The first joint-stock company and stock market were established through the financing of various colonies, most notably the Virginia Company, during the 1600s in England.
The Virginia Company was a joint-stock company established by King James I with the aim of colonizing the eastern coast of North America. Shareholders of the Virginia Company provided funds for the venture, and in return, they were entitled to a share of any profits.The company’s success led to other joint-stock companies being established for colonial ventures, and by the mid-1600s, there were many such companies in existence.
These companies led to the establishment of the first stock market, which was located in London, and it allowed shareholders to buy and sell shares in these companies. As for the Mississippi Bubble, it was a financial scheme initiated by John Law, a Scottish financier, in France in the early 18th century. The scheme involved the sale of shares in the Mississippi Company, a joint-stock company that Law established to develop the Mississippi River Valley. The company’s stock price rose dramatically, leading to a speculative bubble, but the bubble burst in 1720 when the price plummeted, leading to a financial crisis. Many investors lost their savings, and Law was forced to flee France to escape prosecution.
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item 11 a major credit card company is interested in whether there is a linear relationship between its internal rating of a customer’s credit risk and that of an independent rating agency.
The major credit card company is interested in examining whether a linear relationship exists between its internal rating of a customer’s credit risk and that of an independent rating agency.Item 11 in this case would require a regression analysis.
in order to determine whether or not the independent variable (credit rating from independent rating agency) can predict the dependent variable (internal rating of the customer's credit risk) in a linear fashion. This analysis would involve the following steps:Collect the data for the dependent and independent variables.Plot the data on a scatter plot to assess the linear relationship between the variables.
Calculate the correlation coefficient (r) to determine the strength of the relationship.Perform a regression analysis to develop a linear equation that can be used to predict the dependent variable using the independent variable.Evaluate the significance of the regression equation and the individual regression coefficients.A linear relationship between the internal rating of a customer’s credit risk and that of an independent rating agency would be useful for the major credit card company. If such a relationship exists, then the company can use the independent rating agency's ratings to improve their own internal ratings of customers' credit risk.
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The major credit card company wants to determine whether there is a linear relationship between these two variables. There are two variables involved here: internal rating and independent rating.
The major credit card company wants to determine whether there is a linear relationship between these two variables. Linear regression is an appropriate statistical tool for this type of analysis. The company can use regression analysis to determine the relationship between the internal rating of credit risk and that of the independent rating agency. They can collect a sample of customers from their database and compare their internal credit ratings with the ratings given by the independent agency. After obtaining the data, they can then perform a regression analysis to determine the correlation between the two variables and to test whether this correlation is statistically significant. The regression analysis will produce an equation that can be used to predict the independent rating based on the internal rating. If there is a strong linear relationship between the two ratings, the company can use this equation to predict the independent rating of other customers based on their internal rating.
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Question 4: Assuming that the expectations theory is the correct theory of the term structure, calculate the interest rates for maturities of one to five years, and plot the resulting yield curve for the following paths of one-year interest rates over the next five years:
i) 6%, 7%, 8%, 7%, 6%
ii)6%, 5%, 4%, 5%, 6%
b) How would your yield curves both in (i) and (ii) change if people preferred shorter-term bonds over longer-term bonds?
Maturity (Years) Interest Rates (%)1 6.002 6.883 7.3464 7.0275 6.805
Assuming that the expectations theory is the correct theory of the term structure, the long-term interest rate should equal the average of the expected future short-term rates. Given two paths of one-year interest rates over the next five years, we will calculate the interest rates for maturities of one to five years, and plot the resulting yield curve.
i) 6%, 7%, 8%, 7%, 6%The interest rates for maturities of one to five years will be as follows:
Maturity (Years) Interest Rates (%)1 6.002 6.883 7.3464 7.0275 6.805
Plotting the resulting yield curve gives: Yield Curve for i)
ii)6%, 5%, 4%, 5%, 6%The interest rates for maturities of one to five years will be as follows:
Maturity (Years) Interest Rates (%)1 6.002 5.873 5.6814 5.5735 5.567Plotting the resulting yield curve gives: Yield Curve for ii)
b)If people preferred shorter-term bonds over longer-term bonds, the yield curve would change. The yield curve would become upward-sloping or steeper than it would have been otherwise if investors preferred longer-term bonds over shorter-term bonds. The curve would become downward-sloping or flatter than it would have been otherwise if investors preferred shorter-term bonds over longer-term bonds.
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For the US economy in April 2022, the 12-month inflation
year-over-year based on the Consumer Price Index
(CPI) was…?
a. 6.24%
b. 7.83%
c. 14.15%
d. 3.89%
e. 8.20%
8. Which is not a goal of US macro
To provide the most accurate answer, I would need access to real-time data, which is beyond the knowledge cutoff of September 2021. However, I can provide you with information on the goals of US macroeconomic policy.
One goal of US macroeconomic policy is to achieve stable prices, which refers to keeping inflation in check and avoiding excessive price fluctuations. This helps to promote economic stability and maintain the purchasing power of the currency.
Another goal is to achieve full employment, which means maximizing employment opportunities and reducing unemployment rates. The aim is to ensure that a significant portion of the labor force is employed and productive, which contributes to economic growth and individual well-being.
A third goal is to promote sustainable economic growth. This involves fostering long-term economic expansion while maintaining stability and avoiding imbalances or unsustainable practices.
Lastly, policymakers strive for a stable and balanced external trade position, aiming to promote a favorable balance of trade and avoid excessive reliance on imports or exports.
It's important to note that the goals of US macroeconomic policy may vary depending on the specific economic conditions and priorities at any given time.
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T
orF
nts initially collect costs by some natural classificati on such as activities performed Companie s must assign all productio n-related costs to cost objects for external financial reporting purposes.
Above statement is True. initially collect costs by some natural classification such as activities performed.
Companies must assign all production-related costs to cost objects for external financial reporting purposes. In order to understand costs, companies must classify costs according to their nature and then assign these costs to the cost objects. Initially, costs are collected and grouped based on their natural classification, like the cost of raw materials, labor costs, and other expenses. Later on, companies must assign all production-related costs to cost objects for external financial reporting purposes. This is done to accurately measure the total cost of producing goods or services. Cost objects can be products, departments, jobs, or other activities, and the cost is assigned to the specific object in order to understand the total cost of that object.
In summary, natural classification is used initially to collect costs and companies must assign all production-related costs to cost objects for external financial reporting purposes.
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Which of the following are features of the corporate form of organization? (check all that apply)
Limited liability
Unlimited liability
Double taxation
Infinite life
Finite life
The features of the corporate form of organization are:Limited liability: Shareholders' liability is limited to the amount they have invested in the corporation.
Their personal assets are generally protected from the corporation's debts and liabilities.Double taxation: Corporations are subject to double taxation, meaning that the corporation itself is taxed on its profits, and then shareholders are taxed on the dividends they receive from the corporation.
Infinite life: A corporation has an indefinite or infinite life. It can continue to exist even if shareholders or key individuals associated with the corporation change or pass away.
Therefore, the correct features of the corporate form of organization are:
Limited liability
Double taxation
Infinite life
Unlimited liability and finite life are not features of the corporate form of organization.
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tell me about a time when you demonstrated self-leadership, noting each stage in the process (stages means activities of self leadership) (each of the practices)
Self-awareness is the foundation of self-leadership. It involves understanding one's strengths, weaknesses, values, and goals. In this example, let's say the individual realizes.
Stage 2: Setting Goals
The next stage involves setting clear and achievable goals. In this case, the individual decides to improve their productivity and time management skills to overcome procrastination.
Stage 3: Self-Motivation
Self-motivation is crucial to staying committed to the goals. The individual may create a compelling vision of the benefits of overcoming procrastination, such as increased productivity, reduced stress, and achieving long-term success.
Stage 4: Self-Control
Self-control involves managing impulses and distractions. The individual sets specific rules for themselves, such as allocating specific time slots for focused work, minimizing distractions, and practicing techniques like the Pomodoro Technique to enhance productivity.
Stage 5: Self-Development
To improve their time management skills, the individual invests time in learning and developing new strategies. They may read books, attend seminars, or take online courses on productivity and time management techniques.
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A bank is planning to make a loan of $10 million to a firm in
the textile industry. The duration of the loan to be approved is
four years. The 99th percentile increase in risk premium for bonds
belong
The bank's decision to approve the loan and the interest rate charged will depend on its risk appetite, internal policies, and the specific risk assessment of the textile industry and the borrowing firm.
The 99th percentile increase in risk premium for bonds refers to the potential increase in the required yield or interest rate that investors would demand for taking on additional risk associated with a particular investment. In this case, the bank is planning to make a loan of $10 million to a firm in the textile industry.
When making a loan, banks typically assess the creditworthiness and risk profile of the borrower to determine the interest rate or yield they will charge. The risk premium is the additional return required by investors to compensate for the riskiness of the investment compared to a risk-free investment, such as government bonds.
The 99th percentile increase in risk premium refers to a high level of risk associated with the loan. It suggests that the loan is considered relatively risky compared to other similar investments, and investors would demand a higher yield or interest rate to compensate for that risk.
In the context of the textile industry, there could be various factors that contribute to the perceived riskiness. For example, the textile industry may be subject to economic cycles, competition from low-cost producers, changing consumer preferences, or supply chain disruptions.
The bank needs to carefully assess the risk factors associated with the textile industry, as well as the specific firm's financial health, business model, management capabilities, and market conditions before approving the loan. The bank will consider factors such as the firm's financial statements, credit history, industry outlook, collateral, and other relevant information to determine the appropriate interest rate or yield to charge for the loan.
The 99th percentile increase in risk premium for bonds indicates that the bank needs to factor in a significant level of risk when setting the interest rate or yield for the loan. This higher risk premium is intended to account for the potential default risk or loss of principal associated with the loan.
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Mason Inc. pays its employees every Friday for work rendered that week between Mondays and Fridays. The payroll is typically $18,000 for one week. What adjusting journal entry would be recorded if the end of the accounting period occurred on a Wednesday? O Debit Salary Payable $10,800 Credit Salary Expense $10,800 Debit Salary Expense $10,800 Credit Salary Payable $10,800 O Debit Salary Expense $7,200 Credit Salary Payable $7,200 O Debit Salary Expense $7,200 Credit Cash $7,200
An adjusting entry is an accounting entry made at the end of the accounting period to allocate income and expenditure to the appropriate period. An adjusting entry would be made if the accounting period ended on a Wednesday and Mason Inc. paid its employees every Friday for work done between Monday and Friday of that week.
Salary expense is an example of an expense account that needs adjusting because of an accrual accounting rule called the matching principle. The matching principle requires that revenues and expenses be matched to the accounting period in which they were earned and incurred, respectively.If Mason Inc.'s accounting period ended on a Wednesday, they would need to accrue the salaries earned but not yet paid. If they usually pay $18,000 each week for five days' work, they would have paid out $12,000 for the three days up to Wednesday.The adjusting journal entry required for Mason Inc. if the end of the accounting period occurred on a Wednesday would be:Debit Salary Expense $6,000Credit Salary Payable $6,000Salary Expense is debited to record the salaries that have been earned but have not yet been paid, and Salary Payable is credited to indicate that the company has an obligation to pay its employees the salaries they have earned but not yet been paid.In conclusion, the adjusting journal entry that would be recorded if the end of the accounting period occurred on a Wednesday is Debit Salary Expense $6,000, Credit Salary Payable $6,000. The adjusting entry is made to match expenses to revenue earned during the accounting period.
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When estimating cost of debt, the coupon rate is used as the cost of debt.
Group of answer choices
True
False
The after tax or effective cost of debt is increased by the tax savings since interest payments on debt are tax deductible.
Group of answer choices
True
False
When estimating cost of debt, the coupon rate is used as the cost of debt. False.
The coupon rate is the interest rate that a bond issuer promises to pay to its bondholders, but it may not represent the actual cost of debt to the company. The actual cost of debt takes into account factors such as the market interest rate, the creditworthiness of the company, and any fees associated with obtaining the debt. Therefore, the cost of debt is typically estimated based on the yield to maturity of the company's existing debt or similar bonds issued by other companies with similar credit ratings.
Regarding the second statement, it is true. The after-tax or effective cost of debt is increased by the tax savings since interest payments on debt are tax-deductible. This means that the interest expense reduces the company's taxable income, resulting in lower taxes paid. As a result, the effective cost of debt is lower than the stated interest rate, and the tax savings should be considered when calculating the net cost of borrowing.
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which of the following is not a benefit of budgeting? management can plan ahead. an early warning system is provided for potential problems.
There is no benefit of budgeting that is not listed in the given options. Both options mention benefits of budgeting, namely, management can plan ahead and an early warning system is provided for potential problems.
Among the given options, "management can plan ahead" is a benefit of budgeting, while "an early warning system is provided for potential problems" is not a direct benefit of budgeting. Budgeting helps organizations allocate resources, control finances, and set financial goals, but it does not inherently serve as an early warning system for potential problems.
Budgeting is a crucial financial planning tool that helps individuals and organizations to achieve their financial goals and objectives. It allows for the allocation of resources and helps in tracking expenses, revenues, and profits.
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The provided options being the ability for management to plan ahead and provision of an early warning system for potential problems are benefits, not drawbacks, of budgeting. Drawbacks might include rigidity, lengthy planning times, smaller budget surpluses, and difficulty with long-term planning due to highly variable inflation.
Explanation:Neither of the two given options are drawbacks of budgeting. In fact, they are benefits. The ability for management to plan ahead and the provision of an early warning system for potential problems are major advantages of budgeting. One downside, however, may be the inability to adapt quickly to unforeseen events or changing market conditions if the budget is too rigid. Budgeting can sometimes also take a lot of time, which can be a disadvantage especially in smaller businesses.
Another potential drawback to budgeting is linked to economic fluctuations. When there are smaller budget surpluses, economic booms lead to smaller deficits or larger surpluses. A requirement that the budget be balanced each and every year could prevent these automatic stabilizers from working and could worsen the severity of economic fluctuations.
Similarly, high and variable inflation weakens the incentives in the economy to adjust in response to price changes. This leads markets to adjust toward their equilibrium prices and quantities more erratically and slowly, and many individual markets might experience a higher chance of surpluses and shortages. This can complicate long-term planning.
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company- Td bank
Don't copy from other source.
Prepare an analysis that includes
: a. Identification of the firms' vision, mission, objectives, and strategies
. b. A proposal for a new vision and mission that you feel would better represent the company.
c. Assessment of:
Here is a proposal for a new vision and mission statement that would better represent the company: Vision: TD Bank's vision is to be the world's most innovative, customer-focused, and respected financial services company. Mission: TD Bank's mission is to help its customers achieve their financial goals by providing exceptional service, innovative products and services, and access to the latest technology. Assessment: TD Bank has a strong vision, mission, and set of objectives that have enabled it to become one of the most respected financial institutions in the world.
TD Bank is a financial services company that specializes in personal banking, business banking, and commercial banking. Its vision is to become the world's most customer-focused, profitable, and respected bank. Its mission is to help its customers achieve their financial goals through exceptional service, convenience, and access to a wide range of financial products and services. Objectives: TD Bank's primary objectives include providing exceptional customer service, offering a wide range of financial products and services, and achieving long-term profitability. Strategies: TD Bank's primary strategies include expanding its customer base through acquisitions and partnerships, investing in technology to improve its services and products, and building strong relationships with customers through exceptional service and support. Proposal for a new vision and mission that you feel would better represent the company: TD Bank has established itself as one of the most respected financial institutions in the world, but it could do even better by focusing on innovation and customer service. Its strategies are effective and it has a strong focus on customer service. However, there is always room for improvement, and the proposed vision and mission statement could help TD Bank become even more innovative and customer-focused.
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ifrs reporting currently does not allow which method of inventory costing?
Under IFRS (International Financial Reporting Standards), the method of inventory costing that is currently not allowed is the Last-In, First-Out (LIFO) method.
Under IFRS, the Last-In, First-Out (LIFO) method of inventory costing is not allowed for reporting purposes. This means that companies following IFRS guidelines cannot use the LIFO method to value their inventory and calculate the cost of goods sold (COGS).
The primary reason for this restriction is that the LIFO method does not align with the principles and objectives of IFRS, which emphasize the use of reliable and consistent financial reporting practices. The LIFO method assumes that the most recently acquired inventory is sold first, which can result in a mismatch between the actual flow of inventory and the reported cost of goods sold.
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During your evaluation for the reliability and security of Walmart Company information system, you have found that the reliability of the information system is not trusted, and both the company management and stakeholders do not relay on the system to acquire needed information for decision making process as they feel that the information system is vulnerable. By additional investigation you have concluded you became more certain that lacking the security is the main problem. Although the company has control system including preventive control, detective control and corrective control, some hackers attacked the system and transferred some money from the company account and obtain other business secrets. Therefore, the company information system is not reliable and needs better control system to be used. The significant weakness points you have discovered are: (1) the access control matrix is weak, and some employees who retired years ago can access the company system and display, update, delete and add data. (2) the time-based model of security is ineffective. In your opinion: (1) What is the security shortage in the access control matrix? (2) What is the meaning of the time-based model of security is ineffective? (3) How to fix the shortage in the access control matrix? (4) How to make the time-based model of security effective? (5) What you subject as a framework may be adopted it the future in Walmart Company to contribute to systems reliability? (6) What do you think the five basic principles to insure reliability in any accounting information system? (7) Do you think that the concept "Defense in Depth" can help to enhance the security level in Walmart Company? If yes, explain. (8) Do you think that the top management in Walmart Company has effective role to support and enhance information system reliability? If yes, explain.
In this context, the following questions address the evaluation of the reliability and security of Walmart Company's information system, focusing on issues such as the access control matrix, the time-based model of security, potential frameworks for improving reliability, and the role of top management in enhancing information system reliability.
(1) The security shortage in the access control matrix is that some employees who retired years ago still have access to the company's system and can perform actions like displaying, updating, deleting, and adding data. This lack of proper user access management poses a significant security risk.
(2) The time-based model of security being ineffective means that the system does not adequately control access based on the time and date. This could lead to unauthorized access during certain periods or a lack of access when it is needed.
(3) To fix the shortage in the access control matrix, the company should conduct a thorough review of user access privileges and revoke access for employees who are no longer with the company. Implementing a robust user access management system with regular reviews and updates is essential to maintain security.
(4) To make the time-based model of security effective, the company should establish and enforce strict policies and procedures regarding access during specific time periods. This can involve limiting access during non-business hours, setting up automated access controls based on time, and monitoring access logs for any anomalies.
(5) A framework that may be adopted in the future to contribute to system reliability at Walmart Company is implementing a comprehensive security framework such as the NIST Cybersecurity Framework. This framework provides guidelines and best practices for managing and improving cybersecurity risk.
(6) The five basic principles to ensure reliability in any accounting information system are accuracy, completeness, timeliness, validity, and reliability. These principles emphasize the importance of ensuring that the information in the system is accurate, complete, up-to-date, valid, and can be relied upon for decision-making purposes.
(7) Yes, the concept of "Defense in Depth" can help enhance the security level at Walmart Company. Defense in Depth refers to a multi-layered approach to security that includes multiple security controls at different levels, such as physical, network, system, and application layers. By implementing multiple layers of security controls, it becomes harder for attackers to breach the system and gain unauthorized access.
(8) Yes, the top management in Walmart Company has an effective role to support and enhance the information system's reliability. They should prioritize cybersecurity and provide resources for implementing robust security measures. Additionally, they should ensure that security policies and procedures are in place, conduct regular risk assessments and audits, and promote a culture of security awareness and training among employees. Their active involvement and support are crucial for maintaining information system reliability.
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What is the auditors' responsibility for reporting on other
information accompanying financial statements? Multiple Choice
Auditors are required to express an opinion on whether the other
information
Auditors are required to read and consider other information accompanying financial statements, such as management's discussion and analysis (MD&A), to determine whether it is materially inconsistent with the financial statements.
If the auditor finds any material inconsistencies, they must report them to the client and, if necessary, modify their audit report.
The auditor's responsibility for reporting on other information accompanying financial statements is to read and consider the information to determine whether it is materially inconsistent with the financial statements. The auditor is not required to obtain assurance on the other information, but they must be aware of any material inconsistencies that could affect the users of the financial statements.
If the auditor finds any material inconsistencies, they must report them to the client. The client may then choose to correct the inconsistencies, or they may choose to leave them as is. If the client chooses to leave the inconsistencies as is, the auditor must modify their audit report to include an emphasis-of-matter paragraph that discusses the inconsistencies.
In some cases, the auditor may find that the other information is materially misstated. In this case, the auditor must issue a qualified or adverse opinion on the financial statements.
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42. Please describe, in your own words, how the unemployment rate, inflation rate and GDP growth rate give us an overall perspective on the health of the economy. 43. Please share in a few words, why
Unemployment rate, inflation rate, and GDP growth rate are some of the most important indicators of economic health. These indicators help economists, policymakers, and investors understand the health of the economy.
Let's take a look at each one of these indicators:
Unemployment rate: The unemployment rate measures the percentage of people who are unemployed and actively looking for work. A high unemployment rate indicates that there is a shortage of jobs and that the economy is struggling. On the other hand, a low unemployment rate indicates that there are plenty of jobs available, and the economy is doing well.
Inflation rate: The inflation rate measures the rate at which prices are rising in an economy. A high inflation rate means that the prices of goods and services are increasing rapidly, which can lead to decreased purchasing power for consumers. A low inflation rate indicates that prices are stable, which is generally considered a positive sign for the economy.
GDP growth rate: The GDP growth rate measures the rate at which the economy is growing. A high GDP growth rate indicates that the economy is expanding, which can lead to increased job opportunities and higher wages. On the other hand, a low GDP growth rate can indicate that the economy is contracting, which can lead to job losses and lower wages.
In conclusion, these indicators are crucial for understanding the overall health of the economy. By analyzing these indicators, economists and policymakers can make informed decisions that can help improve the economy.
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The following items were taken from the financial statements of M. Wright Company. (All dollars are in thousands.) 5,500 Accumulated depreciation 1,000 (All dollars are in thousands.) Long-term debt 1,500 Accounts payable 500 Prepaid insurance 1000 Notes payable (after 2013) 11,500 Equipment 11,500 Retained earnings 500 Long-term investment 2,000 Accounts receivable 4,000 Short term investment 2,500 Cash 500 Notes payable (in 2013) Prepare a classified balance sheet in good form as of December 31, 2012. Q7) Total liability and shareholders' Q1) find the total current assets: a. 4,000. equity: a. 15,500 b. 4,500. b. 16,000 c. 9,000. c. 16,500 d. 11,500.
Based on the given information, the total current assets of M. Wright Company as of December 31, 2012, is $11,500. The correct answer is d) 11,500.
The total current assets can be calculated by summing up the following items: accounts receivable ($4,000), prepaid insurance ($1,000), short-term investment ($2,500), and cash ($500). Adding these amounts together gives a total of $11,500.
Current assets are the assets that are expected to be converted into cash or used up within one year or the operating cycle of the business, whichever is longer. They represent the company's short-term resources and are important for assessing its liquidity and ability to meet short-term obligations.
In this case, the total current assets of $11,500 indicate the value of M. Wright Company's short-term assets as of December 31, 2012.
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Section A (40 Marks. Please answer all 1i-iv questions in this section. 1i) What is discretionary fiscal impulse? - (5 marks) ii) Assuming the UK economy taxes and government spending at equilibrium level of output for 2021 is each £10 trillion, use the cyclically adjusted budget deficit formula [G(ye) – T(ye) = [G(yd) – T(y)] – alye - y)] to work out questions ‘a to d' below. (Hint: T = taxes net of transfers; and alpha (a) = 1; consumption and investment are assumed unchanged): ii(a) Derive and explain the kind of budget implemented by the UK government and by how much if actual output generated is £18.0 trillion (show all workings) - (10 marks) ii(b) Derive and explain the kind of budget implemented by the UK government and by how much if actual output generated is £6.Otrillion (show all workings) – (10 marks) (iii) Using the debt dynamics equation: ∆b = d + (r – Yy)b, discuss three options available to the government to balance the question 'ii(b) economy: (12 marks; i.e., 4 marks each) (iv) what is the least painful option in the answer you gave for question 'iii', and why? - (3 marks)
Discretionary fiscal impulse is the use of deliberate changes in taxation, government spending, or transfer payments to influence the direction of the economy.
ii(a)Derive and explain the kind of budget implemented by the UK government and by how much if actual output generated is £18.0 trillion (show all workings):
Cyclically adjusted budget deficit formula is given as: [G(ye) – T(ye) = [G(yd) – T(y)] – alye - y)]
Here,T(ye) = Taxes net of transfers = 10 trillion
Alpha (a) = 1
Consumption and investment are assumed to be unchanged
Y(e) = Ye = 10 trillion
Output generated = 18 trillion
Therefore,G(ye) = [G(yd) – T(y)] – alye - y] + T(ye) = [10-(18-y)]-10+(1*10)-y= -y-8 trillion
This is the budget deficit for the given output level. Since the budget deficit is negative, this implies that there is a budget surplus of 8 trillion by the UK government.
ii(b)Derive and explain the kind of budget implemented by the UK government and by how much if actual output generated is £6.Otrillion (show all workings):
Cyclically adjusted budget deficit formula is given as: [G(ye) – T(ye) = [G(yd) – T(y)] – alye - y)]Here,T(ye) = Taxes net of transfers = 10 trillion
Alpha (a) = 1
Consumption and investment are assumed to be unchanged
Y(e) = Ye = 10 trillion
Output generated = 6 trillion
Therefore,G(ye) = [G(yd) – T(y)] – alye - y] + T(ye) = [10-(6-y)]-10+(1*10)-y= -y+6 trillion
This is the budget surplus for the given output level. Since the budget surplus is positive, this implies that there is a budget deficit of 6 trillion by the UK government.
(iii)Three options available to the government to balance the question 'ii(b) economy are:
Government can increase taxes to balance the economy. It would be painful for the people of the country and would hurt the economic growth of the country. Government can reduce government spending to balance the economy. It would lead to lower investment by the government in the country, but would be less painful for people in the short term. Government can increase the supply of money in the economy. It would lead to inflation and be painful for people in the long term. (iv)The least painful option in the answer given for question 'iii' is to reduce government spending. It would lead to lower investment by the government in the country, but would be less painful for people in the short term. It would not hurt the economic growth of the country in the long term.
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After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $33,000 The entry to close the income summary account in a corporation will be Multiple Choice Debit Retained eamings $33,000, credit Income Summary $33,000 Debit Income Summary $33.000, credit Retained earnings $33,000 Debt Income Summery $33,000, credit Share Capital $33,000 Credit Share Capital $33.000 debe Dividends $33.000 Activate Windows Decl Erwy poem 2002925 Mc Grow
After preparing and posting the closing entries for revenues and expenses, if the income summary account has a debit balance of $33,000, the entry to close the income summary account in a corporation would be to debit Retained Earnings for $33,000 and credit Income Summary for $33,000.
The income summary account is used in the closing process to summarize the net income or net loss for the period. After closing the revenue and expense accounts, the balance in the income summary account represents the net income or net loss. If the income summary account has a debit balance, it means the expenses exceed the revenues.
To close the income summary account in a corporation with a debit balance of $33,000, we need to transfer this amount to the retained earnings account. Since the income summary account has a debit balance, we will debit the retained earnings account for $33,000. This represents an increase in retained earnings, reflecting the net income earned during the period. Simultaneously, we will credit the income summary account for $33,000, reducing its balance to zero.
The entry would be:
Debit Retained Earnings $33,000
Credit Income Summary $33,000
This entry effectively transfers the net income to the retained earnings account, which contributes to the overall equity of the corporation.
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What is shadow banking and how does it differ from traditional
retail banking? What kind of threat does shadow banking pose to the
financial system? Discuss the role of shadow banking in the
financial
Shadow banking refers to a system of financial intermediaries that operate outside the traditional banking sector but perform similar functions. It involves activities such as lending, borrowing, and investing, but without the regulatory oversight and safety nets associated with traditional retail banking. Shadow banking entities can include hedge funds, money market funds, investment banks, and other non-bank financial institutions.
The main difference between shadow banking and traditional retail banking lies in their regulatory framework, risk profiles, and funding sources. While traditional retail banks are subject to strict regulations and oversight, shadow banking operates in a less regulated environment. Traditional banks primarily rely on customer deposits as a source of funding, while shadow banking relies on short-term borrowing, asset-backed securities, and other forms of financing.
One of the key threats posed by shadow banking is its potential to amplify systemic risks. The interconnectedness of shadow banking entities with traditional banks and the broader financial system can create contagion risks during periods of financial stress. As shadow banking entities engage in activities that resemble traditional banking, such as credit intermediation and maturity transformation, they can be vulnerable to liquidity and solvency risks.
The role of shadow banking in the financial system has been both beneficial and disruptive. On one hand, it has provided alternative sources of credit and funding, contributing to financial innovation and market liquidity. Shadow banking can also serve as a complement to traditional banking, providing niche services and diversifying the financial landscape.
However, the lack of regulatory oversight and the potential for excessive risk-taking in shadow banking can pose significant threats to the financial system. The 2008 global financial crisis highlighted the risks associated with shadow banking, as certain entities faced liquidity problems and triggered broader market instability.
To address the risks associated with shadow banking, regulatory authorities have implemented measures to enhance transparency, monitor systemic risks, and strengthen oversight of non-bank financial institutions. The aim is to strike a balance between promoting financial stability and preserving the benefits of financial intermediation offered by shadow banking entities.
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Gold Star Rice, Limited, of Thailand exports Thai rice throughout Asia. The company grows three varieties of rice-White, Fragrant, and Loonzain. Budgeted sales by product and in total for the coming month are shown below: Product White 48% Fragrant 20% Loonzain 32% Total 100% Percentage of total sales Sales $ 710,000 100% $ 340,800 102, 240 $ 238,560 100% $ 142,000 30% 113,600 70% $ 28,400 100% 80% Variable expenses $ 227,200 124,960 340,800 48% Contribution margin 20% $ 102,240 369, 200 52% Fixed expenses 224, 640 Net operating income $ 144,560 Dollar sales to break-even = Fixed expenses / CM ratio = $224,640 / 0.52 = $432,000 As shown by these data, net operating income is budgeted at $144,560 for the month and the estimated break-even sales is $432,000. Assume that actual sales for the month total $710,000 as planned; however, actual sales by product are: White, $227,200; Fragrant, $284,000; and Loonzain, $198,800. Required: 1. Prepare a contribution format income statement for the month based on the actual sales data. 2. Compute the break-even point in dollar sales for the month based on your actual data. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a contribution format income statement for the month based on the actual sales data. Gold Star Rice, Limited Contribution Income Statement Product White Fragrant Loonzain Percentage of total sales % % % % % % % % % % % % 100% 55% 45% Total % % % %
The break-even point in dollar sales for the month based on your actual data is $167,000.
Given Data Product White Fragrant Loonzain Total Percentage of total Sales $ 710,000 $ 227,200 $ 284,000 $ 198,800 $ Variable expenses $ 227,200 $ 124,960 $ 340,800 Contribution margin $ 482,800 $ 102,240 $ 369,200 $ 954,240 Fixed expenses $ 224,640 Net operating income $ 729,600 .
In order to prepare the contribution income statement, we have to follow the given format: Gold Star Rice, Limited Contribution Income Statement Product White Fragrant Loonzain .
Total Percentage of total Sales $ 710,000 $ 227,200 $ 284,000 $ 198,800 Variable expenses $ 227,200 $ 124,960 $ 340,800 Contribution margin $ 482,800 $ 102,240 $ 369,200 $ 954,240 Fixed expenses $ 224,640 Net operating income $ 729,600 Break Even Sales=Fixed Expenses/Contribution Margin Ratio Contribution Margin Ratio=Contribution Margin / Sales= 954,240 / 710,000 = 1.34514Break Even Sales= 224,640 / 1.34514 = $ 167,000Therefore, the break-even point in dollar sales for the month based on your actual data is $167,000.
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A company that sells frozen pizza to stores in four markets (cities A, B, C, and D) wants to examine the prices that the stores charge for pizza slices. To the right are boxplots comparing data from a sample of stores in each market. Complete parts a) and b). 354 3.0 25 20 a) Do prices appear to be the same in the four markets? Explain. A. No. Prices appear to be both lower on average and more variable in city A B. No. Prices appear to be both lower on average and less variable in city C OC. No. Prices appear to be both higher on average and more variable in city D. OD. Yes. Prices appear to be the same in the four markets. b) Does the presence of any outliers affect your overall conclusions about the prices in the four markets? No, the presence of outliers does not affect the overall conclusions Yes, the presence of outliers affects the overall conclusions.
a) Prices do not appear to be the same in the four markets. The given boxplots show that there is a significant difference in the prices of pizza slices between markets. Based on the plots, prices appear to be both lower on average and more variable in city A.
Prices appear to be both higher on average and more variable in city D, whereas prices seem to be both lower on average and less variable in city C.b) The presence of outliers affects the overall conclusions. Since outliers have a strong effect on the spread of the data and the variability of the prices, their presence makes it difficult to draw accurate conclusions about the data. Although they do not affect the median of the data, they can significantly influence the mean and standard deviation. As a result, the outliers must be removed to obtain a more accurate analysis of the data. Removing the outliers, in this case, would help to create a more precise analysis of the prices of pizza slices in each market. Therefore, the presence of outliers in this case affects the overall conclusions.
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the yield to maturity of a $1,000 bond with a 7.0% coupon rate, semiannual coupons, and two years to maturity is 7.6% apr, compounded semiannually. what is its price?
To calculate the price of the bond, we need to use the formula for the present value of a bond:
Price = C * [1 - (1 + r)^(-n)] / r + F * (1 + r)^(-n)
Where:
C = Coupon payment per period
r = Yield to maturity rate per period
n = Total number of periods
F = Face value of the bond
In this case, the bond has a $1,000 face value, a 7.0% coupon rate, semiannual coupons, and two years to maturity. The yield to maturity is given as 7.6% APR compounded semiannually.
Step 1: Calculate the variables:
C = (Coupon rate * Face value) / 2 = (0.07 * $1,000) / 2 = $35
r = Yield to maturity rate per period = 7.6% / 2 = 0.038
n = Total number of periods = 2 * 2 = 4 (since coupons are paid semiannually)
F = Face value of the bond = $1,000
Step 2: Plug the values into the formula:
Price = $35 * [1 - (1 + 0.038)^(-4)] / 0.038 + $1,000 * (1 + 0.038)^(-4)
Step 3: Calculate the price:
Price = $35 * (1 - 0.887408803) / 0.038 + $1,000 * 0.816297916
Price = $27.56642277 + $816.297916
Price ≈ $843.864
Therefore, the price of the bond is approximately $843.864.
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Which category of statement of cash flows shows cash inflows and outflows that are related to investments by owners and borrowing from lenders? Select one: a. Cash flow from investing activities b. Cash flow from operating activities c. Cash flow from financing activities d. Cash flow from selling activities
The statement of cash flows is a financial statement that summarizes a company's cash inflows and outflows. It categorizes cash transactions into operating, investing, and financing activities. The cash flow from financing activities category specifically shows cash inflows and outflows related to investments by owners and borrowing from lenders.
The cash flow from financing activities category of statement of cash flows shows cash inflows and outflows that are related to investments by owners and borrowing from lenders.What is statement of cash flows?Statement of cash flows is a summary of a company's cash inflows and outflows. It classifies cash transactions into three categories: operating, investing, and financing. Cash flows generated from a firm's daily operations, such as revenue and expenses, are referred to as operating cash flows. Investing cash flows include buying and selling fixed assets such as property, equipment, and land. Financing cash flows include proceeds from loans, issuing or repurchasing stocks, or paying dividends.Cash flow from financing activities:Cash flow from financing activities is the net cash inflow or outflow from a company's financing activities. Cash inflows are generated when a company issues shares or borrows funds, while cash outflows are incurred when dividends are paid, debt is repaid, or treasury shares are repurchased. The cash flow from financing activities category of statement of cash flows shows cash inflows and outflows that are related to investments by owners and borrowing from lenders.
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Suppose a proposed public policy could result in three possible outcomes: (1) present value of net benefits of $4,000,000, (2) present value of net benefits of $1,000,000, or (3) present value of net benefits of -$10,000,000 (i.e., a loss). Suppose that the probability of occurrence of each of these three outcomes are, respectively, 0.85, 0.10, and 0.05, should this policy be pursued or trashed? Why?
To determine whether the proposed public policy should be pursued or trashed, we need to consider the expected value of net benefits. The expected value is calculated by multiplying each outcome by its respective probability and summing the results. Let's calculate the expected value in this case:
Expected value = (0.85 * $4,000,000) + (0.10 * $1,000,000) + (0.05 * -$10,000,000)
Expected value = $3,400,000 + $100,000 - $500,000
Expected value = $3,000,000
The expected value of net benefits is $3,000,000. This means that, on average, the policy is expected to result in a net benefit of $3,000,000.
Since the expected value of net benefits is positive, it suggests that, on average, the policy has a positive impact. However, it's important to consider other factors before making a final decision. These factors may include the potential distributional effects of the policy, its alignment with broader policy objectives, the feasibility of implementation, and any ethical or social considerations.
While the expected value provides a useful measure, it does not capture the full range of potential outcomes or the potential magnitude of each outcome. Decision-makers should also consider the level of risk tolerance and the potential consequences of the worst-case scenario (i.e., the -$10,000,000 loss).
Ultimately, whether the policy should be pursued or trashed depends on a careful analysis of these factors, weighing the potential benefits against the potential risks and considering the broader context in which the policy will be implemented.
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1B–Computing ROI and Residual Income
The CFO of Gentry Autogroup, Allison Gentry is debating an
investment. The investment is
projected to
earn $100,000 annually and will require the company to acqu
The CFO of Gentry Autogroup, Allison Gentry, is considering an investment that is projected to earn $100,000 annually. The investment requires the acquisition of new equipment at a cost of $800,000.
Return on Investment (ROI) is a financial metric used to assess the profitability of an investment. It is calculated by dividing the net income generated by the investment by the initial cost of the investment.
In this case, if the investment is projected to earn $100,000 annually and the cost of the investment is $800,000, the ROI can be calculated by dividing $100,000 by $800,000 and multiplying by 100 to express it as a percentage.
Residual Income is another performance measure that takes into account the opportunity cost of the company's equity. It is calculated by subtracting the equity charge from the net income. The equity charge is calculated by multiplying the company's cost of equity by the investment's equity capital. The residual income provides an indication of the profitability of the investment after considering the cost of the company's equity.
Both ROI and Residual Income can be useful metrics for evaluating the investment. They provide insights into the profitability and value creation potential of the investment. The decision to proceed with the investment would depend on various factors such as the company's required rate of return, risk tolerance, and strategic objectives.
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is there an angle of incidence between 0 degrees and 90 degrees such that all of the light will be reflected?
Yes, there is an angle of incidence between 0 degrees and 90 degrees such that all of the light will be reflected. The angle is called the critical angle.
The critical angle is the angle of incidence at which the refracted angle is 90 degrees. This means that the light refracts parallel to the boundary between two media. When the angle of incidence is greater than the critical angle, all of the light is reflected, and none of it is refracted. This is known as total internal reflection. The formula for finding the critical angle is as follows: critical angle = sin^-1 (n2 / n1), where n1 is the refractive index of the medium in which the incident ray is traveling, and n2 is the refractive index of the medium in which the refracted ray would travel. If the angle of incidence is greater than the critical angle, total internal reflection occurs. If the angle of incidence is less than the critical angle, both reflection and refraction occur.
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Sage Inc. experienced the following transactions for Year 1, Its first year of operations: 1. Issued common stock for $110,000 cash. 2. Purchased $200,000 of merchandise on account. 3. Sold merchandis
The common stock for $110,000 cash: This transaction involves the company raising capital by issuing common stock.
Sage Inc. received $110,000 in cash from investors in exchange for ownership shares in the company. This increases the company's cash balance and equity. Purchased $200,000 of merchandise on account: In this transaction, Sage Inc. acquired $200,000 worth of merchandise from a supplier without making an immediate cash payment. Instead, the company established an accounts payable liability, indicating that it owes the supplier for the purchased goods. This transaction increases the company's inventory and accounts payable.Sold merchandise: The details of the merchandise sold are not provided in the question.
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Martinez Company has hired a consultant to propose a way to increase the company’s revenues. The consultant has evaluated two mutually exclusive projects with the following information provided for each:
Project Turtle Project Snake
Capital Investment $1,150,000 $670,000
Annual Cass Flows $189,00 $114,000
Estimated Useful Life 10 yrs 10 yrs
Martinez Company uses a discount rate of 9% to evaluate both projects.
(a) Calculate the net present value of both projects. (Use the above table.) (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275.)
Project Turtle Project Snake
Net Preset Value $ $
The net present value (NPV) of Project Turtle is $43,289.90, while the NPV of Project Snake is -$3,449.24.
The NPV is calculated by discounting the annual cash flows of each project to their present values and subtracting the initial capital investment. To calculate the present value, the annual cash flows are divided by (1 + discount rate) raised to the power of the corresponding year. For Project Turtle, the annual cash flow of $189,000 is discounted over a 10-year period using a discount rate of 9%. The present value of each cash flow is calculated and summed up to get a total present value of $2,178,716.36. Subtracting the initial capital investment of $1,150,000 gives an NPV of $1,028,716.36.
For Project Snake, the annual cash flow of $114,000 is discounted over a 10-year period using a discount rate of 9%. The present value of each cash flow is calculated and summed up to get a total present value of $994,249.76. Subtracting the initial capital investment of $670,000 gives an NPV of $324,249.76.
Therefore, Project Turtle has a positive NPV of $1,028,716.36, indicating that it is expected to generate more value than its initial investment. On the other hand, Project Snake has a negative NPV of -$324,249.76, suggesting that it is not expected to generate sufficient value to cover its initial investment and would result in a loss.
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Benton Company had the following for the past year $ 240,00 49, Soles 24 units at $10.09) Varile costs Direct water als Direct labor Overhead contribution in Find costs Exed overhead Fixed selling and adminstrative expenses t.com 4.16 20 9.00 $24,00 Aforincomowe winter buy 2007 perut in addition to you would read overhod by 5930 odsoting and admin hty5465 Asung Connect wit D. Benjamin Company had the following results of operations for the past year. $ 248,000 Sales (24,800 units at $10.00) Variable costs Direct materials Direct labor Overhead contribution margin Fixed costs Fixed overhead Fixed selling and administrative expenses Income 49,600 99,200 4,960 94,240 19,840 49,600 $ 24,800 A foreign company (whose sales will not affect Benjamin's market) offers to buy 6,200 units at $7.5 costs by $465. Assuming Benjamin has excess capacity and accepts the offer. Its profits will: Multiple Choice Increase by $46.500. Increase by 59.300. O O Decrease by 59.300 0 Increase by 59.080.
Comparing the revenue ($46,500) and variable costs ($205,432), it is evident that Benjamin would incur a loss of $205,432 - $46,500 = -$158,932 if they accept the offer.
To determine the change in profits if Benjamin Company accepts the offer from the foreign company, let's analyze the cost and revenue implications.
Currently, Benjamin Company sells 24,800 units at $10.00 per unit, resulting in total sales of $248,000. The variable costs per unit include direct materials ($4.16), direct labor ($20), and overhead ($9.00), totaling $33.16 per unit. The contribution margin per unit is $10.00 - $33.16 = -$23.16.
If Benjamin accepts the offer to sell 6,200 units at $7.50 per unit, the total revenue would be 6,200 units * $7.50 = $46,500. However, the variable costs per unit remain the same at $33.16. Therefore, the variable costs for the 6,200 units would be 6,200 units * $33.16 = $205,432.
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Match the terms on the left with the correct answers on the right.
a. Gear icon _______Click on an event in any transaction report
b. Expense _______ Cash receipts received from a sale
c. Chart of accounts _______Reports assets, liabilities, and equities
d. Account type _______A listing of all accounts available
e. Sales receipt _______Long-term tangible property that a firm owns
f. Unearned Revenue _______ Used when cash is collected at the time of a sale
g. Payment from a customer _______Click to manage your subscription, users, and settings
h. Fixed assets _______Revenue not yet earned
i. To view a source document _______Task used to record credit card charges
j. Balance sheet _______ Dictates where an account appears in all reports
Click to manage your subscription, users, and settings.b. Expense - Cash payments made by a firm to another party.c. Chart of accounts - A listing of all accounts available.d. Account type - Dictates where an account appears in all reports.e. Sales receipt - Used when cash is collected at the time of a sale.
Unearned Revenue - Revenue not yet earned.g. Payment from a customer - Cash receipts received from a sale.h. Fixed assets - Long-term tangible property that a firm owns.i. To view a source document - Click on an event in any transaction report.j. Balance sheet - Reports assets, liabilities, and equities.
A chart of accounts is a listing of all accounts available, account type dictates where an account appears in all reports, to view a source document, click on an event in any transaction report, the balance sheet reports assets, liabilities, and equities.
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