $10,5005 years ago, and the stock had a fair market value of $13,800 when he made the donation?
a. $10,500
b. $13,800
c. $3,300
The correct option 'the amount of Byron's deduction assuming that he had purchased the stock for $10,500 years ago, and the stock had a fair market value of $13,800 when he made the donation' is a. $10,500
To calculate Byron's deduction for donating the stock to a qualified charitable organization, we need to determine the fair market value of the donated stock.
Given:
Purchase price of the stock: $10,500
Fair market value of the stock at the time of donation: $13,800
Byron's deduction for donating the stock will be based on the fair market value of the stock, which is the value that the stock would sell for on the open market.
The amount of Byron's deduction will be the lesser of the fair market value or the original purchase price.
In this case, the fair market value of the stock at the time of donation is $13,800, which is higher than the original purchase price of $10,500.
Therefore, the amount of Byron's deduction for donating the stock is $10,500.
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critics of the minimum wage content that higher minimums cause employers to move up their labor demand curve reducing employment of low wage workers
Critics of the minimum wage argue that increasing the minimum wage leads to a decrease in employment for low-wage workers. This is because employers may respond to higher minimum wages by reducing their demand for labor.
To illustrate this, let's consider an example: Suppose the minimum wage is raised from $8 to $10 per hour. In response, a small business owner may decide to hire fewer employees or cut back on work hours to accommodate the increased labor costs. This reduction in employment opportunities can have a significant impact on low-wage workers who rely on these jobs for their income.
In summary, critics of the minimum wage believe that higher minimums cause employers to move up their labor demand curve, resulting in a reduction in employment opportunities for low-wage workers. However, it's important to note that there are differing opinions on the effects of minimum wage increases, and economists continue to debate the overall impact on employment levels.
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Suppose the Federal Reserve raises the target federal funds rate. This is an example of contractionary fiscal policy expansionary monetary policy contractionary monetary policy expansionary fiscal policy Question 23 (Mandatory) (2.5 points) Which of the following would be the immediate effect (before any lending takes place) if an individual makes a $1000 cash deposit to a commercial bank? Assume the reserve ratio is 10% The money supply would increase by $9000. The money supply would decrease by $1000. The money supply would increase by $1000. The money supply would not change.
The initial deposit of $1000 increases the money supply by $1000.
The correct option for the first question is: contractionary monetary policy When the Federal Reserve raises the target federal funds rate, it is an example of contractionary monetary policy.
This is because the Federal Reserve increases the cost of borrowing and reduces the money supply, which reduces economic growth.
The correct option for the second question is: The money supply would increase by $1000.
When an individual makes a $1000 cash deposit to a commercial bank, the money supply would increase by $1000. This is because the bank can lend out a portion of the deposit and hold the rest in reserves.
If the reserve ratio is 10%, the bank can lend out $900 and hold $100 in reserves. When the $900 is lent out, it becomes a deposit in another bank, increasing the money supply by $900.
Therefore, the initial deposit of $1000 increases the money supply by $1000.
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A new employee at a large construction company reports that several of the other workers at work refuse to use the worker’s name, instead calling the worker derogatory names. In addition, they isolate the worker from work activities. The worker approaches the site supervisor to report workplace harassment.
The site supervisor is not involved in the incident. The supervisor promptly interviews the worker, the alleged harassers and the other witnesses and takes detailed notes of what they say. A written summary of the results of the investigation and any corrective action is given to the worker and the alleged harassers.
Findings: Workers engaged in harassment, violating policy. Harassers face discipline, employee receives support. Training on respect emphasized. Written summary provided.
Summary of Investigation Findings: The site supervisor, who was not involved in the incident, thoroughly investigated the allegations of workplace harassment made by the new employee. The worker, the alleged harassers, and additional witnesses were all swiftly questioned by the supervisor, who painstakingly recorded their comments.
The investigation found that numerous workers at the construction site were in fact harassing the worker by refusing to use their names and calling them names that were insulting and isolating them from work-related activities. Such conduct blatantly contravenes business policies and fosters a hostile work environment.
Therefore, the proper corrective measures will be implemented. The claimed harassers will be obliged to comply with disciplinary actions, such as verbal or written warnings.
take sensitivity instruction. The employee who reported the harassment will be given assistance and counselling to help them deal with the psychological effects of the event and will be given reassurance that their concerns will be taken seriously.
The business will also provide all staff with refresher training on workplace respect and harassment. To avoid future occurrences of this kind, it shall be emphasized how important inclusive and polite communication.
The employee who reported the harassment as well as the accused harassers will get a written summary of the investigation's findings and the corrective measures implemented. The business is dedicated to upholding a secure and civil workplace where each person is given the respect they deserve.
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