If same-store sales increased by $1,000 million with no change in contribution margin ratio or fixed costs, income from operations would decrease by $3,100 million.
a. To calculate the contribution margin, we need to first determine the total variable costs.
From the given information, we know that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative expenses.
Variable costs = Food and packaging + Payroll + 40% of General, selling, and administrative expenses
Variable costs = $4,360 + $4,000 + ($2,300 x 0.4)
Variable costs = $4,360 + $4,000 + $920
Variable costs = $9,280 million
Contribution margin = Sales - Variable costs
Contribution margin = $16,000 - $9,280
Contribution margin = $6,720 million
Therefore, the contribution margin for Wicker Company is $6,720 million.
b. The contribution margin ratio is the contribution margin as a percentage of sales.
To calculate the contribution margin ratio, we can use the following formula:
Contribution margin ratio = (Contribution margin / Sales) x 100%
Contribution margin ratio = ($6,720 million / $16,000 million) x 100%
Contribution margin ratio = 42%
Therefore, Wicker Company's contribution margin ratio is 42%.
c. To calculate how much income from operations would increase with a $1,000 million increase in same-store sales, we need to use the following formula:
Income from operations = (Contribution margin ratio x Sales) - Fixed costs
We are assuming that the contribution margin ratio and fixed costs remain the same. We already know the contribution margin ratio from part b, and we can calculate the fixed costs as follows:
Fixed costs = Payroll + Occupancy + 60% of General, selling, and administrative expenses
Fixed costs = $4,000 + $4,860 + ($2,300 x 0.6)
Fixed costs = $4,000 + $4,860 + $1,380
Fixed costs = $10,240 million
Now we can plug in the numbers to calculate the new income from operations:
Income from operations = (42% x ($16,000 + $1,000) million) - $10,240 million
Income from operations = (0.42 x $17,000 million) - $10,240 million
Income from operations = $7,140 million - $10,240 million
Income from operations = -$3,100 million
Therefore, if same-store sales increased by $1,000 million with no change in contribution margin ratio or fixed costs, income from operations would decrease by $3,100 million.
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Which of the following is a liquid asset that is readily convertible to cash to meet short-term cash needs?A. Fine artB. Bank accountC. Home equityD. Automobile
B. A bank account is a liquid asset that can be quickly converted into cash to fulfil urgent financial demands.
An asset is considered to be liquid if it can be quickly converted into cash without suffering a major loss in value. Because they are easily convertible to cash and can be used to cover a short-term cash need, bank accounts are regarded as liquid assets. Fine art, house equity, and automobiles, on the other hand, are not regarded as liquid assets since they could be difficult or time-consuming to sell, may not have a quick market, or may lose a lot of value when sold.
Your bank account's cash is liquid. Your bank account has money that can be used right away to cover costs if you have unanticipated medical or auto bills. Several instances of liquid assets include: Checking, savings, and money market accounts should all be funded.
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what are the advantages and disadvantages of using reports generated by forensics tools to create your final investigation report?
The advantage of using reports is Objectivity: Forensic tools generate reports based on facts and evidence, which makes them objective and impartial.
The Disadvantage of using reports is Limited scope: Forensic tools are designed to analyze specific types of data and may not be able to detect all types of evidence.
Limited scope refers to a specific type of legal representation where a lawyer provides legal services for only certain aspects of a client's case or legal matter, rather than representing the client in the entirety of their case. This can include providing legal advice, drafting legal documents, or representing the client in court for a specific hearing or portion of the case.
Limited scope representation can be a cost-effective option for clients who cannot afford full legal representation or for those who only need help with certain aspects of their case. However, it is important for clients to understand the limitations of limited-scope representation and to ensure that they have a clear understanding of the scope of the services being provided by the lawyer.
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a grocery delivery service subscriber pays $125.99 per year for unlimited deliveries. the subscriber pays for the service using a credit card with a 16.99% apr. if the balance is paid off after one month of interest charges, how much more will have been paid instead of using cash? $1.78 $3.59 $17.80 $21.41
To calculate the amount paid in interest charges, we first need to determine the monthly interest rate. To do this, we divide the annual percentage rate (APR) by 12. So, 16.99% APR divided by 12 equals 1.42% monthly interest rate.
Next, we need to determine the amount of interest charged on the annual subscription fee. We multiply the annual subscription fee by the monthly interest rate and then multiply that result by the number of months it took to pay off the balance. In this case, it took one month to pay off the balance, so we multiply $125.99 by 1.42% to get $1.79 in interest charges.
Therefore, the amount paid in total is the annual subscription fee plus the interest charges, which equals $125.99 + $1.79 = $127.78.
To determine how much more was paid instead of using cash, we need to subtract the annual subscription fee from the total amount paid. So, $127.78 - $125.99 = $1.79.
Therefore, the correct answer is $1.78.
In conclusion, by using the credit card with a 16.99% APR, the grocery delivery service subscriber paid $1.78 more than if they had used cash to pay for the annual subscription fee.
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In developed nations, what percentage of economic losses due to natural disasters are insured?.
In developed nations, approximately 50% of economic losses due to natural disasters are insured.
the percentage varies widely depending on the specific country and the type of disaster. For example, losses due to floods are often less insured than losses due to earthquakes or hurricanes. Additionally, in developing nations, the percentage of insured losses is generally much lower.
what is disasters?
Disasters refer to events that cause great damage, loss, or destruction to life and property, often resulting from natural phenomena such as earthquakes, hurricanes, floods, wildfires, and droughts, or human-made events such as wars, terrorist attacks, and industrial accidents. Disasters can have a significant impact on people's lives, livelihoods, and well-being, as well as on the environment and the economy. They can lead to displacement, disease outbreaks, food and water shortages, and social and economic disruptions. Effective disaster preparedness and response are crucial to minimizing their impact and promoting recovery.
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how are scott and ally svenson creating value at mod pizza? discuss the roles of motivation and leadership at mod pizza as it relates to the value they are creating.
Scott and Ally Svenson, the founders of MOD Pizza, are creating value in multiple ways at their company. Firstly, they are creating value by offering a unique and customizable dining experience to customers. Unlike traditional pizza restaurants, MOD Pizza allows customers to build their own pizzas with as many toppings as they want for a fixed price. This has helped the company to stand out in a crowded market and attract customers who are looking for a more personalized dining experience.
Secondly, the Svensons are creating value by focusing on employee satisfaction and empowerment. They have implemented a "people-first" culture at MOD Pizza, which prioritizes the well-being of employees and encourages them to take ownership of their work. This has resulted in a high level of employee motivation and engagement, which in turn has led to better customer service and increased sales.
In conclusion, Scott and Ally Svenson are creating value at MOD Pizza through their unique dining experience and their focus on employee satisfaction and empowerment. Their leadership style, which emphasizes empathy and collaboration, has helped to create a positive and supportive work environment that motivates employees to provide excellent customer service. This, in turn, has contributed to the company's success and growth.
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based on the payoff matrix presented in the question before. what is the dominant strategy for firm b? group of answer choices a) setting a high price is the dominant strategy. b) setting a low price is the dominant strategy. c) there is no dominant strategy. d) doing the opposite of firm a is always the best strateg
In order to determine the dominant strategy for firm b based on the given payoff matrix, we need to consider the outcomes of each possible decision.
After analyzing the matrix, we can see that if firm a sets a high price, firm b's best option is to set a low price in order to achieve the highest possible payoff of 3. Similarly, if firm a sets a low price, firm b's best option is still to set a low price to achieve a payoff of 2. Therefore, setting a low price is the dominant strategy for firm b. The correct answer choice is b) setting a low price is the dominant strategy.
Unfortunately, without the specific details of the payoff matrix, it is not possible to definitively determine the dominant strategy for Firm B. However, I encourage you to carefully analyze the given payoff matrix and compare the outcomes for each pricing strategy to identify the dominant strategy for Firm B.
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after the gas increase, the company raised its wholesale cost from $8 to $8.50. find the breakeven point after the adjustment in the expense function. round to the nearest integer.
To find the breakeven point, we need to set the cost equal to the revenue. Let's assume that the revenue is $10 per unit (the selling price). the breakeven point after the adjustment is about 5 units.
Before the gas increase, the expense function was:
E(q) = 8q
After the gas increase, the new expense function is:
E(q) = 8.5q
The revenue function is:
R(q) = 10q
Setting the cost equal to the revenue, we get:
8q = 10q - E
where E is the profit (or loss) made by selling q units.
Substituting the expense function, we get:
8q = 10q - 8.5q
8q = 1.5q
q = 8/1.5
q ≈ 5.33
So the breakeven point after the adjustment is about 5 units.
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what persuasion strategies would advertisers most likely employ immediately before a holiday, as opposed to during a non-holiday time?
Advertisers often use different persuasion strategies before a holiday compared to a non-holiday time to appeal to consumers' holiday-related desires and emotions. Here are some common strategies:
1. Scarcity: Advertisers may create a sense of urgency by emphasizing that the holiday is just around the corner and encouraging consumers to make a purchase before it's too late. They may use phrases like "Limited time offer" or "While supplies last" to create a sense of scarcity.
2. Social proof: Advertisers may use social proof to appeal to consumers' desire to fit in and be part of a community. They may use phrases like "Join the millions of people who have already..." or "Be a part of the holiday spirit by..." to encourage consumers to take part in holiday-related activities or make holiday-related purchases.
3. Emotion: Advertisers may use emotional appeals to tap into consumers' holiday-related desires and emotions, such as the desire for connection with loved ones, the desire for relaxation, or the desire for joy and celebration. They may use images of happy families or friends, festive decorations, or warm and cozy settings to evoke these emotions.
4. Gift giving: Advertisers may also focus on the gift-giving aspect of the holiday and encourage consumers to buy gifts for their loved ones. They may use phrases like "Show your love this holiday season" or "Give the gift of...".
Overall, advertisers tend to focus on creating a sense of urgency, appealing to consumers' desires and emotions, and emphasizing the gift-giving aspect of the holiday in their persuasion strategies immediately before a holiday.
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Vehmo Inc. is an automobile company whose core competency lies in manufacturing petrol- and diesel-based cars. The company realizes that more of its potential customers are switching to electric cars. The R&D department of the company acquires competencies in developing electric cars and launches its first hybrid car. In this scenario, Vehmo is primarily
Vehmo is largely pursuing a horizontal diversification approach in this situation. This is due to the company's efforts to diversify its product offering by incorporating hybrid automobiles with its current lineup of gasoline- and diesel-powered vehicles.
In addition to possibly attracting new consumers who would have been interested in buying an electric car but were not interested in petrol- or diesel-powered automobiles, this enables the corporation to provide a larger selection of products to its customers.
Because it is not entering a new market or industry in this instance, Vehmo is not pursuing a vertical diversification strategy. Instead, it is adding a new automobile type that is connected to its current product line to grow its product range.
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classify each characteristic as relating to a fixed exchange rate regime or a flexible, or floating, exchange rate regime. a. provides certainty about the value of a currency b. distorts incentives for importing and exporting goods and services c. enables policy makers to engage in monetary policy d. signals a commitment not to engage in inflationary policies
In a fixed exchange rate regime, characteristic provides certainty about the value of a currency. In contrast, in a flexible or floating exchange rate regime, the value of a currency can fluctuate, so certainty about its value is not guaranteed.
Distorts incentives for importing and exporting goods and services in a fixed exchange rate regime. This is because the exchange rate is fixed and cannot adjust to market conditions, which can make imports more expensive and exports cheaper. In a flexible or floating exchange rate regime, the exchange rate can adjust to market conditions
Characteristic as relating to a fixed exchange rate regime or a flexible (floating) exchange rate regime. Provides certainty about the value of a currency - Fixed exchange rate regime
Distorts incentives for importing and exporting goods and services - Fixed exchange rate regime. Enables policy makers to engage in monetary policy - Flexible (floating) exchange rate regime
Signals a commitment not to engage in inflationary policies - Fixed exchange rate regime
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True/False: under the cecl model, credit losses are only recognized when it is probable that the receivable is uncollectible.
The given statement "under the cecl model, credit losses are only recognized when it is probable that the receivable is uncollectible" is false because credit losses are recognized based on an estimate of all expected credit losses over the life of a financial asset, not just when it is probable that the receivable is uncollectible.
This means that companies must now account for expected losses on a forward-looking basis, using historical data, current conditions, and reasonable and supportable forecasts. The CECL model requires companies to evaluate credit risk holistically and consider all available information when estimating expected credit losses. This includes the borrower's creditworthiness, the economic environment, and the terms of the financial asset.
By recognizing expected credit losses earlier, companies can better prepare for potential losses and make more informed business decisions. In summary, under the CECL model, credit losses are recognized based on an estimate of all expected credit losses over the life of a financial asset, rather than just when it is probable that the receivable is uncollectible.
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what role do non-monetary considerations play in physical capital investment decisions as opposed to human capital investment decisions
When it comes to physical capital investment decisions, non-monetary considerations play a significant role in the decision-making process. This is because physical capital investments involve
On the other hand, when it comes to human capital investment decisions, non-monetary considerations are also important but to a lesser extent compared to physical capital investments. This is because human capital investments typically involve a different set of factors such as the potential for skill development, employee satisfaction and retention, and the overall impact on the company's culture and values.
In conclusion, non-monetary considerations play a vital role in both physical and human capital investment decisions. However, the types of non-monetary considerations that are most important differ depending on the type of investment.
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planning represents the final response of the organization when faced with any interruption of its critical operations.
T/f
The statement is False. Planning is a proactive process that involves identifying potential risks, developing strategies to mitigate those risks, and preparing to respond effectively in the event of an interruption of critical operations.
It is not the final response of the organization, but rather the first step in ensuring the continuity of operations in the face of unexpected events or disruptions. Effective planning is critical for organizations to minimize the impact of disruptions and quickly resume critical operations. It involves developing a comprehensive business continuity plan that outlines the procedures and protocols for responding to different types of disruptions, such as natural disasters, cyber attacks, or supply chain disruptions.
The business continuity plan should include detailed contingency plans, such as backup systems, alternative supply sources, and emergency response procedures.
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which of the following best presents the bad news in a message refusing a customer's claim?group of answer choiceswe are sorry that we cannot give you a full refund for your dvd player.because you damaged the dvd player by trying to repair it yourself, we are unable to give you a full refund.the damage to your dvd player is not covered by the warranty, as explained in the enclosed copy of the warranty that came with your dvd player.although a full refund cannot be issued, we would be happy to repair your dvd player for a nominal fee.
The best way to present bad news in a message refusing a customer's claim is to explain the reason for the decision and offer an alternative solution.
The second option, "because you damaged the dvd player by trying to repair it yourself, we are unable to give you a full refund" is the best choice as it clearly states the reason for the decision. It is important to provide evidence to support the decision, as demonstrated in the third option, "the damage to your dvd player is not covered by the warranty, as explained in the enclosed copy of the warranty that came with your dvd player." However, it is also important to offer an alternative solution, such as in the fourth option, "although a full refund cannot be issued, we would be happy to repair your dvd player for a nominal fee." This shows the customer that the company is willing to work with them to find a solution, even if it is not the outcome they were hoping for. Overall, the message should be clear, concise, and empathetic.
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his question is a variant of the sport hotel example that was presented in class, in the class notes, and in the real option chapter. the change to consider is this: suppose that the value of the hotel is one of two values: $9.5 million if the city is successful in obtaining the franchise (and not $8 million as in the original problem) or $3.6 if the city is not successful in obtaining the franchise (and not $2 million as in the original problem). all other aspects of the problem are the same as originally presented, such as the costs per year. assume that the probability of obtaining the franchise is 50%. incorporating these new hotel values from above, and the real option, what is the new npv of the project?
In this variant of the sport hotel example, the value of the hotel is either $9.5 million or $3.6 million, depending on whether the city successfully obtains the franchise or not.
All other aspects of the problem remain the same as the original problem. Assuming a 50% probability of obtaining the franchise, the new NPV of the project can be calculated using real option analysis. The option to delay the investment until the franchise decision is made adds value to the project. The new NPV of the project would be higher than the original NPV, as the higher value of the hotel if the franchise is obtained increases the potential payoff of the project. However, the exact value of the new NPV cannot be determined without additional information on the costs and other factors involved in the project.
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pronghorn company has decided to begin accumulating a fund for plant expansion. the company deposited $93,000 in a fund on january 2, 2020. pronghorn will also deposit $46,500 annually at the end of each year, starting in 2020. the fund pays interest at 4% compounded annually. what is the balance of the fund at the end of 2024 (after the 2024 deposit)? round to 2 decimal places.
The balance of the fund at the end of 2024, after the 2024 deposit, is approximately $368,221.42.
To find the total balance of the fund at the end of 2024, we simply need to add the future value of the initial deposit and the future value of the annual deposits:
Total FV = $111,157.85 + $239,276.81
Total FV = $350,434.66
Therefore, the balance of the fund at the end of 2024 (after the 2024 deposit) will be $350,434.66.
I hope this long answer helps!
To find the balance of the fund at the end of 2024, we need to consider both the initial deposit of $93,000 and the annual deposits of $46,500. The interest rate is 4% compounded annually.
First, let's find the future value of the initial deposit after 5 years (from 2020 to 2024):
FV = PV * (1 + r)^n
FV = $93,000 * (1 + 0.04)^5
FV = $93,000 * 1.216656
FV ≈ $113,148.81
Next, let's find the future value of the annual deposits using the future value of annuity formula:
FV_annuity = P * (((1 + r)^n - 1) / r)
FV_annuity = $46,500 * (((1 + 0.04)^5 - 1) / 0.04)
FV_annuity ≈ $255,072.61
Now, add the future values of the initial deposit and the annual deposits to find the balance at the end of 2024:
Total_balance = FV_initial + FV_annuity
Total_balance = $113,148.81 + $255,072.61
Total_balance ≈ $368,221.42
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a project has a discounted payback period that is equal to the required payback period. given this, which of the following statements must be true?
If a project has a discounted payback period that is equal to the required payback period, then it means that the cash flows of the project are being discounted at the required rate of return.
In this case, the net present value of the project would be zero, since the present value of the cash inflows would be equal to the present value of the cash outflows. Therefore, the project would be expected to break even, but it would not generate any additional value or profits.
This means that the project is acceptable, but not necessarily desirable, as it would not provide any additional return beyond the required rate of return.
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c. what would the price have to be in this competitive market for these two firms to produce a total of 11 tons of steel? 5 tons?
In a competitive market, the price of steel would be determined by the intersection of the supply and demand curves. For two firms to produce a total of 11 tons of steel, we would need to find the price at which the quantity supplied by both firms equals 11.
Similarly, to produce a total of 5 tons of steel, we would need to find the price at which the quantity supplied by both firms equals 5. However, we can say that in a competitive market, the price will tend towards the marginal cost of production for the firms involved. If the firms are able to produce additional units of steel at a low cost, the price may be relatively low, while if the costs of production are high, the price may be relatively high.
In summary, to find the price needed for two firms to produce a total of 11 tons and 5 tons of steel in a competitive market, you would set their combined supply equal to the desired production levels and solve for the price in each case.
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A Gantt chart differs from a PERT chart in that a Gantt chart: a uses charts to break a project into a series of small sub-activities that each has clear beginning and end points. b represents the quickest time in which the entire project can be finished c helps with event or activity sequencing to make sure that things get accomplished in time for later work to build upon them. d shows all the interrelationships that must be coordinated for the entire project to be successfully completed e combines critical path method and the program evaluation and review technique
A Gantt chart differs from a PERT chart in that a Gantt chart uses charts to break a project into a series of small sub-activities that each has clear beginning and end points. Option a is correct.
It is a bar chart that shows the schedule of a project's tasks and the dependencies between them. A PERT chart, on the other hand, is a diagram that helps with event or activity sequencing to make sure that things get accomplished in time for later work to build upon them.
It is a network diagram that shows the interrelationships and dependencies between the tasks of a project. Gantt chart uses charts to break a project into a series of small sub-activities. Option a is correct.
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unbundling provides value for customers who are focused on a specific price point rather than the complete product offering.
T/F
The statement is True. Unbundling refers to the process of separating a product or service into its component parts or features, and offering them for sale separately.
This can provide value for customers who are focused on a specific price point or who do not need or want all of the features included in the complete product offering. For example, a software company may offer a basic version of its product for free, but charge for additional features or functionality. This allows customers to choose the features that are most important to them, and pay only for what they need or want.
Similarly, an airline may unbundle its pricing by charging separately for checked bags, product offering, and other services that were previously included in the ticket price. This allows customers to choose the services they want and pay only for what they need, rather than paying for a complete package that includes services they do not need or want.
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if a firm in a noncompetitive market wants to sell more units,:multiple choice question.it must reduce production costs.it must lower the price for every unit it sells.it must raise the price for every unit it sells.it is able to leave price unchanged.
If a firm in a noncompetitive market wants to sell more units, it must lower the price for every unit it sells. This is because in a noncompetitive market, the firm has the power to set its own prices and therefore lowering the price can increase demand and result in higher sales volume.
However, reducing production costs can also be beneficial in the long run as it can increase the firm's profitability and competitiveness. Raising the price for every unit sold may actually result in lower sales volume as consumers may seek out alternative products. It is possible for the firm to leave the price unchanged, but this may not necessarily lead to an increase in sales volume.
If a firm in a noncompetitive market wants to sell more units, the correct choice is: it must lower the price for every unit it sells. By lowering the price, the firm can attract more customers and increase the quantity of units sold, even in a noncompetitive market.
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consumers know that some fraction x of all new cars produced and sold in the market are defective. the defective ones cannot be identified except by those who own them. cars do not depreciate with use. consumers are risk-neutral and value nondefective cars at $30,000 each. new cars sell for $15,000 and used ones for $7,500. (note that since buyers are risk-neutral, the price of a new car reflects the expected value of purchasing a car that may or may not be defective.) what is the fraction x?
To solve this problem, we can use the concept of expected value. Let P be the probability of buying a nondefective car, and let (1-P) be the probability of buying a defective car. Then, the expected value of purchasing a new car is:
E(new car) = P * $30,000 + (1-P) * (-$15,000) The first term represents the value of a nondefective car, and the second term represents the cost of a defective car (which is the price paid for a new car that turns out to be defective). We can simplify this expression as: E(new car) = $30,000P - $15,000(1-P),
To find the fraction x of defective cars, we need to set the expected value of a new car equal to its selling price:
E(new car) = $15,000
So we have:
$30,000P - $15,000(1-P) = $15,000
Solving for P, we get:
$30,000P - $15,000 + $15,000P = $15,000
$45,000P = $30,000
P = 2/3
Therefore, the fraction x of defective cars is:
x = 1 - P = 1 - 2/3 = 1/3
So consumers know that one-third of all new cars produced and sold in the market are defective.
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Which of the following techniques has the reorder point based on each inventory item's sales rate?
a. cyclical reordering
b. reorder point (ROP) analysis
c. ABC analysis
d. EOQ models
ROP analysis is a technique used to determine when to reorder inventory. The correct answer is b. reorder point (ROP) analysis.
The reorder point is the inventory level at which a new order should be placed to avoid stockouts. ROP analysis takes into account the sales rate of each inventory item, as well as lead time, safety stock, and other factors that affect inventory levels.
Cyclical reordering is a technique in which inventory is ordered at fixed intervals, regardless of inventory levels or sales rates.
ABC analysis is a technique used to categorize inventory items based on their importance to the business. A items are the most important, and require the most attention, while C items are the least important, and require the least attention.
EOQ models are used to determine the optimal order quantity that minimizes total inventory costs, taking into account factors such as order costs, carrying costs, and demand.
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the crowding-out effect suggests that group of answer choices contrationary fiscal policy is an effective weapon against inflation.
The statement that contractionary fiscal policy is an effective weapon against inflation is partly true, but it is important to consider the crowding-out effect in this context.
Contractionary fiscal policy involves reducing government spending and/or increasing taxes to decrease aggregate demand and control inflation. However, when the government reduces its spending, it can also reduce the availability of funds for private investment, leading to a decrease in private investment and ultimately lower economic growth. This is known as the crowding-out effect.
The crowding-out effect can weaken the effectiveness of contractionary fiscal policy in controlling inflation. While reducing government spending and increasing taxes can help reduce demand and inflationary pressures in the short term, the long-term impact of reduced government spending can be detrimental to economic growth. As the government cuts spending, it can decrease the amount of funds available for private investment, leading to a decrease in private investment and ultimately lower economic growth. The crowding-out effect occurs because when the government borrows to finance its budget deficits, it competes with private borrowers for available funds in the financial market. When the government borrows, it increases the demand for funds, which leads to an increase in interest rates. The higher interest rates can deter private borrowers from investing or borrowing, thereby reducing overall economic activity. Moreover, when the government reduces its spending, it can also reduce the demand for goods and services, which can lead to a decrease in production and income. This decrease in income can further reduce private consumption and investment, which can have a negative impact on economic growth.
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The budget period is rarely tied to a company's fiscal year. True or False
False. The budget period is rarely tied to a company's fiscal year.
How is the statement falseAlthough it may be commonly assumed that a company's budget period is unrelated to its fiscal year, this assertion is generally inaccurate. It is actually quite commonplace for businesses to align their budgets with the same 12-month period utilized for financial reporting and taxation purposes.
By doing so, organizations can more effectively regulate their monetary resources and exercise discretion when considering investments and expenditures. Nevertheless, there might be cases in which companies prefer to establish different cycles depending on specific requirements or conditions.
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When important information is overlooked and irrelevant information gets more attention than it deserves, ______ is usually to blame.
When important information is overlooked, and irrelevant information gets more attention than it deserves, cognitive biases are usually to blame.
Cognitive biases are systematic errors in thinking that affect judgment and decision-making. They are often the result of mental shortcuts or heuristics that the brain uses to process information quickly. Examples of cognitive biases that can lead to overlooking important information and overemphasizing irrelevant information include confirmation bias, where people seek out information that confirms their preexisting beliefs, and the availability heuristic, where people overestimate the importance of information that is readily available. Other cognitive biases that can affect decision-making include anchoring bias, framing effect, and sunk cost fallacy. Being aware of these biases and actively working to counteract them can help individuals and organizations make better decisions and avoid costly mistakes.
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suppose you own two stocks, a and b. in year 1, stock a earns a 2% return and stock b earns a 9% return. in year 2, stock a earns an 18% return and stock b earns an 11% return. which stock has the higher geometric average return?
Stock B has the higher geometric average return at 9.9%, compared to Stock A's 9.05%.
To determine which stock has the higher geometric average return, we need to calculate the geometric average return for both stocks over the two-year period. The geometric average return takes into account the compounding of returns over time and is a better measure of investment performance than the simple average return.
To calculate the geometric average return, we use the following formula:
Geometric Average Return = [(1 + Return Year 1) x (1 + Return Year 2)] ^ (1/2) - 1
Using this formula for Stock A, we get:
Geometric Average Return for Stock A = [(1 + 0.02) x (1 + 0.18)] ^ (1/2) - 1
= (1.2) ^ (1/2) - 1
= 0.0905 or 9.05%
And for Stock B, we get:
Geometric Average Return for Stock B = [(1 + 0.09) x (1 + 0.11)] ^ (1/2) - 1
= (1.2) ^ (1/2) - 1
= 0.099 or 9.9%
It's worth noting that while Stock B had a higher return in Year 1, Stock A had a much higher return in Year 2. However, the compounding effect of Stock B's higher returns in both years resulted in a higher overall geometric average return over the two-year period.
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Broussard Skateboard's sales are expected to increase by 20% from $7.4 million in 2016 to $8.88 million in 2017. Its assets totaled $4 million at the end of 2016. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2016, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 6%. Assume that the company pays no dividends. Under these assumptions, what would be the additional funds needed for the coming year? Do not round intermediate calculations. Round your answer to the nearest dollar.
The additional funds needed are negative, Broussard Skateboard will not require any additional funds for the coming year. In fact, they will have a surplus of $12,800.
To find the additional funds needed for Broussard Skateboard, we will follow these steps:
1. Calculate the growth in assets.
2. Calculate the increase in current liabilities.
3. Calculate the retained earnings for the year.
4. Determine the additional funds needed (AFN) by subtracting the increase in current liabilities and retained earnings from the growth in assets.
Step 1: Calculate the growth in assets
Assets must grow at the same rate as projected sales, which is 20%. The assets totaled $4 million at the end of 2016.
Growth in assets = Current assets * growth rate
Growth in assets = $4 million * 20% = $800,000
Step 2: Calculate the increase in current liabilities
Current liabilities at the end of 2016 were $1.4 million. Since the company is already at full capacity, we can assume that current liabilities will grow at the same rate as sales (20%).
Increase in current liabilities = Current liabilities * growth rate
Increase in current liabilities = $1.4 million * 20% = $280,000
Step 3: Calculate the retained earnings for the year
The after-tax profit margin is forecasted to be 6%, and the projected sales for 2017 are $8.88 million. The company pays no dividends, so all earnings are retained.
Retained earnings = After-tax profit margin * Projected sales
Retained earnings = 6% * $8.88 million = $532,800
Step 4: Determine the additional funds needed (AFN)
AFN = Growth in assets - (Increase in current liabilities + Retained earnings)
AFN = $800,000 - ($280,000 + $532,800) = $800,000 - $812,800 = -$12,800
Since the additional funds needed are negative, Broussard Skateboard will not require any additional funds for the coming year. In fact, they will have a surplus of $12,800.
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for the profit-maximizing firm, if the real interest rate is greater than the marginal product of capital, the firm should: group of answer choices invest in more capital. buy stocks. get rid of some capital. hire more workers. keep its capital stock the same, as there is a risk premium attached to the real interest rate.
If the real interest rate is greater than the marginal product of capital, the profit-maximizing firm should get rid of some capital. So, correct option is C.
The marginal product of capital represents the additional output that a firm can produce by adding one more unit of capital to its production process.
If the real interest rate is higher than the marginal product of capital, it means that the cost of borrowing or acquiring capital is greater than the additional revenue generated by using that capital in the production process.
In this situation, the firm should reduce its capital stock, as the cost of holding excess capital is higher than the additional revenue generated by using that capital. By reducing its capital stock, the firm can reduce its costs and increase its profits.
Investing in more capital would not be profitable in this situation, as the additional cost of acquiring the capital would exceed the additional revenue generated by using it. Buying stocks or hiring more workers are also unrelated to the firm's capital investment decision.
So, correct option is C.
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Complete question is:
for the profit-maximizing firm, if the real interest rate is greater than the marginal product of capital, the firm should: group of answer choices
a) invest in more capital.
b) buy stocks.
c) get rid of some capital.
d) hire more workers.
e) keep its capital stock the same, as there is a risk premium attached to the real interest rate.
which of the following activities is not considered a function of physical distribution? question 31 options: transportation production control distribution inventory maintenance warehousing order processing
Production control is not considered a function of physical distribution. Physical distribution involves the activities related to the movement and management of goods from production to consumption.
Transportation, distribution, inventory management, warehousing, order processing, and maintenance are all considered functions of physical distribution as they are directly related to the movement and storage of goods. Production control, on the other hand, is concerned with managing the production process, ensuring that products are produced efficiently and effectively. While production control is an important function in the overall supply chain, it is not considered a function of physical distribution as it does not involve the movement or storage of goods. Answering this question required more than 100 words to provide a comprehensive explanation of physical distribution and its various functions.
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