Given, Amount to be invested for 3 years
= $30,000Interest rate
= 5%Since the interest is compounded annually, we will use the following formula to calculate the amount: A
= P(1 + r/n)^(n*t)Here, A
= Amount at the end of the given time periodP
= Principal amountr
= rate of interestn = number of times compounded per yeart
= time period Let us assume that the amount required to be invested in year 1 is P.So, the amount at the end of 3 years will be:$30,000
= P(1 + 5/100)^3
=> $30,000
= P(1.05)^3$P
= $30,000/(1.05)^3
= $25,915.13Therefore, the amount of money that you have to invest at year 1 is $25,915.13.Option A is correct.
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Assume the MPC is 0.8. Assuming only the multiplier effect matters, a decrease in government purchases of $100 billion will shift the aggregate demand curve to the a. left by $180 billion b. left by $500 billion c. right by $180 billion d. right by $400 billion 5. When the Fed decreases the discount rate, banks will borrow more from the Fed and lend more to the public. The money supply increases borrow more from the Fed and lend less to the public. The money supply decreases borrow less from the Fed and lend more to the public. The money supply increases borrow less from the Fed and lend less to the public. The money supply decreases a. b. c. d. If businesses and consumers become pessimistic, the Federal Reserve can attempt to reduce the impact on the price level and real GDP by 6. a. increasing the money supply, which raises interest rates b. increasing the money supply, which lowers interest rates. c. decreasing the money supply, which raises interest rates.
1. MPC - Marginal Propensity to Consume
2. Aggregate demand curve
3. Multiplier effect
4. Fed - Federal Reserve
5. Discount rate
6. Money supply
7. Pessimistic
8. Price level
9. Real GDP
10. Interest rates
1. The MPC, or Marginal Propensity to Consume, is the proportion of additional income that is spent on consumption. In this case, the MPC is given as 0.8, which means that for every additional dollar of income, 80% of it will be spent.
2. The multiplier effect refers to how changes in spending can have a multiplied impact on the overall economy. When there is an increase in government purchases, it increases the aggregate demand, which is the total amount of goods and services that all sectors of the economy are willing to buy at a given price level.
3. The formula to calculate the multiplier effect is 1/(1-MPC). In this case, the MPC is 0.8, so the multiplier is 1/(1-0.8) = 1/0.2 = 5.
4. To determine the shift in the aggregate demand curve, we multiply the decrease in government purchases by the multiplier. In this case, the decrease in government purchases is $100 billion. So, the shift in the aggregate demand curve will be -100 billion * 5 = -500 billion.
Therefore, the correct answer is b. left by $500 billion.
5. When the Fed decreases the discount rate, it encourages banks to borrow more from the Fed and lend more to the public. This increases the money supply, which is the total amount of money available in the economy.
6. Conversely, when the Fed increases the discount rate, it discourages banks from borrowing from the Fed and lending to the public. This decreases the money supply.
7. The correct answer for the statement is "The money supply increases." When banks borrow more from the Fed and lend more to the public, it leads to an increase in the money supply.
8. If businesses and consumers become pessimistic, the Federal Reserve can attempt to reduce the impact on the price level and real GDP by increasing the money supply, which lowers interest rates. This can stimulate borrowing and spending, which can help boost economic activity.
9. Increasing the money supply lowers interest rates because it increases the supply of money available for borrowing. When there is more money available, lenders compete for borrowers by offering lower interest rates. Lower interest rates can incentivize borrowing and investment, leading to an increase in real GDP.
10. Conversely, decreasing the money supply raises interest rates because there is less money available for borrowing. With less money available, lenders can charge higher interest rates to borrowers. Higher interest rates can discourage borrowing and investment, leading to a decrease in real GDP.
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True or False The 2.0 rule states that an athlete needs a D average
in high schooll to be a student athlete in college. True
False
The statement is false; the 2.0 rule for student-athletes in college is not universally applicable and varies among institutions.
False. The statement is false. The 2.0 rule is not a requirement for all student-athletes in college. The academic eligibility requirements for student-athletes vary depending on the specific college or university, as well as the governing body of collegiate athletics (e.g., NCAA, NAIA). Some institutions may have a minimum GPA requirement of 2.0 or higher, while others may have different standards. It is important for student-athletes to familiarize themselves with the academic eligibility requirements of the specific college or university they are interested in.
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"
Question 4:
A. Give an example of an economic situation
where the Federal Reserve would decide to increase interest
rates.
B. Explain one way that higher interest rates
may affect the economy, unemplo
"
A) Economic situation where the Federal Reserve would decide to increase interest rates: The Federal Reserve might consider increasing interest rates when inflation levels in the economy are increasing.
The central bank might decide to increase interest rates to reduce inflation levels. Inflation is the rate at which the cost of goods and services rises, indicating that consumers need to pay more for the same quantity of goods and services.
When inflation is high, people tend to spend less money, and this can have an impact on economic development. Higher interest rates may help to reduce inflation by slowing down the rate at which money is lent and borrowed.
B) One way that higher interest rates may affect the economy, unemployment: Higher interest rates might lead to increased unemployment in the economy. When interest rates rise, the cost of borrowing money rises, and people become more hesitant to spend money on investment, business development, and expansion.
As a result, businesses become less profitable, and they may be required to lay off workers to cut costs. As a result, the unemployment rate increases, which might further harm the economy. Lower interest rates, on the other hand, might encourage businesses to borrow and invest more, which might result in the creation of more job opportunities and lower unemployment levels.
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The point where income equals expenses is called _____.
a)gross income
b)net income
c)break-even point
d)none of the above
The answer is c) break-even point.The break-even point is the point where income equals expenses.
The break-even point is the point at which a company's total revenue equals its total expenses, resulting in neither profit nor loss. It is the level of sales or business activity at which income equals expenses. At the break-even point, there is no net income or net loss. It is an important concept in financial analysis and helps businesses determine the minimum level of sales or operations needed to cover their costs.
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The
stages of supply a product or service from its initial conception
to the statisfaction of the last customer and products withdrawl
from the market place is knows as the product life cycle
The stages of supplying a product or service from its initial conception to the satisfaction of the last customer and product withdrawal from the marketplace are known as the product life cycle.
The product life cycle represents the different stages that a product or service goes through from its introduction to the market until its eventual decline and discontinuation. These stages typically include introduction, growth, maturity, and decline. It encompasses the entire lifespan of a product, from its development and launch to its eventual exit from the market.
As the product gains traction and customer acceptance increases, it enters the growth stage. Sales start to rise rapidly, and competitors may enter the market. Companies often invest in expanding production capacity and improving the product's features and functionality to meet growing demand.
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2. A lottery claims its grand prize is $16 million, payable over 4 years at $4 million per year. If the first payment is made three years from now, what is this grand prize worth today? Use an interest rate of 3.5%.
The lottery claims its grand prize is $16 million, payable over 4 years at $4 million per year. If the first payment is made three years from now, then the actual number of payments that will be paid is 1.
We need to calculate the present value of this amount. The interest rate is 3.5%.We will use the present value of an annuity formula:PV = A(1 - 1 / (1 + r) n) / rWhere,PV is the present value.
A is the annual paymentr is the interest raten is the number of paymentsThe annual payment is $4 million. We know that the grand prize is payable over four years at $4 million per year.
So, the annual payment is $4 million.The interest rate is 3.5%.We have only one payment left that will be paid three years from now.
So, the number of payments is one. Let us put these values in the formula:P = $4,000,000r = 0.035n = 1PV = $3,727,203The grand prize is worth $3,727,203 today.
Therefore, the present value of the grand prize is $3,727,203.
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The Solow growth rate is the rate of economic growth that occurs when:
a. prices and wages are flexible.
b. prices and wages are sticky.
c. the money supply is growing.
d. inflation is moderate
The correct answer is option (a) which is the Solow growth rate is the rate of economic growth that occurs when the prices and wages are flexible.
What is Solow growth rate?
The Solow growth model is a neoclassical model of economic growth developed by Robert Solow.
It is a capital accumulation model that examines the long-run economic growth and income distribution of an economy.
The Solow growth rate is the steady-state rate of economic growth that occurs when the rate of capital accumulation, the rate of population growth, and the rate of technological progress are balanced.
What is Economic growth?
Economic growth is an increase in an economy's capacity to produce goods and services over time. It is the increase in the quantity and quality of goods and services produced in an economy over time.
Economic growth is measured by the rate of increase in real GDP per capita over time.
The rate of economic growth that takes place when prices and wages are flexible is known as the Solow growth rate.
Hence, option (a) is correct.
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Which of the following statements regarding bonds and their terms is FALSE? A. When we calculate a bond's yield to maturity by solving the formula, Price of an n - period bond = (1+) 1
Coupon
+ (1+) 2
Coupon
+…+ (1+) n
Coupon + Face
. the yield we compute will be a rate per coupon interval. B. The internal rate of return (IRR) of an investment in a zero - coupon bond is the rate of return that investors will earn on their money if they buy a default - free bond at its current price and hold it to maturity. C. The yield to maturity of a bond is the discount rate that sets the future value (FV) of the promised bond payments equal to the current market price of the bond. D. Financial professionals also use the term spot interest rates to refer to the default-free zero-coupon yields
The false statement regarding bonds and their terms is option A. When we calculate a bond's yield to maturity by solving the formula, Price of an n - period bond = (1+) 1
Coupon + (1+) 2Coupon
+…+ (1+) nCoupon + Face , the yield we compute will be a rate per coupon interval. Bonds are financial instruments that companies, municipalities, and governments may use to fund large projects or operational expenses. Bondholders lend money to the bond issuer in exchange for interest payments over a set period. Bondholders also receive their principal back when the bond matures.
The terms and features of a bond issue are outlined in the bond indenture. A bond's coupon rate is the annual interest rate that the bond issuer agrees to pay to bondholders. The coupon rate is used to compute the bond's periodic interest payments.
When the bond matures, the bond issuer repays the principal, which is also known as the face value.The yield to maturity of a bond is the discount rate that sets the future value (FV) of the promised bond payments equal to the current market price of the bond.
Financial professionals also use the term spot interest rates to refer to the default-free zero-coupon yields. The internal rate of return (IRR) of an investment in a zero-coupon bond is the rate of return that investors will earn on their money if they buy a default-free bond at its current price and hold it to maturity.
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Suppose the demand curve for coffee is represented by =$100−P + 0.01QD=$100−P + 0.01I and the supply curve for coffee is represented by = PQS = P. Assume the consumer's income is $2,000.
a. What are the equilbrium price and quantity?
P=$120PE=$120 and =120QE=120
P=$100PE=$100 and =20QE=20
P=$60PE=$60 and =60QE=60
b. Calculate the price elasticity of demand at equilibrium. =ED=
c. Calculate the income elasticity of demand at equilibrium. =EID=
d. True or False. At equilibrium, coffee is a normal good.
False
True
We can equate the supply and demand curves to find the equilibrium price and quantity:
PQD=PQSP=(100−P+0.01(2000)) =P(1)QD=(100−P+0.01(2000))=0.01QD(2000)=2000−20P2000=2000−19P=100−P+0.01(2000)=101−0.99PP=$60PE=$60 and =60QE=60.
The price elasticity of demand at equilibrium is found using the formula:
E=−∂QD∂P×PPQD=−dQDdP×PPQD∂QD∂P=−0.01(2000)−P=−2000−100+P(2000−P)QD=100−P+0.01(2000)=99+0.99P0.01(2000)+P=199+1.01PP=60E=−∂QD∂P×PPQD=−dQDdP×PPQD∂QD∂P=−0.01(2000)−60=−2000+60(2060)QD=100−60+0.01(2000)=140+0.99P0.01(2000)+60=260+1.01P
E = dQD/dP × P/QD= 0.99 × 60/140 ≈ 0.4236c.
The income elasticity of demand at equilibrium is found using the formula:
EID=∂QD∂I×I/QD=0.01(2000)/140=2/14=1/7 ≈ 0.143d.
Coffee is a normal good since the income elasticity of demand is positive (0.143).
the given statement is True.
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The relevant criterion for the requirement to prepare consolidated financial statements is whether one company _____ the decision-making process of another company.
The relevant criterion for the requirement to prepare consolidated financial statements is whether one company "controls" the decision-making process of another company.
Consolidated financial statements are prepared when a company has control over another company or companies. Control is generally determined by assessing the power of one company to govern the financial and operating policies of another entity in order to obtain benefits from its activities. It goes beyond just having a significant influence or ownership interest in the entity. Control can be established through ownership of voting rights, the ability to appoint majority members to the board of directors, or contractual arrangements that grant significant decision-making authority. When control exists, the parent company is required to consolidate the financial statements of its subsidiaries into a single set of consolidated financial statements, providing a comprehensive view of the financial position, performance, and cash flows of the entire group of companies under its control.
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The stated inserest payment, in dollars, made on a bond each period is called the bond's: A. cosipon. B. face value, C. maturity. D. yield to maturity. E. coupon rate. 32. A bond that makes no coupon paymens and is initially priced at a deep discount is called a boesd. A. Treasury B. municipal C. floating-rat d D. jun k E. 7ero cocipon 33. The principal amonent of a bond that is repaid at the end of the loan term is called the bond's: A. cocipon. B. face value. C. matarity, D. yicld to maturity. E. coupon rate. 34. The specified date on which the principal amoumt of a bond is repaid is called the bond's: A. cocipon. B. face value. C. matarity. D. yield to maturity.
The stated interest payment, in dollars, made on a bond each period is called the bond's coupon rate. A bond that makes no coupon payments and is initially priced at a deep discount is called a zero coupon bond.
The principal amount of a bond that is repaid at the end of the loan term is called the bond's face value. The specified date on which the principal amount of a bond is repaid is called the bond's maturity. A bond is a debt investment in which the investor loans money to an entity such as a government, corporation, or agency that borrows the funds for a defined amount of time at a fixed interest rate.
A bond typically represents a loan agreement between an investor and a borrower. This arrangement specifies the amount of principal, the interest rate that the borrower must pay on the borrowed funds, and the bond's lifespan. The bond's lifespan is typically several years, and the interest payments are made annually or semiannually until the bond's maturity.
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during the interview for a job, the process that attempts to reveal both the good and bad points of the job and organization is called
The process during a job interview that attempts to reveal both the good and bad points of the job and organization is called the interviewee asking questions.
During a job interview, it is not only the employer who asks questions to assess the suitability of the candidate, but the interviewee also has the opportunity to ask questions. This is a crucial part of the interview process as it allows the candidate to gather more information about the job and organization. By asking questions, the interviewee can gain insights into various aspects of the job, such as the work culture, opportunities for growth and development, work-life balance, and any potential challenges or drawbacks. This helps the interviewee make an informed decision about whether the job and organization align with their needs and goals.Examples of questions that can reveal both the positive and negative aspects of the job and organization include:
When asking questions, it is essential to prepare thoughtful and relevant inquiries that delve deeper into understanding the role and the company. This demonstrates the candidate's interest in the position and their ability to critically evaluate the fit between their skills and the job requirements.Can you tell me more about the company culture and values? How would you describe the typical workday in this role? What opportunities for growth and advancement are available within the company? Can you provide examples of how the organization supports work-life balance? Are there any specific challenges or obstacles that employees in this role typically face?
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Question 2 (25 points). On 01/01/2019, Flowers Ltd. entered into a contract with Daisy Ltd. to lease a non-current asset for 3 years. To obtain the lease, Daisy Ltd. incurs in initial direct costs of £7,000 that are paid in credit. Daisy Ltd. must pay £10,000 each year with the lease payments commencing on 31/12/2019. Daisy Ltd. can borrow at a rate of 8% each year. At the end of the lease contract, the ownership of the non-current asset will be transferred to Daisy Ltd. The useful life of the non-current asset is 10 years. Required: a) After doing the necessary calculations, draw all the journal entries for years 2019,2020 and 2021 for Daisy Ltd. considering the accounting treatment of the leasing contract from the point of view of Daisy Ltd. (12 points) b) Describe the accounting treatment for Flowers Ltd (calculations and journal entries are not required for this question). (5 points) c) How would the accounting treatment change for Daisy Ltd and Flowers Ltd if, at the end of the contract, the ownership of the non-current asset is not transferred to the lessee (calculations and journal entries are not required for this question). (5 points) d) Describe what the non-lease components are and provide an example to support your answer (3 points)
a) Journal Entries for years 2019, 2020, and 2021 for Daisy Ltd:
Year 2019
Lease Receivable Dr. £9,238.17
Bank Cr. £9,238.17
To record lease receivable
Year 2020
Interest Receivable Dr. £1,490.25
Lease Receivable Dr. £8,606.92
Bank Cr. £10,097.17
To record lease and interest receivables
Year 2021
Interest Receivable Dr. £898.32
Lease Receivable Dr. £10,198.85
Bank Cr. £11,097.17
To record lease and interest receivables
b) Accounting treatment for Flowers Ltd
The accounting treatment for Flowers Ltd. is to recognize the leased asset as an asset on its balance sheet and as a liability for the obligation to make lease payments. Flowers Ltd. will recognize lease payments as income over the lease term, using the effective interest method.
c) Accounting treatment changes for Daisy Ltd and Flowers Ltd
If, at the end of the contract, the ownership of the non-current asset is not transferred to the lessee, then the accounting treatment will change. Daisy Ltd. will have to recognize the asset and liability on its balance sheet, and Flowers Ltd. will have to continue recognizing lease payments as income.
d) Non-lease components and Example
Non-lease components are the components of a contract that are not related to the lease, such as maintenance, insurance, and property taxes. An example of non-lease components is a lease contract for a vehicle that includes maintenance and repair services. The maintenance and repair services are non-lease components.
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Match the debt contract term to its definition Call provision Credit rating Conversion option Collateral Covenant
Debt contract terms are a financial agreement between the borrower and lender that lays out the specifics of the loan. It includes the repayment structure and interest rate. There are various terms that lenders use to protect their investment and mitigate the risk of a borrower defaulting.
Let's match the debt contract term to its definition below:Call Provision - The right to repay the debt before its maturityCredit Rating - The borrower's creditworthiness rating, which represents the probability of defaultConversion Option - The right to convert debt into equityCollateral - An asset used to secure a loanCovenant - A condition specified in the loan agreement that must be followed.More than 100 words, so let's have some additional details on the subject. The borrower and lender should understand these terms to avoid any miscommunication or disputes that might arise. The borrower has the right to repay the debt before its maturity under the call provision, but the lender may impose a penalty fee for doing so.
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This question asks you to consider how a change in government purchases and taxes and transfers impacts the IS curve. Consider the expenditure function, where we have excluded the effect of wealth for simplicity: E=c 0
+c y
(Y−T)−c r
r+i 0
+i y
Y−i r
r+G Suppose that c 0
=50,c r
=0.1,c y
=0.3,i 0
=50,i r
=0.1, and i y
=0.2. a) Solve for the IS curve, with T and G kept in the equation as exogenous, to be determined, variables. b) Suppose G increases by 100. Holding all else fixed, what will happen to Y ? (Hint: just look at how Y will change when your G term changes). c) Suppose instead that taxes decrease by 100 . Holding all else fixed, what will happen to Y ? d) Lastly, suppose instead that MPC rises to 0.6 while G rises by 100 . Holding all else fixed, what will happen to Y ?
Previous question
(a) IS curve is Y = 1,000 − 10r and (b) When G increases by 100, the IS curve shifts to the right and (c) When taxes decrease by 100, the IS curve shifts to the right.
To solve the given equation, we have to substitute the given values of c0, cr, cy, i0, ir, and iy in the given formula:
E = c0 + cy(Y - T) - cr(r + i0 + iyY)
The expenditure function becomes:
E = 50 + 0.3(Y - T) - 0.1(r + 50 + 0.2Y)
On simplifying, we get:
E = 5Y - r - 40T - 5r
When T and G are held exogenous and to be determined variables, then the equation can be written as:
Y = 1,000 - 10r [IS curve]
Now, if G increases by 100, then the IS curve shifts to the right. This is because an increase in G increases the aggregate demand and hence shifts the IS curve to the right.
When taxes decrease by 100, then the IS curve also shifts to the right.
This is because the decrease in taxes increases the disposable income of the consumers, which increases consumption and, thus, shifts the IS curve to the right.
If MPC rises to 0.6 while G rises by 100, and all else is kept fixed, then the equation becomes:
Y = 1,100 - 16r [IS curve]
So, an increase in MPC increases the slope of the IS curve, and hence, an increase in G causes a larger shift in the IS curve.
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ABC CO had cash and marketable securities worth $1,041,357 accounts payables worth $4,179,975, inventory of $2,141,726, accounts receivables of $2,118,924, short-term notes payable worth $776,297, and other current assets of $80,971. What is the company's net working capital? Rearrange: Cash & marketable securities short-termnotes payable AR other current assets NET WORKING CAPITAL
Net working capital can be calculated by subtracting current liabilities from current assets. In this case, the company's current assets include cash and marketable securities ($1,041,357).
Accounts receivables ($2,118,924), and other current assets ($80,971). Current liabilities consist of short-term notes payable ($776,297). Subtracting the liabilities from the assets, the net working capital is $1,465,955.
Net working capital is the difference between a company's current assets and current liabilities. In this scenario, the current assets include cash and marketable securities, accounts receivables, and other current assets, totaling $3,241,252 ($1,041,357 + $2,118,924 + $80,971). The current liabilities, comprising short-term notes payable, amount to $776,297. Subtracting the liabilities from the assets yields a net working capital of $1,465,955 ($3,241,252 - $776,297).
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Examine the advantages and disadvantages of using celebrities to
promote products and services based on relevant theory.
The practice of using celebrities to promote products and services has become commonplace in today's society. Companies hire celebrities as endorsers to advertise their products in the hope of increasing sales.
There are advantages and disadvantages to using celebrities as endorsers of a product or service, and these are discussed below.Advantages of using celebrities to promote products and services:Celebrity endorsement has the advantage of raising brand awareness.
Celebrity status adds a touch of glamour and prestige to the product or service being promoted, making it more attractive to consumers. Celebrities have built-in audiences and fan bases, so companies can benefit from these established networks and extend their reach to new customers.
Celebrity endorsement can also improve a product's image. Celebrity endorsers are often seen as role models, so if they endorse a product, it must be good. Consumers may be more inclined to buy a product if they see a celebrity using it, as they may perceive it as being of higher quality.Disadvantages of using celebrities to promote products and services:Celebrity endorsement can be expensive.
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CK Company stockholders expect to receive a year-end dividend of $5 per share and then immediately sell their shares for $115 dollars per share. If the required rate of return for the stock is 20 percent, what is the current value of the stock? Select one: a. $100 b. 5132 c. 5110 a. 5122
The value of a stock in the stock market is the present value of the sum of all future dividends that the stock is expected to pay.
in this given problem, CK Company stockholders expect to receive a year-end dividend of $5 per share and then immediately sell their shares for $115 per share, and the required rate of return for the stock is 20%. The problem asks for the current value of the stock.
So, the calculation of the current value of the stock is done as follows; The dividend yield on the stock = $5/$115 = 4.35%And the capital gains yield = (115 - 0) / 0 = ? So, we have to estimate the price of the stock in one year from now, and then determine the percentage gain that results from the stock price increase over that year.
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Daphne works with Syed. Syed has a doctoral degree and is a subject matter expert in biomedical science. Daphne recalls that she learned about power in her labour relations course. What source of power does Syed exhibit? Define power, and describe the five sources of power. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac)
Power is the capacity or ability to direct or influence the behavior of others or the course of events.
The five sources of power include legitimate power, reward power, coercive power, expert power, and referent power.
Legitimate power refers to the influence one possesses due to their position or title.
Reward power refers to the influence one possesses due to their ability to provide incentives for others.
Coercive power refers to the influence one possesses due to their ability to enforce punishments on others.
Expert power refers to the influence one possesses due to their knowledge, expertise, or special skills.
Referent power refers to the influence one possesses due to their ability to attract or charm others.
Due to Syed’s doctoral degree and his subject matter expertise in biomedical science, he exhibits expert power.
As per the scenario given in the question, Daphne works with Syed and Syed is an expert in his field.
Hence, he has the expertise required to direct or influence the behavior of others in the context of biomedical science.
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The auditor is responsible for communicating significant internal control deficiencies to the audit committee, or those charged with governance. This communication
Select one:
A. must be oral.
B. must be written.
C. may be oral or written.
D. must be oral via direct communication.
The auditor is required to communicate significant internal control deficiencies to the audit committee, or those charged with governance, in writing.
This is in accordance with auditing standards, such as ISA 265 and AU 325.
The written communication should include the following information:
The nature of the deficiency
The potential impact of the deficiency on the company's financial statements
Any recommendations for how the deficiency can be corrected
The written communication should be made prior to the issuance of the auditor's report on the financial statements.
The oral communication of significant internal control deficiencies is not sufficient. This is because the oral communication can be easily forgotten or misunderstood. The written communication provides a permanent record of the deficiency and its potential impact on the company's financial statements.
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the change in total cost from producing the eightieth unit of output is , and the change in total revenue from producing the seventh unit of output is . $3.50; $6.50 $7.00; $6.50 $10.00; $70.00 $5.00; $14.00
The change in total cost from producing the eightieth unit of output is $5.00, and the change in total revenue from producing the seventh unit of output is $14.00.
Businesses need to know these numbers to establish the best level of production and pricing that will optimize revenues. In contrast to marginal income, which varies when an additional unit of production is sold, marginal cost is the change in total cost that occurs when the amount produced changes by one unit.
A company should produce at the point where marginal cost and marginal revenue equal each other in order to maximize profits. Keeping current customers longer is less expensive than finding new ones, and higher retention rates are directly correlated with increased revenue.
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Cariton was a director of Rich Financial. Incorporated. Which of the following are duties that Carlion owes to Rich Financial? Multiple Choice A duty of private interest and a duty of rational belief. A duty of business judgment and a duty of obedience. A duty of rationality and a duty of independence. A duty of care and a duty of loyalty.
Carlton owes the following duties to Rich Financial Incorporated: a duty of care and a duty of loyalty.As a director of Rich Financial Incorporated, Carlton owes the company certain duties. These duties are generally divided into two categories: fiduciary duties and non-fiduciary duties.
Fiduciary duties are legal and ethical obligations that require Carlton to act in the best interests of the company and its shareholders at all times. They include the duty of care and the duty of loyalty.The duty of care requires Carlton to exercise reasonable care, skill, and diligence in carrying out his responsibilities as a director.
This duty includes the obligation to keep up to date with developments in the industry, to be aware of the company's financial position, and to attend board meetings regularly. Carlton must also ensure that the company's operations are conducted in a manner that is legal and ethical, and that all relevant laws and regulations are followed.
The duty of loyalty requires Carlton to act in the best interests of Rich Financial Incorporated and its shareholders. This duty includes the obligation to avoid conflicts of interest, to disclose any conflicts of interest that arise, and to act in a manner that is consistent with the company's best interests. Carlton must also ensure that he does not use his position as a director to benefit himself or any other person at the expense of the company.
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Which one of the following does monetary policy concern?
a.Government spending
b.Political risk
c.Taxation
d.Interest rates
Monetary policy concerns Interest rates. Monetary policy is the process through which the central bank controls money supply in the economy to promote price stability and sustainable economic growth. Interest rates are a key element of monetary policy.
Monetary policy can be expansionary or contractionary and both policies aim to stabilize the economy. Expansionary monetary policy is implemented by reducing interest rates which increases the money supply and aggregate demand. This is done to boost economic growth and prevent deflationary pressures. Contractionary monetary policy on the other hand is implemented through the increase of interest rates to reduce money supply and control inflation.
A reduction in the money supply leads to reduced demand for goods and services thereby reducing price inflation. This policy is used when the economy is experiencing high inflationary pressures that threaten economic stability.In conclusion, monetary policy concerns interest rates.
Monetary policy is a vital tool in the promotion of price stability and economic growth through the control of money supply in the economy.
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Suppose that a share of common stock of Average Industries, Inc. behaves like the stock market as a whole (i.e., it performs like the Wilshire 5000 stock index). Presently, shares of Average Industries, Inc. sell for 10 times the company's earnings and have a dividend payout ratio (i.e., dividend to earnings ratio) of 0.561. Assume further that both the dividends and the earnings are expected to grow indefinitely at an effective annual rate of 7 percent. What is the cost of capital for the common stock of Average Industries, Inc.?
Cost of capital is the required rate of return, which is the minimum return a firm requires from an investment project to undertake the project.
Average Industries Inc’s cost of capital is calculated as follows:
Cost of equity= (Dividend yield+ Capital gains yield)
Dividend yield= Dividend per share/ Market value per share Capital gains yield= Expected growth rate of dividend= 7%
Capital gains yield= Expected growth rate of earnings= 7% - 5.61%= 1.39%
Dividend per share = Dividend payout ratio × Earnings per share
Earnings per share= Market value per share/ P/E Ratio
= 10*1 / 10
= 1 per share
Dividend payout ratio= 0.561 Dividend per share
= 0.561*1
= 0.561 per share
Market value per share = Dividend per share
/ Dividend yield
= 0.561/ 5.61%
= 10 per share Dividend yield
= 0.561* 1/ 10
= 5.61%Capital gains yield
= 7%- 5.61%
= 1.39%Cost of equity
= 5.61%+ 1.39%= 7%.
Hence, the cost of capital for the common stock of Average Industries Inc. is 7%.
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Choose the option that best completes the following statement.Considering the strategies used to adjust capacity, levelproduction sets production at a fixed rate to meet average demandis commonly used when demand fluctuations are NOT extremeis feasible for unskilled jobs or in areas with large temporarylabor pools requires maintaining strong ties with possiblesuppliers and firsthand knowledge of their work Which of thefollowing is NOT generally an option in ensuring supply meetsdemand in the sales and operations aggregate planning process:building new facilities or purchasing new equipment buildingup or depleting inventory levels subcontracting out work hiringor laying off workers
While strategies like building new facilities or purchasing new equipment may be part of long-term capacity planning, they are not generally utilized in the sales and operations aggregate planning process, which focuses on more immediate and flexible approaches to meet demand fluctuations efficiently.
The option that is NOT generally an option in ensuring supply meets demand in the sales and operations aggregate planning process is "building new facilities or purchasing new equipment."
In the sales and operations aggregate planning process, the aim is to align production capacity with the anticipated demand in the most efficient and cost-effective manner. The strategies mentioned in the statement, such as level production, building up or depleting inventory levels, subcontracting out work, and hiring or laying off workers, are commonly employed to manage capacity and meet demand fluctuations.
Building new facilities or purchasing new equipment is not generally considered an option in the aggregate planning process because it involves significant capital investments and takes a considerable amount of time to implement. These options are typically long-term decisions that require careful analysis and planning beyond the scope of aggregate planning, which focuses on medium-term capacity adjustments.
Instead of building new facilities or purchasing equipment, aggregate planning aims to optimize the utilization of existing resources and adjust capacity through more flexible means such as inventory management, subcontracting, and adjusting the workforce size. These options provide a more agile and cost-effective approach to aligning supply with demand.
In conclusion, while strategies like building new facilities or purchasing new equipment may be part of long-term capacity planning, they are not generally utilized in the sales and operations aggregate planning process, which focuses on more immediate and flexible approaches to meet demand fluctuations efficiently.
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Holidays Baskets is a small company that receives and delivers orders of nut baskets around Christmas times. The founder and president of the company, Helen Hemkey, needs you to help her with a couple of concerns she has been having lately. The operations of Holiday Baskets are rather straight forward as they only take orders for 4-nut (walnut, cashew, almond peanut) baskets, and they always have these nuts in stock. Helen receives the orders, picks the nuts in quantities ordered, places them in a bags. She then puts the bags and the shipping labels in bins and sends them to the basketing workshop. In the workshop her four employees (Dianne, Nancy, Sue and Mariam) basket them, place the shipping labels on the baskets and place them on the pick-up table to be delivered to the customers by a courier company. There are three tables in the workshop. Dianne makes her basket independently on the first table. Nancy and sue jointly work at the second table and share the work (some part of basket is completed by Nancy and then Sue finishes the basket). Mariam makes her basket independently on the third table. There are three tables in the workshop. Dianne makes her basket independently on the first table. Nancy and sue jointly work at the second table and share the work (some part of basket is completed by Nancy and then Sue finishes the basket). Mariam makes her basket independently on the third table. Helen has built a reputation for the quality of baskets she sells to customers (the nuts are presentably sectioned and do not mix) so she does not want to have more than two percent of prepared baskets disarrayed (nut sections are disorderly mixed) before they are sent to the customers. She has recorded the error rates of all her employees and found that only 6% of the baskets her employees prepare might be disarrayed (nut sections are disorderly mixed). Concern 1: Would Helen be able to maintain her desired quality reputation? [15 marks]
Helen Hemkey, the founder and president of the small company named Holidays Baskets which receives and delivers orders of nut baskets around Christmas times, needs help to clear out her concerns regarding a couple of things.
Helen maintains a record of her employees' error rates and has found that the baskets that her employees prepare might have a chance of being disarrayed (nut sections are disorderly mixed) by 6%.
Helen has built a reputation for the quality of baskets she sells to customers (the nuts are presentably sectioned and do not mix) so she does not want to have more than two percent of prepared baskets disarrayed (nut sections are disorderly mixed) before they are sent to the customers.
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the duties of inside salespeople may overlap heavily with the duties of:
The duties of inside salespeople may overlap heavily with the duties of account representatives. Both of these roles focus on developing and maintaining relationships with customers to drive sales and meet revenue targets.
Inside salespeople primarily work from an office and connect with potential customers via phone, email, or video conference. They are responsible for identifying potential leads, qualifying them, and guiding them through the sales process.
On the other hand, account representatives typically work in the field and meet with customers face-to-face. They may be responsible for maintaining relationships with existing customers, identifying upsell and cross-sell opportunities, and ensuring customer satisfaction. They may also be responsible for identifying new business opportunities and bringing in new customers.
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Quad Enterprises is considering a new 2-year expansion project that requires an initial fixed asset investment of $1.188 million. The fixed asset will be depreciated straight-line to zero over its 2 -year tax life, after which time it will be worthless. The project is estimated to generate $1,056,000 in annual sales, with costs of $422,400. If the ' tax rate is 21 percent, what is the OCF for this project? Multiple Choice $31,284 $633,600 $594,020 $656,548 $625,284
Calculation of OCF for a two-year expansion from the given data. The annual sales revenue from the expansion project is given as $1,056,000.
The annual cost of the expansion project is given as $422,400. The depreciation value of the fixed asset, which will be straight-lined to zero, is given as $1,188,000/2 = $594,000 per year. As per the tax rate of 21%, the tax paid by the company is 21% of its taxable income.
The after-tax salvage value of the project is 79% of the investment made by the company. This can be calculated as:[tex]79% × $1,188,000 = $938,520[/tex] The Operating Cash Flow (OCF) of the company can be calculated as: OCF = EBIT + Depreciation − Taxes.
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assume that turing pharmaceuticals based its pricing decision on an inverse demand curve estimate of p
Turing Pharmaceuticals based its pricing decision on an inverse demand curve estimate of p. This means that the company considered how the quantity demanded of their product would change in response to different price levels.
An inverse demand curve shows how the quantity demanded of a product changes as the price of the product changes. In simple terms, an inverse demand curve estimates the relationship between price and demand, suggesting that as the price of a product increases, the quantity demanded decreases. Turing Pharmaceuticals likely used this estimate to determine the optimal price for their product, considering factors such as production costs and market demand.
To understand how an inverse demand curve is used, consider an example of a hypothetical medicine. Let's assume that Turing Pharmaceuticals estimates an inverse demand curve for their medicine, where the price (p) of the medicine is on the vertical axis and the quantity demanded is on the horizontal axis. The inverse demand curve shows that as the price of the medicine increases, the quantity demanded decreases.
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Balancing resources is crucial in project planning. It is likely that after completing Part 1 of the assignment, you will have to make adjustments in resource allocations in order to optimize resources and meet the goals established in Part 1 of the assignment.
Review the "Resource Graph" for your project and consider specific steps you can take to adjust resource allocations to meet the established goals. Conduct research related to whether salaries need to be market-adjusted based on your location and whether the workweek needs to be adjusted. Consider effort versus durations in this exercise.
Optimize resource allocations by adjusting assignments, evaluating salaries, considering workweek adjustments, and balancing effort versus durations for project success.
To optimize resource allocations and meet the established goals in project planning, the following steps can be taken:
1. Review the Resource Graph: Analyze the current allocation of resources and identify any imbalances or areas of concern.
2. Identify Critical Resources: Identify key resources that are essential for project success and ensure they are appropriately allocated and utilized.
3. Adjust Resource Assignments: If certain resources are overallocated or underutilized, make necessary adjustments by redistributing tasks or adjusting workloads.
4. Evaluate Salaries: Conduct research to determine if salaries need to be market-adjusted based on the location of the project. Ensure that compensation is competitive to attract and retain skilled resources.
5. Consider Workweek Adjustments: Assess whether the workweek needs to be adjusted to optimize resource availability and productivity. This could involve revising working hours or implementing flexible schedules.
6. Balance Effort versus Durations: Evaluate the effort required for each task and ensure that durations are realistic. Adjust resource allocations to align with the required effort, considering the skill levels and availability of resources.
7. Continuously Monitor and Adapt: Regularly monitor resource allocations, project progress, and workload distribution. Make ongoing adjustments as needed to maintain optimal resource utilization throughout the project lifecycle.
By following these steps and considering market-adjusted salaries, workweek adjustments, and balancing effort versus durations, project managers can optimize resource allocations and increase the chances of meeting established goals in project planning.
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