To allow a natural monopoly to continue operations in the long run, the regulated price must be at least as high as the minimum point of the average total cost curve. Hence, Option (a) is correct.
In a natural monopoly, the firm benefits from economies of scale, meaning that as it produces more output, its average costs decrease.
Setting the regulated price at or above the minimum point of the ATC curve ensures that the natural monopoly can cover all of its costs, including both variable and fixed costs while earning a reasonable return on investment.
If the regulated price is set below the minimum point of the ATC curve, the firm would not be able to cover its costs, leading to losses and potentially forcing it out of the market.
Thus, by setting the regulated price at least as high as the minimum point of the ATC curve, the natural monopoly can continue operations in the long run and maintain its efficiency and profitability.
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in order to allow a natural monopoly to continue operations in the long run, the regulated price must be at least as high as
a)the minimum point of the average total cost curve.
b)minimum point of the average variable cost curve.
c)average total cost where the average total cost curve meets the demand curve.
d)minimum point of the marginal cost curve.
e)marginal cost where the marginal cost curve meets the demand curve.
Diaz Company owns a machine that cost $126,000 and has accumulated depreciation of $93,300. Prepare the entry to record the disposal of the machine on January 1 in each separate situation. 1. The machine needed extensive repairs and was not worth repairing Dlaz disposed of the machine, receiving nothing in return 2. Diaz sold the machine for $17,200 cash. 3. Diaz sold the machine for $32,700 cash. 4. Diaz soid the machine for $40,500 cash. Journal entry worksheet Record the disposal of the machine recelving nothing in return. Nothi Enter debits before credits. Journal entry worksheet Record the sale of the machine for $17,200 cash. Note: Enter debits before credits. Journal entry worksheet Record the sale of the machine for $32,700 cash. Note: Enter debits before credits, Journal entry worksheet 1 Record the sale of the machine for $40,500cash. Notet Enter debits before credits.
1. The machine needed extensive repairs and was not worth repairing Diaz disposed of the machine, receiving nothing in return
In this case, Diaz Company has disposed of the machine that costs $126,000 and has accumulated depreciation of $93,300, and received nothing in return. The loss incurred by Diaz is calculated as follows:Cost of machine = $126,000Accumulated Depreciation = $93,300
Book value of the machine = Cost of machine - Accumulated DepreciationBook value of the machine = $126,000 - $93,300Book value of the machine = $32,700Loss on disposal of machine = Book value of machine sold - Cash receivedLoss on disposal of machine = $32,700 - $0Loss on disposal of machine = $32,700Now, let us prepare the journal entry to record this transaction.
Account TitlesDebitsCreditsLoss on Disposal of Machine$32,700Accumulated Depreciation - Machine$93,300Machine$126,000(To record the disposal of machine that needed repairs and was not worth repairing)2. Diaz sold the machine for $17,200 cash.
In this case, Diaz Company has disposed of the machine that costs $126,000 and has accumulated depreciation of $93,300, and received $17,200 in cash for it.
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Shahrul had been with the organization for a fortnight now and was due to meet Razali. He opened the door and walked in.
Razali asked him to be seated and said, ‘So doctor, what is the diagnosis?’
Shahrul had been recently hired as the company counsellor at MJS United Sdn Bhd, as Razali, the CEO, felt that he was fed up with his team of non-performers. He had hand-picked the Band II decision makers from the most prestigious and growing enterprises. Each one came with a proven track record of strategic turnarounds they had managed in their respective roles. So why this inertia at MJS United Sdn Bhd? The salaries and perks were competitive, reasonable autonomy was permitted in decision-making and yet nothing was moving.
There had been two major mergers and the responsibilities had increased somewhat. When Shahrul went to meet Samad Mamat, the bright star who had joined six months back, he was reported absent and seemed to be suffering from hypertension and angina pain. His colleague in the next cabin was not aware that Samad had not come for the past four days. As he was talking to Razali’s secretary, he could hear Kamal Baharu, the HR head, yelling at the top of her voice at a new recruit, who after six weeks of joining had come to ask her about her job role.
The Band III executives had been with the company for a tenure of 5–15 years and yet had not been able to make it to the Band II position (except two lady employees). They were laid back, extremely critical and yet surprisingly were not moving.
Razali also seemed a peculiar guy, he had hired him as the counsellor and was also making some structural changes as suggested by a spiritual expert, to nullify the effect of ‘evil spirits’. He had a history of hiring the best brains, and then trying to fit them into some role in the organization. And in case someone did not fit in, firing him without any remorse. He had changed his nature of business thrice and on the personal front, he was on the verge of his second divorce.
The company had a great infrastructure, attractive compensation packages and yet the place reeked of apathy. It was like a stagnant pool of the best talent. Was it possible to undertakeoperation clean up?
QUESTIONS
What is the management decision problem that Shahrul is likely to narrate to Razali?
Convert and formulate it into a research problem and state the objectives of your study.Can you suggest a theoretical framework about what you propose to study?
Develop the working hypothesis for your study.
The management decision problem that Shahrul is likely to narrate to Razali is the organizational apathy that reeks of the stagnant pool of the best talent despite the company having a great infrastructure and attractive compensation packages.
The company's Band III executives had been with the organization for a tenure of 5–15 years and yet had not been able to make it to the Band II position (except two lady employees).
They were laid back, extremely critical, and yet surprisingly were not moving.
Razali, the CEO, had hand-picked the Band II decision-makers from the most prestigious and growing enterprises, each one coming with a proven track record of strategic turnarounds they had managed in their respective roles.
However, despite this, there was inertia at MJS United Sdn Bhd.
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What nominal annual rate of interest compounded semi-annually is required to double an investment in 7 years Rate = %
The nominal annual rate of interest compounded semi-annually required to double an investment in 7 years is 10.2%.
The formula for compound interest compounded semi-annually is:
A = P(1 + r/n)^nt
where:
A is the future value
P is the present value
r is the nominal annual interest rate
n is the number of compounding periods per year
t is the number of years
In this case, we want A = 2P, t = 7 years, and n = 2 (since we are compounding semi-annually. So we can solve for r:
2P = P(1 + r/2)^2t
2 = (1 + r/2)^14
(1 + r/2)^7 = 2
1 + r/2 = 2^(1/7)
r/2 = 2^(1/7) - 1
r = 2(2^(1/7) - 1)
r = 10.2%
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2. The following is an excerpt from an article published at the US Bureau Labor Statistics with regard to COVID 19 and remote work. "Businesses made many adjustments to their operations and policies during the coronavirus disease 2019 (COVID-19) pandemic. One key adjustment was shifting some employees from working in person at offices and stores to teleworking (also known as working from home or remote work). By limiting in-person contact among employees, telework allowed businesses to maintain operations and workers to remain employed. At the beginning of the pandemic, the extent of job loss was much lower for workers who were able to telework. Matthew Dey, Harley Frazis, Mark A. Loewenstein, and Hugette Sun found that, between February and April 2020, employment fell 8 percent among workers in occupations in which telework is feasible, compared with 21 percent among workers in occupations in which telework is not feasible." Please explain how likely it is that the change in the trend in remote work affects job mobility and internal migration.
The shift towards remote work is changing the way that people view job mobility and internal migration.
Prior to the COVID-19 pandemic, people often felt that they needed to be close to their job to be effective and to advance in their career.
However, as remote work becomes more common, people are realizing that they can work from anywhere and still be productive.
This is leading to more people considering moving to new areas, which can lead to greater job mobility and internal migration.
By working remotely, people are not tied to a specific geographic location, which means they can move to new areas without having to worry about finding a new job.
This is leading to greater job mobility and internal migration, as people are more willing to move to new areas to take advantage of job opportunities or to be closer to family and friends.
Overall, the shift towards remote work is likely to have a significant impact on job mobility and internal migration in the years to come.
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A market with free entry, and many firms selling virtually similar products would best be characterized as which of the following?
[ Select ] ["Undifferentiated oligopoly", "Perfect competition", "Monopolistic competition", "Monopoly"]
A market with free entry, and many firms selling differentiated products would best be characterized as which of the following?
[ Select ] ["Perfect competition", "Undifferentiated oligopoly", "Monopolistic competition", "Monopoly"]
When a market has free entry, and there are numerous firms selling virtually similar products, then it can be characterized as a monopolistic competition.
Such a market structure is characterized by a large number of firms producing and selling products that are somewhat differentiated. The firms can control the prices of their products to some extent, but they are still price-takers.
A monopolistic competition can be characterized by the following features : Many firms: This market structure has many firms that produce and sell products, so no one firm can dominate the market.
Product differentiation: Firms can differentiate their products by branding or marketing them differently than their competitors.
This market structure is similar to perfect competition, but the firms are selling differentiated products that can be branded or marketed differently than their competitors. In this market, firms can charge slightly different prices based on product differentiation and branding.
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At the beginning of his current tax year, David invests $12,680 in original issue U.S. Treasury bonds with a $10,000 face value that mature in exactly 20 years. David receives $660 in interest ($330 every six months) from the Treasury bonds during the current year, and the yield to maturity on the bonds is 4.6 percent. (Round your intermediate calculations to the nearest whole dollar amount.)
Semiannual Period
Adjusted Basis of Bonds at Beginning of Semiannual Period
Interest Received
Premium Amortization
Reported Interest
1
12680
330
2
330
Yearly Total
660
At the beginning of his current tax year, David invests $12,680 in original issue U.S. Treasury bonds with a $10,000 face value that mature in exactly 20 years.
David receives $660 in interest ($330 every six months) from the Treasury bonds during the current year, and the yield to maturity on the bonds is 4.6 percent.David's semiannual period is 20 years, so he will have 40 semiannual periods.
The bond's adjusted basis at the beginning of the semiannual period is $12,680. David received $330 in interest during the first semiannual period.Using the straight-line method, David must amortize the $2,680 premium over the 40 semiannual periods that the bond exists.
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Which of the following debts may be discharged in a bankruptcy?
a: Taxes.
b: Child support.
c: A new auto purchased 90 days before filing.
d: Punitive damages.
Taxes may be dischargeable in bankruptcy, but it depends on the type of tax and the circumstances. Hence the correct answer is option a.
The dischargeability of debts in a bankruptcy process relies on the type of bankruptcy filed and the unique circumstances.
Taxes - Depending on the type of tax and the situation, taxes may be dischargeable in bankruptcy. If certain requirements are met, such as the tax debt being at least three years old and the tax returns being filed on time, income taxes can typically be cancelled. Payroll taxes, for example, are typically not dischargeable taxes.
Child support is not a debt that may be discharged in bankruptcy. They are regarded as priority debts and are not dischargeable in bankruptcy.
A new car purchased 90 days prior to filing - Debts for upscale products or services accrued within 90 days of bankruptcy filing are deemed to be luxury debts. These debts might not be forgiven if you buy a new car or other luxuries during this time.
Punitive damages are typically not dischargeable in bankruptcy, as stated in item d. Punitive damages and other wrongful behavior-related debts are often not dischargeable.
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in order to reduce the ________ problem in loan markets, bankers collect informa- tion from prospective borrowers to screen out the bad credit risks from the good ones.
In order to reduce the adverse selection problem in loan markets, bankers collect information from prospective borrowers to screen out the bad credit risks from the good ones.
Adverse selection problem is a situation where one party in a transaction has more information than the other party which leads to an imbalance of power between the two parties. In loan markets, adverse selection occurs when borrowers with a high risk of default are more likely to seek out loans than borrowers with a low risk of default. This can lead to a situation where lenders are hesitant to lend to borrowers due to the risk of default.To reduce this problem, bankers collect information from prospective borrowers to screen out the bad credit risks from the good ones. This information can include credit history, income, and other financial information.
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Adverse selection arises in a market when
A. the seller knows more about the value of the good than the
buyer.
B. the buyer knows more about the value of the good than the
seller.
C. the gains from tr
Adverse selection arises in a market when the buyer knows more about the value of the good than the seller. Adverse selection is a situation in which one party has more information than the other, resulting in an imbalance of power in the transaction. It frequently occurs in the context of insurance policies, loans, and financial markets. The party with more information, frequently referred to as the "informed party," has a bargaining advantage over the other party, frequently known as the "uninformed party."
Because the uninformed party does not have all of the information required to make an informed decision, adverse selection might result in the exchange of a suboptimal agreement for both parties. When the uninformed party is unable to determine the quality of the good or service being sold, adverse selection happens. Adverse selection arises in a market when the buyer knows more about the value of the good than the seller. As a result, the seller may be hesitant to sell high-quality products or services to the buyer because they fear that the buyer will take advantage of their knowledge.
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IVY has preferred stock selling for 105 percent of par that pays a 6 percent annual coupon. What would be IVY's component cost of preferred stock? Select one: a. 6.30 percent b. 5.71 percent c. 1.11 percent d. 99.00 percent
The formula to calculate the component cost of preferred stock is as follows:Component cost of preferred stock = Preferred dividends / Net proceeds from sale of preferred stock × 100
Given that,IVY's preferred stock is selling for 105 percent of par that pays a 6 percent annual coupon.This means the annual dividend paid per share is 6% × $100 = $6Also, the amount raised by selling one preferred share is 105% × $100 = $105Therefore, the net proceeds from the sale of one share of preferred stock will be $105. Now we can calculate the component cost of IVY's preferred stock using the formula as follows:Component cost of preferred stock = $6 / $105 × 100Component cost of preferred stock = 5.71%Therefore, the correct answer is option b) 5.71 percent.
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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. Questions: a. Based on the scenario above and the principles relating to training design, describe TWO (2) training mistakes that Jamilah as a trainer has committed. (4 Marks) b. What should Jamilah have done to prevent these mistakes? Provide TWO (2) recommendations that Jamilah could adopt and apply to make her training session more interesting and engaging. (6 Marks) c. If Jamilah were asked by the college administrator to assist them in evaluating the training, elaborate on the following: i. The TWO (2) outcomes to be collected from the training and the measurement methods that she could use. (4 Marks) ii. The most suitable evaluation design to assess the two-day training. (6 Marks
a. Two training mistakes committed by Jamilah as a trainer are as follows: Inadequate preparation: Jamilah was given a task of preparing and conducting a two-day training course on the pedagogy of teaching online students.
Though she tried her best by reading through the training materials, observing other senior trainers delivering the course, and thinking of some creative activities, she did not prepare adequately. Therefore, her participants lost interest and got bored with the session and looked distracted.
Not taking into account the diverse learning styles of participants: In the course of designing her training, Jamilah did not take into consideration the diverse learning styles of her participants. She was so immersed in designing the training course that she failed to design for participants with different learning styles.
She assumed that her teaching style was perfect and would appeal to all participants, but this was not the case. b. The following are the recommendations that Jamilah could adopt and apply to make her training session more interesting and engaging and to prevent the mistakes:
Interactive training techniques: Instead of relying only on the lecture format, Jamilah can include interactive training techniques that can increase the attention span and participation of her participants. Examples of interactive training techniques include group work, role-play, games, case studies, and brainstorming, among others.
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Explain why customers sometimes get a "good deal" on a product. Think about the behavioral aspects of consumption and/or your knowledge of supply and demand to answer the question.
Customers sometimes get a "good deal" on a product due to different reasons that can be explained based on behavioral aspects of consumption and/or knowledge of supply and demand. When it comes to supply and demand, it may result in lower prices if the supply of a product is high and the demand is low.
This makes it harder for suppliers to sell their products, and they will, therefore, reduce prices to attract customers. On the other hand, if the demand is high and the supply is low, suppliers will raise their prices since they know that customers will still be willing to pay for the product because it is in high demand. Thus, supply and demand play a significant role in determining product prices.
As for behavioral aspects, customers may get a good deal on a product for different reasons. For example, a company may launch a new product, and they want to introduce it to the market. They may offer discounts and promotions to attract customers and get them to try the new product. Another reason may be that the product is nearing its expiration date or season, and the company wants to get rid of its remaining stock. They may offer discounts or sales to encourage customers to buy the product before it goes off the shelf.
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The Budget Line is
a. The maximal expenditure that a consumer can afford for given income and prices
b. The set of all consumption plans that are exactly feasible for the consumer, for a given income and given prices
c. The set of all prices that, for a given income, make a certain consumption plan x feasible
d. The set of all incomes that allow the consumer to buy a certain consumption plan x at given prices
e. The set of all consumption plans that are indifferent to a given consumption plan x
The Budget Line is the maximal expenditure that a consumer can afford for given income and prices. The option (a) is the correct answer.
A budget line is a visual representation of a budget constraint. A budget line describes all of the potential combinations of goods that someone can purchase given their income and the prices of goods. It's a straight line that shows the maximum amount of two different goods that can be purchased with limited resources.
The budget line demonstrates how the consumer's income is spent on goods and services. The budget line helps to determine what the consumer can afford and how much they must pay for the goods and services they want to buy.
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last year easton corporation reported sales of $920,000, a contribution margin ratio of 40 nd a net loss of $44,000. based on this information, the break-even point was:
To determine the break-even point, we need to calculate the level of sales at which the company neither incurs a profit nor a loss. The break-even point for Easton Corporation based on the given information is $810,000.
To determine the break-even point, we need to calculate the level of sales at which the company neither incurs a profit nor a loss. The break-even point can be calculated using the following formula:
Break-even point (in dollars) = Fixed costs / Contribution margin ratio
From the given information:
Sales = $920,000
Contribution margin ratio = 40% (or 0.40)
Net loss = $44,000
Since a net loss is reported, it indicates that the company's total costs (including fixed costs and variable costs) exceeded its total sales revenue.
To calculate the break-even point, we need to find the fixed costs. We can rearrange the formula to solve for fixed costs:
Fixed costs = Contribution margin ratio × Sales - Net loss
Fixed costs = 0.40 × $920,000 - $44,000
Fixed costs = $368,000 - $44,000
Fixed costs = $324,000
Now, we can calculate the break-even point:
Break-even point = $324,000 / 0.40
Break-even point = $810,000
Therefore, the break-even point for Easton Corporation based on the given information is $810,000.
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Required information Problem 12-6A (Algo) Use ratios to analyze risk and profitability ( LO12-3, 12-4) [The following information applies to the questions displayed below.] Income statements and balance sheets data for Virtual Gaming Systems are provided below. Required: 1. Assuming that all sales were on account, calculate the following risk ratios for 2024 and 2025
We need additional data, such as net income, total assets, and total liabilities, to compute risk ratios for Virtual Gaming Systems for 2024 and 2025.
It is impossible to generate detailed risk ratio estimations without these specifics. I can, however, give you a list of often employed risk ratios that you can compute using the pertinent data from the income statements and balance sheets:1. Debt-to-Equity Ratio: This ratio assesses how much debt financing there is compared to equity financing and shows how risky and leveraged the company's finances are.2. Current Ratio: This ratio evaluates the company's capacity to pay current obligations and short-term liquidity
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Hardy-Furn is a manufacturing company that makes and restores furniture and uses a jobcosting system. Fixed overhead costs are allocated on the basis of direct labour hours. Budgeted fixed overheads for the year ended 31 December 2014 were R4 320000 . The company employs 288 skilled carpenters who work a 40 hour week for 50 weeks per annum. The company had no work in progress at the beginning of the 2014 year. The entire month of January 2014 was spent on job 460 , which called for 8000 labour hours. Cost data for January 2014 was as follows: - Raw materials purchased on account, R365 000. - Raw materials requisitioned for production, R315 000(70% direct and 30% indirect). - R190 000 was incurred in respect of factory labour costs and paid in cash. An analysis of this R190 000 indicates that R80 000 accounts for fringe benefits. - Depreciation recorded on factory equipment, R72 000. - Other manufacturing overhead costs incurred were paid for in cash and amounted to R48 000 . - Manufacturing overhead cost was applied to production on a basis of 40000 labour hours worked during the month. - The completed job was moved into the finished goods warehouse on 31 January to await delivery to the customer. REQUIRED: Prepare the following general ledger accounts for the month of January 2014: - raw materials - manufacturing overheads - work in progress
Raw Materials Account:Particulars Amount Particulars AmountTo purchases a/c 365,000.
By Wages a/c 120,000To indirect materials 94,500 By balance c/d 255,500To balance b/d - - -Total 459,500 Total 459,500 Manufacturing Overheads Account:
Particulars Amount Particulars AmountTo Depreciation a/c 72,000 By Cash a/c 48,000To balance b/d - By WIP a/c 15,840To Wages a/c 120,000 By Creditor a/c 15,000
To Indirect Material a/c 94,500 By Balance c/d 214,660To Balance c/d 214,660 - -Total 501,160 Total 501,160Work in Progress Account:
Particulars Amount Particulars AmountTo Balance b/d - By Manufacturing Overheads a/c 15,840To Direct Material a/c 220,500 By Balance c/d 420,660To Wages a/c 120,000 - -By Balance c/d 420,660 - -Total 340,500 Total 840,500Therefore, Raw Material Account is debited with the total amount of purchases and indirect materials amounting to R459,500.
Manufacturing Overhead Account is debited with Depreciation, Wages, Indirect Materials totaling R501,160.The Work in Progress Account is debited with direct material, wages amounting to R340,500 and is credited with Manufacturing Overheads of R15,840 to arrive at a balance of R420,660.
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Trailblazer ha pent £ 6 bn over the pat two year in advertiing. A a reult, it ha increaed it revenue by £10 bn and it ha reduced the revenue of it competitor by £7 bn. How much i it unk cot?
The correct option is d. £ 6bn .The sunk cost for Trailblazer is £6 billion, representing the amount already spent on advertising over the past two years.
In this scenario, the sunk cost for Trailblazer is the amount of money it has already spent on advertising, which is £6 billion. Sunk costs are costs that have been incurred and cannot be recovered, regardless of the outcomes or impacts they may have. In this case, the £6 billion spent on advertising is a sunk cost because it has already been expended and cannot be reversed. Although the advertising efforts have resulted in an increase in revenues by £10 billion and a reduction in competitors' revenues by £7 billion, these outcomes do not affect the classification of the initial expenditure as a sunk cost. Sunk costs are important to consider when making decisions going forward, as they should not be factored into future decisions since they are irretrievable.
The complete question is
Trailblazer has spent £6 bn over the past two years in advertising. As a result, it has increased its revenues by £10 bn and it has reduced the revenues of its competitors by £7 bn. How much is its sunk cost? a. £ 10bn b. £3bn c. £7bn d. £ 6bn.
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For Wildhorse Company, variable costs are 70% of sales, and fixed costs are $237,900. Management's net income goal is $91,500. Compute the required sales in dollars needed to achieve management's target net income of $91,500. (Use the contribution margin approach.) Required sales $
Contribution margin approach:Contribution margin = sales - variable costsContribution margin ratio = contribution margin / salesThe formula for calculating the required sales is:
Required sales = (Fixed cost + Target net income) / Contribution margin ratioFormulaSubstitute the given values into the formula as follows:
Contribution margin ratio = 100% - 70% = 30%Fixed cost = $237,900Target net income = $91,500Required sales = ($237,900 + $91,500) / 30% = $1,097,000
So, the required sales in dollars needed to achieve management's target net income of $91,500 is $1,097,000.
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Group of answer choices
Writing a covered call is typically regarded as a conservative strategy because it reduces the cost of owing the stock.
For protective puts, the greatest profit possible is infinite.
For covered calls, the greatest profit possible is unlimited.
A protective put offers some insurance against a decline in the stock price.
Out of the given statements, the correct ones are: Writing a covered call is typically regarded as a conservative strategy because it reduces the cost of owning the stock and a protective put offers some insurance against a decline in the stock price.
Explanation:
Writing a covered call involves selling a call option on a stock that is already owned. This strategy is considered conservative because it generates income (from selling the call option) and reduces the cost basis of owning the stock.
The income from selling the call option helps offset any potential losses in the stock's value.
A protective put is an options strategy where an investor buys a put option on a stock they already own. This put option acts as insurance against a decline in the stock price.
If the stock price decreases, the put option can be exercised, allowing the investor to sell the stock at the strike price, limiting their potential losses.
The statements about the greatest profit possible for protective puts and covered calls are incorrect:
For protective puts, the greatest profit possible is limited to the difference between the stock's initial price and the strike price of the put option.
This is because the investor has the right to sell the stock at the strike price even if the market price drops significantly.
For covered calls, the greatest profit possible is limited to the strike price of the call option, as that is the price at which the stock can be sold if the call option is exercised.
The stock's potential upside beyond the strike price is not captured by the covered call strategy.
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Assume the true market risk premium is constant over time and that the CAPM holds. How should you choose the data sample when estimating the market risk premium if you have 100 years of data?
a. You should use all available data (100 years).
b. If the market has gone up for the last 20 years, but was not performing so well previously, you want to use only the last 20 years of data.
C. If the market has gone up for the last 20 years, but was not performing so well previously, you want to exclude the data from the last 20 years.
d. You want to exclude years with extreme negative or extreme positive returns, since they are not representative of typical market returns.
e. (b) and (d)
f. (c) and (d)
g. None of the above.
When estimating the market risk premium if you have 100 years of data and you assume that the true market risk premium is constant over time and that the CAPM holds, positive returns since they are not representative of typical market returns.
Thus, the correct answer is d. You want to exclude years with extreme negative or extreme positive returns, since they are not representative of typical market returns.
To estimate market risk premium using the CAPM method, the equity risk premium and the risk-free rate are combined. CAPM model is used for calculating the expected return on equity investments, considering the return on the market index as a benchmark. The formula for the CAPM model is shown below:
Ri = Rf + β (Rm - Rf)Where, Ri is the expected return on a stock or portfolio, Rf is the risk-free rate,β is the beta of the security or portfolio,Rm is the expected return of the market.
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Generally, the is the best measure of central tendency when outiers are present.
The median is generally the best measure of central tendency when outliers are present.
When a dataset contains outliers, the mean can be heavily influenced by these extreme values and may not accurately represent the central tendency of the majority of the data. The median, on the other hand, is less affected by outliers because it is simply the middle value when the data is sorted in ascending or descending order. This makes the median a more robust measure of central tendency in the presence of outliers.By using the median, we focus on the value that divides the data into two equal halves, disregarding the extreme values that might skew the mean. This provides a more representative measure of the typical or central value within the dataset, even if there are outliers present. However, it is still important to consider the nature of the data and the specific context when selecting the appropriate measure of central tendency.
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1) Explain what spreading the overhead means. 2) Explain what is the rational range of production?
3) Explain the relationship between average revenue and marginal revenue. 4) How do you identify the point of profit maximization on a set of marginal cost and marginal revenue curves? 5) What is the break-even point? What is the shüt-down point? How do you distinguish between the two?
1) Spreading the overhead refers to the process of dividing a company's overhead expenses (such as rent, utilities, and insurance) among the products it produces.
This is done to determine the cost of each product and set a price that covers the cost and allows for a profit margin.
2) The rational range of production refers to the range of production where a company can maximize its profits. It is determined by the point where the marginal cost (the cost of producing an additional unit) is equal to the marginal revenue (the revenue earned by selling an additional unit).
3) Average revenue is the revenue earned per unit sold, while marginal revenue is the revenue earned by selling an additional unit. The relationship between the two is that when marginal revenue is greater than average revenue, the average revenue will increase. When marginal revenue is less than average revenue, the average revenue will decrease.
4) The point of profit maximization is where the marginal cost and marginal revenue curves intersect. At this point, the company is producing the optimal level of output where the cost of producing an additional unit is equal to the revenue earned by selling an additional unit, resulting in the maximum profit.
5) The break-even point is the point where a company's total revenue is equal to its total cost, resulting in zero profit or loss. The shut-down point is the point where a company's total revenue is less than its total variable cost, resulting in a loss.
The difference between the two is that the break-even point is where a company is covering all of its costs, while the shut-down point is where a company should stop producing because it is losing money.
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a type of research that tries to discover a relationship between variables and may use questionnaires, observations, and secondary date as its collection methods is called
The type of research described is called correlational research. Correlational research aims to identify and understand the relationship between variables.
It seeks to determine whether changes in one variable are associated with changes in another variable. This type of research often involves the use of questionnaires, observations, and secondary data as methods of data collection. In correlational research, researchers collect data from participants or sources and analyze it to determine the strength and direction of the relationship between variables. Questionnaires or surveys are commonly used to gather data directly from individuals, while observations involve systematically watching and recording behaviors or events. Additionally, researchers may utilize secondary data from existing sources such as databases, previous studies, or records. The main objective of correlational research is to identify patterns or associations between variables without establishing a cause-and-effect relationship.
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a tax hair who completes a 2022 return and who answers
yes to the fbar question on sexual B is required to complete f i n
c e n form 114 by what date
The tax hair who completes a 2022 return and answers yes to the f bar question on Schedule B will be required to complete the Financial Crimes Enforcement Network (FinCEN) Form 114, which is also known as the Foreign Bank Account Report (FBAR).
A FinCEN Form 114 is required to be completed by a taxpayer if they have foreign financial accounts with an aggregate value of more than $10,000 during a calendar year. The term "foreign financial account" is defined broadly, including bank accounts, brokerage accounts, mutual funds, and other types of investments held in foreign countries.
The FBAR for the 2022 tax year must be filed electronically with FinCEN by April 15, 2023. The FBAR filing deadline can be extended to October 15, 2023, by submitting FinCEN Form 114a. The extension is granted automatically, and there is no need to explain why the extension is being requested.
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Suppose you run a pension fund and you have the following liability: you will have to pay retirees $1,000,000 in 15 years. Suppose interest rates are equal to 1% forever and that there are only two bonds available in the market: a 2 year zero coupon bond, and a 20 year zero coupon bond.
(a) What is the present value of your liability at t = 0?
(b) Suppose you start at t = 0 with an amount of cash equal to the present value of the liability. What portfolio of 2 year and 20 year zero coupon bond should you buy at t = 0 in order to be immunized against change in interest rates?
(c) Suppose that the interest rate increases from 1% to 1.25% at t = 0. Suppose that you have bought the portfolio that you found in question (b). What is the approximate change in the value of your asset and liability? What is the exact change in the value of your asset and liability?
(d) Re-do the calculation of question (c) assuming that, instead of the portfolio of question (b) you have bought a portfolio composed of 30 year bonds only. Explain the
difference in results.
a) We have to find the present value of the liability at t = 0. For this, we need to use the formula for present value of a lump sum which is given as:PV = FV / (1 + r)nHere, FV = $1,000,000, r = 1% and n = 15 yearsTherefore, PV = $1,000,000 / (1 + 1%)15 = $670,012.80b) In order to be immunized against changes in interest rates.
the value of the assets at time 0 should be equal to the present value of the liability which is $670,012.80. We can buy a combination of 2 year and 20 year zero coupon bonds to get this value.
Let the amount invested in the 2 year bond be x and the amount invested in the 20 year bond be y. The price of the 2 year bond is given by:Price of 2 year bond = $100 / (1 + 1%)2 = $98.04Therefore, x = ($670,012.80) / (98.04) = $6834.62 (approx)The price of the 20 year bond is given by.
Price of 20 year bond = $100 / (1 + 1%)20 = $55.95Therefore, y = ($670,012.80) / (55.95) = $11,966.88 (approx)Therefore, the portfolio should contain ($6834.62) of 2 year bond and ($11,966.88) of 20 year bond.c) The new interest rate is 1.25%. We need to calculate the approximate and exact change in the value of asset and liability. Let the new price of the 2 year bond be P2 and the new price of the 20 year bond be P20.
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On May 30,20×6, Hopple Ltd. purchased equipment costing $59,000. The company paid $6,000 cash and signed a 1-year, 7% note payable for the remaining amount of $53,000. How would this transaction be reflected in the cash flow statement? Investing outflow of $6,000 and a financing outflow of $0 Investing outflow of $6,000 and a financing outflow of $53,000 Investing outflow of $59,000 and a financing outflow of $53,000 Investing outflow of $0 and a financing outflow of $0 Page 1 of 5
The transaction described would be reflected in the cash flow statement as an investing outflow of $6,000 and a financing outflow of $53,000.
The purchase of equipment for $59,000 is considered an investing activity because it involves the acquisition of a long-term asset. The cash payment of $6,000 represents the portion of the equipment cost paid in cash and would be categorized as an investing outflow.
The remaining amount of $53,000 was financed through a 1-year, 7% note payable. Since this represents a borrowing arrangement, it is classified as a financing activity.
The signing of the note payable does not involve a cash outflow at the time of the transaction, but it creates a liability that will require future cash payments. Therefore, it would be reflected as a financing outflow of $53,000.
So, the correct answer is: Investing outflow of $6,000 and a financing outflow of $53,000.
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How does duration (interest rate risk), liquidity and credit risk get mitigated regarding the composition of risk management investment portfolios ? What is meant by the "Securitization of Risk" ?
Transferring to the financial capital markets an insurable risk through the creation of a financial instrument referred to as an insurance-linked security.. "ILS"?
The composition of risk management investment portfolios and the mitigation of duration (interest rate risk), liquidity, and credit risk are accomplished through various measures.
The following is a list of these methods:1. Duration (interest rate risk) Risk ManagementDuration risk can be mitigated by matching the duration of assets and liabilities.2. Liquidity Risk ManagementThe liquidity risk can be managed through the use of various investment strategies that allow for easier access to cash in the event of an unexpected requirement.
3. Credit Risk ManagementThe credit risk can be reduced by diversifying the portfolio across various securities, industries, and geographical regions, as well as selecting securities that are less volatile in nature.Securitization of RiskThe securitization of risk is a term used to describe the process of transferring an insurable risk to the capital markets by creating a financial instrument known as an insurance-linked security (ILS).
An insurance-linked security (ILS) is a form of investment vehicle that allows investors to obtain exposure to insurance risks such as natural disasters, weather events, or other catastrophic losses. Rather than purchasing an insurance policy, investors purchase securities that are linked to a particular insurance risk.
The issuer of the ILS uses the proceeds from the issuance of the securities to provide coverage for the insurance risk. The ILS pays a premium to investors if the risk materializes, and the investors receive the proceeds from the ILS. If the risk does not materialize, the investors receive no payout.
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27) Which of the following is intended to keep employees up-to-date on important events and p inspirational stories about employee and team contributions to the firm? A) Employee handbook B) Managerial memo C) Company financial report D) Company newsletter 28) In general, retreats are: A) inappropriate for family businesses. B) harmful to most large corporations. C) helpful at enhancing employee relations. D) effective only for rewarding performance. 29) The first step in the use of an Employee Assistance Program (EAP) is to: A) refer the employee to an EAP counselor. B) put the employee on corrective action. C) identify the troubled employee. D) seek a solution to the problem. 30) Which of the following is most likely a symptom of a troubled employee? A) Early departures from work B) Unusual on-the-job accidents C) Altercations with co-workers D) All of the above
The intended purpose of a company newsletter is to keep employees up-to-date on important events and provide inspirational stories about employee and team contributions to the firm. This helps to ensure that everyone is aware of what is happening within the company and can feel like a valued member of the team. It is an excellent way to build morale and keep everyone motivated to do their best work.
Retreats are helpful at enhancing employee relations. They provide an opportunity for employees to get to know each other better, build stronger relationships, and learn new skills. They also provide a much-needed break from the daily routine, which can help employees return to work feeling refreshed and energized. While they may not be appropriate for family businesses, they are beneficial to most large corporations.
The first step in the use of an Employee Assistance Program (EAP) is to identify the troubled employee. This is necessary to determine the best course of action to take and to ensure that the employee receives the help they need. Once the troubled employee has been identified, they can be referred to an EAP counselor, who can work with them to find a solution to the problem.
All of the above are most likely symptoms of a troubled employee. Early departures from work, unusual on-the-job accidents, and altercations with co-workers are all signs that an employee may be struggling with personal issues or other problems. It is important for employers to be aware of these symptoms so that they can take appropriate action to help the employee before the situation becomes worse.
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Which of the following are examples of production deviance? check all that apply. A. leaving early B.damaging equipment C. taking long breaks D.employee shrinkage E. cyberloafing
Production deviance refers to a type of workplace deviance that involves unethical and negative behavior targeted towards the organization's production or equipment. Therefore, B, C, D, and E are examples of production deviance. The following are examples of production deviance:
B. Damaging equipment
Production deviance involves harmful behaviors targeted towards the organization's property. Damaging or vandalizing company property is a common type of production deviance as it is capable of reducing the organization's efficiency and productivity.
C. Taking long breaks
Employees who frequently take longer breaks than they are allowed can reduce the productivity and efficiency of the organization. Taking long breaks is considered production deviance because it decreases the amount of work accomplished by the organization and may lead to a decline in overall revenue.
D. Employee shrinkage
Employee shrinkage is a situation where employees take things that belong to the company for their personal use, such as stationery, electronic gadgets, or other items. Employee shrinkage is considered production deviance because it reduces the amount of resources available to the organization.
E. Cyberloafing
Cyberloafing is a situation where employees use company resources to perform personal tasks that are unrelated to work. Cyberloafing is considered production deviance because it reduces the amount of time and resources available to the organization to accomplish tasks efficiently.
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"
The direct question or closed-ended question requires short answer and will provide little feedback or information. True False "
Direct or closed-ended questions typically require short and specific answers, providing limited information or feedback.
True closed-ended questions can often be answered with a simple "yes" or "no" or with a specific choice from a predetermined list. While these questions may not yield elaborate responses, they can be useful in certain situations when seeking concise information or confirmation. however, it is worth noting that not all closed-ended questions elicit short answers. Some closed-ended questions may require respondents to choose from multiple options or provide brief explanations. In such cases, the answers may be slightly longer than just a single word or phrase.
Overall, closed-ended questions are generally designed to gather specific information efficiently, but they may not provide extensive feedback or encourage in-depth discussion unless accompanied by open-ended questions or prompts for elaboration.
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