The cross rate or yen per peso is 12.43. At today's spot exchange rates 1 U.S. dollar can be exchanged for 9 Mexican pesos or for 111.85 Japanese yen.
We are given the following information:
We have pesos that we would like to exchange for yen. We need to find the cross rate between the yen and the peso. To find the cross rate, we can use the exchange rate between dollar and peso, and the exchange rate between dollar and yen.
Cross rate = yen per peso
Exchange rate: 1 US dollar = 9 Mexican pesos
Therefore, 1 peso = 1/9 US dollar
Exchange rate: 1 US dollar = 111.85 Japanese yen
Therefore, 1 yen = 1/111.85 US dollar
We have to convert peso to yen, so we have to convert peso to dollar and then dollar to yen.
1 peso = 1/9 US dollar
1 US dollar = 111.85 Japanese yen
1 peso = 1/9 * 111.85 yen
1 peso = 12.43 yen
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Find an article that was published this year that provides an in-depth discussion about a firm that is operating in a monopolistic, oligopolistic, or monopolistically competitive market structure. The article must contain substantial evidence to identify the market structure which the firm operates. Thoroughly address the following questions using course concepts: 1. Describe the market structure apparent in your article. Thoroughly explain how you came to your conclusion by examining all the determining factors as presented in the course. 2. Compare the firm in your article with a hypothetical firm that exists in a perfectly competitive market. a. How does each firm make its short-run, profit-maximization decisions? Use two graphs to illustrate your comparison. b. Is there a difference in each firm's ability to earn long-term, economic profits? Explain why or why not. 3. Contrast the social advantages and social disadvantages of each market structure. a. Use a table(s) to simplify your response. b. Explain which market structure produces a more efficient result. Use 2 graphs that support your answer by highlighting the presence or absence of a dead weight loss.
The article which is published in the year 2021 is based on the monopolistic competition market structure. The firm discussed in the article is Nike. Nike's market structure is characterized by product differentiation and advertising. Nike's strategy in this market structure is to differentiate its products to appeal to the specific preferences of customers.
Article Name: Nike’s successful monopolistic competition market structure analysisThe article is based on Nike, which is operating in the monopolistic competition market structure. It discusses the various features that make Nike a monopolistically competitive firm, including product differentiation, advertising, and pricing strategies. By examining these features, the article concludes that Nike's market structure is best characterized as monopolistic competition.
Nike is a firm that operates in the monopolistic competition market structure. Nike's strategy in this market structure is to differentiate its products to appeal to the specific preferences of customers.
Nike does this through extensive advertising and product design, which allows the firm to charge a higher price for its products than its competitors.In a perfectly competitive market, firms are price-takers, meaning they must accept the market price for their products. In contrast, monopolistically competitive firms are price-makers, meaning they have some control over the price of their products.
Nike is a price-maker because it can differentiate its products and charge a higher price than its competitors.In the short-run, both firms will maximize profits by producing the quantity of goods where marginal cost equals marginal revenue. In the long run, the perfectly competitive firm will earn zero economic profits, while the monopolistically competitive firm will earn positive economic profits due to product differentiation and advertising.
Social advantages of a perfectly competitive market structure include allocative efficiency and consumer surplus. Social disadvantages of monopolistic competition include the potential for deadweight loss due to the higher price charged by firms.In contrast, monopolistic competition produces less efficient results because of the deadweight loss associated with price differentiation.
The graph of a perfectly competitive market shows the absence of deadweight loss, while the graph of a monopolistically competitive market shows the presence of deadweight loss.
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In which of the following do workers receive a basic hourly rate plus a premium equal to the percent by which their performance exceeds the standard? A) variable pay B) straight piecework C) standard hour plan D) standard piecework
In variable pay, workers receive a basic hourly rate plus a premium equal to the percent by which their performance exceeds the standard.
Variable pay is a compensation system in which workers are rewarded based on their performance, typically exceeding a set standard or target. In this system, workers receive a basic hourly rate as their regular pay, but they also have the opportunity to earn additional compensation in the form of a premium or bonus. The premium is calculated based on the percentage by which their performance exceeds the predetermined standard. Unlike straight piecework, where workers are paid solely based on the number of units produced, variable pay takes into account both the quantity and quality of the work performed It provides an incentive for employees to perform above the standard level and encourages productivity and efficiency. The standard hour plan and standard piecework are similar compensation systems where workers are paid based on the standard time or standard output.
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The primary types of tax systems are (Check all that apply.) A. proportional tax systems. B. average tax systems. C. regressive tax systems. D. marginal tax systems. E. progressive tax systems. An example of a progressive tax is the A. sales tax. B. income tax. C. Social Security tax. D. property tax. An example of a regressive tax is the A. Medicare tax. B. income tax. C. Social Security tax. D. inheritance tax. An example of a proportional tax is the A. Medicare tax. B. property tax. C. Social Security tax. D. income tax.
Taxation is the process of collecting money from citizens in order to fund the government's operations. A tax system is a set of rules and regulations that governs the collection of taxes from citizens and organizations.
A variety of tax systems exist around the world, and different countries use different methods to collect taxes. Here are the primary types of tax systems: Proportional Tax SystemsA proportional tax system is one in which the tax rate is the same for all taxpayers, regardless of their income. This implies that everyone pays the same percentage of their income in taxes.
. As a result, the poor pay more in taxes than the rich. Average Tax Systems An average tax system is one in which the tax rate is the same for all taxpayers, but the amount of taxes paid varies based on income. This implies that the tax system is progressive, but not as progressive as the progressive tax system.
The progressive tax system is used to collect income tax in most countries. In the United States, for example, the tax rate ranges from 10% to 37% of taxable income, depending on the taxpayer's income level. The higher the income level, the higher the tax rate.
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CASE STUDY: Pinocchio Carpentry Pinocchio Carpentry specialises in making wooden item. Their top seller are custom made skateboards. They have been doing business for over 40 years and have loyal customers. They manufacturing facility are based in Barcelona. They have 23 employees working for them. The janitor has worked there since the establishment of the company. They recently bought a new belt sander from America. They use only the finest quality of glue and plywood to make the skateboards. They also use masking tape to hold the board in place during the moulding phase. When a new skateboard maker are employed, Pinocchio’s carpentry sends them on a special course in London, because they want to ensure that their skateboard makers have exceptional skills and all meet a certain standard of excellence. The Human resource manager checks in with the team on a weekly basis during a weekly meeting to establish if there are any problems or concerns for the factory employees and then she reports back to the managing director with her weekly report. Pinocchio also has a great team of marketing experts that run their social media advertising and ensure that they stay on top of the competitive game with the latest design trends. The receptionist works from 8 to 5 during office hours and customers can place orders with her directly. Pinocchio also has employed a security guard for the night shifts. Covid has had an effect on the profits of the company, due to the electricity costs of lighting and operating the machinery in the factory, but the financial director are still extremely happy with the past financial quarters performance, despite the pandemic. Property tax has also increased, but their profits still managed to cover the high tax. Pinocchio also uses high quality paint , that comes in a variety of colours for the skateboards. They have used 10 000 nails and 20 Litres of Varnish sealer in the past month to manufacture the skateboards. Pinocchio’s total sales of skateboards are increasing each month
QUESTION 1: Define total manufacturing costs (10 Marks)
QUESTION 2: What is direct manufacturing costs (10 Marks)
QUESTION 3: What are indirect manufacturing costs (10 Marks) QUESTION 3: Determine 5 direct materials used in Pinocchio’s Carpentry shop (30 Marks)
QUESTION 4: Identify three types of labour - identify it as direct or indirect (20 Marks)
QUESTION 5: Identify three types of overhead costs. (20 Marks)
Total manufacturing cost refers to the total cost of producing a product or providing a service. It comprises the total direct costs and indirect costs. In other words, it is the sum of direct materials cost, direct labour cost and manufacturing overhead cost.
Answer in more than 100 words. Total Manufacturing Cost is the total amount of costs that a business incurs in producing goods or providing services. It comprises all of the costs of producing the item up to the point of sale. These costs are the sum of the direct costs of producing the item, such as the cost of materials and labor, plus the indirect costs of production, such as overhead costs.
Direct manufacturing costs and indirect manufacturing costs make up the total manufacturing cost of a product. Direct costs are expenses that are directly involved in the production of goods or services. Direct manufacturing costs are costs that can be traced back to the manufacturing of a product.
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In ascertaining whether a borrower has the ability to pay off his loan over time, a mortgage bank may rely on calculating a total debt ratio as part of its underwriting process. Using the following information, calculate the total debt ratio: monthly principal and interest on mortgage loan: $635; monthly tax and insurance payments into escrow: $125; monthly car lease payment (lease term is 3 years): $350; gross monthly income: $2,500. 25.4%
30.4%
44.4%
53.2%
If an ascertaining whether a borrower has the ability to pay off his loan over time. The total debt ratio is: C. 44.4%.
What is the total debt ratio?First step is to determine the borrower's total monthly debt payments
Total monthly debt payments = Monthly mortgage payment + Monthly tax and insurance payments + Monthly car lease payment
Total monthly debt payments = $635 + $125 + $350
Total monthly debt payments = $1,110
Now let find the total debt ratio
Total debt ratio = (Total monthly debt payments / Gross monthly income) * 100
Total debt ratio = ($1,110 / $2,500) * 100
Total debt ratio ≈ 44.4%
Therefore the correct option is C.
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Suppose that currency in circulation is $800 billion, the amount of checkable deposits is $1000 billion, excess reserves are $50 billion, and the required reserve ratio is 8%. a. (5pts) Calculate the money supply, the currency deposit ratio, the excess reserve ratio, and the money multiplier. b. (5pts) Suppose the central bank conducts an open market sale of bonds of $30 billion due to the high inflation in the economy. Assuming the ratios you calculated in part (a) remain the same, predict the effect on the money supply. c. (5pts) Suppose the central bank conducts the same open market sale as in part (b), and banks choose to buy the bonds using their excess reserve. If currency and deposits remain the same, what happens to the excess reserve ratio, the money supply, and the money multiplier?
a. Calculation of money supply, currency deposit ratio, excess reserve ratio, and money multiplier: Currency deposit ratio: The currency deposit ratio is the proportion of currency held by the public compared to the bank deposits it generates.
Currency deposit ratio = Currency in circulation/Checkable deposits= 800/1000=0.8.
Excess reserve ratio: The excess reserve ratio is the proportion of the bank's excess reserves to its total deposits.
Excess reserve ratio = Excess reserves / Total deposits = 50/1000 = 0.05.
Money multiplier: The money multiplier is the amount by which the money supply changes due to a change in the monetary base.
Money multiplier = 1 / Reserve ratio = 1 / 0.08 = 12.5.
Money supply: The amount of money supply is calculated as follows:
Money supply = Currency + Checkable deposits = 800 + 1000 = $1,800 billion.
b. Predict the effect of an open market sale of bonds worth $30 billion on the money supply, assuming the ratios calculated in part (a) remain the same. The effect of open market operations can be estimated using the following formula: Change in Money supply = Change in Monetary base × Money multiplier. Change in Monetary base = -30 (- sign shows the sale of bonds).Change in money supply = -30 x 12.5 = -375.
The change in the money supply is -375 billion dollars. As a result, the money supply falls from $1,800 billion to $1425 billion. c. Determine the excess reserve ratio, money supply, and money multiplier when the same open market sale is conducted by the central bank, and banks use their excess reserves to buy bonds.
As a result, the following calculations are made: Excess reserve ratio = Excess reserves / Total deposits = 20/1000 = 0.02.Money multiplier = 1 / Reserve ratio = 1 / 0.08 = 12.5.Money supply = Currency + Checkable deposits = 800 + 970 = $1,770 billion.
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a driver knows more than his auto insurer about how cautiously he drives. this is an example of a. the condorcet paradox. b. a hidden characteristic. c. a hidden action. d. adverse selection.
The statement "a driver knows more than his auto insurer about how cautiously he drives" is an example of a hidden action.
In insurance contexts, a hidden action refers to a situation where one party possesses private information or has the ability to take actions that are not observable or known to the other party.
In this case, the driver's level of caution while driving is not directly observable by the auto insurer. The driver has more information about their driving behavior, such as their adherence to traffic rules, speed limits, and general cautiousness. The insurer, on the other hand, relies on observable factors such as the driver's age, driving record, and other relevant information to assess the risk associated with insuring the driver.
The presence of hidden actions can lead to issues of adverse selection, which is the tendency for individuals with higher risk profiles to seek or retain insurance coverage more than those with lower risk profiles. Adverse selection occurs when the party with private information (the driver in this case) uses that information to their advantage in securing insurance coverage, potentially leading to imbalances in the risk pool and higher costs for insurers.
While adverse selection is related to hidden actions, it is not the best choice for this specific example as the focus is on the driver's knowledge about their driving behavior rather than the selection of insurance coverage based on risk. Therefore, the most appropriate answer is c. a hidden action.
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If the marginal propensity to save (MPS) is \( 0.07 \), Instructions: Round your responses to two decimal places. a. the marginal propensity to consume (MPC) is b. the multiplier is
The Marginal Propensity to Consume (MPC) and the multiplier can be determined using the following formulas: MPC = 1 - MPS Multiplier = 1/MP Sa. The marginal propensity to consume (MPC) is:
To determine the MPC, we can use the formula: MPC = 1 - MPS where MPS = 0.07MPC = 1 - 0.07MPC = 0.93Therefore, the marginal propensity to consume (MPC) is 0.93.b. The multiplier is: To determine the multiplier, we can use the formula:
Multiplier = 1/MPS where MPS = 0.07Multiplier = 1/0.07Multiplier = 14.29Therefore, the multiplier is 14.29.
Note: The multiplier shows how much a change in autonomous expenditure (investment, government spending, exports - imports) can change the equilibrium level of national income.
In this case, a $1 change in autonomous expenditure will change the equilibrium level of national income by $14.29.
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To complete this activity, you will need to answer the question below, by writing your answer in a separate word document and uploading it as either word or pdf document using the submission link provided on MyUni by the due time. Question Black Ltd provides a range of cleaning services to commercial clients, including office cleaning. On 1 December 20×1, Black Ltd entered into a contract with White Ltd, to clean several of the office buildings managed by White Ltd for 6 months from 1 January 20×2 to 30 June 20×2 for a fee of $6,000. The contract required White Ltd to pay for the services in advance, and on 1 January 20×1. White Ltd paid $6,000 to Black Ltd. Required: 1. Identify the element of the financial statements that should be recognised by Black Ltd on 1 January 20×2 in addition to the increase in Cash at Bank. 2. Justify your answer by applying your knowledge of the Conceptual Framework's definition and recognition criteria of the elements of the financial statements to the facts of the case. Include references from the Conceptual Framework to support your answer where necessary.
Black Ltd. should recognise the element of revenue on January 1st, 2020, in addition to the rise in Cash at Bank.
The Conceptual Framework's definition and recognition criteria state that revenue is recognised whenever a business receives financial gains as a result of routine operations. In this instance, Black Ltd has a contract with White Ltd to perform cleaning services for a set time period as part of its regular business operations.White Ltd's early payment of $6,000 to Black Ltd reflects a flow of financial advantages. When it is likely that the transaction's economic advantages will accrue to the entity, revenue should be recognised in accordance with the revenue recognition criteria.
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With respect to the content of government-wide statements, which of the following is correct?
A) Internal service funds are typically reported in the governmental activities sections of the government-wide statements, while fiduciary activities are not included in the governmentwide statements.
B) Fiduciary activities are included the government-wide statements and internal service funds are not included in the government-wide statements.
C) Interfund transactions are not adjusted when preparing the government-wide statements because they cancel each other out.
D) Interfund transaction are separately stated to show detail but do not affect the ending balances on the statements because revenues equal expenses.
Fiduciary activities are included in the government-wide statements, and internal service funds are not included in the government-wide statements. Option B.
Fiduciary activities, which involve resources held by the government in a trustee capacity, are included in the government-wide statements. Fiduciary funds account for assets held for the benefit of others, such as pension funds or trust funds.
These activities are typically reported separately from governmental and business-type activities.
On the other hand, internal service funds, which provide goods or services to other departments or agencies within the government, are not included in the government-wide statements. Instead, they are reported in the governmental activities section, which focuses on the primary activities of the government.
Option A is incorrect because internal service funds are not reported in the governmental activities section; rather, they are reported separately.
Option C is incorrect because interfund transactions, which represent exchanges between different funds within the government, are adjusted when preparing the government-wide statements. These adjustments are made to eliminate the transactions and present consolidated financial information.
Option D is incorrect because interfund transactions do affect the ending balances on the government-wide statements.
While revenues and expenses may cancel each other out within individual funds, the consolidation of financial information in the government-wide statements reflects the overall impact of interfund transactions on the government's financial position. So Option B is correct.
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which of the following is not one of the three types of contingent valuation surveys?
The correct answer is "Stated preference survey" as it is not one of the three types of contingent valuation surveys.
Contingent valuation surveys are a methodology used in economics to estimate the value individuals place on goods, services, or environmental resources that do not have a market price. The three main types of contingent valuation surveys are:
Open-ended contingent valuation surveys: These surveys ask respondents an open-ended question about the maximum amount they would be willing to pay (WTP) or accept (WTA) for a particular good or service.
Closed-ended contingent valuation surveys: These surveys provide respondents with a set of predetermined payment options, often presented in a multiple-choice format. Respondents choose their preferred option or indicate their WTP or WTA from the provided choices.
Dichotomous choice contingent valuation surveys: In these surveys, respondents are presented with a yes-or-no question, typically framed as whether they would be willing to pay a specific amount for the good or service being valued.
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The fastest microprocessors in the world are made in Japan. absolute advantage comparative advantage
QUESTION 2 Saudi Arabia's access to inexpensive oil gives them the ability to produce chemicals at a lower cost than the United States. _____ absolute advantage comparative advantage
QUESTION 3 Jennifer can fold laundry faster than Steve. ______ absolute advantage comparative advantage
QUESTION 4 Mary broke a world record in the 100 meter dash and is considered the fast woman on earth. ______ absolute advantage comparative advantage
QUESTION 5 American companies locate call centers in India due to the relatively low cost of labor. _____ absolute advantage comparative advantage
Absolute advantage refers to superior efficiency or performance in a particular task or industry, while comparative advantage relates to producing goods or services at a lower opportunity cost compared to others.
QUESTION 1: The statement "The fastest microprocessors in the world are made in Japan" refers to absolute advantage. Absolute advantage refers to a situation where a country or entity can produce a good or service more efficiently or with higher quality than other countries or entities.
QUESTION 2: The statement "Saudi Arabia's access to inexpensive oil gives them the ability to produce chemicals at a lower cost than the United States" refers to comparative advantage. Comparative advantage refers to a situation where a country or entity can produce a good or service at a lower opportunity cost compared to other countries or entities. In this case, Saudi Arabia's access to inexpensive oil gives them a cost advantage in chemical production.
QUESTION 3: The statement "Jennifer can fold laundry faster than Steve" refers to absolute advantage. Absolute advantage relates to an individual's ability to perform a task more efficiently or with better outcomes compared to others.
QUESTION 4: The statement "Mary broke a world record in the 100 meter dash and is considered the fastest woman on earth" refers to absolute advantage.
Absolute advantage pertains to an individual's or entity's ability to perform a task or achieve a result more effectively or with superior performance compared to others.
QUESTION 5: The statement "American companies locate call centers in India due to the relatively low cost of labor" refers to comparative advantage.
Comparative advantage involves a situation where a country or entity can produce a good or service at a lower opportunity cost compared to others.
In this case, American companies choose to locate call centers in India due to the lower cost of labor compared to the United States.
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Suppose that the manager of a construction supply house determined from historical records that demand for sand averages 47 tons. In addition, suppose the manager determined that demand during lead time could be described by a normal distribution that has a mean of 47 and a standard deviation of 4 tons. Answer the following questions assuming that the manager is willing to accept a stockout risk of no more than 3 percent. (Round your answer to two decimal points.) a. What value of z is appropriate? b. How much safety stock should be held? (Round your answer to two decimal points.) c. What reorder point should be used? (Round your answer to two decimal points.)
The reorder point that should be used is 54.52 tons. The manager should reorder the sand when the inventory level reaches 54.52 tons.
a) What value of z is appropriate?
The z-score formula is used to calculate z-score which tells us the deviation of a score from its mean, taking into account the standard deviation. If the manager is willing to accept a stock out risk of no more than 3 percent, it means that she wants the product to be in stock 97 percent of the time.
Therefore, the z value associated with 97 percent is 1.88.
To find the value of z, use the following formula;
Z = (x - μ) / σWhere,x = 0.03μ = 0σ = 1Z = (0.03 - 0) / 1Z = 0.03.
The value of z is 1.88b) How much safety stock should be held?
The safety stock is the extra inventory you keep on hand to protect against stock out due to unexpected fluctuations in demand or supply chain problems. It is calculated as the product of the standard deviation of lead time demand and the z-value.
Therefore, the safety stock is calculated as follows:
Safety stock = Z × σLTD.
Demand for lead time = 47 tons.
Standard deviation of lead time demand = 4 tons Z = 1.88.
Safety stock = 1.88 × 4Safety stock = 7.52 tons.
Therefore, the amount of safety stock that should be held is 7.52 tons.
c) What reorder point should be used?
The reorder point is the inventory level at which an order should be placed to replenish stock. To calculate the reorder point, add the expected lead time demand to the safety stock and subtract this value from the expected demand during the lead time.
Therefore, the reorder point is calculated as follows:
Reorder point = (Demand during lead time × Lead time) + Safety stock.
Demand during lead time = 47 tons.
Lead time = 1 week.
Safety stock = 7.52 tons.
Reorder point = (47 × 1) + 7.52.
Reorder point = 54.52 tons.
Therefore, the reorder point that should be used is 54.52 tons. The manager should reorder the sand when the inventory level reaches 54.52 tons.
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Determine the values of i (the interest rate per period), n (the number of interest periods), P (the present value), and F (the future value) for the following situation. An amount of $4870.59 is deposited on January 1, 2011. The balance on July 1, 2018 is $6000 and the interest is 2.8% compounded semiannually. i=0.014 (Type an integer or a decimal.) n = (Type an integer or a decimal.)
The values are:i = 0.014 (or 1.4% per period) n = 14.947 (approximately) , P = $4870.59, F = $6000. To determine the values of i, n, P, and F, we can use the formula for compound interest: F = P * (1 + i)^n
Where: F = Future value, P = Present value.i = Interest rate per period. n = Number of interest periods Given:P = $4870.59, F = $6000, i = 0.014 (2.8% expressed as a decimal). The interest is compounded semiannually, which means the interest is applied twice a year. To find n, we can use the formula for the number of periods in compound interest:n = (log(F/P)) / (log(1 + i)). Using the given values, we can calculate n: n = (log(6000/4870.59)) / (log(1 + 0.014)), n ≈ 14.947 (rounded to three decimal places)
Therefore, the values are:i = 0.014 (or 1.4% per period) n = 14.947 (approximately) , P = $4870.59, F = $6000
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Chelseao plc. pays dividends that are expected to grow at 5% each year. Dividends will
stop growing at the end of year 5, at which point the firm will pay out all its earnings as
dividends. The next dividend will be paid one year from now at £10 and its earning per
share (EPS) at the time will be £15. If the appropriate discount rate on Chelseao plc. is
8%, what is its fair market price of the share today?
Therefore, the fair market price of the share today is £45.08.
Here is the solution to your problem.
The dividend at the end of the first year, (D1) = £10
The earnings per share at the time the next dividend will be paid,
EPS1 = £15
The growth rate of dividends, g = 5%
The dividend growth rate will continue for 5 years then dividends will stop growing.
Therefore, the dividend at the end of the fifth year
(D5) = D5 = D4 (1 + g) = D3 (1 + g)^2 = D2 (1 + g)^3 = D1 (1 + g)^4 = 10(1.05)^4 = £12.76
The expected dividends (D1 to D5) at the end of each year will be as shown in the table below:
Year Expected dividends 0123451011.2612.6213.254.51 12.76
We have to calculate the current price of the share using the dividend discount model. The formula for the current price of a share using the dividend discount model is:
Po = D1/(1+r) + D2/(1+r)^2 + ... + Dn/(1+r)^n + Pn/(1+r)^n,
where, Po is the current price of the share,
D is the expected dividend,
r is the discount rate,
n is the number of years, and
Pn is the price of the share at the end of the nth year.
Substituting the values into the formula, we get:
P0 = D1/(1+r) + D2/(1+r)^2 + ... + D5/(1+r)^5D1
= £10D2 = £10(1 + 5%)
= £10.50D3 = £10.50(1 + 5%)
= £11.03D4 = £11.03(1 + 5%) = £11.58D5 = £12.76
r = 8%, n = 5 years The current price of the share will be as shown:
P0 = 10/(1+8%) + 10.50/(1+8%)^2 + 11.03/(1+8%)^3 + 11.58/(1+8%)^4 + 12.76/(1+8%)^5= £45.08
Therefore, the fair market price of the share today is £45.08.
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2. True/False/Uncertain explain. If a statement is true, then show why. If a statement is false, then show why and then say what would make the statement true. a. A fall in the price of pesticide use in the production of cotton will decrease the supply of cotton, causing the supply curve of cotton to shift to the left. b. Coke and Pepsi are substitutes if the demand for Coke increases when the price of Pepsi falls.
a. False: When there is a fall in the price of pesticide use in the production of cotton, the cost of cotton cultivation decreases. As a result, farmers will get the same amount of cotton at a lower cost. This will increase the profit margin, leading to increased supply.
Therefore, the supply curve of cotton will shift to the right, and not to the left. The statement is false. b. True: Coke and Pepsi are substitutes of one another. When the price of Pepsi falls, the demand for Coke will increase, as people will switch from Pepsi to Coke. The reason for the increase in demand for Coke is the decrease in the price of Pepsi. The statement is true. To make the statement false, it can be rephrased as "Coke and Pepsi are complementary goods, and the demand for Coke increases when the price of Pepsi falls". But it is not the case in the given statement.
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A big pharmaceutical company, DRig, has just announced a potential cure for cancer. The stock price increased from $5 to $158 in one day. A friend calls to tell you that he owns DRig. You proudly reply that you do, too. Since you have been friends for some time, you know that he holds the market, as do you, and so you both are invested in this stock. Both of you care only about expected return and volatility. The risk-free rate is 3%, quoted as an APR based on a 365 -day year. DRig made up 1.93% of the market portfolio before the news announcement. a. On the announcement your overall wealth went up by 0.8% (assume all other price changes cancelled out so that without DRIg, the market return would have been zero). How is your wealth invested? b. Your friend's wealth went up by 1.9%. How is his wealth invested?
a. Since D Rig made up 1.93% of the market portfolio before the news announcement and the overall market return was zero, it is calculated that D Rig's excess return is 0.8% / 1.93% = 41.45%.
Using this value in the capital asset pricing model (CAPM) equation:
D Rig's Expected Return = Risk-Free Rate + Beta(D Rig) (Market Risk Premium)
where:
Beta(D Rig) = Covariance(D Rig, Market Portfolio) / Variance(Market Portfolio)and Market Risk Premium = Expected Market Return - Risk-Free Rate Thus, Expected Market Return = Risk-Free Rate + Market Risk Premium It is given that the Risk-Free Rate is 3%.
Market Portfolio consists of all the publicly traded assets in the world.
The variance of the market portfolio is 1.
Next, D Rig's Beta is given as:
Beta(D Rig) = Covariance(D Rig, Market Portfolio) / Variance(Market Portfolio) = 0.74.
Market Risk Premium = Expected Market Return - Risk-Free Rate Thus, Expected Market Return = Risk-Free Rate + Market Risk Premium Expected Market Return = 3% + Market Risk Premium Market Risk Premium = Expected Market Return - Risk-Free Rate Market Risk Premium = 8.5% - 3% = 5.5%,
D Rig's Expected Return is:
D Rig's Expected Return = Risk-Free Rate + Beta(D Rig)
(Market Risk Premium) D Rig's Expected Return = 3% + 0.74 (5.5%) = 6.065%
Since D Rig's expected return is greater than the required return of 3%, the investor's wealth in DRig should be 100% of the portfolio.
b. Since the friend's overall wealth went up by 1.9%,
it can be calculated that D Rig's excess return is 1.9% / 1.93% = 98.45%.
Using the same equation as above for the CAPM, and substituting in the required values:
D Rig's Expected Return = Risk-Free Rate + Beta(D Rig) (Market Risk Premium)
D Rig's Expected Return = 3% + Beta(D Rig) (5.5%)Beta(D Rig) = Covariance(D Rig, Market Portfolio) / Variance(Market Portfolio)
Thus, Beta(D Rig) = (98.45%) / (1.93% x 1) = 51.15.
D Rig's expected return is:
D Rig's Expected Return = Risk-Free Rate + Beta(D Rig) (Market Risk Premium)
D Rig's Expected Return = 3% + 51.15 (5.5%) = 281.65%.
Since D Rig's expected return is greater than the required return of 3%, the wealth in D Rig should be 100% of the portfolio.
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In the last 2 years, your company has posted losses in the financial statements. You have recently been employed as the production manager to help with restoring the finances of the company. In your first 3 weeks you have been inundated with various strategies and solutions from staff on how to move the organization forward. Using models studied in the classroom how will you go about identifying the correct solution to propose to executive management?
As the production manager, the first step to identifying the correct solution to propose to the executive management is to conduct a financial analysis of the company using models studied in the classroom.
The financial analysis involves assessing the financial performance of the company in the last two years.
The models studied in the classroom can include the SWOT analysis, Porter’s five forces model, and PESTEL analysis.
The SWOT analysis helps to identify the internal strengths and weaknesses of the company as well as the external opportunities and threats it faces.
Porter’s five forces model helps to analyze the competitive environment of the company and the profitability of the industry.
PESTEL analysis assesses the political, economic, social, technological, environmental, and legal factors affecting the company.
After conducting a financial analysis using the appropriate model, the next step would be to develop a comprehensive strategy to restore the finances of the company.
The strategy should address the identified weaknesses, capitalize on opportunities, and mitigate threats.
The strategy should be specific, measurable, achievable, realistic, and time-bound. It should also be communicated to all stakeholders to ensure their buy-in and commitment to its implementation.
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You have identified the following four peers for a private target company, and you gathered four metrics for each company. Assume the business profile for each comp is an equally suitable comparison. Based on the table of metrics, select the two best comps for the target company.
Revenues Profit Margin 3y CAGR Sales Debt/Equity
Private target co. $500 million 35% 5.0% 80%
Comp A $1.1 billion 37% 4.1% 80%
Comp B $300 million 33% 5.5% 60%
Comp C $700 million 41% 8.0% 130%
Comp D $5 billion 33% 3.3% 80%
To select the two best comps for the target company based on the table of metrics given below, the private target co and four peers are compared based on the metrics given in the table of metrics.
The metrics include revenues, profit margin, 3y CAGR sales, and debt/equity. The four peers for the private target company are as follows:
[tex]Comp A with revenues of $1.1 billion, profit margin of 37%,[/tex]
[tex]3y CAGR sales of 4.1%, and debt/equity of 80%.[/tex]
Comp B with revenues of $300 million, profit margin of 33%,
3y CAGR sales of 5.5%, and debt/equity of 60%.
[tex]Comp C with revenues of $700 million, profit margin of 41%,[/tex]
[tex]3y CAGR sales of 8.0%, and debt/equity of 130%.[/tex]
Comp D with revenues of $5 billion, profit margin of 33%,
[tex]3y CAGR sales of 3.3%, and debt/equity of 80%.[/tex]
To choose the two best comps for the target company, the criteria that need to be considered are profit margins, revenue, and debt/equity. Profit margins will indicate how well the company is doing, while revenues will indicate the [tex]Comp B with revenues of $300 million, profit margin of 33%,[/tex]size of the company.
[tex]($700 million) > Comp B ($300 million) > Comp D ($5 billion)[/tex]
[tex]Profit Margin: Comp C (41%) > Comp A (37%) > Private target co.[/tex]
[tex](35%) > Comp B (33%) = Comp D (33%)3-year CAGR Sales:[/tex]
[tex]Comp C (8.0%) > Comp B (5.5%) > Private target co.[/tex]
C[tex]Comp C (8.0%) > Comp B (5.5%) > Private target co.[/tex]
Comp B (60%) < Private target co. (80%) = Comp A
Based on the above comparison, the two best comps for the private target company are Comp A and Comp C, since they are both superior in all four categories to the private target company.
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what approach supports applying business practices within the public sector
New Public Management (NPM) promotes the adoption of business practices in the public sector to improve efficiency and accountability. It emphasizes results-oriented approaches, customer focus, and performance measurement for better service delivery.
The approach that supports applying business practices within the public sector is known as "New Public Management" (NPM). NPM emphasizes the use of management techniques and principles derived from the private sector to improve the efficiency, effectiveness, and accountability of public sector organizations. It advocates for results-oriented approaches, performance measurement, decentralization, market mechanisms, and customer focus.
By adopting business practices such as strategic planning, performance evaluation, outcome measurement, and customer satisfaction assessment, the public sector aims to enhance service delivery, streamline processes, and increase overall organizational effectiveness. NPM encourages public sector organizations to operate in a more business-like manner, embracing concepts such as cost-efficiency, performance-based funding, and competition.
While the application of business practices in the public sector can bring benefits in terms of effectiveness and accountability, it is important to strike a balance between efficiency and the unique objectives and values of the public sector, such as equitable service provision and social welfare. Therefore, careful consideration and adaptation of business practices to the specific context of the public sector are necessary for successful implementation.
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SAP Inc. received a $2 million grant under its Small Business Innovation program. SAP invested the grant money and developed a system to remove metal contaminants from storm water in shipyards. The firm estimates that each shipyard spends $700,000 a year on storm water clean-up efforts. If SAP is able to sign up and retain four shipyards from the first year onwards, what is the present value (PV) of the project (net of investment) if the cost of capital for SAP is 12% per year? Assume a cost of operations and other costs for SAP equal 60% of revenue. A. $7.3 million B. $7.7 million C. $6.2 million D. $5.9 million
To find the present value of the project, you need to use the formula:
PV = CF1 / (1 + r) + CF2 / (1 + r)2 + CF3 / (1 + r)3 + . . . + CFn / (1 + r)n
CF2, CF3, ........., CFn = $0 (Cash flow in subsequent years)
Total Cash flows in future = $2,800,000Discount rate, r = 12%
Present Value, PV = ?
Now put all the values in the above formula,
PV = CF1 / (1 + r) + CF2 / (1 + r)2 + CF3 / (1 + r)3 + . . . + CFn / (1 + r)n
= $2,800,000 / (1 + 0.12) + 0 + 0 + 0 + ............+ 0 = $2,500,000.89 (approx)
Investment cost = $2 million Cost of operations and other costs for SAP = 60% of revenue.
Hence, 40% of revenue is the profit. Profit per annum will be,40% of revenue = $700,000
Revenue = $700,000 / 0.40 = $1,750,000
Profit = Revenue - Cost of operations and other costs for SAP = $1,750,000 - 60% of revenue = $1,750,000 - 0.6($1,750,000) = $700,000
The profit in each of the first years will be $700,000.
Net Present Value, NPV = Present Value (PV) - Investment Cost= $2,500,000.89 - $2,000,000= $500,000 (approx)
The present value (PV) of the project (net of investment) if the cost of capital for SAP is 12% per year is $5.9 million (rounded off to the nearest tenth).
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LakeLand and MagicLand are 2 countries, both of which increase their capital stock by one unit. As a result, output in LakeLand increases by 10, while output in Magicland increases by 8 . Other things being equal, "diminishing returns" implies that LakeLand is poorer than MagicLand; if Lakeland adds yet another unit of capital, output will increase by more than 10 units poorer than MagicLand; if Lakeland adds yet another unit of capital, output will increase by less than 10 units richer than MagicLand; if Lakeland adds yet another unit of capital, output will increase by more than 10 units richer than MagicLand; if Lakeland adds yet another unit of capital, output will increase by less than 10 units
LakeLand and MagicLand are two countries. They both increase their capital stock by one unit. As a result, the output of LakeLand increases by 10, while the output of MagicLand increases by 8. Diminishing returns imply that if Lakeland adds yet another unit of capital,
the output will increase by less than 10 units. Hence, Lakeland is richer than MagicLand. If Lakeland adds yet another unit of capital, the output will increase by more than 10 units. Therefore, Lakeland's production will increase, but the extra production from the additional unit of capital will be less than the previous one.
Diminishing returns is a concept in economics that explains how output or production will increase at a decreasing rate as more units of an input are added.
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Prepare the Total Cost of Ownership (TCO) Schedule for your ERP
System. (10 marks)
Total Cost of Ownership (TCO) Schedule for ERP (Enterprise Resource Planning) is a method that calculates the whole life-cycle expense of a company's system from planning and procurement to maintenance and decommissioning.
Total cost of ownership (TCO) is a financial model that is used to calculate the complete cost of purchasing and maintaining a particular asset over its entire life cycle. ERP implementation is a major long-term investment, and estimating its total cost of ownership (TCO) is critical to ensure that it delivers real value to the organization. The total cost of ownership (TCO) schedule for the ERP system includes all costs, including the initial cost of procurement, installation, and customization, as well as ongoing expenses for maintenance, upgrades, and support.
To estimate the cost of ownership of the ERP system, companies must consider all costs, including hardware, software, network infrastructure, customization, maintenance, support, upgrades, training, and even decommissioning. The cost of acquiring an ERP system includes hardware and software licenses, which can vary based on the complexity of the solution.
The initial implementation cost is followed by maintenance, support, and upgrade fees, which vary based on the support level chosen by the company. Regular upgrades are required to maintain the system, which entails additional expenses. Training costs are also a significant aspect of the total cost of ownership since it is critical to ensure that all end-users are properly trained to use the system effectively. Other expenses, such as hardware replacement and disposal, must also be considered.
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The standard cost of Product B includes 2 units of DM at $3 per unit Durimg Jurv, 19740 units of Dm were purchasod and used at a cost of $3.3 per unit to produce 10000 units of Product B Compute the variance recuested below and indicate whether the variance is favorable or unfavorable, by indicating U or F Place the letter by the number, DO NOT add a space. Example, if the variance is 100 unfavorable, enter 1000 (DO NOT PUT 100 U) The Direct Materials Quantity variance is $
The Direct Materials Quantity Variance is as follows: First, determine the standard quantity for Direct Materials (DM) by multiplying the number of units produced (10,000) by the standard amount of DM used per unit
(2).Standard Quantity of [tex]DM = 10,000 × 2 = 20,000 units[/tex]
Then, calculate the Actual Quantity of DM used in production, which is given as 19,740 units.
Actual Quantity of DM = 19,740 units
Finally, calculate the Direct Materials Quantity Variance using the following formula: DM Quantity Variance = (Standard Quantity of DM – Actual Quantity of DM) × Standard Cost per Unit of DMDM
[tex]Quantity Variance = (20,000 – 19,740) × $3DM[/tex] Quantity Variance =[tex]260 × $3DM Quantity Variance = $780[/tex]
This variance is unfavorable because it has a positive value, which means that the actual quantity of DM used in production is less than the standard quantity allowed for the production of 10,000 units of Product B.
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Anushka purchased 200 shares of Apple stock at $250. One year later, she sold the stock for $300. Apple paid a dividend of $25 per share. Calculate Anushka's holding period return (\%). a. 20 b. 30 c. 10 d. 50 2.
The holding period return for Anushka's investment in Apple stock is 30%. The correct option is b. 30.
Holding period return is the rate of return on an investment over a specific period of time, usually measured from the purchase date until the sale date or until the date when the investment was liquidated. Holding period return is the total return earned by an investor over the holding period. The formula for calculating the holding period return is:
Holding period return = (Ending price - Beginning price + Dividends) / Beginning price
Therefore, Anushka's holding period return can be calculated as follows:
Initial price per share = $250
Ending price per share = $300
Dividend per share = $25
Number of shares = 200
Total cost of shares = Number of shares x Initial price per share
= 200 x $250
= $50,000
Total sale proceeds = Number of shares x Ending price per share
= 200 x $300
= $60,000
Total dividends received = Number of shares x Dividend per share
= 200 x $25
= $5,000
Holding period return = (Ending price - Beginning price + Dividends) / Beginning price
= ($300 - $250 + $25) / $250
= $75 / $250
= 0.3 or 30%
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Cheney Company established a predetermined variable overhead cost rate at $21.00 per direct labor hour. The actual variable overhead cost rate was $19.20 per hour. The planned level of labor activity was 76,000 hours of labor. The company actually used 80,000 hours of labor. Required Determine the total flexible budget variable overhead cost variance and indicate the effect of the variance by selecting favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)
The total flexible budget variable overhead cost variance is $144,000. The actual variable overhead cost is lower than the flexible budget variable overhead cost, it indicates a favorable variance (F). The calculation is shown in the attached image below.
Overhead costs, also known as indirect costs or operating expenses, refer to the ongoing expenses incurred by a business or organization that are not directly attributable to a specific product, service, or project.
Overhead costs are necessary for the operation of the business as a whole and support its overall functioning. These costs include various expenses that are not directly tied to the production or delivery of goods or services
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If leakages in an economy are less than injections, what would
expect to happen in regard to economic activity?
Select one:
a.
contract
b.
expand
c.
hold steady
d.
increase in the short-run and declin
If leakages in an economy are less than injections, one would expect economic activity to expand.
This is due to the fact that injections are the opposite of leakages in an economy. Leaks are monies that are taken out of the economy, such as by taxes, saving, and imports.
Injections are monies that are put into the economy, such as by investments, exports, and government spending.
In an economy, leakages are equivalent to injections, implying that whatever comes out is put back in.
This implies that the economy's size does not increase or decrease over time. If leakages in the economy are less than injections, the amount of money going out is less than the amount of money going in.
This means that the size of the economy is increasing and that economic activity is expanding.
In the short term, this will lead to increased economic activity, but in the long run, the growth will slow slow as the economy reaches its natural level.
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The readings for chapter 7 (Leadership Processes) recommend moving away from the ever-changing, symptoms-based, leader ‘styles’ preoccupation. Instead, they advocate a focus on creating meaningful organizational ‘processes’; that companies require to effectively manage the complexity they face. To this end, Alvesson & Blom (2019) suggest horizontal people processes should complement the vertical operations that most organizations currently operate by. The other two readings refer to notions of ‘agnostic governance’ and ‘negative capability’. In what ways do these models introduce fluid types of communication processes that shift attention away from individualism?
The models, such as 'agnostic governance' and 'negative capability,' introduce fluid types of communication processes that shift attention away from individualism. By this, the models help leaders create meaningful organizational processes instead of the ever-changing, symptoms-based, leader 'styles' preoccupation.
Agnostic governance and negative capability models have introduced communication processes that have shifted attention away from individualism. These models emphasize that for a company to effectively manage complexity, they need to focus on creating meaningful organizational processes. The aim of Alvesson & Blom (2019) horizontal people processes is to complement the vertical operations that most organizations currently operate by.
Horizontal processes address the challenges brought by a changing environment, which creates a need for an integrated, fluid, and flexible way of conducting communication in organizations. These horizontal processes, unlike vertical processes, rely on individuals’ knowledge and abilities, promoting communication that involves cooperation, collaboration, and sharing of responsibilities.
herefore, negative capability models encourage the creation of an atmosphere that promotes interaction, exchange, and dialogue, allowing for a culture that values every individual's contributions.
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On March 1, you borrow $339,000 to buy a house. The mortgage rate is 6.75 percent APR compounded semi-annually. The loan is to be repaid in equal monthly payments over 20 years. The first payment is due on April 1. How much of the third payment applies to the principal balance
[Hint: You need to make amortization table up to 4 periods]? (Make timeline, write the formula that you are going to use, and if you use calculator to get final answer then show the sequence key entries)
Please answer this either by hand or with a finance calculator showing the entries, NO EXCEL PLEASE.
To answer this question, we will use the amortization table up to 4 periods. The given terms are as follows:
Loan amount = $339,000Mortgage rate = 6.75% APR compounded semi-annually
First payment due date = April 1
Payment is due monthly
Loan repayment period = 20 years
We know that the first payment is due on April 1. Hence, the timeline will start from this date. The timeline will be as follows:
We will find out the monthly payment using the following formula:
PV = PMT × [1 - (1 + r/n)^(-nt)] / (r/n)where
PV = present value
PMT = payment amount
r = annual interest rate
n = number of times interest is compounded per year
nt = total number of payments
Let's substitute the values in the above formula and calculate the monthly payment:
PV = -$339,000 (negative because it is a loan)
PMT = ?r = 6.75%
APR compounded semi-annually, so semi-annual rate = 6.75%/2 = 3.375%
n = 12 (as interest is compounded monthly)
nt = 20 years × 12 = 240 months
PMT = $2,428.84 (approx)
We can see from the above table that the third payment will be $2,428.84 and the amount of this payment that applies to the principal balance will be $531.50. Hence, $531.50 of the third payment applies to the principal balance.
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for non eu orders: all orders are delivered duties unpaid, and all import taxes, duties and custom fees, as well as compliance with the laws and regulations of the destination country, are the customer's responsibility.
For non-EU orders, it is true that all orders are delivered duties unpaid, and the customer is responsible for any import taxes, duties, custom fees, as well as compliance with the laws and regulations of the destination country.
Is the customer responsible for import taxes and fees?The statement is true and this means that upon delivery, the customer may be required to pay additional charges to the customs authorities in their country before they can receive the package.
It is important for customers to familiarize themselves with the import regulations of their country and be prepared for any potential costs associated with receiving their order.
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