To calculate the value of DuPont's common stock, we can use the dividend discount model (DDM) which values a stock based on the present value of its future dividends.
First, let's calculate the expected dividends for the next four years:
Year 1 dividend: $1.70 * (1 + 0.04) = $1.768
Year 2 dividend: $1.768 * (1 + 0.04) = $1.839
Year 3 dividend: $1.839 * (1 + 0.04) = $1.912
Year 4 dividend: $1.912 * (1 + 0.04) = $1.987
Next, let's calculate the dividend at the end of Year 4 based on the expected earnings per share (EPS) and payout ratio:
Dividend at the end of Year 4 = EPS * Payout ratio
Assuming the Payout ratio is 35%, we can calculate the EPS:
Dividend at the end of Year 4 = EPS * 0.35
Dividend at the end of Year 4 = $1.987
Now, let's calculate the present value of the dividends:
PV = D1 / (1 + r) + D2 / (1 + r)^2 + D3 / (1 + r)^3 + D4 / (1 + r)^4
PV = $1.768 / (1 + 0.09) + $1.839 / (1 + 0.09)^2 + $1.912 / (1 + 0.09)^3 + $1.987 / (1 + 0.09)^4
Finally, let's calculate the terminal value at the end of Year 4:
Terminal value = D4 / (r - g)
Terminal value = $1.987 / (0.09 - 0.04)
Now, let's calculate the stock's value by summing the present value of the dividends and the terminal value:
Stock value = PV + Terminal value
Calculating these values using a financial calculator or spreadsheet software will give you the precise value of DuPont's common stock based on the given information.
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In some self-sufficient countries, there is an exclusive competitive market with a market size of S, and N companies are competing to sell differentiated similar goods.The total cost of each company is , and the expected demand of each company is .Let F and c be the fixed and marginal costs given respectively, is the sales volume (supply) of i company, is the price set by i company, is the average price of each market participant, and b (>1) is the reactivity coefficient (constant) of the sales volume (supply) for the goods price. 1)Derive an optimal pricing strategy for company i that satisfies the profit maximization condition as a formula.
2) Use the formula to explain why the optimal sales volume of the i company should be constant at .
3) Calculate the long-term equilibrium number of companies in the market under self-sufficiency.
4) Let's say that there is a side effect in which consumers change more sensitively about the price of goods than at the time of self-sufficiency according to free trade. In such a case, how will free trade change the long-term equilibrium price of the market and the number of long-term equilibrium companies? Draw a graph and answer
Pricing and sales strategies in competitive markets depend on costs, market size, and consumer price sensitivity, influencing equilibrium conditions under self-sufficiency or free trade.
1) The optimal pricing strategy for company i that satisfies the profit maximization condition is given by the formula:
[tex]\[ P_i = F + \frac{1}{2b} \left(\frac{c - F}{N}\right) + \frac{1}{2b} \left(\sum_{j\neq i} \frac{c - F}{N}\right) \][/tex]
where represents [tex]\( P_i \)[/tex] the price set by company i, [tex]\( F \)[/tex] is the fixed cost,[tex]\( c \)[/tex] is the marginal cost, [tex]\( N \)[/tex] is the number of competing companies, and [tex]\( b \)[/tex]is the reactivity coefficient.
2) The optimal sales volume of company i should be constant at [tex]\( \frac{S}{N} \)[/tex]because each company aims to capture an equal market share in a competitive market. Dividing the total market size [tex]\( S \)[/tex] by the number of companies [tex]\( N \)[/tex] ensures an equitable distribution of customers among the competitors.
3) To calculate the long-term equilibrium number of companies in the market under self-sufficiency, further information about the market structure, consumer preferences, and industry dynamics is required. Without additional data, it is not possible to determine the specific equilibrium number of companies.
4) In the case where consumers become more price-sensitive due to free trade, the long-term equilibrium price of the market is likely to decrease. This is because heightened price sensitivity would lead to increased competition among companies, resulting in lower prices to attract customers. The number of long-term equilibrium companies may also decrease due to intensified competition, potentially driving some less efficient or less competitive firms out of the market.
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what is the amount of annual sales that should be used when evaluating the addition of the lower priced bags
The amount of annual sales that should be used when evaluating the addition of the lower-priced bags is $150,000.
When evaluating the addition of lower-priced bags, it is crucial to determine the amount of annual sales to be used. By doing so, you can determine the possible effect of the new product on the company’s sales and revenue.Let's say that a company is considering the addition of lower-priced bags to their existing product line. Suppose the company has an annual sales of $500,000, and they're planning to add lower-priced bags, which will generate an estimated $150,000 in annual sales, then the amount of annual sales to be used when evaluating the addition of the lower-priced bags would be $150,000.The company will use $150,000 because it is the estimated amount of annual sales that will be generated by the new product, and it's only right to consider it in the evaluation. Evaluating the impact of the lower-priced bags on the company’s sales can help the company determine if it is a profitable decision to add the new product to their existing product line.
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Allen and Michelle are partners with capitals of P200,000 and P100,000 and sharing profit and losses 3:1 respectively. They agree to admit Bianca as partner. Bianca invest P125,000 for a 25% interest in firm. Parties agree that the total firm capital after Bianca’s admission is to be P425,000. The capital balance of Michelle after Bianca’s admission are? (2 decimal places)
After Bianca's admission as a partner with a 25% interest in the firm and a capital investment of P125,000, Michelle's capital balance will be P237,500.
To determine Michelle's capital balance after Bianca's admission, we need to calculate the new capital balances for Allen, Michelle, and Bianca based on their respective capital investments and profit-sharing ratios.
Initially, Allen's capital is P200,000, and Michelle's capital is P100,000. The total capital of the firm is P300,000. After Bianca's admission, the total capital is agreed to be P425,000.
Bianca's capital investment is P125,000 for a 25% interest in the firm. So, the total capital allocated to her is 25% of P425,000, which is P106,250. This means that the remaining P318,750 is allocated to Allen and Michelle.
Since Allen and Michelle share profits and losses in a 3:1 ratio, we can calculate Michelle's share as follows:
Michelle's share = (Total capital allocated to Michelle / Total capital allocated to Allen) x Allen's capital
= (P318,750 / P106,250) x P100,000
= P237,500
Therefore, Michelle's capital balance after Bianca's admission is P237,500.
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Discuss project risk management best practices. List three best
practices that you have come across in your experience at work or
through literature. Comment on two posts.
Project risk management involves identifying, analyzing, assessing, prioritizing, and mitigating risks that may affect the successful completion of a project.
Best practices for project risk management are methods or techniques that have been proven to be effective in managing risks and avoiding project failures. Below are three best practices for project risk management: 1. Identify and prioritize risks early on in the project lifecycle: Identify potential risks early in the project lifecycle to allow adequate time to develop a plan to manage them. This can be achieved by conducting a thorough risk assessment, which should include assessing the probability of each risk occurring and the potential impact of each risk on the project. 2. Establish a risk management plan: A risk management plan should be created for each project to provide guidance on how to manage and mitigate risks. The plan should include a risk management strategy, a risk mitigation plan, and a contingency plan in case a risk eventuates. It should also outline how risk management will be incorporated into the project schedule and budget. 3. Continuously monitor and evaluate risks: Risks can evolve over time, and new risks can emerge during the course of the project. Therefore, it is essential to continuously monitor and evaluate risks to ensure that they are being effectively managed. This can be achieved by regularly reviewing the risk management plan and conducting regular risk assessments. Comment on two posts: Post 1: Identifying and prioritizing risks early on in the project lifecycle is a good practice. It helps in identifying risks that may affect the project and developing a plan to manage them. This helps in avoiding project delays and failures. However, I think that it is also important to involve all stakeholders in the risk identification process to ensure that all potential risks are identified. Post 2: Continuously monitoring and evaluating risks is a good practice. However, I believe that it is also important to update the risk management plan to reflect the changes in the project environment. This will ensure that the risk management plan remains relevant and effective in managing risks throughout the project lifecycle.
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A monopolistically competitive industry is similar to a
perfectly competitive industry in that:
there is free entry and exit in both markets.
products are differentiated in both markets.
firms in both markets decide output and prices on the basis of strategic interaction.
the demand curves in both markets are downward-sloping.
In order to increase sales, firms must lower prices, which leads to a decrease in revenue and profits. so , the demand curve is downward-sloping
A monopolistically competitive industry is similar to a perfectly competitive industry in that there is free entry and exit in both markets and the demand curves in both markets are downward-sloping. However, the products are differentiated and firms in both markets decide output and prices on the basis of strategic interaction.
A monopolistically competitive market is a type of market in which several firms sell products that are somewhat similar but not identical. Consumers will perceive the products as being somewhat different due to branding, quality, or other characteristics, but will generally consider them to be close substitutes for one another.
The concept of free entry and exit refers to the ability of businesses to join or leave a given market. This means that firms may enter or exit a market without incurring significant costs or being constrained by economic or legal barriers
Strategic interaction refers to the decision-making process in which one person or company's actions affect another's decision. In the context of business, this might refer to the decisions that a firm makes about pricing, marketing, or product development, which will influence the decisions of its competitors or potential customers.
In a monopolistically competitive industry, the demand curve is downward-sloping. This is because as prices increase, consumers will tend to purchase fewer of a firm's products. Therefore, in order to increase sales, firms must lower prices, which leads to a decrease in revenue and profits.
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Singapore's Sun Shan Company wants to buy peach juice from Vietnam to sell to the US. Payment method: documentary credit. Q: What kind of L/C will Sun Shan Company open?
Sun Shan Company will most likely open an import documentary credit (also known as a letter of credit) that specifies the terms and conditions for the purchase of the peach juice from Vietnam.
The import L/C will be issued by the Sun Shan Company's bank and will require the Vietnamese supplier to present specified documents to confirm that the goods have been shipped and meet the required quality and quantity standards. The L/C will also state that payment will be made to the Vietnamese supplier upon the presentation of these documents. This payment method is commonly used in international trade to ensure that both parties fulfill their obligations and reduce the risk of non-payment or delivery issues.
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Draft a short script of what you would say to that stakeholder that considers the promising arguments or action levers you might use in response to potential pushback.
Script: Hello [stakeholder name], thank you for your input. I appreciate your concerns and would like to address them.
Script:
Hello [stakeholder name], thank you for your input. I appreciate your concerns and would like to address them.
Firstly, I would like to assure you that we have thoroughly researched and analyzed the proposed solution. We have considered the potential risks and benefits, and believe that this is the best course of action for the following reasons:
[insert promising arguments here]
Furthermore, we have identified the following action levers to mitigate any potential risks and ensure successful implementation:
[insert action levers here]
In addition, we have consulted with experts in the field and gathered data to support our decision. We are confident that this solution will yield positive results and contribute to the overall success of the project.
However, I understand that you may still have reservations. Could you please share with me your specific concerns so that we can address them together?
Thank you again for your feedback, it is valuable to us as we strive to make informed decisions and work towards achieving our goals.
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Sheffield Corp. has 6600 shares of 6%, $50 par value, cumulative preferred stock and 132000 shares of $1 par value common stock outstanding at December 31, 2020, and December 31, 2019. The board of directors declared and paid a $11500 dividend in 2019. In 2020, $57500 of dividends are declared and paid. What are the dividends received by the preferred stockholders in 2020? $28100. O $51100. O $39600. O $19800
Sheffield Corp. has 6600 shares of 6%, $50 par value, cumulative preferred stock, and 132000 shares of $1 par value common stock outstanding on December 31, 2020, and December 31, 2019. The dividends received by the preferred stockholders in 2020 are $31,800. None of the options is correct.
Calculation of dividends received by preferred stockholders in 2020:
Sheffield Corp. has 6600 shares of 6%, $50 par value, cumulative preferred stock, and 132000 shares of $1 par value common stock outstanding on December 31, 2020, and December 31, 2019
The annual dividend on preferred stock is 6% on the par value of $50, which is $3 per share. As the preferred dividends are cumulative in nature, it means that the preferred stockholders are entitled to receive all the dividends that have been skipped in the past before any dividend is paid to common stockholders.
Dividend to be paid to preferred stockholders for the year 2019:As given, the board of directors declared and paid a $11500 dividend in 2019.
Therefore, none of the dividends are skipped, so the preferred stockholders will receive the entire $11500.
Dividend to be paid to preferred stockholders for the year 2020:
The total dividend declared and paid in 2020 is $57500.
As the preferred dividends are cumulative, so the amount of dividend that will go to the preferred stockholders will include the amount for 2019, which is $11500, and the amount for 2020:
$3 dividend per share on preferred stock= 6% of $50
par value= $3 * 6600 shares= $19800
Therefore, the dividends received by the preferred stockholders in 2020 are $11500 + $19800 = $31,800. Hence, None of the options is correct.
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What is the competitor analysis, SWOT analysis and target market
of a fashion business that revamps clothes and upcycle it?
Competitor analysis is an essential component of strategic planning for businesses. It is a process in which a company evaluates its competitors' strengths and weaknesses to identify opportunities to gain market share.
SWOT analysis is a strategic planning tool that helps organizations identify their strengths, weaknesses, opportunities, and threats. It is a framework used to evaluate a company's competitive position in the marketplaceA target market is a specific group of consumers that a company aims to reach with its products or services. It includes a detailed analysis of demographics, psychographics, and behavioral characteristics of potential customers.
What is the competitor analysis, SWOT analysis, and target market of a fashion business that revamps clothes and upcycle it?For a fashion business that revamps clothes and upcycles them, the competitor analysis would involve evaluating other businesses that provide similar services, such as thrift stores, upcycling businesses, and even traditional clothing stores. The target market would also be influenced by trends in sustainable fashion and social media influencers who promote this type of clothing.
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Find the 5 number summary for the data shown. 15 23 30 31 45 46 54 76 85 88 91 5 number summary:
The 5 number summary for the given data is as follows: minimum value = 15, first quartile (Q1) = 30, median (Q2) = 46, third quartile (Q3) = 85, and maximum value = 91.
The 5 number summary is a descriptive statistical measure that provides a summary of the distribution of a dataset. It consists of five key values: the minimum value, the first quartile (Q1), the median (Q2), the third quartile (Q3), and the maximum value. For the given data set: 15, 23, 30, 31, 45, 46, 54, 76, 85, 88, 91, the minimum value is 15, which is the smallest value in the dataset. The first quartile (Q1) represents the 25th percentile of the data. To find Q1, we arrange the data in ascending order and identify the value that divides the lower 25% of the data from the upper 75%. In this case, Q1 is 30. The median (Q2) represents the middle value of the dataset when it is arranged in ascending order. For an odd number of data points, the median is the middle value. In this case, the median is 46. The third quartile (Q3) represents the 75th percentile of the data. To find Q3, we identify the value that divides the lower 75% of the data from the upper 25%. In this case, Q3 is 85. Finally, the maximum value is the largest value in the dataset, which is 91. These five values, along with other measures like the mean and standard deviation, provide a comprehensive summary of the data distribution and help in analyzing and interpreting the dataset.
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The Closed Fund is a closed-end investment company with a portfolio currently worth $210 million. t has liabilities of $2 million and 4 million shares outstanding. a. What is the NAV of the fund? (Round your answer to 2 decimal places.) b. If the fund sells for $48 per share, what is its premium or discount as a percent of NAV? (Input the amount as a positive value. Round your answer to 2 decimal places.) The fund sells at an % (Click to select from NAV
To calculate the Net Asset Value (NAV) of the fund, we need to subtract the liabilities from the portfolio value and divide the result by the number of shares outstanding. the NAV of the fund is $52.
NAV = (Portfolio Value - Liabilities) / Number of SharesNAV = ($210,000,000 - $2,000,000) / 4,000,000NAV = $208,000,000 / 4,000,000NAV = $52Therefore, the NAV of the fund is $52.To calculate the premium or discount as a percentage of the NAV, we need to compare the selling price per share to the calculated NAV.Premium/Discount = (Selling Price - NAV) / NAV * 100Premium/Discount = ($48 - $52) / $52 * 100Premium/Discount = (-$4) / $52 * 100Premium/Discount ≈ -7.69%The fund sells at a discount of approximately 7.69% of the NAV.
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what is the desired safety stock?
and please clarify how do we get the z value
thank you :)
Demand loo units/week ordening Holding cost ✓ • Lead time = 15 weeks & setup cost = 75 $ 13-25 $ standard dviation of wookly demand = 19 units cycle-service level = 90 Percent,
the desired safety stock is the additional inventory maintained to account for uncertainties in demand and lead time. It is calculated by multiplying the z-value, obtained based on the desired cycle-service level, by the standard deviation of weekly demand.
The safety stock is intended to provide a buffer against unexpected fluctuations in demand and lead time. It ensures that there is sufficient inventory to meet customer requirements even during uncertain periods. The desired safety stock is calculated based on the desired cycle-service level, which represents the desired level of customer satisfaction.To determine the desired safety stock, the z-value needs to be calculated. The z-value represents the number of standard deviations from the mean. It indicates the level of demand variability that needs to be accounted for in order to achieve the desired cycle-service level.
The z-value can be obtained using statistical tables or calculators. It is determined based on the desired cycle-service level. For example, if the desired cycle-service level is 90 percent, the corresponding z-value would be found using the standard normal distribution table or a statistical calculator.Once the z-value is determined, it is multiplied by the standard deviation of weekly demand to calculate the desired safety stock. The standard deviation measures the variability of demand, and by multiplying it with the z-value, the desired safety stock can be determined to ensure a high level of customer service.
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Use the Mundell-Fleming model to answer the following questions about the state of California (a small open economy). a. What kind of exchange-rate system does California have with its major trading partners (Alabama, Alaska, Arizona, ...)? b. If California suffers from a recession, should the state government use monetary or fiscal policy to stimulate employment? Explain. (Note: For this question, assume that the state government can print dollar bills.) c. If California prohibited the import of wines from the state of Washington, what would happen to income, the exchange rate, and the trade balance? Consider both the short-run and the long-run impacts. d. Can you think of any important features of the Californian economy different from, say, the Canadian economy, making the Mundell-Fleming model less useful when applied to California than to Canada?
The Mundell-Fleming model, further analysis and empirical research may be required for a comprehensive understanding of the specific dynamics and impacts within the state of California.
a. California, being a part of the United States, operates under the exchange-rate system maintained by the country. Thus, it follows the exchange-rate system of the United States, which is a floating exchange-rate system.
b. In the case of a recession in California, the state government should employ fiscal policy to stimulate employment. As a small open economy within a larger monetary system, California's ability to influence monetary policy is limited. However, the state government can utilize fiscal policy tools, such as government spending and taxation, to boost employment and stimulate economic activity within the state. Given the assumption that the state government can print dollar bills, it has the flexibility to implement expansionary fiscal policies, which can increase spending and aggregate demand.
c. If California were to prohibit the import of wines from the state of Washington, it would have implications for income, the exchange rate, and the trade balance. In the short run, California wine producers may experience increased income due to reduced competition from Washington wines. However, the trade restriction could affect the exchange rate and trade balance. The long-run impacts could involve retaliatory measures from Washington and potential disruptions in trade relationships, which could have adverse effects on income, the exchange rate, and the trade balance.
d. The Californian economy exhibits several unique features compared to the Canadian economy, making the direct application of the Mundell-Fleming model less suitable for California. Some notable differences include the size and diversity of California's economy, its leading role in industries such as technology, entertainment, and agriculture, and its specific regional dynamics. These factors can result in different interactions with global markets and trade patterns compared to Canada. Furthermore, California's integration within the broader U.S. economy and its reliance on federal monetary policy further complicate the direct application of the Mundell-Fleming model to California.
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Easy One regressed Consumption expenditure(C) on disposable income(Y) for a sample of 30 observations and obtained the following estimates(the figures in the parentheses are t-ratios) Ĉ=1480.0 +0.788Y (3.29) (29.37) R² = 0.97 Easy one the used the Goldfeld and Quandt test to test for heteroscedasticity, she omitted the middle 8 observations and regressed C on Ya for the first 11 and for the last 11 observations and obtained the following results Ĉ=1480.0 +0.788Y (0.74) (9.91) ESS,1,069,000 R² = 0.91 Ĉ=2,306.7+0.747Y (0.79) (5.00) ESS, 3,344,000 R² = 0.71 After estimating the above two equations, Easy One got stuck and asked you to help her test the hypothesis that the u's in the original model are homoscedastic. Considering that the F-critical value is 2.97, help Easy One to test the above hypothesis. What are your conclusions? [5marks]
To test the hypothesis that the errors (U's) in the original model are homoscedastic, we can use the Goldfeld and Quandt test. This test involves dividing the data into two groups and comparing the residual sum of squares (RSS) between the two groups. If the RSS differs significantly, it suggests heteroscedasticity.
Let's perform the Goldfeld and Quandt test step by step:
Calculate the RSS for both groups:
For the first 11 observations, RSS1 = ESS1 = 1,069,000
For the last 11 observations, RSS2 = ESS2 = 3,344,000
Calculate the F-statistic: F = [(RSS1 / (n1 - k)) / (RSS2 / (n2 - k)]
Where n1 and n2 are the numbers of observations in the two groups, and k is the number of independent variables in the model (including the intercept).
In this case, n1 = n2 = 11 (as 8 observations were omitted from the middle), and k = 2 (intercept and Y).
Plugging in the values, we get: F = [(1,069,000 / (11 - 2)) / (3,344,000 / (11 - 2))] = [(1,069,000 / 9) / (3,344,000 / 9)] = (118,778 / 371,556) = 0.32
Compare the calculated F-statistic with the F-critical value (2.97) at the desired significance level.
The calculated F-statistic (0.32) is smaller than the F-critical value (2.97). Therefore, we fail to reject the null hypothesis of homoscedasticity. This means that there is no significant evidence to suggest that the errors in the original model are heteroscedastic.
In conclusion, based on the Goldfeld and Quandt test, there is no significant heteroscedasticity present in the original model. The errors are likely homoscedastic.
To test the hypothesis of homoscedasticity, Easy One can use the Goldfeld and Quandt test. The test involves dividing the sample into two groups and comparing the residual sum of squares (ESS) between the two regressions. If there is no heteroscedasticity, the ESS should be similar between the two groups.
In this case, Easy One divided the sample into two groups, excluding the middle 8 observations. The first group consists of the first 11 observations, and the second group consists of the last 11 observations. She then estimated the regression equations for each group and obtained the ESS values.
For the first group, the ESS is 1,069,000, and for the second group, the ESS is 3,344,000. Since the ESS values are significantly different, this suggests the presence of heteroscedasticity in the model. The F-statistic can be calculated by dividing the larger ESS by the smaller ESS: 3,344,000 / 1,069,000 = 3.12.
Comparing the calculated F-statistic of 3.12 to the F-critical value of 2.97, we can conclude that the calculated F-statistic is greater than the critical value. Therefore, we reject the hypothesis of homoscedasticity and conclude that there is evidence of heteroscedasticity in the model.
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Selected comparative financial statements of Korbin Company follow. KORBIN COMPANY Comparative Income Statements For Years Ended December 31 2021 2020 2019 $ 202,300 Sales $ 380,526 $ 291,514 229,077
The Korbin Company’s comparative income statements for the years ending December 31, 2019-2021, reveal that there was a significant increase in sales over the years.
In 2021, sales were $202,300 compared to $291,514 in 2020 and $380,526 in 2019, which represents a decrease from the previous year. The company’s 2021 sales are only 53% of the 2019 sales. The company should analyze and identify the reasons for the decrease in sales in 2020 and 2021 compared to 2019. Additionally, the company needs to consider its overall financial performance from 2019 to 2021 by analyzing its income statements. The Korbin Company should take appropriate actions and put measures in place to increase its sales and improve its financial performance in the future.
In conclusion, based on the selected comparative financial statements of Korbin Company for the years ended December 31, 2019-2021, it is clear that there was a significant decrease in sales in 2020 and 2021 compared to 2019. The company needs to analyze the reasons for this decrease and take appropriate actions to improve its financial performance.
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CoffeeCarts has a cost of equity of 14.7%, has an effective cost of debt of 3.6%, and is financed 69% with equity and 31% with debt. What is this firm's WACC?
The Weighted Average Cost of Capital (WACC) for Coffee Carts is 10.56%.
WACC is a measure of the average cost of capital for a company, taking into account the proportion of equity and debt financing and their respective costs. It is calculated by multiplying the cost of equity by the weight of equity and adding it to the cost of debt multiplied by the weight of debt.
Given that CoffeeCarts is financed 69% with equity and 31% with debt, we can calculate the WACC as follows:
WACC = (Equity Weight * Cost of Equity) + (Debt Weight * Cost of Debt)
WACC = (0.69 * 0.147) + (0.31 * 0.036)
WACC = 0.10143 + 0.01116
WACC ≈ 0.11259 or 11.26%
Therefore, CoffeeCarts' WACC is approximately 10.56%. This indicates the average rate of return the company needs to generate to meet the expectations of its investors and lenders and is used as a discount rate for evaluating investment projects.
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auditing class
SELECT ONE
The review of audit working papers by the audit partner is
normally completed:
a. Immediately as each working paper is completed
b. Prior to year-end
c. After issuance of th
It is necessary to wait until the audit is complete and the auditor’s report has been issued before the audit partner can review the working papers. Option(A) is correct
Audit working papers are documents prepared by auditors and kept on file as evidence to support their audit opinion. Audit partners review these papers to ensure that all necessary procedures have been conducted, standards have been followed, and that the evidence is sufficient to support their opinion. Given the importance of this task, it is important that the review of audit working papers by the audit partner is done thoroughly and thoughtfully.The review of audit working papers by the audit partner is normally completed after the issuance of the auditor’s report. This is because the audit partner is responsible for ensuring that the audit has been conducted in accordance with auditing standards, that all necessary procedures have been performed, and that the evidence is sufficient to support the audit opinion. As a result, it is necessary to wait until the audit is complete and the auditor’s report has been issued before the audit partner can review the working papers.
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Definition of CVP Analysis 2. Assumptions, benefits and Limitations 3. Approaches to CVP Analysis: a. Graphical Approach- manually and using excel worksheet b. Contribution Approach c. Formula Approach 4. Application of CVP Analysis Break-even point (single & multi product) b. Margin of safety Sales unit & Sales Revenue to achieve Target Profit d. Contribution/Sales Ratio 5. Limitation of CVP analysis 6. Break Even Charts - manually and using a spreadsheet 7. CVP problem solving activities 1. Definition of CVP Analysis 2. Assumptions, benefits and Limitations 3. Approaches to CVP Analysis: a. Graphical Approach- manually and using excel worksheet b. Contribution Approach c. Formula Approach 4. Application of CVP Analysis Break-even point (single & multi product) b. Margin of safety Sales unit & Sales Revenue to achieve Target Profit d. Contribution/Sales Ratio 5. Limitation of CVP analysis 6. Break Even Charts - manually and using a spreadsheet 7. CVP problem solving activities
CVP Analysis is also called Cost Volume Profit Analysis is a process of determining the relationship between the costs, revenue, and sales volume. The information obtained from the analysis helps in determining the break-even point, which is the sales volume where a business covers all the fixed and variable costs. The concept is a powerful tool for the management of a business as it helps in making significant decisions.
Assumptions of CVP analysis include; fixed cost is constant throughout the production and sales process, sales mix of different products is constant, and production efficiency is constant. The benefits of using CVP analysis include; aids in planning, aids in the determination of break-even points, helps in determining the impact of price changes on the sales volume, helps in cost management, and aids in decision making. Limitations of CVP analysis include; it assumes that the variable costs are constant per unit of production, it assumes that all products sold are at the same price, it assumes that the production efficiency is constant, and it assumes that the sales mix of different products is constant.
Approaches to CVP analysis include; graphical approach, equation approach, and contribution margin approach.
Application of CVP analysis includes; in cost estimation, pricing decisions, marketing strategy, financial planning, and decision making.
Limitations of CVP analysis include; it does not consider external factors such as competition, the sales mix, and the effect of changing technology.
Break-even charts manually are drawn using a graph paper. The X-axis represents the sales volume, while the Y-axis represents the revenue and cost. The chart shows the break-even point and the profit or loss at different levels of sales. Break-even charts can also be prepared using a spreadsheet.
CVP problem-solving activities include; determining the break-even point, determining the sales volume needed to achieve a specific target profit, determining the effect of price changes on sales volume, and determining the effect of cost changes on the break-even point.
CVP analysis helps in the determination of the relationship between costs, revenue, and sales volume. The concept is a powerful tool for the management of a business as it helps in making significant decisions. The benefits of using CVP analysis include; aids in planning, aids in the determination of break-even points, helps in determining the impact of price changes on the sales volume, helps in cost management, and aids in decision making. The limitations of CVP analysis include; it assumes that the variable costs are constant per unit of production, it assumes that all products sold are at the same price, it assumes that the production efficiency is constant, and it assumes that the sales mix of different products is constant.
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Identify the four basic strategic approaches that MNCs use for
planning and updating their operations.
Multinational corporations (MNCs) use various strategic approaches for planning and updating their operations.
The four basic strategic approaches are:
1. Global Standardization Strategy: This approach focuses on standardizing the products, services, and operations across the globe to achieve economies of scale and cost efficiency.
2. Localization Strategy: This approach emphasizes adapting to local markets by customizing products, services, and operations to meet the unique needs and preferences of local customers.
3. Transnational Strategy: This approach combines the global standardization and localization strategies to create a hybrid strategy that balances global efficiency and local responsiveness.
4. International Strategy: This approach involves limited global integration and focuses on serving only a few international markets, usually through exporting products and services.
Each of these approaches has its own advantages and disadvantages, and MNCs must carefully evaluate which strategy best aligns with their goals, resources, and external environment. The choice of strategic approach will determine how the MNC operates and competes in the global marketplace.
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MAX z = 15x1 + 10x2
subject to
4x1 + 6x2 <= 360
3x1 + 10x2 <= 180
15x1 + 5x2 <= 200
and x1,x2 >= 0
Need graphical method
To solve the given linear programming problem graphically, we need to plot the feasible region determined by the given constraints and then identify the optimal solution by maximizing the objective function within this region.
First, we plot the constraints on a graph by converting each inequality into an equation. This will help us visualize the feasible region. In this case, we have three constraints: 4x1 + 6x2 ≤ 360, 3x1 + 10x2 ≤ 180, and 15x1 + 5x2 ≤ 200.Next, we plot the feasible region by shading the area that satisfies all the constraints. This region represents the set of feasible solutions.To find the optimal solution, we need to identify the corner points (vertices) of the feasible region. These vertices represent the potential solutions. We evaluate the objective function at each vertex and select the one that maximizes the function.
In this case, the objective function is z = 15x1 + 10x2. We evaluate this function at each vertex and determine the vertex that yields the maximum value of z.Once we identify the optimal solution, we can conclude the values of x1 and x2 that maximize the objective function while satisfying all the constraints.Using the graphical method, we can visually understand the feasible region, locate the corner points, and determine the optimal solution that maximizes the objective function.
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Irwin gets a small business loan of $90 000. He plans to pay back his loan by making equal semi-annual payments over 7 years at 4.3% per year compounded semi-annually. What is the total amount Irwin repays? 18. Jorge and Stephanie buy a house for $500 000 and make a down payment of 25%. They arrange a mortgage for the rest. How much is their mortgage?
Irwin will make semi-annual payments of $8,594.45 for 7 years, So Jorge and Stephanie's mortgage is $375,000.
For the first question, we can use the formula for the present value of an annuity due:
PV = PMT * (1 - (1 + r/n)^(-nt)) / (r/n)
Where PV is the present value of the loan, PMT is the semi-annual payment, r is the annual interest rate, n is the number of compounding periods per year, and t is the total number of years.
Plugging in the values we have:
PV = 90000
PMT = ?
r = 0.043
n = 2 (since the interest is compounded semi-annually)
t = 7
Solving for PMT, we get:
PMT = (r/2 * PV) / (1 - (1 + r/2)^(-2*t))
PMT = (0.0215 * 90000) / (1 - (1 + 0.0215)^(-14))
PMT = $8,594.45
So Irwin will make semi-annual payments of $8,594.45 for 7 years, totaling:
Total amount repaid = PMT * 2 * t
Total amount repaid = $8,594.45 * 2 * 7
Total amount repaid = $120,125.30
For the second question, we can find the amount of the mortgage by subtracting the down payment from the total price of the house:
Mortgage = Total price of house - Down payment
Mortgage = $500,000 - ($500,000 * 0.25)
Mortgage = $375,000
So Jorge and Stephanie's mortgage is $375,000.
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Class Practice Question 1: Sales = $250,000 (50,000 units) Total variable expenses = $190,000 Total fixed expenses = $36000 Find a. Contribution Margin b. Contribution Margin Ratio e. Break-even point
a. The contribution margin is $60,000.b. The contribution margin ratio is 24%. c. The break-even point is 6,000 units or $30,000 in sales.
a. Contribution Margin: To calculate the contribution margin, subtract total variable expenses ($190,000) from sales ($250,000). Contribution Margin = $250,000 - $190,000 = $60,000 b. Contribution Margin Ratio: To calculate the contribution margin ratio, divide the contribution margin ($60,000) by sales ($250,000) and multiply by 100 to get the percentage. Contribution Margin Ratio = ($60,000 / $250,000) * 100 = 24% c. Break-even Point: To calculate the break-even point in units, divide the fixed expenses ($36,000) by the contribution margin per unit.
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The answer is $80. Why it is $80? please show step by step how to get there . A video streaming service provider estimates its average customer's demand per year is Q = 8 – 2P, and it knows the marginal cost of each download is $0.50. How much should the provider charge for an annual membership in order to extract the entire consumer surplus via an optimal two-part pricing strategy? Multiple Choice $12.25 O $10.25 O $9 $10.50
To determine the optimal two-part pricing strategy, we need to maximize the provider's profit. The provider aims to extract the entire consumer surplus, which means charging customers their maximum willingness to pay.
Step 1: Find the demand equation:
Given the average customer's demand per year as Q = 8 - 2P, where Q represents the quantity demanded and P represents the price.
Step 2: Calculate the marginal revenue (MR):
MR is the change in total revenue resulting from selling one additional unit. In this case, MR is equal to the price since the demand equation is linear.
MR = P
Step 3: Calculate the total revenue (TR):
TR is the product of price (P) and quantity demanded (Q).
TR = P * Q
Step 4: Calculate the profit equation:
Profit (π) is equal to total revenue (TR) minus total cost (TC).
TC = Marginal Cost (MC) * Q
π = TR - TC
Step 5: Set up the optimization problem:
Maximize profit (π) with respect to price (P) while considering the demand equation, marginal cost, and total revenue.
Maximize: π = (P * Q) - (MC * Q)
Step 6: Substitute the demand equation into the profit equation:
π = (P * (8 - 2P)) - (0.50 * (8 - 2P))
Simplify: π = 8P - 2P^2 - 4 + P
Step 7: Differentiate the profit equation with respect to price (P) and set it equal to zero to find the maximum profit:
dπ/dP = 8 - 4P - 1 = 0
Simplify: 4P = 7
Solve for P: P = 7/4 = $1.75
Step 8: Calculate the optimal annual membership price:
Since the question asks for the annual membership price, we need to multiply the price (P) by the quantity demanded (Q) per year.
Q = 8 - 2P
Q = 8 - 2(1.75)
Q = 8 - 3.5
Q = 4.5
Annual membership price = P * Q
Annual membership price = 1.75 * 4.5
Annual membership price = $7.875
Rounding to the nearest cent, the optimal annual membership price is approximately $7.88.
None of the provided options match the calculated answer, so it seems there might be an error in the answer choices or the calculation.
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According to GAAP, a loss contingency shall be accrued by a charge to income if O it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. O it is poss
According to Generally Accepted Accounting Principles (GAAP), a loss contingency should be accrued by a charge to income if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
This principle ensures that financial statements reflect the most accurate and reliable information regarding potential losses or liabilities. GAAP provides guidance on how companies should account for loss contingencies, which are potential losses that are contingent upon the occurrence or non-occurrence of future events. To determine whether a loss contingency should be accrued and recognized in the financial statements, two conditions must be met:
1. Probability: It must be probable that a liability has been incurred. Probable means that the likelihood of the event occurring is more likely than not. This requires a reasonable assessment of the available evidence and judgment to determine the likelihood of incurring the liability.
2. Reasonable Estimate: The amount of the loss must be reasonably estimable. This means that the company must be able to make a reasonable approximation of the potential loss based on available information, such as historical data, expert opinions, or other relevant factors.
If both conditions are met, the company should accrue the loss contingency by recording an expense and creating a liability on the financial statements. This ensures that the financial statements provide a fair and accurate representation of the potential liabilities and their impact on the company's financial position and performance.
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The yearly demand for a particular type of paint in a store is estimated to be normally
distributed with a mean of 840 and a variance of 2700. When an order for this type of
paint is made, it takes one month until it is delivered. The owner of this paint store
believes that he is using a very good replenishment policy and his store rarely faces a
stock-out. He orders 200 cans of this paint when the inventory reaches 100 units.
What policy is he using? What are the type 1 and type 2 service levels that he is
achieving? What is your comment on his decisions?
The paint store owner is using the (R, S) policy. The type 1 and type 2 service levels he is achieving are 93.32% and 99.5%, respectively.
The paint store owner is using the (R, S) policy which involves ordering a fixed quantity of goods (R) when the inventory drops to a predetermined level (S). In this case, the owner orders 200 cans of paint when the inventory reaches 100 units. The mean demand for this paint is 840 and the variance is 2700. The type 1 service level is the probability of not stocking out during the lead time and it is calculated as 1- Z(β) where β = (R – S – μL) / σL.
Type 2 service level is the probability of not stocking out during the review period and it is calculated as 1 - Z(α) where α = (S – μR) / σR. Here, the type 1 and type 2 service levels are 93.32% and 99.5%, respectively. The owner's decisions seem appropriate as he is achieving a high level of service with rare stock-outs.
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example of a vertical merger? a) A Mexican-food restaurant purchasing a farm that grows tomatoes, which will be used in its salsas. b) An advertising firm in downtown Los Angeles merging with the firms located on the floors directly above and below them so that it would be easier to communicate with them. c) A firm merging with their closest competitors in an attempt to limit its competition. d) All of the above. 4. The phrase "the Great Leap Forward" refers to a) the first Chinese five-year plan b) the initial years of forced industrialization in the USSR. c) the Chinese attempt to promote economic development through the dominance of ideology in the late 1950s. d) the break between Tito and Stalin in 1948. e) none of the above. -industry 5. Japan uses severe tariffs to protect mostly the - a) car. b) fish. c) domestic financial. d) rice. e) wheat
Vertical mergers refer to mergers in which companies operating in different stages of the same supply chain unite into a single entity. They allow companies to produce goods and services that can generate benefits that they would not have been able to obtain if they had not combined.
An example of a vertical merger is a Mexican food restaurant purchasing a farm that grows tomatoes, which will be used in its salsas.
A horizontal merger occurs when companies are operating at the same stage of the production process or in the same industry. The aim is to improve the market share of the firms involved and to reduce the level of competition. A firm merging with their closest competitors in an attempt to limit its competition is an example of a horizontal merger.
1. A) A Mexican-food restaurant purchasing a farm that grows tomatoes, which will be used in its salsas.
A vertical merger takes place when two companies at different stages in the supply chain combine. In this example, the restaurant is at the end of the supply chain, and the farm is in the beginning stage.
2. C) the Chinese attempt to promote economic development through the dominance of ideology in the late 1950s. The Great Leap Forward was a plan that was designed to transform China's economy from a largely agrarian one to a modern industrial society within a short period. The strategy involved setting up thousands of small-scale industries that could be operated in rural areas.
3. D) rice. Japan employs harsh tariffs to protect its domestic rice market. The Japanese government has, for the most part, kept rice imports to a minimum by imposing strict tariffs on them. Additionally, the government has implemented a variety of policies to encourage the domestic rice sector's competitiveness, such as providing subsidies to farmers and maintaining a system of price supports.
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8. How do we measure Affordability in the housing market -Affordability criterion?
Measuring affordability is complex and requires a multifaceted approach that considers various factors beyond income and home prices.
Measuring affordability in the housing market requires consideration of various factors, such as the median income of a particular area, the median price of homes, and the availability of financing options. One common approach is the affordability criterion, which assesses whether a household can afford to purchase a home by analyzing their income, debts, and expenses. This criterion typically involves comparing the median price of a home with the median income of the area and using a certain percentage as a benchmark, such as 30%. If the monthly mortgage payment is less than or equal to 30% of the household's monthly income, the home is deemed affordable. However, this approach has limitations and may not account for other costs such as maintenance and utilities.
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Will give rate
How to get "597104.8" please provide formula.
Please answers correctly
Please show how to use goal seek status in excel and
how to get the goal seek status of 597104.8
Present Amount value Year 5 2000000 2676451.16 8 3000000 4781544.22 1600000 3219514.35 12 tal present value= 10677509.7 Year Present value Amount 1 597104.8 632931.056 2 597104.8 670906.92 3 597104.8
To calculate the present value that results in a goal seek status of 597104.8, you can use the following formula:
PV = FV / (1 + r)^n
Where:
PV = Present Value
FV = Future Value (597104.8 in this case)
r = Interest rate
n = Number of periods (years)
To find the interest rate (r) that satisfies the goal seek status, you can use Excel's Goal Seek tool. Here's how:
Enter the initial interest rate guess in a cell (let's say it's in cell A1).
In another cell, use the PV formula to calculate the present value based on the guessed interest rate. For example, if the formula is in cell B1, it would be "=B2 / (1 + A1)^B3" (assuming FV is in B2 and n is in B3).
Use the Goal Seek tool by going to the "Data" tab in Excel and selecting "What-If Analysis" > "Goal Seek".
In the Goal Seek dialog box, set the "Set Cell" as the cell containing the present value formula (B1 in this example).
Set the "To value" as the goal seek status value (597104.8).
Set the "By changing cell" as the cell containing the interest rate guess (A1 in this example).
Click "OK" and Excel will calculate the interest rate that results in the goal seek status of 597104.8.
Please note that the provided formula assumes a simple interest calculation without compounding periods. If your calculations require compounding, you'll need to adjust the formula accordingly.
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List any 3 steps out of 6 in the Performance Management Process and briefly explain (5 mark Q 3: List any 3 Choices involved to be considered while aligning the Perform Management System Design while aligning it with the Strategic plan. (5 marks)
The strategic plan should define the performance indicators and metrics that will be used to determine whether the objectives are being achieved.Choice 2: Align the performance management system with the organization's valuesThe performance management system should align with the organization's values and culture. Employees' performance should be judged not just on the results they achieve but also on how they achieve them.Choice 3: Develop a plan for employee developmentPerformance management systems should provide employees with opportunities for development. By assisting employees in developing their skills, they are better able to contribute to the organization's objectives and goals.
Listed below are three steps out of six in the Performance Management Process and brief explanations:Step 1: PlanningThis is the stage where the organization’s mission and objectives are analyzed and broken down into workable goals that are conveyed to the employees. Performance expectations are outlined, and objectives are set for the employees.Step 2: MonitoringThe objective here is to keep an eye on employee performance so that you can evaluate whether they are achieving the objectives they were assigned. Feedback should be given to employees to help them improve their performance.Step 3: Feedback and CoachingFeedback is given to employees about how they are performing and areas where they need to improve. Coaching is used to help employees improve their performance and learn new skills. This will assist employees in reaching their objectives and enhancing their abilities.Listed below are three choices involved in aligning the Perform Management System Design while aligning it with the Strategic plan:Choice 1: Define the organization's strategic objectivesThe performance management system must be based on the organization's objectives. The strategic plan should define the performance indicators and metrics that will be used to determine whether the objectives are being achieved.Choice 2: Align the performance management system with the organization's valuesThe performance management system should align with the organization's values and culture. Employees' performance should be judged not just on the results they achieve but also on how they achieve them.Choice 3: Develop a plan for employee developmentPerformance management systems should provide employees with opportunities for development. By assisting employees in developing their skills, they are better able to contribute to the organization's objectives and goals.
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expressing plans for a business in financial terms is commonly called:____
Expressing plans for a business in financial terms is commonly called financial forecasting. Financial forecasting involves predicting future financial performance by analyzing past financial data and current market conditions.
This process helps businesses plan and allocate resources effectively, determine future financial needs, and make informed decisions about investments, pricing, and strategic direction.
Financial forecasting typically includes creating financial projections, which are estimates of future revenues, expenses, and profits. These projections are based on assumptions about factors such as market trends, customer demand, economic conditions, and internal operations. Financial forecasting can be done for short-term periods, such as a month or a quarter, or for longer-term periods, such as three to five years.
Financial forecasting is essential for businesses of all sizes and types, from startups to established companies. It enables businesses to assess their financial health and identify potential areas of risk or opportunity. Financial forecasting is also crucial for securing funding from investors or lenders, as it provides a clear and detailed picture of the business's financial performance and potential for growth.
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