a. At a discount rate of 18% is PV18% = $13,000 / (1 + 0.18)^5
b. At a discount rate of 18% is PV18% = $6,500 / (1 + 0.18)^8
c. Using the given cash flow information, we can calculate the discounted cash flows at a discount rate of 10% are Year 1: [tex]$600 / (1 + 0.10)^1, Year 2: $700 / (1 + 0.10)^2, Year 3: $1,300 / (1 + 0.10)^3, Year 4: $4,900 / (1 + 0.10)^4, and Year 5: $9,400 / (1 + 0.10)^5[/tex]
a. To calculate the present value (PV) of the future lump sum of money at different discount rates, we can use the PV formula in Excel. The formula is:
PV = FV / (1 + r)^n
Where:
FV = Future value to be received
r = Discount rate
n = Number of years
Using the given information, we can calculate the present value at three different discount rates:
For Scenario A:
Future value to be received = $13,000
Future date received = 5 years
At a discount rate of 8%:
PV8% = $13,000 / (1 + 0.08)^5
At a discount rate of 12%:
PV12% = $13,000 / (1 + 0.12)^5
At a discount rate of 18%:
PV18% = $13,000 / (1 + 0.18)^5
b. To calculate the present value (PV) of the stream of year-end annual cash payments at different discount rates, we can use the PV formula in Excel. The formula is the same as in part a.
For Scenario B:
Annual cash receipt = $6,500
Number of years = 8 years
At a discount rate of 8%:
PV8% = $6,500 / (1 + 0.08)^8
At a discount rate of 12%:
PV12% = $6,500 / (1 + 0.12)^8
At a discount rate of 18%:
PV18% = $6,500 / (1 + 0.18)^8
c. To determine the total net cash flows, net present value (NPV), and estimated payback period for the investment project, we need to calculate the discounted cash flows and analyze the cumulative cash flows.
Using the given cash flow information, we can calculate the discounted cash flows at a discount rate of 10%:
Year 1: $600 / (1 + 0.10)^1
Year 2: $700 / (1 + 0.10)^2
Year 3: $1,300 / (1 + 0.10)^3
Year 4: $4,900 / (1 + 0.10)^4
Year 5: $9,400 / (1 + 0.10)^5
To find the total net cash flows, sum up the discounted cash flows for each year.
To calculate the net present value (NPV), subtract the initial investment from the total net cash flows.
To estimate the payback period, analyze the cumulative cash flows until they equal or exceed the initial investment.
Please note that without the initial investment amount, it is not possible to provide the exact net cash flows, NPV, and payback period for the investment project.
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Mickey Mouse Co. purchased equipment on January 1, 2019, at a cost of $50,000. Depreciation for 2019 and 2020 was based on an estimated 10 -year life and $5,000 estimated residual value. The company uses the straight-line method of depreciation and records any partial-year depreciation based on the number of months the asset is in service. In 2021, Mickey Mouse Co. revised its depreciation estimate and now believes the equipment will have a total service life of 7 years & a residual value of $4,000. Required: Calculate the depreciation for 2021 on the worksheet, then prepare the journal entry to record the 2021 depreciation, in good form. ≫ To indent an account in this general journal, use 3 periods before the account. Example: ...Buildings (1 point reduction for not indenting appropriately.)« Requirement Calcuate the depreciation expense for 2021 .
Given Data: Purchased Equipment cost = $50,000
Estimated Life of the equipment = 10 years
Estimated Residual value = $5,000Straight-line Depreciation Method
The equipment was purchased on January 1, 2019.The depreciation of the equipment is recorded based on the number of months the asset is in service. In 2021, Mickey Mouse Co. revised its depreciation estimate and now believes the equipment will have a total service life of 7 years & a residual value of $4,000.The calculation of depreciation is based on the following formula:
Depreciation Expense = (Asset cost - Residual value) / Life in years
Depreciation Expense for 2019 & 2020
The depreciation expense for 2019 and 2020 can be calculated by using the given formula:
Depreciation Expense = (Asset cost - Residual value) / Life in years
Depreciation Expense for 2019 and 2020 = (50000 - 5000) / 10= $4500 per year
Depreciation Expense for 2021Since the company revised its depreciation estimate and believes that the equipment will have a total service life of 7 years, we will need to calculate the annual depreciation rate, using the same formula:
Annual Depreciation Expense = (Asset cost - Residual value) / Life in years
Annual Depreciation Expense = (50000 - 4000) / 7= $6428.57
Depreciation for the year 2021 will be calculated as follows:
Depreciation expense for 2021 = Annual Depreciation Expense * Number of months the asset is in service/ 12
Depreciation Expense for 2021 = $6428.57 * 12/12 = $6428.57
To record the depreciation expense in the books of accounts of Mickey Mouse Co., we need to pass the journal entry accordingly. Journal entry for 2021:
Date Account Titles Debit Credit December 31, 2021
Depreciation Expense6,428.57
Accumulated Depreciation Equipment6,428.57
Explanation:
Depreciation expense for the year 2021 will be debited with $6,428.57 in the income statement.
Accumulated Depreciation Equipment account will be credited with the same amount in the balance sheet, to show the accumulated depreciation of the equipment.
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If you deposit $1,750 at the end of each month for the next 10 years into an account paying 5.6% per year, how much will you have in the account in 16 years?
*Show work, not excel function for full credit*
We are given a present value of $1,750 which is deposited at the end of each month for the next 10 years into an account paying 5.6% per year, and we are required to find how much will be in the account in 16 years.
Since the amount is deposited at the end of each month, we can convert the time from years to months: 10 years x 12 months = 120 months. 16 years x 12 months = 192 months.
The interest rate is given as 5.6% per year, which we convert to monthly by dividing by 12:5.6% ÷ 12 = 0.4666666667%
The monthly deposit, present value, and interest rate can now be used in the formula for future value of an annuity:
[tex]$FV = \frac{PMT[(1+r)^n-1]}{r}$[/tex]
where [tex]PMT = $1,750$[/tex], monthly depositr = 0.4666666667%$, monthly interest rate, andn = 192, number of months.
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Question 3 [45]
We South Africans have commonly referred to ourselves as the ‘rainbow nation’ because our nation includes people of many different races, languages, and religions. While we all share the important dimensions of the human species, biological and environmental differences separate and distinguish us as individuals and groups. This vast array of differences constitutes a spectrum of human diversity and causes us to perceive and interpret similar situations differently.
3.1 Explain what diversity entails. (15)
Diversity can be explained as a term used to depict the uniqueness of individuals, groups, and societies. It refers to human qualities and attributes, such as race, gender, ethnicity, sexual orientation, nationality, religion, language, age, etc. Diversity is not only about the physical differences but also the distinctions in cognitive and social attributes.
It encompasses a wide range of human experiences and perspectives. Diversity acknowledges and celebrates the differences in people and cultures, and how those differences influence their beliefs, values, behavior, and interaction with others.
Therefore, it is crucial to recognize, understand, and appreciate diversity as it creates more opportunities for growth, learning, and innovation. In the context of South Africa, diversity is evident in the nation's many races, cultures, and languages.
This diversity is reflected in different social structures, institutions, and policies that have been created to accommodate different backgrounds. Understanding diversity is a crucial aspect of promoting a more inclusive society that celebrates everyone's unique qualities and perspectives.
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5. Why are we concerned with unemployed or underemployed resources in a society?
Unemployment and underemployment are significant challenges that many societies face. There are several reasons why we are concerned about the unemployed or underemployed resources in a society.
These reasons are explained below: Economic implications: The unemployment rate in a society can have significant implications for the economy. The more people that are unemployed or underemployed, the more money the government may have to spend to support them. Unemployment also means that individuals have less money to spend, which can affect the economy as a whole.
Social implications: Unemployment or underemployment can also have negative social consequences. Individuals who are unemployed or underemployed may experience social isolation, which can lead to mental health problems. This situation may also result in increased crime and social unrest.
Political implications: Unemployment can have significant political implications. If the unemployment rate is high, it can lead to political instability as people may demand change and solutions to the problem. Human implications: The most important reason why we are concerned about unemployment or underemployment is the human cost.
Unemployment can cause significant psychological stress and lead to feelings of low self-esteem, depression, and anxiety. The longer an individual is unemployed, the more challenging it can be to find a job.
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Branch Corp. uses a standard cost system to account for the costs of its one product. Variable overhead is applied using oirect labor hours. Standards allowed for each unit are 2.9 hous of iabor at a variable overhead rate of $10. During November, Eranch Corp produced 2,250 units. Payroll totaled $97790 for 7140 hours worked. Variable overhead incurfed totaled $73,630. a. Calcialife the variable overhead rate vanance (Do not round your intermediate calculations. Indicate the effect of variance by selecting "Favorable", "Unfavoroble", or "None" for no effect (i.e., zero variance).) b. Calculate the variable overhead efficiency variance. findicate the effect of variance by selecting "Fovorable", "Untavorable", or "None" for no effect (i.e., zero variencel)
Standard cost accounting is a costing method in which standards or predetermined costs are set for different activities or processes. The method is a tool for planning and control. Standard cost accounting is widely used in manufacturing companies that produce large quantities of homogeneous products.
Variable overhead efficiency variance measures the impact of actual production on variable overhead cost. Variable overhead efficiency variance = (Actual hours worked − Standard hours allowed) × Standard variable overhead rate Variable overhead efficiency variance = (7140 − (2.9 × 2250)) × $10 Variable overhead efficiency variance
= $11,250
Favorable variable overhead efficiency variance of $11,250 indicates that less time was taken by workers to complete the actual production as compared to the standard time. Therefore, the actual variable overhead cost was lower than the standard variable overhead cost, which is favorable for the company.
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The National Bank of Anywhere desires to hold 20 percent reserves and has excess reserves of $40000. What is the maximum amount of additional loans that the bank can extend? $200000 $8000 $32000 $40000
The maximum amount of additional loans that the bank can extend is $160000
To determine the maximum amount of additional loans that the National Bank of Anywhere can extend, we need to calculate the total reserves required based on the desired reserve ratio and the excess reserves available.
The desired reserve ratio is given as 20 percent, which means the bank wants to hold 20 percent of its deposits as reserves.
The excess reserves are provided as $40,000.
To calculate the total reserves required, we divide the excess reserves by the desired reserve ratio:
Total reserves required = Excess reserves / Desired reserve ratio
Total reserves required = $40,000 / 0.20
Total reserves required = $200,000
The total reserves required represent the total amount of deposits that the bank must hold as reserves. Since the bank already has $40,000 in excess reserves, the maximum amount of additional loans that the bank can extend is equal to the difference between the total reserves required and the excess reserves:
Maximum additional loans = Total reserves required - Excess reserves
Maximum additional loans = $200,000 - $40,000
Maximum additional loans = $160,000
Therefore, the correct answer is $160,000.
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For 2012, the New Products Division, of Testar Company, had operating income of $9,600,000 and operating assets of $46,400,000. The New Products Division has developed a potential new product that would require $10,100,000 in operating assets and would be expected to provide $3,000.000 in operating income each year. Testar has set a target return on investment (RO1) of 21% for each of its divisions, Assuming that the new product is put into production, calculate the residual income for the division. Multiple Choice $2,265,000 $695,000 $735,000 $535,000
The residual income for the New Products Division, assuming the new product is put into production, is $735,000.
Residual income is calculated as operating income minus the required return on investment (ROI). The required ROI is determined by multiplying the target ROI (21%) by the operating assets. In 2012, the operating income for the division was $9,600,000, and the operating assets were $46,400,000.
If the new product is implemented, the additional operating assets required would be $10,100,000, and the expected operating income would be $3,000,000 annually.
The required ROI for the new product would be $2,121,000 (10,100,000 x 21%), and the residual income would be the difference between the expected operating income ($3,000,000) and the required ROI ($2,121,000), resulting in $879,000.
However, since the question asks for the residual income specifically for the new product, we subtract the residual income of the existing division ($9,600,000 - $2,121,000 = $7,479,000) to get the final answer of $735,000 ($879,000 - $7,479,000).
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Define the concept of agency in the context of commercial law. What is meant by Actual authority and Apparent authority, support your answers by drawing on specific examples. Discuss at least three advantages and disadvantages of the agency relationship.
Agency is a relationship in which a person (the agent) is appointed by another person (the principal) to act on their behalf. The agent acts on behalf of the principal with actual or apparent authority.
The concept of agency in the context of commercial law refers to a legal relationship where one person (the agent) acts on behalf of another person (the principal). There are two types of authority that agents can have: actual authority and apparent authority.Actual authority refers to the authority that the agent has been given directly by the principal. This can be expressed (such as in a contract) or implied (such as by the agent’s actions).
If a principal gives a car dealership the impression that a salesperson is authorized to offer discounts on their behalf, the salesperson has apparent authority to offer those discounts to customers. However, if the principal later denies that the salesperson had that authority, the dealership may not be able to enforce the discounts.
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What is does the "spot price" refer to? The price at which a long position can buy (for calls) the asset. The actual price of an underlying asset. The value of an option (premium). The strike price at the expiration of an option.
The "spot price" refers to the actual price of an underlying asset. In commodities trading, the spot price refers to the price of a commodity that is available for immediate delivery, while in currency trading, the spot price refers to the price of a currency that is available for immediate delivery.
As a result, the spot price is an important consideration for investors who are looking to buy or sell an asset immediately. It can be influenced by a variety of factors, including supply and demand, economic data, geopolitical events, and market sentiment.
In financial derivatives trading, the spot price is often used as a reference point for determining the value of options and other financial instruments. In general, options become more valuable as the difference between the spot price and the strike price increases.
Therefore, the spot price can play a significant role in determining the value of an option or other financial instrument.
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G!aspen ine coerates a chan of doughnut shops. The company is considering two possele expansion plans. Plan A would open eight smallor shops at a cost of S8,740, cco. Expected anfual net cashinfown are $1,450,000 with zano residual vilue at the end of ten years. Under Plan B, Glascoe would open throe larger shops at a cost of $8,440,000. This plan is expected to generafe net cosh infiows of 51,300,000 per year for ten years, the estimated sle of the properties. Estimated residual value is $925,000. Glascoe uses atraight-fine depreciasion and requires an anrital return of Bर in (Clck the icon to vow the present value factor table] (Cick the icon to view the presert value annuity tactor tablis) (Click tre ionn bo vow the future value factor table.) (Cick the icon to viow the future valien arnuly factor tatio? Read the ceakiterneras. Requirement 1. Compute the paptack period, the AFR, and the NPV of these two ptans. What are the theoghs and weaknesses of these capital budgeting modes? Hegen by computing the payback seriod for both plans. (Rnund your antwers to one decitar phace) Plon A (in youm) Plan 8 (in yaars) Requirements 1. Compule the paytsck period, the ARR, and the NPV of these two plans. What at the ufbengts and weaknesses of these captal budgering models? 2. Which expansion puan sheuld ciancoe choose? Why? 3. Estimash Plar A's IRR. How does the IRR compare with the conpany's requized rate of return?
This is higher than the company's required rate of return of 8%. As a result, Plan A would be considered a good investment.
Compute the payback period, the AFR, and the NPV of these two plans.
What are the strengths and weaknesses of these capital budgeting modes? Begin by computing the payback period for both plans.
Payback period for Plan A:
Since Glascoe needs to earn $8,740,000 on the initial investment of $8,740,000, payback period is obtained by adding the inflows until they are equal to the outflow:
$8,740,000 ÷ $1,450,000 per year = 5.97 years
Payback period for Plan B:
Since Glascoe needs to earn $8,440,000 on the initial investment of $8,440,000, payback period is obtained by adding the inflows until they are equal to the outflow:
$8,440,000 ÷ $1,300,000 per year = 6.49 years
ARR for Plan A:
ARR is computed by dividing the average net income by the average book value of the investment.
(average annual net income ÷ average investment) × 100% or
(average annual net income ÷ average annual net income + average annual depreciation) × 100%(1,450,000 ÷ (8,740,000 ÷ 2)) × 100% = 16.67%ARR for Plan B:(1,300,000 ÷ (8,440,000 ÷ 2)) × 100% = 15.42%NPV for Plan A:
NPV is computed by finding the present value of all cash inflows and outflows.
$1,450,000 (PVIFAn-10, 8%) + $1,450,000 (PVIFAn-9, 8%) + ... + $1,450,000 (PVIFAn-1, 8%) - $8,740,000 = $22,739.68NPV for Plan B:
$1,300,000 (PVIFA10, 8%) + $925,000 (PVIF10, 8%) - $8,440,000 = $1,331,712.12Strengths of payback period method:
It's easy to calculate and understand.
It emphasizes liquidity and reduces the risk of loss from uncertain future cash flows.
It's useful for assessing risk and uncertainty of future cash flows.
Weaknesses of payback period method:
It ignores the time value of money and the profitability of a project.
It ignores cash flows beyond the payback period.
It doesn't measure value or wealth creation.
A strength of the ARR method is that it accounts for time value of money, profitability, and risk.
The method is simple to use and understand.
Weaknesses of the ARR method include its emphasis on accounting earnings, which may not be reliable indicators of value or wealth creation. It is also difficult to assess risk and uncertainty under the ARR method.
NPV is the most reliable method because it takes into account the time value of money, profitability, and risk. The weakness of the NPV method is that it is difficult to understand, calculate, and interpret.
Which expansion plan should Glascoe choose? Why?
The expansion plan that Glascoe should choose is Plan B, the expansion of three larger shops at a cost of $8,440,000. It has a positive NPV of $1,331,712.12, which is higher than the NPV of Plan A. It also has a lower payback period of 6.49 years, which is less than the payback period of Plan A.
The ARR for Plan A is 16.67%, while the ARR for Plan B is 15.42%.
Therefore, Plan B is the most profitable investment.3. Estimate Plan A's IRR. How does the IRR compare with the company's required rate of return?
IRR for Plan A is approximately 18%.
This is higher than the company's required rate of return of 8%. As a result, Plan A would be considered a good investment.
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When the Fed sells government securities to commercial banks: Group of answer choices
the reserve requirement of banks decrease.
the excess reserves of banks increase.
the federal funds rate decreases.
the total reserves of banks decrease.
When the Fed sells government securities to commercial banks, the excess reserves of banks decrease.
The sale of government securities by the Federal Reserve decreases the supply of money, making it more expensive. The Fed decreases the supply of money when it sells government securities to commercial banks. The reverse occurs when the Fed buys securities from banks, increasing the supply of money in the economy. Banks keep a portion of their deposits on reserve with the Federal Reserve Bank.
The reserve requirement is the proportion of a bank's deposit that must be kept on reserve. Banks have excess reserves, which are the deposits kept with the Federal Reserve Bank beyond the required reserve amount.
These reserves can be lent out to other banks that may need them. When the Federal Reserve sells government securities to commercial banks, the banks purchase them using their excess reserves, and the reserves decrease as a result. As a result, banks' capacity to lend out deposits to other banks decreases.
This also raises interest rates and reduces the amount of money in circulation.
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An important component of this course is providing you with a challenge to learn about (researching) and develop a solution to a problem that has not been covered in class. This is what happens every day in the real world. New problems pop up and the manager has to get as much information as possible about the problem (research) and then develop a solution to the problem- usually in a short period of time. Because there is a lot of material to be covered in this class and we had to spend the first two weeks refreshing our knowledge of basic accounting, we will combine the course project with an important textbook chapter that we did not have time to cover in class. Chapter 18. International Aspects of Financial Management After you have reviewed Chapter 18, go to the end of the chapter and read the case on page 615 - S&S Air Goes International Carefully work through the analysis of the company’s decision by answering the questions at the end of the case. and prepare a report to management. State your recommendations and explain clearly why you are making each recommendation. Make use of a database available through the LIRN system to discuss foreign exchange issues. Include this as a reference.
This report looks at the situation where S&S Air wants to expand their business overseas. One want to look at the company's situation and suggest how they can expand to other countries.
What is the solution to a problemS&S Air is thinking about expanding to other countries because of some reasons. We will look at how this decision might help us or hurt us, including what it will cost, how it will work, and how it fits into our long-term plans.
Foreign exchange is very important for businesses that expand globally. We will talk about how money from different countries affects S&S Air and how changes in exchange rates might affect how much money they make and how much they have available to spend.
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Analyse the risks and benefits of the public debt using the
appropriate modelling framework. The answer must be based on Burda
& Wyplosz (2009), Mishkin (2013), and Bowdler & Esteves
(2013).
Public debt is the amount of money that is owed by a government to its creditors. When a government takes on public debt, it is taking on an obligation to pay back the borrowed funds at a later date with interest. This can have both risks and benefits for a country, depending on how the debt is managed and used. The risks of public debt can include a number of factors.
One of the main risks is that if the debt burden becomes too large, it can lead to a sovereign debt crisis. This occurs when a government is no longer able to service its debt obligations and is forced to default on its loans. This can lead to a number of negative consequences, including higher interest rates, inflation, and a loss of confidence in the government's ability to manage its finances.
This can help to stimulate the economy and reduce unemployment. In conclusion, the risks and benefits of public debt depend on how it is managed and used. While excessive debt can lead to a number of negative consequences, if it is used wisely, it can be a valuable tool for promoting economic growth and social welfare.
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Imagine that you are building a website and answer the questions for each phase
Coding Phase:
How will divide the work between Design Team, Developers and Project Manager
How will you review the code?(at least 3 points)
How will you work collaborate with everyone?
How will you communicate?
Testing Phase:
Who will review? Add 3 group of people who can test your application and describe the role
How testing will be done?
1. Testing methods and what is it?
2. How long test will be done?
Maintenance Phase
How will you fix the bugs found?
How will you gather the feedback from user?
Who will maintain it ?
What will be the cycle of update or maintenance?
Coding Phase: To divide the work between the design team, developers, and project manager, I would assign specific tasks to each team member based on their skills and strengths. The design team would be responsible for creating the website's layout.
Color scheme, and overall visual appearance, while developers would handle coding the site's functionality. The project manager would oversee the entire process and ensure that everything is on track. For reviewing the code, I would do the following:
Use code review tools to scan the code for bugs, errors, and security vulnerabilities. Utilize automated testing to check the functionality of the website's features. Have other team members review the code to ensure that everything is working as intended.
To ensure that everyone is collaborating effectively, we would have daily stand-up meetings to discuss progress, challenges, and solutions. We would also utilize project management tools such as Trello or Asana to assign tasks and keep track of deadlines.
Testing Phase: Three groups of people who can test your application are: Beta Testers: These are real users who test the application in a live environment.QA Testers: These are trained professionals who test the application's functionality and usability.
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Curtis James Jackson III files for Chapter 7 bankruptcy. After all his assets have been sold and the proceeds distributed among his creditors, Curtis' remaining debts
a. paid by the court.
b. must be paid by Curtis .
c. are put on hold until Curtis has sufficient means to pay them.
d. are discharged .
Curtis James Jackson III who is better known by his stage name 50 Cent filed for chapter 7 bankruptcy. Chapter 7 bankruptcy is a type of bankruptcy that involves liquidation of assets.
The assets of the debtor are sold by the trustee, and the proceeds from the sale are distributed among the creditors. After the distribution of the proceeds, any remaining debts of the debtor are discharged. The answer is d) are discharged. This means that Curtis will not be required to pay these debts.Curtis James Jackson III’s bankruptcy shows that even the wealthiest of people can find themselves struggling with finances. The bankruptcy process involves selling the assets of the debtor to pay off creditors. Creditors are those who are owed money by the debtor. The remaining debts of the debtor are discharged which means that they are eliminated and the debtor does not need to pay them.Curtis’ bankruptcy case serves as a reminder that it is important to manage your finances and not overspend. Even those who have made millions of dollars can find themselves in debt if they do not manage their money well.
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Which of the following is a focus for microeconomics? Inflation Unemployment GDP Household decisions
Microeconomics is the field of economics that studies how individuals, households, and firms make decisions concerning the allocation of resources, as well as how they interact in markets. It is a part of economics that focuses on the economic behavior and actions of individual consumers, households, businesses, and industries and their impact on the economy.
The primary focus of microeconomics is on the demand and supply of goods and services in the market. It also looks at how households and businesses make decisions regarding the allocation of resources. In other words, it focuses on the small-scale economy and individual economic actors, including individual consumers and producers. The study of microeconomics seeks to understand the behavior of individuals and organizations in response to changes in the availability of resources and the demand for goods and services.
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microeconomics
Please briefly discuss your key takeaways from this class- what will help you be a better decision maker?
Microeconomics is a branch of economics that deals with the behavior of individuals and firms, and the distribution of goods and services within.
The key takeaways from this class are as follows. Microeconomics teaches us how to make decisions based on limited resources. One of the key takeaways from this class is that microeconomics teaches us how to make decisions based on limited resources.
This is an important skill that can help us be better decision makers in our personal and professional lives. By understanding the principles of microeconomics, we can learn how to allocate resources in a way that maximizes our satisfaction and helps us achieve our goals.
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olsen's contract with archer obligated olsen to pay archer $10,000. archer properly assigns the contract to able. at that time, able notifies olsen about the assignment. olsen, however, forgets and pays the $10,000 to archer rather than able. by this time, able is screaming for his money. but then archer goes into bankruptcy. in this case: group of answer choices olsen is liable to able for $10,000. able is out of luck because olsen performed his obligation by paying archer. olsen is liable to able not for the $10,000, but for his breach of the implied warranty that the assignor is solvent. able is out of luck because his notification was oral rather than written.
In this case, Olsen is liable to Able for $10,000.
How is Olsen liable?Olsen is liable because in the original agreement, he was entitled to pay Able the sum of $10,000. Now, we hae a situation whereby a mistake occurred in the course of payment.
The fact that Olsen made a mistake in this regard does not absolve him of the eed to still pay Able the agreed sum. Thus we can coclude that Olsen is liable to pay Able the sum of $10,000.
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Sage Company is operating at 90% of capacity and is currently purchasing a part used in its manufacturing operations for $18.00 per unit. The unit cost for the business to make the part is $21.00, including fixed costs, and $10.00, not including fixed costs. If 31,105 units of the part are normally purchased during the year but could be manufactured using unused capacity, the amount of differential cost increase or decrease from making the part rather than purchasing it would be a
a. $93,315 cost increase
b. $559,890 cost decrease
c. $248,840 cost decrease d. $248,840 costincrease
The answer to this question is the option C, that is $248,840 cost decrease.
In the given case, the company is operating at 90% capacity, and currently, it is purchasing a part that it is using in the manufacturing process. The company is purchasing the part for $18 per unit. But, the cost to make that part is $21 per unit, including fixed costs, and $10 per unit, not including fixed costs.
If the company purchases 31,105 units of that part during the year, the amount of differential cost incurred would be calculated as:
Cost to purchase = 31,105 × $18 = $559,890
If the company uses unused capacity to manufacture the parts, the cost would be calculated as follows:
Cost to make = 31,105 × $10 = $311,050
But, this cost includes the variable cost of $10 per unit plus the fixed costs, which the company is already incurring by operating at 90% capacity. Therefore, the differential cost for the company would be:
$559,890 - $311,050 = $248,840
This means that the company would save $248,840 by manufacturing the parts instead of purchasing them.
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Suppose that the average stock has a volatility of 42%, and that the correlation between pairs of stocks is 15%. Estimate the volatility of an equally weighted portfolio with: a. 1 stock b. 30 stocks c. 1,000 stocks
The question requires us to estimate the volatility of an equally weighted portfolio with 1 stock, 30 stocks, and 1000 stocks given that the average stock has a volatility of 42%, and that the correlation between pairs of stocks is 15%.a.
a. Estimating the volatility of an equally weighted portfolio with 1 stock
For a portfolio with one stock, the volatility of the portfolio is simply the volatility of the stock. Thus, the volatility of the portfolio is 42%.
b. Estimating the volatility of an equally weighted portfolio with 30 stocks:
For a portfolio with 30 stocks, the formula for estimating the portfolio volatility is:
σportfolio = [(1/n) * σ12 + (1/n) * σ22 + ... + (1/n) * σn2 + (2/n(n-1))]1/2
Thus, we can write:
σportfolio = [(1/n) * σ2 + (1/n) * σ2 + ... + (1/n) * σ2 + (2/n(n-1))]1/2
σportfolio = [(n/n) * σ2 + (2/n(n-1))]1/2
σportfolio = [σ2 + (2/(30*29))]1/2
σportfolio = [σ2 + 0.0024]1/2
σportfolio = (σ2 + 0.0024)1/2
For a portfolio with 1,000 stocks, using the formula from the previous part, we can write:
σportfolio = [(1/n) * σ12 + (1/n) * σ22 + ... + (1/n) * σn2 + (2/n(n-1))]1/2
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what holding period rate of return did an investor earn if an investor invested $1000 a year ago, and that investment is now worth $1,135? there were also cash payments received of $25 at the end of six months and $85 dollars at the end of the year.
The investor earned a holding period rate of return of 2.25%.
What is the holding period rate of return?To get holding period rate of return, we need to consider the initial investment, the final investment value, and any cash payments received during the holding period.
Given data:
Initial investment = $1,000Final investment value = $1,135Cash payments received = $25 + $85 = $110Total investment value = Initial investment + Cash payments received
= $1,000 + $110
= $1,110
Holding period rate of return:
= (Final investment value - Total investment value) / Total investment value
= ($1,135 - $1,110) / $1,110
= $25 / $1,110
= 0.0225225225
= 2.25%.
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Question 2: Many firms have unsuccessfully tried to develop global leaders. What are the characteristics of global leaders and why is it so difficult for leaders to be effective in an increasingly globalized world?
Global leaders are highly skilled professionals with outstanding abilities that are highly valuable in an international environment. These are individuals who understand the nuances of different cultures, values, and beliefs, and are capable of establishing good working relationships with people from various backgrounds.
Global leaders have a deep understanding of different cultures, religions, and beliefs. They are sensitive to these differences and can easily adapt to different cultures.Communication skills: Global leaders are excellent communicators who are proficient in a variety of languages. They have the ability to communicate effectively with people from different cultures.
Adaptability: Global leaders are adaptable and flexible. They can quickly adapt to changing situations, and they are comfortable working in different environments.Strategic thinking: Global leaders are strategic thinkers who can develop and execute effective plans. They have the ability to make decisions in complex and dynamic environments. They are also innovative and creative.Problem-solving: Global leaders are skilled at solving problems.
They can identify problems, analyze the situation, and develop effective solutions.The challenges of developing global leaders are numerous.
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Describe the difference between the current ratio and the acid test ratio. Which one do you think is more useful and why?
Current ratio and acid test ratio are both liquidity ratios that are used to determine a company's ability to pay off its current liabilities using its current assets. Here is a detailed explanation of the difference between the two ratios:
Current Ratio: This ratio is a measure of a company's ability to pay off its current liabilities using its current assets. It is calculated by dividing the company's current assets by its current liabilities. The current ratio measures the company's overall liquidity, including its inventory and prepaid expenses. It is expressed as a decimal or a ratio. A current ratio of 1:1 or above is generally considered healthy.
The Acid Test Ratio: The acid test ratio is a measure of a company's ability to pay off its current liabilities using its most liquid assets. It is calculated by dividing the company's current assets minus inventory and prepaid expenses by its current liabilities. This ratio is also known as the quick ratio or the liquid ratio. The acid test ratio is more conservative than the current ratio since it excludes inventory and prepaid expenses from current assets, which are not as liquid. A quick ratio of 1:1 or above is generally considered healthy. The acid test ratio is more useful than the current ratio in determining a company's short-term liquidity. The acid test ratio measures a company's ability to meet its short-term obligations using its most liquid assets. This ratio is a more conservative measure of a company's liquidity since it only takes into account its most liquid assets.
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Briefly explain the issue short-sellers had with GameStop (GME).
What happened to GameStop stock, and why the stock continues to
trade for more than its intrinsic value?
The issue short-sellers had with GameStop (GME) is that they bet against the stock and hoped to make a profit when the stock price went down.
A group of Reddit users on the subreddit WallStreetBets discovered that GameStop had a high amount of short interest, meaning many investors had bet against the company. They saw an opportunity to buy the stock and drive up the price, known as a short squeeze.
The short squeeze caused the stock price to skyrocket from around $20 per share to over $400 per share in just a few weeks. This increase in price was not due to any fundamental changes in the company's performance, but rather the result of a speculative buying frenzy driven by online communities like WallStreet Bets.
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What is the total liabilities immediately following a margin purchase of 50 shares at $80/ share given an initial margin of 50%. $4,000 $2,000 $1,000 not enough information to answer. Which of the following risks is not diversifiable? systematic risk non-systematic risk idiosyncratic risk total risk An In-The-Money (ITM) option.. is an option where the exercise price generates a positive cash flow for the short position. is an option where the exercise price generates a positive cash flow for the long position. generates a positive cash flow when exercised for call options and a negative cash flow when exercised for put options. generates a positive cash flow when exercised for put options and a negative cash flow when exercised for call options.
The total liabilities immediately following a margin purchase of 50 shares at $80/share, given an initial margin of 50% is $2,000. When an investor buys stocks on margin, they borrow part of the funds to purchase the shares from their broker. The broker requires a minimum amount to be deposited before the shares are purchased and this is called the initial margin.
In this case, the initial margin is 50%. Therefore, the amount of money required to purchase 50 shares is:
$80 x 50 = $4,000
The initial margin is 50%, therefore, the margin deposit is:
0.5 x $4,000 = $2,000
Therefore, the total liabilities are $4,000 - $2,000 = $2,000.
Systematic risk is not diversifiable. Idiosyncratic risk is a type of risk that is specific to a company, industry, market, economy, or country. Therefore, idiosyncratic risk can be diversified away by investing in a portfolio of securities. Non-systematic risk is a type of risk that can be eliminated by diversification because it affects a small number of assets. Total risk is the combination of systematic and non-systematic risk. An In-The-Money (ITM) option generates a positive cash flow when exercised for call options and a negative cash flow when exercised for put options. Therefore, the correct option is option (c).
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population increases that resulted from the baby boom of the 1950s and 1960s contributed to a
Population increases resulting from the baby boom of the 1950s and 1960s contributed to a variety of social, economic, and cultural changes.
The baby boom, a significant increase in birth rates following World War II, led to a substantial population growth in the 1950s and 1960s. This demographic shift had far-reaching effects on society. Economically, the increased population created a larger consumer market, driving demand for goods and services and stimulating economic growth. Socially, the baby boomers shaped the landscape of education, healthcare, and housing, as their large numbers required expanded infrastructure and services to accommodate their needs. Culturally, the baby boom generation influenced trends, attitudes, and values, leaving an indelible mark on art, music, fashion, and popular culture. The population increases resulting from the baby boom had profound implications across various aspects of society, shaping the subsequent decades in significant ways.
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The monthly Current Population Survey has been conducted every month since _____ and provides the best picture of the economy's unemployment situation.
The monthly Current Population Survey has been conducted every month since 1940 and provides the best picture of the economy's unemployment situation.
The Current Population Survey (CPS), conducted by the U.S. Census Bureau and the Bureau of Labor Statistics, is a widely recognized and authoritative survey that collects data on employment and unemployment in the United States. It has been conducted consistently since 1940, making it a valuable and reliable source of information for assessing the unemployment situation in the country.
The CPS employs a sample-based approach, surveying a representative sample of households to gather data on labor force participation, employment status, and unemployment. The survey asks individuals about their job status during a specific reference week, allowing for the calculation of key labor market indicators, such as the unemployment rate, labor force participation rate, and employment-to-population ratio.
Given its long history and regular frequency, the CPS provides a comprehensive and continuous record of the nation's employment and unemployment trends over time. Policymakers, economists, researchers, and analysts rely on the CPS data to assess the health of the labor market, identify employment patterns, and inform policy decisions. Its consistent methodology and long-running nature make it an essential tool for understanding the dynamics of the economy's unemployment situation.
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Given the following information, Determine the beta coefficient
for Stock L that is consistent with equilibrium: r^L=11.5%; rRF =
3.5%, rM = 9.5%?
a.
1.33
b.
1.50
c.
1.92
d.
1.19
e.
1.17
The beta coefficient for Stock L that is consistent with equilibrium can be determined as follows:
Beta coefficient is a number that indicates the level of stock or market sensitivity to movements. It is frequently used in the Capital Asset Pricing Model (CAPM) to compute an appropriate rate of return for an asset.
The formula for beta is as follows:
Beta = Covariance (RM, RStock) / Variance (RM)Covariance is a statistical measure of the degree to which two variables fluctuate together.
Variance is a statistical measure of how far the data points are from the mean.
Rm = 9.5% is the market return, while
Rf = 3.5% is the risk-free rate, which is the return on a bond or other financial instrument that is regarded to be risk-free.
The expected return on L stock is 11.5%.
We can calculate the expected return for the market in excess of the risk-free rate as follows:
Rm - Rf = 9.5% - 3.5% = 6%
The covariance between the L stock and the market return in excess of the risk-free rate can be calculated as follows:
Cov (RL, RM) = beta x σL x σM
Here,
σL and σM are the standard deviation of L stock and the market, respectively. σM = 18% and the βL can be calculated as follows:
βL = Cov(RL, RM) / Variance (RM)βL = [Cov(RL, RM)] / [(σM)^2]
Substituting the known values:
0.08 = βL * (0.18)^2βL = 0.08 / (0.18)^2βL = 0.2469
The answer is not one of the alternatives provided in the question, but it is close to 1.19 and can be rounded off to that.
The answer is (d) 1.19.
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Target Profit Forest Company sells a product for $90 per unit. The variable cost is $50 per unit, and fixed costs are $268,000. Determine (a) the break-even point in sales units and (b) the sales units required for the company to achieve a target profit of $83,080. a. Break-even point in sales units units b. Break-even point in sales units required for the company to achieve a target profit of $83,080 uni
Target Profit: Forest Company sells a product for $90 per unit. The variable cost is $50 per unit, and fixed costs are $268,000. Determine (a) the break-even point in sales units and (b) the sales units required for the company to achieve a target profit of $83,080.
Break-even point in sales units: The formula for calculating the break-even point is as follows: Break-Even Point (BEP) = Fixed Costs / Contribution Margin per Unit The contribution margin is $90 - $50 = $40 per unit. BEP = 268000 / 40 = 6,700 units.
The break-even point in sales units is 6,700 units. Break-even point in sales units required for the company to achieve a target profit of $83,080: The target profit of $83,080 is added to the company's fixed costs. After that, the calculation will be performed to find the new break-even point.
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with an increase in abstract, idealistic, and logical reasoning, adolescents demonstrate an increase in _______ behaviors.
With an increase in abstract, idealistic, and logical reasoning, adolescents demonstrate an increase in prosocial behaviors. Prosocial behaviors refer to actions and behaviors that are intended to benefit others or society as a whole, rather than focusing solely on one's self-interest.
During adolescence, individuals undergo significant cognitive and socioemotional development, which includes the advancement of abstract and logical thinking. As adolescents develop the ability to think hypothetically and consider multiple perspectives, they also start to demonstrate an increased capacity for empathy, moral reasoning, and understanding of social norms.
This cognitive growth and maturation contribute to the development of prosocial behaviors, which are actions intended to benefit others or society as a whole. Adolescents become more capable of understanding the consequences of their actions and recognizing the importance of cooperation, empathy, and moral values. They may engage in behaviors such as volunteering, helping others, displaying empathy, and demonstrating acts of kindness.
It is important to note that while many adolescents exhibit an increase in prosocial behaviors, individual differences exist, and external factors such as cultural influences and socialization play a role in shaping behavior during this developmental stage.
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