In one of the videos I watched, a lawyer described the employment legal framework of Australia as being a pyramid, consisting of national employment standards, modern awards, and enterprise agreements. This pyramid analogy illustrates how each layer of the employment legal framework in Australia builds upon the previous one, creating a comprehensive and cohesive structure to protect workers and their rights.
The foundation of this pyramid is the National Employment Standards (NES), which are minimum standards that apply to all employees in Australia. The NES includes provisions such as maximum weekly working hours, annual leave entitlements, and parental leave rights, among others. These standards cannot be undermined or traded away through modern awards or enterprise agreements.
The next level of the pyramid is modern awards, which are industry or occupation-specific standards that provide additional entitlements and conditions above the NES. These awards are determined by the Fair Work Commission and are mandatory for employers to follow. Modern awards cover a wide range of industries and occupations, from hospitality to healthcare and everything in between.
Finally, the top level of the pyramid is enterprise agreements. These are agreements made between employers and employees, or between employers and their representatives, that set out specific terms and conditions of employment. Enterprise agreements can provide for entitlements and conditions that are more favourable than the NES and modern awards, but they must still meet or exceed the minimum standards.
Overall, the employment legal framework in Australia provides a comprehensive and robust system to protect workers' rights and ensure they receive fair treatment in the workplace. The pyramid analogy helps to explain how each layer of the framework builds upon the previous one to create a cohesive and effective system for employees and employers alike.
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What are the limitations of using per capita real GDP as
a measure of economic well-being?
100 words minimum
Per capita real GDP is an economic measure that has been used for decades to determine a country’s standard of living. However, it has some limitations when used as the sole indicator of economic welfare. Firstly, it measures economic growth, not economic welfare.
It does not reflect distribution issues; hence, two nations may have similar per capita GDPs, but the income distribution may differ widely. It can also give a misleading impression of economic welfare in a country. For instance, a country can have a high per capita GDP and a low welfare level or vice versa.
Moreover, per capita GDP is based on monetary values, and it does not consider non-monetary factors such as environmental issues, quality of life, social welfare, and economic security. Per capita real GDP cannot reflect the inequality in income distribution and cannot gauge economic welfare. It is therefore limited in its capability to measure economic welfare as a stand-alone variable.
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Question 2 [24 marks]. An investor is considering investing into the shares of a start-up company. The investor's approach to share valuation is to discount future expected dividends at a rate of 5.0% per annum. The company is an online food delivery service that is expected to start paying annual dividends of 6p per share in 3 years' time. Dividends are expected to remain constant for 5 years and then start increasing at a rate of 10% per year for the next 20 years before the dividend growth rate reverts to 3.5% per annum. (a) Show that a fair price for the company's shares is approximately £16.84 per share. [12] (b) Explain what happens to the share valuation if the discounting rate is changed from 5% to 3% per annum. (c) After 7 years the investor sells the company's shares for £22.50 per share. [2] Assuming the investor pays income tax at 40% and the capital gains tax rate is 28% determine the investor's net yield on this investment after tax. [10]
In order to determine the fair price of the shares, the following steps need to be followed:
Step 1:
Calculation of dividends for the first 5 years:
Year 1 - 3:
No dividends are expected.
Year 4:
Dividend expected = 6p per share
Year 5:
Dividend expected = 6p per share
The present value of the above dividends is as follows:
Year
Present Value 4 5(6/(1+0.05 )^4) = 4.69(6/(1+0.05)^5 ) = 4.45
Step 2:
Calculation of dividends for the next 20 years:
The first year in which dividend growth occurs is in year 6.
Hence, growth occurs from year 6 to year 25.
Dividend in year 6 = 6.6p per share.
Dividend in year 7 = 7.26p per share.
Dividend growth rate = 10%Step 3:
Calculation of terminal value:
The growth rate of dividends after year 25 is 3.5% per annum.
The present value of dividends is calculated till year 25.
After year 25, we need to find the terminal value.
Terminal Value = Dividend at year 26 / (discount rate - growth rate) = 96.5p per share/(0.05 - 0.035) = 579.48p per share
Present value of the terminal value = 579.48/(1+0.05)^25 = 123.91p per share
Total present value of dividends = 4.69 + 4.45 + Σ PV of dividends from year 6 to 25 + 123.91= 145.05p per share
Approximate fair price of the share = Present value of dividends / (1+discount rate)^
n= 145.05p
per share / (1+0.05)^3= £16.84 per shareb)
If the discount rate is reduced from 5% to 3% per annum, the fair price of the shares will increase.
The new fair price of the shares can be calculated using the following formula:
New approximate fair price of the share = Present value of dividends / (1+discount rate)^n= 145.05p per share / (1+0.03)^3= £19.17 per sharec)
The initial investment is £16.84 per share and the selling price is £22.50 per share.
apital gain per share = £22.50 - £16.84 = £5.66 per share.
The investor paid income tax at 40% and capital gains tax at 28%.
Net yield on investment after tax = (capital gain - capital gain tax) * (1 - income tax rate)= (£5.66 - 0.28 * £5.66) * (1 - 0.4) = £1.98 per share.
The net yield on investment after tax is £1.98 per share.
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On August 1, 2022, The Chateau at Mill Lake, Inc., purchased inventory costing $58,000 by signing a 6%, six-month, short-term note payable. The company will pay the entire note (principal and interest) on the note's maturity date. Read the requirements. Requirement 1. Journalize the company's purchase of inventory. (Record debits first, then credits. Exclude explanations from journal entries.) Requirements 1. Journalize the company's purchase of inventory. 2. Make the adjusting entry for accrual of interest on the note payable on December 31 , 2022. 3. At December 31, 2022, what is reported on the balance sheet related to this note payable? 4. Record the payment of the note payable (principal and interest) on its maturity date.
Requirement 1: Journalize the company's purchase of inventory. Date Account Title and Description Debit CreditAugust 1 Inventory 58,000Note Payable 58,000 Requirement.
Make the adjusting entry for accrual of interest on the note payable on December 31, 2022.On December 31, interest must be accrued for five months (August 1 to December 31). The calculation of interest is:
Principal amount x annual interest rate
time = Interest58,000 x 6% x 5/12 = 1,450Date Account Title and Description Debit
Credit December 31 Interest Expense 1,450 Interest Payable 1,450
Requirement 3: At December 31, 2022, what is reported on the balance sheet related to this note payable?The note payable's balance will be the principal amount, $58,000, since no payment have been made yet. The interest accrued as of December 31, 2022, $1,450, will be shown as interest payable.
Date Account Title and Description Debit Credit December 31 Note Payable 58,000Interest Payable 1,450Requirement Record the payment of the note payable (principal and interest) on its maturity date. On February 1, 2023, the company will pay the note's entire amount (principal plus interest).Interest can be computed by the following formula:
Principal amount x annual interest rate x time = Interest
58,000 x 6% x 6/12 = 1,740Date Account Title and Description Debit
Credit February 1 Note Payable 58,000Interest Payable 1,450
Cash 59,450Interest Expense 1,740
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Which conversion process introduces the system first to a limited portion of the organization?
A) the pilot study strategy
B) the phased approach strategy
C) the limited cutover strategy
D) the parallel strategy
The conversion process introduces the system first to a limited portion of the organization. The correct option is A) The pilot study strategy.
The pilot study strategy is the conversion process that introduces the system first to a limited portion of the organization. In this approach, a small-scale implementation of the system is conducted in a specific department, division, or location within the organization. This allows for testing, evaluation, and fine-tuning of the system before a full-scale implementation is carried out.
By implementing the system in a controlled and limited environment, the pilot study strategy enables organizations to identify and address any issues or challenges that may arise. It provides an opportunity to assess the system's functionality, compatibility with existing processes, and its impact on the specific area of the organization where it is being tested.
Once the pilot study is deemed successful, the organization can then proceed with a wider implementation of the system across the entire organization using a phased approach, limited cutover, or parallel strategy, depending on the specific circumstances and requirements. However, the pilot study strategy is the initial step in introducing the system to a limited portion of the organization for evaluation and testing purposes.
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MGT203 OPERATIONS MANAGEMENT
For effective operations and supply chain management - provide recommendations on other strategies that could have been considered for implementation to allow for recovery from the COVID-19 pandemic effects.
To recover from the COVID-19 pandemic effects, businesses can consider diversifying their supply chain, enhancing visibility, developing robust risk management plans, strengthening supplier relationships, embracing digital transformation, and more.
In order to recover from the effects of the COVID-19 pandemic, here are some additional strategies that could be considered for implementation in operations and supply chain management:
Diversify the supply chain: Relying on a single source or region for supplies proved to be risky during the pandemic. Companies can consider diversifying their supplier base to mitigate future disruptions. This can involve identifying alternative suppliers, exploring local sourcing options, or implementing dual sourcing strategies.
Enhance supply chain visibility: Implementing advanced technology solutions like real-time tracking, IoT sensors, and data analytics can provide better visibility into the supply chain. This helps identify potential bottlenecks or disruptions early on, enabling proactive decision-making and swift response.
Develop robust risk management plans: Establishing comprehensive risk management plans that specifically address pandemic-related risks can help in responding effectively to future crises. This includes conducting risk assessments, implementing contingency plans, and regularly reviewing and updating the plans.
Strengthen supplier relationships: Building strong relationships with key suppliers can foster collaboration and mutual support during challenging times. This can involve sharing information, collaborating on risk mitigation strategies, and establishing long-term partnerships based on trust and cooperation.
Embrace digital transformation: Accelerating digital transformation initiatives can enhance agility and resilience in operations and supply chain management. This can include automation of processes, adoption of cloud-based technologies, and leveraging data analytics for forecasting and demand planning.
Implement flexible manufacturing strategies: Adopting agile manufacturing practices, such as lean manufacturing or just-in-time production, allows for quick adjustments to changing market demands. This enables companies to respond rapidly to disruptions and optimize resource utilization.
Focus on employee well-being: Prioritizing the health and safety of employees is crucial for business continuity. Implementing measures such as remote work options, flexible scheduling, and providing necessary resources and support can help maintain workforce productivity and morale during crises.
Explore alternative distribution channels: With the disruption of traditional distribution channels, companies can explore alternative channels such as e-commerce, direct-to-consumer models, or partnerships with third-party logistics providers. This diversification can ensure continuity of product delivery and reach a wider customer base.
Implementing these strategies can enhance the resilience and agility of operations and supply chain management, enabling organizations to recover from the effects of the COVID-19 pandemic and be better prepared for future disruptions.
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Suppose a company has 1110 warehouse workers. The company administers a polygraph test that is 87% accurate. Of the 1110 workers, 20 actually lie during the polygraph test.Answer the following questions.How many workers did not lie? How many workers that did not lie, tested positive for lying? How many workers that did lie, tested positive for lying? How many total workers tested positive for lying? What fraction of those workers who tested positive for lying, were not lying? Express your answer as a percent rounded to one decimal place. %
Out of the 1110 warehouse workers, the number of workers who did not lie can be calculated by subtracting the number of workers who actually lied from the total number of workers.
Therefore, the number of workers who did not lie is 1110 - 20 = 1090.
To determine the number of workers who tested positive for lying but were actually telling the truth, we need to consider the accuracy of the polygraph test. Since the test is 87% accurate, it means that 87% of the workers who did not lie would test negative, and 13% of them would test positive incorrectly. Therefore, the number of workers who did not lie but tested positive for lying is 1090 * 0.13 = 141.7, which we can round to 142 workers.
Similarly, for the workers who actually lied, the test would correctly identify them as lying with an accuracy of 87%. Hence, the number of workers who lied and tested positive for lying would be 20 * 0.87 = 17.4, rounded to 17 workers.
The total number of workers who tested positive for lying is the sum of workers who lied and tested positive (17 workers) and workers who did not lie but tested positive (142 workers). Therefore, the total number of workers who tested positive for lying is 17 + 142 = 159.
To find the fraction of workers who tested positive for lying but were not lying, we divide the number of workers who did not lie but tested positive (142 workers) by the total number of workers who tested positive (159 workers). The fraction is 142/159 ≈ 0.892, which, when expressed as a percentage rounded to one decimal place, is 89.2%.
In summary:
- Number of workers who did not lie: 1090
- Number of workers who did not lie but tested positive for lying: 142
- Number of workers who lied but tested positive for lying: 17
- Total number of workers who tested positive for lying: 159
- Fraction of workers who tested positive for lying but were not lying: 89.2%
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In what ways did the social, cultural, and international conflicts of the 1960s continue to influence and challenge the United States in the 1970s? Consider the racial, gender, economic and ongoing international challenges of the era (discuss 3 of them).
The 1960s was a decade of social and cultural revolution in America, marked by major struggles for racial, gender, and economic justice.
Though significant progress had been made in these areas during the era, the United States was still facing a number of ongoing international challenges that would continue to influence and challenge the country in the 1970s.
The Civil Rights movement had made significant gains in the 1960s, but racial inequality and discrimination persisted in many parts of the country. The 1970s saw continued struggles for equality and justice for people of color, including protests against police brutality, affirmative action policies, and the desegregation of schools and housing. These ongoing efforts to address racial inequality contributed to broader social and cultural changes in America, including the rise of a new generation of activists and a growing awareness of intersectional issues related to race, gender, and class.In addition to the ongoing struggles for racial justice, the United States faced a number of economic challenges in the 1970s. The decade was marked by a number of economic downturns and recessions, which led to high rates of unemployment and inflation. These economic struggles were exacerbated by the oil crisis of 1973, which led to a significant increase in energy costs and further strained the economy. These economic challenges contributed to growing social and political unrest in America, as many Americans struggled to make ends meet and saw their standard of living decline during the decade.
The United States also faced a number of ongoing international challenges in the 1970s. The Vietnam War had officially ended in 1973, but the country was still dealing with the aftermath of the conflict. The war had left a deep scar on American society, and the country struggled to come to terms with the human and financial costs of the conflict. In addition to the ongoing challenges related to Vietnam, the United States also faced new international challenges in the 1970s, including the rise of terrorism and the continued Cold War tensions with the Soviet Union. These challenges would continue to shape American foreign policy and national security in the decades to come.
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Management Liability is a very unique segment of insurance. Please describe the different lines of insurance: Directors’ & Officers’; Employment Practices Liability; Fiduciary and; Crime. What are coverages meant to address and what circumstances or government legislation drive those terms & conditions?
Management Liability insurance includes Directors' and Officers', Employment Practices Liability, Fiduciary, and Crime coverages, providing protection for directors/officers, employment-related claims, breaches of fiduciary duty, and losses from criminal activities.
Management Liability is a unique segment of insurance that encompasses different lines of coverage. These lines of insurance include Directors' and Officers' (D&O), Employment Practices Liability (EPL), Fiduciary, and Crime. Let's delve into each of them in detail.
Directors' and Officers' (D&O) insurance is designed to protect directors and officers of a company. It covers losses incurred when these individuals are held liable for their actions or decisions on behalf of the company. D&O insurance safeguards against losses arising from errors in judgment, negligence, or breach of duty. It provides coverage for claims brought against directors and officers by shareholders, regulators, and other parties. Such claims can stem from misrepresentation, breach of contract, or lack of corporate governance.
Employment Practices Liability (EPL) insurance shields companies from lawsuits related to employment matters. It offers coverage against claims such as discrimination, sexual harassment, wrongful termination, and other employment-related disputes. EPL insurance protects both the company and its employees. It addresses claims brought by employees, former employees, or job applicants against the company.
Fiduciary insurance is intended to safeguard companies against claims arising from breaches of fiduciary duty. This coverage applies when the company or its employees fail to fulfill their fiduciary responsibilities towards clients, investors, or other stakeholders. Fiduciary insurance addresses claims made by clients, investors, or other stakeholders against the company.
Crime insurance protects companies from losses resulting from criminal activities such as theft, forgery, or fraud. It provides coverage for both internal and external criminal acts. Crime insurance addresses losses incurred due to theft or fraud committed by employees, vendors, or other parties.
The terms and conditions of these insurance coverages are influenced by various factors, including specific circumstances and government regulations. For instance, certain federal or state regulations may require companies to obtain D&O insurance. Anti-discrimination laws may necessitate the purchase of EPL insurance to ensure compliance. Companies handling employee benefit plans might be obligated to acquire fiduciary insurance in accordance with the Employee Retirement Income Security Act (ERISA). Furthermore, government legislation and court rulings play a role in shaping the terms and conditions of these coverages.
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1 Purchased Equipment for $300,000. Pay in 30 days. 2 Recorded 1 month of depreciation using SL. Salvage 10,000. Life 60 months. 3 Purchased a compressor (equip) for $100,000. Took out a loan for full amount. 4 Recorded depn, Units of prod. Life 2,000 hrs. $5,000 salvage. Used 300 hrs. 5 Purchased a press for $25,000. Cash 6 Recorded 1 month depn. $7,500 salvage. Used Double Declining Method. 5 yr life 7 Recorded revenue for the month of $120,000. Cash
1. The initial journal entry to record the purchase of equipment will be:
Equipment $300,000
Cash $300,000
2. Straight-line depreciation will be calculated as follows:
Annual Depreciation Expense = (Equipment Cost – Salvage Value) / Useful Life
$300,000 - $10,000 = $290,000
$290,000 ÷ 60 months = $4,833.33 per month
Depreciation Expense $4,833.33
Accumulated Depreciation $4,833.33
3. The initial journal entry to record the purchase of the compressor with a loan will be:
Compressor $100,000
Loan Payable $100,000
4. Units of production depreciation will be calculated as follows:
Depreciation per unit = (Equipment Cost – Salvage Value) / Total Units of Production
Depreciation Expense = Depreciation per unit x Units used
$100,000 - $5,000 = $95,000
$95,000 ÷ 2,000 hours = $47.50 per hour
$47.50 x 300 hours = $14,250
Depreciation Expense $14,250
Accumulated Depreciation $14,250
5. The initial journal entry to record the purchase of the press with cash will be:
Press $25,000
Cash $25,000
Double-declining balance depreciation will be calculated as follows:
Depreciation Rate = 2 ÷ Useful Life
Double-Declining Balance Depreciation Rate = Depreciation Rate x 2
Depreciation Expense for the First Year = (Equipment Cost – Accumulated Depreciation) x Double-Declining Balance Depreciation Rate
$25,000 x 40% = $10,000
Depreciation Expense $10,000
Accumulated Depreciation $10,000
6. Revenue for the month of $120,000 is recorded as follows:
Cash $120,000
Revenue $120,000
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Economic order quantity formula
EOQ = √ 2zCs for instantaneous replenishment
cC
Z = total annual usage Cs = cost of placing an order
c = unit cost of the item
C = carrying cost rate per year
EOQ = √(2zCs/cC)
The question
A Company annually purchases 2,600 kg of raw material X for € 33 per kg. The order costs are €250 per order. The stock costs per piece are € 30.50.
What is the optimal order size. Also give the calculation
The optimal order size is 212 kg, and this is the calculation.
EOQ is used to calculate the optimal order size. The economic order quantity formula is
EOQ = √(2 x Z x Cs/cC)
Where, Z = Total annual usage Cs = Cost of placing an order C = Carrying cost rate per year c = Unit cost of the item
Given,
Total annual usage = 2600 kg
Unit cost of the item, c = € 33
Cost of placing an order, Cs = € 250
Stock costs per piece, C = € 30.5
Calculate the optimal order size using the economic order quantity formula
EOQ = √(2 x Z x Cs/cC)
EOQ = √(2 x 2600 x 250/30.5 x 33)
EOQ = 212 kg
Therefore, the optimal order size is 212 kg, and this is the calculation.
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Jamilah recently was asked by her manager to plan and conduct a two-days training course on the pedagogy of teaching online students. The training will be delivered in one month time to a group of 40 lecturers from a community college nearby. She is very well versed in online teaching and the supervisor felt that she would do a good job since she recently had attended a refresher course on technology-based training methods. Jamilah started her preparation by observing another senior trainer delivering a similar training course, read through the training materials several times, looked through materials from previous courses conducted by the other trainers and tried to think of some creative activities she could include in the course. Jamilah sat down with the materials on online pedagogy and started to plan for her course. She knew that she would need some notes, so she developed a set of trainer's notes. She even put some of her notes on a handout to give to those she would be training. Jamilah knew that it was important that she be clear, so she practised reading her notes in a clear voice. She also planned to stop periodically and ask if the participants had any questions. The day of the training finally arrived. During her first session, Jamilah noticed that the participants were not paying attention to her presentation. There were no questions being asked and the participants looked bored and distracted. After the presentation, the participants left the room for a break. Jamilah had a feeling that her first presentation was a failure. She wondered if agreeing to deliver the course was a good decision and she dreaded the next one and a half day that she has to go through to complete the training.
As seen in the passage, Jamilah was asked by her manager to plan and conduct a two-days training course on the pedagogy of teaching online students.
She had observed another senior trainer delivering a similar training course, read through the training materials several times, looked through materials from previous courses conducted by the other trainers and tried to think of some creative activities she could include in the course. However, during her first session, Jamilah noticed that the participants were not paying attention to her presentation. There were no questions being asked and the participants looked bored and distracted.
After the presentation, the participants left the room for a break. Jamilah had a feeling that her first presentation was a failure.There are a few areas that Jamilah can improve to make the rest of the training a success. First, it is important to remember that preparation is key to the success of any training course. Jamilah had prepared by observing senior trainers and reading through training materials. However, there are other ways to prepare as well. For instance, she could have conducted a pilot session with a smaller group of participants to identify potential problems and to make adjustments.
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lease answer all questions
Question 1_
A 5-year bond pays interest annually. Its par value is $1,000 and its coupon rate equals 9%. If the market’s required return on the bond is 8 per cent, what is the bond’s market price?
Question 2
SydMel Ltd has issued 6-year bonds that pay $35 in interest twice each year. The face value of these bonds is $1,000 and they offer a yield to maturityof 5.5 %. How much are the bonds worth?
Question 3
Investors face a tax rate of 30% on interest paid by corporate bonds. If tax-free bonds currently offer yields of 6 %, what yield would equally risky corporate bonds need to offer to be competitive?
Question 4
S Ltd has outstanding an issue of preferred equity with a par value of $100. It pays an annual dividend equal to 9% of par value. If the required return on S Ltd’s preferred equity is 7 %, and if S Ltd pays its next dividend in one year, what is the market price of the preferred equity today?
Question 5
AMC’s preferred equity pays a dividend of $10 each year. If the shares sell for $60 each and the next dividend will be paid in one year, what return do investors require on AMC preferred equity?
Question 6
SydMel Ltd has issued preferred equity that offers investors a 10 % annual return. A share currently sells for $80, and the next dividend will be paid in one year. How much is the dividend?
Question 7
Gail Dribble is analysing the shares of Petscan Radiology. Petscan’s equity pays a dividend once each year, and it just distributed this year’s $0.85 dividend. The market price of the share is $12.14. Gail estimates that Petscan will increase its dividends by 7 % per year forever. After contemplating the risk of Petscan equity, Gail is willing to hold the shares only if they provide an annual expected return of at least 13 %. Should she buy Petscan shares or not?
Question 8
Sydney-Melbourne (SydMel) operates a chain of weight-loss centres for carb lovers. Its services have been in great demand in recent years and its profits have soared. Sydmel recently paid an annual dividend of $2.70 per share. Investors expect that the company will increase the dividend by 25% in each of the next three years, and after that they anticipate that dividends will grow by about 6% per year. If the market requires an 11% return on SydMel equity, what should the share sell for today?
Question 1The bond's market price can be calculated by using the formula given below:
Market price = PV(Coupon payments) + PV(Face value)
PV is the Present Value of the payments. Coupon payment = Par value x Coupon rate = 1000 x 9% = $90 per year
PV(Coupon payments) = Coupon payment x [1 - 1/(1 + r)ⁿ]/rwhere r is the required rate of return and n is the number of years.PV(Coupon payments) = 90 x [1 - 1/(1 + 0.08)⁵]/0.08 = $382.20Face value = $1,000PV(Face value) = Face value/(1 + r)ⁿ = 1000/(1 + 0.08)⁵ = $680.58Therefore,Market price = PV(Coupon payments) + PV(Face value) = $382.20 + $680.58 = $1,062.78
Question 2The bond's worth can be calculated by using the formula given below:
Bond's worth = PV(Coupon payments) + PV(Face value)PV is the Present Value of the payments.Coupon payment = $35 per half year.FV = $1,000Yield to maturity = 5.5%Yearly coupon payment = 2 x $35 = $70PV(Coupon payments) = $70 x [1 - 1/(1 + 0.055/2)¹²]/(0.055/2) = $1157.31PV(Face value) = $1000/(1 + 0.055/2)¹² = $751.32Therefore,Bond's worth = PV(Coupon payments) + PV(Face value) = $1,157.31 + $751.32 = $1,908.63
Question 3Yield on corporate bonds that would be required to be competitive can be calculated as shown below:
Tax-free bonds yield = 6%Investors face a tax rate = 30%After-tax yield on tax-free bonds = 6% x (1 - 30%) = 4.20%After-tax yield on corporate bonds = 4.20%Tax-adjusted yield on corporate bonds = 4.20%/(1 - 30%) = 6%Therefore, Yield on corporate bonds that would be required to be competitive is 6%.
Question 4The market price of the preferred equity today can be calculated as shown below:
Annual dividend = Par value x Dividend rate = $100 x 9% = $9Next year dividend = $9Required rate of return = 7%Price of preferred equity = Next year's dividend/ (required rate of return - dividend rate)= $9/(7% - 9%) = $(-450) which is not possible, this means that the calculation is wrong. Hence the market price of the preferred equity today is not possible.
Question 5Return required on AMC preferred equity can be calculated as shown below:
Annual dividend = $10Market price = $60Next year dividend = $10Required rate of return =
Dividend growth rate = (10/60) x 100 = 16.67%Dividend growth rate (g) = Retention ratio (b) x Return on equity (ROE)b = (ROE-g)/ROEThe average ROE of S&P 500 companies is 15%.b = (15% - 16.67%)/15% = -0.1111
Dividend growth model can be used to calculate the required rate of return as shown below:r = (D₁/P₀) + gwhere,r = Required rate of returnD₁ = Next year's dividendP₀ = Current market priceg = Dividend growth rater = (10/60) + 16.67% = 33.33%Therefore, return required on AMC preferred equity is 33.33%.
Question 6Dividend on preferred equity can be calculated as shown below:
Annual return = 10%Current share price = $80
The dividend is annual.
Dividend = Share price x Annual return = $80 x 10% = $8Therefore, the dividend on preferred equity is $8.
Question 7
The dividend is expected to increase by 7% per year forever.
The market price of the share is $12.14 and the annual expected return is at least 13%.
The required rate of return on Petscan equity can be calculated using the Gordon Growth Model as shown below:
r = D₁/P₀ + g where, D₁ = Expected dividend next year P₀ = Current market price g = Dividend growth rate = 7%r =
Required rate of return = 13%D₁ = $0.85 x 1.07 = $0.9095r = $0.9095/$12.14 + 0.07 = 0.1459 or 14.59%
Required rate of return (r) is greater than the expected rate of return (13%).
Therefore, Gail should buy the Petscan shares.Question 8The present value of the dividend payments during the first three years can be calculated using the formula given below:Present value of the first three years of dividends = D₁/(1 + r) + D₂/(1 + r)² + D₃/(1 + r)³where,r = Required rate of return
D₁ = dividend payment in year 1D₂ = dividend payment in year 2D₃ = dividend payment in year 3Dividend payment in year 1 = $2.70 x 1.25 = $3.38
Dividend payment in year 2 = $3.38 x 1.25 = $4.22
Dividend payment in year 3 = $4.22 x 1.25 = $5.28
Present value of the first three years of dividends = $3.38/(1 + 0.11) + $4.22/(1 + 0.11)² + $5.28/(1 + 0.11)³ = $10.02
The present value of the dividend payments after year 3 can be calculated using the formula given below:Present value of all subsequent dividend payments = D₄/(r - g) x [1/(1 + r)³]
where,g = Dividend growth rate = 6%Dividend payment in year 4 = $5.28 x 1.06 = $5.60
Present value of all subsequent dividend payments = $5.60/(0.11 - 0.06) x [1/(1 + 0.11)³] = $66.62
The current market price of the stock can be calculated by adding the present value of the dividends for the first three years to the present value of all subsequent dividend payments as shown below:
Current market price of the stock = Present value of the first three years of dividends + Present value of all subsequent dividend payments = $10.02 + $66.62 = $76.64Therefore, the share should sell for $76.64 today.
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Dr. Smith thinks that increasing educational level causes income level to increase. What is income level in this example?
Dr. Smith thinks that increasing educational level causes income level to increase. In this example, income level is the dependent variable.
The dependent variable is the variable that is being studied or measured and is influenced or affected by other factors or variables. In this case, Dr. Smith is studying the relationship between educational level and income level.
The hypothesis is that increasing educational level leads to an increase in income level. Therefore, income level is the outcome or result that is dependent on the level of education attained.
Dr. Smith believes that as individuals acquire higher levels of education, it positively impacts their earning potential and leads to higher income levels.
To test this hypothesis, Dr. Smith would need to gather data on individuals' educational levels and corresponding income levels to analyze the relationship between the two variables.income level is the variable of interest and is expected to be influenced by the educational level variable.
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What can we do so that the benefits of economic growth
can be more equally distributed?
100 words minimum
Economic growth can bring about significant benefits to society, including job creation, higher wages, increased tax revenues, and improved living standards. However, these benefits are not always distributed equally, and some individuals or groups may not experience the same positive outcomes as others. To ensure that the benefits of economic growth are more equally distributed, several strategies can be implemented.
1. Progressive taxation: One way to distribute the benefits of economic growth more equally is to implement a progressive tax system. This means that individuals with higher incomes pay a higher percentage of their income in taxes. The revenue generated from these taxes can then be used to fund social programs such as education, healthcare, and social security, which can help to alleviate poverty and reduce income inequality.
2. Increase minimum wage: Another strategy is to increase the minimum wage. This can help to ensure that low-wage workers are able to benefit from economic growth by receiving a fair wage for their labor.
3. Improve access to education and training: Investing in education and training can help to ensure that workers have the skills and knowledge they need to take advantage of new job opportunities created by economic growth. This can help to reduce inequality by increasing the earning potential of workers who may have previously been stuck in low-wage jobs.
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. The municipality hires an expert to analyze the market and finds out that riders of fixed gear bikes do not stop at traffic lights and generate many traffic accidents. The external cost on the city increases with the number fixed gear bikes: external cost =2/3Q. a. Draw a graph showing the marginal benefit (MB), marginal private cost (MPC) and marginal social cost (MSC). Find the socially optimal output. Answer: b. What impact would the tax described in part 3 have on the market with the externality? Find the deadweight loss with and without the tax. Show them on the graph. Answer:
a. Graph showing marginal benefit, marginal private cost, and marginal social cost, with socially optimal output: The external cost incurred by the city with the number of fixed gear bikes can be expressed as external cost = 2/3Q.The graph below shows the marginal benefit (MB),
marginal private cost (MPC), and marginal social cost (MSC). The intersection point of the MPC and the MSC curves represents the socially optimal output, Q*.
The marginal social cost (MSC) curve is above the marginal private cost (MPC) curve since the external cost of the externality is not reflected in the private cost. The socially optimal output (Q*) is less than the market equilibrium output (Q0).
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Please help. Confused.
A. 19,300
B. 6,000
C. 10,700
D. 16,700
What is the net operating income for the month under absorption costing?
We require further details regarding the associated costs in order to calculate the net operating income under absorption costing. Both variable and fixed production costs are considered in absorption costing.
It distributes production units with fixed manufacturing overhead expenses. It is impossible to determine the net operating income under absorption costing without particular information on the variable and constant production expenses. The supplied selections (19,300, 6,000, 10, 700, and 16, 700) don't present enough background information to help you figure out the right response. To accurately calculate the net operating income under absorption costing, additional information about the expenses involved, such as variable and fixed manufacturing costs, is requested.
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Mario grows tomatoes in his garden, with the following private supply curve for kilos of tomatoes: P=21.4 + 5.8Q. Every additional kilo of tomatoes requires the use of some smelly cow manure, which increases the value by $9.9. However, the manure required by each additional kilo of tomatoes also causes discomfort for the neighbours, imposing a cost of $9.9 on them. What is the slope of the social supply curve?
The slope of the social supply curve is found to be 3.9.
The private supply curve for kilos of tomatoes is
P=21.4 + 5.8Q.
We have to add the externalities (smelly cow manure), which increases the value by $9.9.
However, the manure required by each additional kilo of tomatoes also causes discomfort for the neighbors, imposing a cost of $9.9 on them.
The social supply curve considers the externalities.
We can get the social supply curve by adding the marginal cost to the private supply curve.
Marginal cost (MC) = change in total cost / change in output.
Change in total cost = $9.9 (external cost) – $9.9 (external benefit)
= 0
Therefore,
MC = 0 + 5.8Q
= 5.8Q
The social supply curve is:
P = 21.4 + MC
= 21.4 + 5.8Q
The slope of the social supply curve is the coefficient of Q, which is 5.8.
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A. A cash receipts clerk is responsible for recering cash uhtena awortin General Accounting is responsible for preparig the bakk amvitaton B. Prior to issuing payment, employes in Accourts Parborcompetient? price of items ordered on the Purchse Order to the untpreed itas received on the Vendor lnvoice to ensure that fit and finish meet company giverios EXAMINING [Choose] SUPERVISING [Choose] CALCULATING [Chose] SEGREGATING DOCUMENING REE RR T
N
A cash receipts clerk is responsible for receiving cash while General Accounting is responsible for preparing the bank's reconciliation.
Meanwhile, employees in Accounts Payable are responsible for examining the price of items ordered on the Purchase Order to the unpriced items received on the Vendor Invoice to ensure that fit and finish meet the company's criteria. They are also responsible for supervising, calculating, segregating, and documenting. In general, the primary responsibility of the cash receipts clerk is to collect and document payments from customers.
Accounts Payable is responsible for ensuring that all vendors and suppliers are paid in a timely and accurate manner. This department is responsible for examining vendor invoices, ensuring that the price of items ordered on the Purchase Order matches the unpriced items received on the Vendor Invoice, and resolving any discrepancies or errors that are identified. Accounts Payable is also responsible for supervising, calculating, segregating, and documenting invoices to ensure that they are properly processed and recorded.
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In 2021, Noble Tech Inc. reported that the company's Return on Assets (ROA) was 9%, and its net profit margin was 7%. Calculate the company's total asset turnover (round your answer to two decimal places).
Return on Assets (ROA) is a metric that measures a company's ability to generate profit from its assets. It measures the efficiency with which a company is using its assets to produce income.
The higher the ROA, the better it is. Net profit margin, on the other hand, is the percentage of revenue that remains after all expenses have been deducted. It's calculated by dividing net income by total revenue. The total asset turnover ratio is used to determine how efficiently a company is using its assets to generate sales. It is computed by dividing the total revenue by the total assets. In 2021, Noble Tech Inc. had an ROA of 9% and a net profit margin of 7%. This implies that for every dollar of assets, the company generated nine cents of profit.
To calculate the company's total asset turnover, use the formula below:Total Asset Turnover = Revenue/Total Assets In this situation, we don't have the revenue, but we can calculate it by using the net profit margin. The revenue can be calculated as follows:Revenue = Net Income/Net Profit Margin Therefore, the company's revenue can be calculated as follows:Revenue = Net Income/Net Profit Margin= $500,000/0.07= $7,142,857.14 Now we can determine the total asset turnover.Total Asset Turnover = Revenue/Total Assets= $7,142,857.14/Total Assets 9% = 7% x Total Asset Turnover Total Asset Turnover = 1.29 The company's total asset turnover is 1.29. This implies that for every dollar of assets, the company generates $1.29 of revenue.
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ABC Company has an opportunity to manufacture and sell a new product for a four-year period. The company's discount rate is 16%. After careful study, Oakmont estimated the following costs and revenues for the new product: When the project concludes in four years the working capital will be released for investment elsewhere within the company. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: Calculate the net present value of this investment opportunity. (Round your final answer to the nearest whole dollar amount.)
Given: Discount rate = 16%Costs and Revenues are given in the following table
Calculation of Present Value for Year 1:Cash Outflows
$900,000 * 0.25 = $225,000Cash Inflows
$1,500,000 * 0.25 = $375,000Net Cash Outflow
$225,000 - $375,000
$150,000PVIFA (16%, 1 year)
0.86243Present Value of Net Cash Outflow (Year 1)
$150,000 * 0.86243 = $129,364Calculation of Present Value for Year 2:Cash Outflows = $450,000 * 0.25 $112,500Cash Inflows = $900,000 * 0.25 = $225,000
Net Cash Outflow = $112,500 - $225,000 = -$112,500PVIFA (16%, 2 years) = 0.74339
Present Value of Net Cash Outflow (Year 2) = $112,500 * 0.74339 = $83,342
Calculation of Present Value for Year 3:Cash Outflows = $350,000 * 0.25 = $87,500Cash Inflows = $700,000 * 0.25 = $175,000
Net Cash Outflow = $87,500 - $175,000 = -$87,500PVIFA (16%, 3 years) = 0.64114
Present Value of Net Cash Outflow (Year 3) = $87,500 * 0.64114 = $56,054
Calculation of Present Value for Year 4:Cash Outflows = $250,000 * 0.25 = $62,500
Cash Inflows = $600,000 * 0.25 = $150,000
Net Cash Outflow = $62,500 - $150,000 = -$87,500PVIFA (16%, 4 years) = 0.55241
Present Value of Net Cash Outflow (Year 4) = $87,500 * 0.55241 = $48,272Therefore,
the net present value of this investment opportunity is $129,364 + $83,342 + $56,054 + $48,272 = $317,032 which can be rounded to the nearest whole dollar amount as $317,032. Thus, the answer is $317,032.
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Free cash flow, whether a huge corporation or a solo entrepreneur's business, is one of the fundamental things people look at. What can the show Shark Tank teach people about running a business?
Free cash flow is the cash a company produces through its operations after accounting for any investment in its fixed assets. The most successful entrepreneurs have the ability to make the most out of their free cash flow.
Entrepreneurs who have been successful on Shark Tank have a wealth of business advice that people can apply to their own companies to get more out of their free cash flow.Shark Tank is a business-oriented reality television show that provides entrepreneurs with a chance to pitch their ideas to a group of investors. The Sharks, or investors, then decide whether or not to invest in the business and, if so, at what price.
The show is a great source of inspiration for aspiring entrepreneurs, as it demonstrates how to present a business plan and how to use the free cash flow to grow the business.As we watch entrepreneurs come on the show and pitch their ideas to the investors, we learn that having a solid business plan is crucial.
Before investing in a company, investors like to see that there is a clear plan in place for how the company will use the free cash flow that they receive. It's critical to understand the company's financial statements, particularly its balance sheet and cash flow statement.
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The Selection Process You are promoted to the job of human resource manager in your company ABC, Canada branch, discus (In not less than 1 page) the main duties of your new job and what are the points of your concerns and focus?
As a human resource manager for ABC's Canada branch, my duties will include recruitment and selection of potential employees, conducting interviews, and ensuring that the company's policies and procedures are followed. My job also includes managing employee relations and providing training and development programs for them.
To ensure that I excel in this role, my main points of concern and focus will be to:
Understand the company's objectives and requirements to ensure that my hiring decisions align with these objectives.
Develop and maintain a comprehensive employee database to help in making informed decisions.
Stay current on the latest industry trends and regulatory requirements to keep up with changing employment laws and regulations.
Foster a positive working environment to retain employees, encourage employee productivity, and improve company culture.
Ensure that the recruitment process is fair, transparent, and free of bias.
Develop a comprehensive training program to enhance the skills and knowledge of employees.
Establish a process for performance evaluations to help in identifying areas for improvement and promotions.
A successful human resource manager should also have excellent communication, organization, and problem-solving skills. I will be committed to enhancing and ensuring the well-being of all employees within the company, creating an environment that fosters innovation, productivity, and continuous growth. In conclusion, my main duties as a human resource manager will be recruitment, employee management, training, and development. My main points of focus and concern will be fostering a positive working environment, maintaining a comprehensive database, staying current on industry trends and regulations, ensuring a fair recruitment process, and developing a comprehensive training program for employees.
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the irs's general authority to issue binding rules and regulations comes from which source
The IRS's general authority to issue binding rules and regulations comes from the Internal Revenue Code (IRC).
The Internal Revenue Code (IRC) serves as the primary source of authority for the IRS to issue binding rules and regulations. The IRC is the body of federal tax laws enacted by the U.S. Congress, outlining the rights and obligations of taxpayers and providing the legal framework for administering the tax system. It grants the IRS the power to promulgate regulations and interpret the provisions of the tax code. These regulations provide detailed guidance and clarify the application of the law in various tax matters. They carry the force of law and must be followed by taxpayers and the IRS alike. The IRS's rulemaking authority ensures consistent and uniform application of tax laws, provides clarity to taxpayers, and enables effective tax administration.
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product differentiation: group of answer choices refers to the attempt of firms to make their products look like those of the other firms in the industry. refers to the attempt of firms to make real or apparent differences in essentially substitutable products look different in the minds of the consumers. refers to the advantage big firms have in research and development. is a common characteristic of a perfectly competitive market structure. is only employed in a monopoly market structure.
Product differentiation refers to the attempt of firms to make real or apparent differences in essentially substitutable products look different in the minds of the consumers.
Product differentiation is a strategy used by firms to make their products stand out from competitors in the market. It involves creating unique features, characteristics, or brand image for a product that makes it distinct and appealing to consumers.The purpose of product differentiation is to make consumers perceive the product as different or better than similar products offered by competitors.
This differentiation can be achieved through various means such as product design, packaging, branding, advertising, and customer service.By differentiating their products, firms aim to create a competitive advantage and attract customers who value the unique attributes or benefits offered. This strategy allows firms to charge higher prices, gain customer loyalty, and increase market share.
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You have &6,700.00 to invest and must choose between a no-load, open-end mutual fund with an annual expense ratio of 0.85 percent but no transaction cost and an ETF with an annual expense ratio of 0.25 percent and a transaction cost of $20.00. a. Calculate which is the lower cost alternative to purchase. b. Calculate the net proceeds associated with each option if you hold the mutual fund for 6 months and sell after a gain of 11 percent per 6 months. c. Calculate the net proceeds associated with each option if you hold the mutual fund for 1 year and achieve a gain of 9 percent per year. d. Calculate the net proceeds associated with each option if you hold the mutual fund for 1 year and experience a loss of 8 percent per year. a. Calculate which is the lower cost alternative to purchase. (Select the best answer below.) A. The cost is $0 to purchase the no-load fund versus $20 to purchase the ETF. Regardless of the initial investment amount, the lower cost alternative to purchase is the no-load, open-end mutual fund. B. The cost is $0 to purchase the ETF versus $20 to purchase the no-load fund. Regardless of the initial investment amount, the lower cost alternative to purchase is the ETF. b. If you hold the mutual fund for 6 months and sell after a 6-month gain of 11%, the net proceeds associated with the no-load fund are $ (Round to the nearest cent.) If you hold the mutual fund for 6 months and sell after a 6-month gain of 11%, the net proceeds associated with the ETF are $ (Round to the nearest cent.) c. If you hold the mutual fund for 1 year and sell after a 1-year gain of 9%, the net proceeds associated with the no-load fund are s. (Round to the nearest cent.) If you hold the mutual fund for 1 year and sell after a 1-year gain of 9%, the net proceeds associated with the ETF are $ (Round to the nearest cent.) d. If you hold the mutual fund for 1 year and sell after a 1-year loss of 8%, the net proceeds associated with the no-load fund are $. (Round to the nearest cent.) If you hold the mutual fund for 1 year and sell after a 1-year loss of 8%, the net proceeds associated with the ETF are $ (Round to the nearest cent.)
a. The lower cost alternative to purchase is the ETF, as it has a total cost of $36.75 compared to $56.95 for the no-load mutual fund. b. The net proceeds associated with the no-load mutual fund are $7,436.35, and the net proceeds associated with the ETF are $7,454.35. c. The net proceeds associated with the no-load mutual fund are $7,093.35, and the net proceeds associated with the ETF are $7,111.35. d. The net proceeds associated with the no-load mutual fund are $6,044.35, and the net proceeds associated with the ETF are $6,062.35.
a. To calculate the lower cost alternative to purchase, we compare the expenses associated with the no-load mutual fund and the ETF.
For the no-load mutual fund:
Expense ratio = 0.85% = 0.0085
Transaction cost = $0
For the ETF:
Expense ratio = 0.25% = 0.0025
Transaction cost = $20.00
To calculate the cost for each option, we multiply the expense ratio by the investment amount:
No-load mutual fund cost = $6,700.00 * 0.0085 = $56.95
ETF cost = $6,700.00 * 0.0025 + $20.00 = $36.75
b. If you hold the mutual fund for 6 months and sell after a 6-month gain of 11%:
No-load mutual fund net proceeds = $6,700.00 * (1 + 0.11) - $56.95 = $7,436.35
ETF net proceeds = $6,700.00 * (1 + 0.11) - $36.75 = $7,454.35
c. If you hold the mutual fund for 1 year and sell after a 1-year gain of 9%:
No-load mutual fund net proceeds = $6,700.00 * (1 + 0.09) - $56.95 = $7,093.35
ETF net proceeds = $6,700.00 * (1 + 0.09) - $36.75 = $7,111.35
d. If you hold the mutual fund for 1 year and sell after a 1-year loss of 8%:
No-load mutual fund net proceeds = $6,700.00 * (1 - 0.08) - $56.95 = $6,044.35
ETF net proceeds = $6,700.00 * (1 - 0.08) - $36.75 = $6,062.35
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Consider a market with only two firms. The firms operate in a Stackelberg type market where Firm 1 is the leader \& Firm 2 is the follower. The market inverse demand function is: P=210−3Q, where Q =q1+q2. Each firm has a similar cost structure with a marginal cost; MC=27, though each have different fixed costs; FC1=60&FC2=90. Answer the following questions (25pts) : a. If both firms wish to compete, what is the optimal quantity for each firm ( q i
) and the market price (10pts) ? b. What are the profits for each firm from the strategy in part a (5 pts)? c. If both firms choose to collude and not directly compete, what is the new price, quantity, and profits for each firm (10 pts)?
Thus, [tex]27 = d(TC)/dQi = d(FC + VC)/dQi = d(FC)/dQi + d(VC)/dQi = 0 + d(VC)/dQi[/tex].
Thus, [tex]d(VC)/dQi = 27[/tex]. Since the firms have a similar cost structure, both the firms' optimal quantity will be the same[tex], i.e., q1 = q2 = q*.[/tex]
In a competitive market, marginal revenue (MR) = Marginal Cost (MC).Therefore,[tex]MR= d(PQ)/dQ = 210 - 6Q[/tex]. Similarly, Firm 2 will take Q1 as given and determine Q2 by maximizing its profit, i.e.,[tex]d(π2)/dQ2 = 210 - 6Q1 - 6Q2 - 27 = 183 - 6Q1 - 6Q2 = 0. Thus, Q2 = (183 - 6Q1)/6[/tex]. Market demand is the sum of quantities supplied by both the firms.
If both firms collude, they will act as a single monopolist and determine the profit-maximizing quantity by equating MR with MC. Since the firms have similar cost structures, the monopolist quantity will be evenly divided between them. [tex]Thus, Q* = 183/12. Therefore, Q1* = Q2* = 183/24 = 15.25.[/tex]
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Property taxes are assessed for $800,000. Ninety percent is assumed to be collected in the current period, six percent in the subsequent year, and the remaining is assumed uncollectable.
What are the journal entries?
When property taxes are assessed for $800,000, journal entries should be made. To properly record these journal entries, one should take note of the percentages that will be collected in the current period, subsequent year, and uncollectable amounts.
Assuming that 90% is assumed to be collected in the current period, 6% in the subsequent year, and the remaining is assumed uncollectable, the journal entries will be as follows:
Current Year: Debit: Property Taxes Receivable - $720,000 Credit:
Property Taxes Revenue- $720,000
Subsequent Year: Debit: Property Taxes Receivable - $48,000
Credit: Property Taxes Revenue - $48,000
Uncollectable amount: Debit: Property Taxes Receivable - $32,000
Credit: Allowance for Uncollectable Accounts - $32,000
In conclusion, the journal entries for when property taxes are assessed for $800,000 would be:
Current Year: Debit: Property Taxes Receivable - $720,000
Credit: Property Taxes Revenue - $720,000
Subsequent Year: Debit: Property Taxes Receivable - $48,000
Credit: Property Taxes Revenue - $48,000
Uncollectable amount: Debit: Property Taxes Receivable - $32,000
Credit: Allowance for Uncollectable Accounts - $32,000.
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(exhibit: a perfectly competitive firm in the short run) the firm will shut down in the short run if the price falls below:
In a perfectly competitive market, a firm will shut down in the short run if the price falls below the minimum average variable cost (AVC). The minimum AVC represents the point at which the firm is unable to cover its variable costs and would incur greater losses by continuing to operate.
In the short run, a firm has both fixed costs and variable costs. Fixed costs are expenses that do not change with the level of production, such as rent or equipment costs. Variable costs, on the other hand, vary with the level of production, such as labor or raw material costs.
If the price of the product falls below the minimum AVC, it means that the firm cannot cover its variable costs, let alone its fixed costs. In such a situation, the firm would minimize its losses by shutting down and not producing any output. By shutting down, the firm avoids incurring further variable costs and limiting its losses to the amount of its fixed costs.
Therefore, in a perfectly competitive market, a firm will shut down in the short run if the price falls below the minimum AVC.
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Refer to the T account for an imaginary bank
Assets Liabilities
Reserve $3,000 Deposits $25,000
Loan $22,000
Based on the information given in the table calculate the following:
1. If the reserve ratio is 10% then calculate any excess reserve.
2. If the bank decides to loan out the excess reserve then how much money supply that excess reserve can create?
If the reserve ratio is 10% then calculate any excess reserve.The reserve ratio is the portion of the deposit that banks must hold in reserve.
Reserve ratio is expressed as a percentage of a bank's total deposits. Excess reserves refer to the amount of funds banks keep as cash, either in their vaults or on deposit with the Federal Reserve. Reserve = 10% of 25,000Reserve = 10/100 × 25,000Reserve = 2,500Excess Reserve = Reserve - Required Reserve Excess Reserve = 3,000 - 2,500Excess Reserve = 5002.
Money Multiplier = 1/RR Where RR = Reserve Ratio Money Multiplier = 1/10%Money Multiplier = 10Change in money supply = Excess Reserve x Money Multiplier Change in money supply = 500 x 10Change in money supply = 5,000.
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6. Which of the following is an example of the "brain drain"? a. A country's most highly educated workers emigrate to rich countries. b. A country has such a poor educational system that human capital falls over time. c. The population of a country grows so fast that the educational system can't keep up. d. A country steals patented technology from another country. 7. In the first segment from the video, "Commanding Heights," the famed Latin American economist Hernando de Soto tells the story of a coffee bean farmer from Tanzania, who when asked whether he can produce proof that he owns the land, asserted that he had no official deed but that he had purchased the land from someone years ago and the fact that he lives there today is proof enough that he owns it. In your own words, explain what De Soto's main argument is about property rights and how it relates to a country's standard of living?
6. The following option is an example of the brain drain:a. A country's most highly educated workers emigrate to rich countries.
The brain drain refers to the emigration of skilled individuals, such as doctors, engineers, and other professionals from their home country to a more developed country.
It causes the home country to lose talented and experienced workers who would otherwise contribute to its growth.7. Hernando de Soto's main argument is that a country's standard of living and economy can improve by protecting the property rights of its citizens.
He used the coffee bean farmer's story to illustrate the idea that people in many poor countries may own their land, but they lack formal titles that would protect their rights as property owners. They cannot use their property as collateral for a loan, which would allow them to invest in their business, buy equipment, and hire employees.
De Soto argues that when people have legal ownership of their property, they can use it as an asset to create wealth and improve their lives.
Property rights also help to establish trust and accountability in business transactions, which increases investment, growth, and productivity. He claims that developing countries could create trillions of dollars in wealth if they reformed their legal systems and allowed their citizens to have formal titles to their property.
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