John tries to understand sunk costs, which he believes including any cost that will occur if the considered project is accepted and once incurred, cannot be recouped. It is important for John to understand that sunk costs are those costs that have already been spent and cannot be recovered, irrespective of whether the project is approved or not.
This implies that any cost incurred in the past, whether tangible or intangible, cannot be retrieved once it has been paid off. Examples of sunk costs may include rental payments, insurance premiums, and salaries, among others.John's view that sunk costs include any cost that will occur if the considered project is accepted and once incurred, cannot be recouped is incorrect.
This is because sunk costs have nothing to do with the future costs of the project, but rather past expenses that have already been spent and cannot be recovered.To understand sunk costs better, John should understand that the decision to continue with a project should be based on the current and future expected costs and benefits of the project and not on the sunk costs.
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Hoops Incorporated sells basketballs. Each basketball requires direct materials of $13.50, direct labor of $7.00, variable overhead of $8.00, and variable selling, general, and administrative costs of $5.50. The company has fixed overhead of $44,000 and fixed selling. general, and administrative costs of $51,000. The company has a target profit of $41,000. It expects to produce and sell 20,000 basketballs. The selling price per unit under the variable cost method is: Mutiple Choice $2720 $34.00 $40.80 $4760
The selling price per unit under the variable cost method is $40.80 , Correct option is C
the Hoops Incorporated sells basketballs. Each basketball requires direct materials of $13.50,
direct labor of $7.00,
variable overhead of $8.00,
and variable selling, general, and administrative costs of $5.50.
The company has fixed overhead of $44,000 and fixed selling, general, and administrative costs of $51,000.
The company has a target profit of $41,000.
It expects to produce and sell 20,000 basketballs.
Based on the above information, the selling price per unit under the variable cost method is: $40.80
Variable cost per unit= Direct materials cost + Direct labor cost + Variable overhead cost + Variable SG&A cost= $13.50 + $7.00 + $8.00 + $5.50= $34.00
Total fixed costs= Fixed overhead + Fixed SG&A cost= $44,000 + $51,000= $95,000
Total cost of production= Variable cost per unit × Number of units produced and sold + Total fixed costs= $34.00 × 20,000 + $95,000= $780,000
Target profit= $41,000Selling price per unit under variable cost method= (Total cost of production + Target profit) ÷ Number of units produced and
sold= ($780,000 + $41,000) ÷ 20,000= $40.80
Hence, the selling price per unit under the variable cost method is $40.80.
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Report on how the company’s choice of measurement addresses the qualitative characteristics of relevance and faithful representation as outlined in the conceptual framework for financial reporting - issued by the IASB.
The company's choice of measurement method can have a significant impact on the qualitative characteristics of relevance and faithful representation.
As outlined in the conceptual framework for financial reporting issued by the International Accounting Standards Board (IASB).
Let's examine how the company's choice of measurement addresses these characteristics:
Relevance:
Relevance refers to the information's ability to influence the decisions of users by making a difference in their assessments or predictions. The choice of measurement should provide information that is timely, has predictive or confirmatory value, and is material to the users' decision-making process.
The company's choice of measurement should focus on capturing and reporting information that is relevant to the users' needs. By selecting appropriate measurement methods, the company can ensure that the reported information is capable of making a difference in the users' decisions. For example, if the company uses market value measurement for its inventory, it may provide more relevant information for users to assess the company's financial position and make informed investment decisions.
Faithful Representation:
Faithful representation means that the reported information faithfully represents the economic phenomena it purports to represent. The choice of measurement should result in information that is complete, neutral, and free from error, providing a true and fair view of the company's financial performance and position.
The company's choice of measurement should aim to faithfully represent the underlying economic events and transactions. By employing reliable and unbiased measurement methods, the company can enhance the faithful representation of financial information. For instance, if the company uses fair value measurement for its investments, it reflects the market value at a given point in time, providing a more accurate representation of the investments' worth.
It's important to note that the choice of measurement involves trade-offs between different qualitative characteristics. For example, historical cost measurement may lack relevance in certain situations, but it may provide a more faithful representation of the original transaction. Therefore, companies must carefully consider the trade-offs and choose measurement methods that strike the right balance between relevance and faithful representation.
Overall, the company's choice of measurement should align with the qualitative characteristics of relevance and faithful representation outlined in the conceptual framework for financial reporting.
By selecting appropriate measurement methods, the company can provide information that is useful for decision-making while ensuring it accurately represents the economic reality of the transactions and events.
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Explain what is a family office, and give me 1 example. What are the services that family office provides.
A family office is a private wealth management company that provides very high net worth families and individuals with a range of tailored services.
These services typically include investment management, tax and estate planning, charitable giving, and other financial advisory services. A family office is a private wealth management firm that offers customized financial and investment solutions to ultra-high-net-worth families and individuals. It can either be single-family or multi-family, depending on the client's needs and preferences.
Single-family offices serve the specific needs of one wealthy family, while multi-family offices serve the needs of several wealthy families. The goal of a family office is to preserve and grow the wealth of its clients while providing them with the highest level of personalized service. A family office provides a wide range of services that cater to the unique needs and objectives of each client.
Some of the key services provided by a family office include: Investment management: A family office provides investment management services that help clients grow and preserve their wealth.
Tax and estate planning: A family office assists customers in maximizing their tax and estate planning strategies to reduce tax obligations and guarantee the orderly transfer of assets to next generations.
Charitable giving: A family office provides guidance on philanthropic giving and helps clients establish charitable foundations or trusts. Other financial advisory services: A family office provides a range of other financial advisory services, such as legal and accounting services, risk management, and insurance planning.
Example: Rockefeller Family Office. The Rockefeller Family Office was established in 1882 to manage the wealth of the Rockefeller family. Today, it is one of the oldest and most prominent family offices in the world, with over $10 billion in assets under management.
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According to Harris, market makers:
a. Trade on price discrepancies between two or more markets
b. Complete quick round-trip trades without assuming much inventory risk
c. Offer liquidity to obtain better prices for trades they want to do
d. Other
e. Buy and sell misvalued instruments
According to Harris, market makers trade on price discrepancies between two or more markets. In other words, market makers are individuals or companies that offer liquidity and thereby help with the execution of trades between buyers and sellers.
They are expected to maintain a continuous flow of bid and ask prices that they are willing to buy and sell for. Market makers are responsible for ensuring that there is sufficient liquidity in the market to satisfy the demand for a security. This is accomplished by buying and selling securities from their own inventory.
They earn a profit by charging a bid-ask spread, which is the difference between the prices they buy and sell securities for. The market maker will buy low and sell high, making a profit on the spread.
Market makers complete quick round-trip trades without assuming much inventory risk. By offering liquidity, market makers help to obtain better prices for trades they want to do, allowing for smoother market operations.
Therefore, the correct option is b and c.
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Security A and security B both provide semi anual payment of 89 over 5Year. the annual rate of return for both securities is 6.5%. both securities will provide the smae number of payments, but the payments for Security A occur atthe beginning of the month and the payment for Security B occur at the end of the month. What is the difference in the present value of these two sets of payment?
12.86 18.96 15.86 25.98 24.36
Your employer contributes 50 a week to your retirement plan. Assume that you work for your employer for another sixteen years and that the applicable discount rate is 6.5 %,compounded weekly. Givn these assumptions, what is this employee benefit worth to you today?
24135.99
25852.63
24218.04
25920.55
21574.68
Both securities are essentially similar, except for the timing of payments. In general, the sooner the payment is received, the more valuable it is, so the present value of Security A payments will be higher than Security B payments.
in order to find the difference in present value of these two sets of payments, we must subtract the present value of Security B payments from the present value of Security A payments.
The present value of employee benefit given that your employer contributes $50 a week for another 16 years and the applicable discount rate is 6.5%, compounded weekly is as follows:
PV = payment amount x present value factorn the employee benefit is worth $30,231.54 today.
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the __________ refers to systematic reductions in production costs that have been observed to occur over the life of a product.
"The learning curve effect refers to systematic reductions in production costs that have been observed to occur over the life of a product."
The learning curve effect refers to the systematic reductions in production costs that occur as a result of learning and experience gained through repetitive production of a product or completion of a task. It is based on the observation that as workers become more familiar with a specific task or process, their efficiency and productivity improve, leading to cost savings.
The learning curve effect suggests that with each doubling of cumulative production, there is a consistent percentage reduction in the average labor hours required to produce each unit. This reduction in labor hours leads to lower production costs over time.
The learning curve effect is attributed to various factors, including improved worker skills, increased efficiency in workflow, process improvements, and economies of scale. By leveraging the learning curve effect, organizations can achieve cost advantages and enhance their competitiveness by producing goods and services more efficiently and at lower costs as production volumes increase.
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Using the currency supply and demand model to predict the exchange rate movement in the short run on the value of U.S. dollars for the following scenarios (You must also draw the appropriate graph to indicate which direction of either supply or demand curve shift:
President Trump imposes import tariff on most of Chinese made products, effectively immediately. (5 points)
As the Fed starts to raise U.S. interest rate, the real interest rate on U.S. bonds increases relatively to all foreign bonds. (5 points)
On the other hand, the increase in U.S. interest rates would lead to a rightward shift in the demand curve for U.S. dollars, causing the value of the U.S. dollar to appreciate.
The currency supply and demand model is based on a number of variables that can influence exchange rates. In the short run, these variables are often determined by political, economic, and social factors that affect the supply and demand for a particular currency. In this context, we will predict the exchange rate movement in the short run on the value of US dollars for the following scenarios.
President Trump imposes import tariff on most of Chinese made products, effectively immediatelyThe imposition of import tariffs on Chinese goods by President Trump would have a negative effect on the Chinese economy. This would lead to a decrease in demand for Chinese goods, which would in turn lead to a decrease in demand for Chinese currency.
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What's the present value of $1,960 discounted back 8 years if
the appropriate interest rate is 6%, compounded semiannually?
a.$1,221.41
b.$1,271.95
c.$956.95
d.$1,207.32
e.$1,116.14
The correct answer is b. 1,271.95.The present value of 1,960 discounted back 8 years with an interest rate of 6%, compounded semiannually can be determined using the formula for present value of an annuity:
PV = FV / (1 + r/m)^(n*m)
Where:
PV = Present value of the annuity
FV = Future value of the annuity
r = interest rate per period
m = number of compounding periods per yearn = total number of years
For this question, FV = 1,960, r = 6%, m = 2 (since interest is compounded semiannually), and n = 8 years.
PV = 1960 / (1 + 0.06/2)^(8*2) = 1,271.95
The present value of 1,960 discounted back 8 years if the appropriate interest rate is 6%, compounded semiannually is 1,271.95.
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A stock has a beta of 1.7. The expected return on the market is 8% and T-bills are yielding 2%. What is the expected return on the stock? 12.00% 10.00% 10.95% 11.50% 12.20%
The expected return on the stock is 12.60%.Explanation:Given:Beta of the stock = 1.7Expected return on the market = 8%T-bills yield = 2%The Capital Asset Pricing Model (CAPM) is used to estimate the cost of equity for any firm.
The cost of equity, which is the required return, can be calculated as follows:required return = Risk-free rate + Beta (expected market return - risk-free rate)Given that, required return = 2% + 1.7(8% - 2%) = 12.6%Therefore, the expected return on the stock is 12.60%.
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Management accounting: 1. Provides information to support decisions which impact on financial statements and share prices ii. Is irrelevant to managers iii. Provides information to improve the organization's performance through better decisions Iv. Uses both monetary and non-monetary information a. 1. in N iii b. if, if d iv c. 1, H. E2 iv d. i, ii eiv Click Sace and Sutunit to sntw ond urubmit: Click Sece Alf Answers fo sawe all anauers
Management accounting is the process of producing and using financial and non-financial data to support decisions that have a significant impact on an organization's financial statements and share prices.
As a result, option "a", "1. in N iii" is the correct answer.
Management accounting is essential to an organization's success because it provides information to improve the company's performance through better decision-making.
It includes financial statements and reports, forecasting and budgeting, cost analysis, variance analysis, and other techniques for analyzing and interpreting data.
Monetary and non-monetary information is used by management accounting. Monetary information refers to financial data that can be measured in monetary terms.
The cost of production, selling price, and profits are examples of this type of information.
Non-monetary information, on the other hand, is data that cannot be quantified in financial terms. Examples of non-monetary information include customer satisfaction, employee morale, and market share.
Therefore, option "d", "i, ii, and iv" is incorrect. Option "b," "if, if, and iv" is also incorrect, while option "c," "1, H. E2, and iv," is incorrect as well.
In conclusion, management accounting is relevant to managers because it provides the necessary information to improve their organization's performance through better decision-making.
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Assignment 1 Identify and write down the industry or area of interest, you want to work or solve problem? ∼ Do watch minimum 3 or 5 episodes of "Shark Tank India " and list down all the components from LEAN CANVAS MODEL ( like Problems, Solution, USP, Revenue model, Key partners, Channels and other components) of your 5 favourite ideas!
Assignment 1:Identify and write down the industry or area of interest, you want to work or solve a problem? ∼ Do watch minimum 3 or 5 episodes of "Shark Tank India " and list down all the components from LEAN CANVAS MODEL ( like Problems, Solution, USP, Revenue model, Key partners, Channels, and other components) of your 5 favorite ideas!Industries or Areas of Interest:
1. Healthcare: The healthcare industry is an ever-growing field where several issues can be identified, for instance, providing affordable healthcare to the masses, digitizing medical records, improving the patient experience, and so on. Solution: Creating a healthcare app that allows users to book appointments with physicians, access their medical history, and have teleconsultations.USP: An easy-to-use app that offers convenience and personalized care.Revenue Model: A subscription-based model that allows users to access premium features.Key Partners: Healthcare providers, hospitals, and clinics.Channels: Digital platforms and social media to raise awareness about the app and its benefits.
2. Education: There are several issues within the education sector, such as the high cost of education, lack of access to quality education, outdated curriculums, and others.
Solution: An online education platform that provides affordable courses and certifications.USP: Interactive courses with access to industry experts and professionals. Revenue Model: A pay-per-course or a subscription-based model.Key Partners: Educational institutions, industry professionals, and experts. Channels: Social media, digital marketing, and educational institutions.
3. Environment: Climate change, pollution, and global warming are a few of the many environmental issues that we face.
Solution: A sustainable packaging solution that replaces plastic packaging.USP: Environmentally-friendly packaging that is cost-effective and durable. Revenue Model: Sales-based model.Key Partners: Manufacturers, distributors, and retailers. Channels: Social media, digital marketing, and local events.
4. Technology: With the rapid advancements in technology, there is always room for improvement and innovation. Solution: An AI-powered chatbot that provides personalized customer service.USP: 24/7 customer support with instant responses. Revenue Model: Subscription-based model.Key Partners: Businesses, e-commerce platforms, and retailers. Channels: Social media, digital marketing, and industry events.
5. Tourism: The tourism industry is constantly growing and evolving, but there are several challenges such as environmental impact, over-tourism, and accessibility.
Solution: A sustainable tourism platform that promotes responsible tourism.USP: Curated travel experiences with a focus on responsible and sustainable tourism. Revenue Model: A commission-based model.Key Partners: Tour operators, travel agencies, and hotels. Channels: Social media, digital marketing, and local events.In conclusion, these five ideas are innovative solutions to some of the most pressing issues in various industries. Each idea has its unique selling point, revenue model, key partners, and channels to reach the target audience. Shark Tank India is an excellent platform to learn from the entrepreneurs who have successfully pitched their ideas and turned them into successful businesses.
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You have been presented with the following information for a business for the month ending 30thApril 2022. (All of the information is for 2022).
The business provided services to customers in April and the customers paid cash as soon as the services were provided. The total amount of cash received from the customers was $7,200.
The business also provided services to customers totalling $6,200 in March. The business received all of the cash from the customers in April.
The business received $2,100 cash from customers in advance in the month of April for services to be performed by the business in June.
The business provided services to customers on credit in April totalling $6,300. The customers will pay the cash to the business in May.
The business provided services to customers in May totalling $3,400. The customers paid the cash to the business as soon as the services were provided to the customers.
The business paid $1,000 cash for 2 months insurance in April. The insurance was for the period 1/4/22 until 31/5/22.
The business used cash to pay the wages for the business for the month of April totalling $7,500.
The electricity expense for the business for the month of April was $600. The $600 was paid using cash by the business in the month of April.
The business paid cash in April for wages for staff who worked for the business in March – the amount was $4,300.
The business paid $1,200 for 4 months’ rent on the 1st of April. The rent was for the period 1st April – 31st July.
Income statement and Balance sheet
Total liabilities and capital is $28,800. The income statement and balance sheet can be prepared based on the provided information for the business for the month ending 30th April 2022.
Income Statement for April 2022:
Cash received from customers: $7,200
Cash received from customers for March: $6,200
Advance cash received from customers for June: $2,100
Services provided on credit in April: $6,300
Total revenue for April: $21,800
Expenses for April:
Wages paid: $7,500
Insurance expense: $500 (1/4th of $1,000 for the month of April)
Rent expense: $300 (1/4th of $1,200 for the month of April)
Electricity expense: $600
Total expenses: $8,900
Net income for April: $12,900
Balance Sheet as at 30th April 2022:
Assets
Liabilities
Cash: $21,600 (Total cash received from customers + advance cash received from customers - wages paid - insurance expense - rent expense - electricity expense)
Accounts Receivable: $6,300 (Services provided on credit in April)
Prepaid rent: $900 (4 months' rent from April to July)
Total assets: $28,800
Accounts Payable: $6,300 (Services provided on credit in April)
Total liabilities: $6,300Capital: $22,500 (Net income for April)
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Related to Checkpoint 10.1) (Common stock valuation) Header Motoc, Inc, paid a $3.11 dvidend last year, At a constant growth rate of 5 percent, what is the value of the common stock if irwestors require a 16 percent rate of retum? The value of the common stock is $5 (Round to the nearest cent.)
Common stock valuation is the technique of calculating the present worth of a firm's stock using the current value of anticipated future dividends. The price of a share of stock is determined by the stockholders' expectations of future earnings, dividends, and other advantages.
Header Motoc, Inc paid a 3.11 dividend last year. Given the following information, determine the value of the common stock when investors require a 16% rate of return:
The current dividend per share (D0) is 3.11.
The constant growth rate (g) is 5 percent.
Investors require a 16 percent rate of return.
Using the following formula, we can calculate the value of the common stock:
P0 = D1/(k - g)
where
D1 = D0 (1 + g)
k = investor's rate of return
g = expected growth rate
We have all the values required for calculation. So, let's substitute them into the formula and solve it.
D1 = 3.11 (1 + 0.05)
= 3.2665
k = 16%
g = 5%
P0 = 3.2665/(0.16 - 0.05)
= 3.2665/0.11
= 29.6964
The value of the common stock is 29.70 (rounded to the nearest cent).
However, the answer mentioned in the question is 5, which is not correct. Hence, the value of the common stock calculated above is the right answer.
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A consumer has standard preferences over only two goods. In particular, [6] they satisfy the more-is-better assumption. Is it possible that both goods are inferior? Either show an example, or argue that this is impossible.
A consumer's standard preferences over only two goods satisfying the more-is-better assumption is an implication that a consumer's quantity of consumption will increase when their income increases.
When a consumer has a limited income, they might have inferior goods to make a purchase from.It's possible that a consumer can have inferior goods to choose from when they have standard preferences over only two goods. Inferior goods are goods that have less quantity demanded when their income increases. In the case of two inferior goods, the income and substitution effect must be noted.
For instance, when there is a rise in income, a consumer may afford both goods simultaneously. However, they may still opt to buy more of the inferior good when compared to the normal good.The Hicksian approach shows that the inferiority of goods lies on the indifference curve. Therefore, it's not impossible for both goods to be inferior.
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Determine which of the ratios provide the most key insights into Amazon's current level of performance. How can you assess whether the results of your calculations are positive or negative? Explain which of the ratios give you reason to be concerned with the organization's current strategy and why.
The ratios that provide the most key insights into Amazon's current level of performance are Gross Margin, Net Margin, and Return on Assets (ROA). Gross Margin is the percentage of sales that is available to cover the overheads and other costs of the company.
It shows how much profit is made on each dollar of sales. The higher the gross margin, the better it is for the company. Net Margin, on the other hand, is the percentage of sales that is left after all expenses have been paid. It indicates how efficient the company is at controlling costs. The higher the net margin, the better it is for the company. ROA, which is a profitability ratio, shows how effectively the company is using its assets to generate profits. The higher the ROA, the better it is for the company.
These ratios provide key insights into Amazon's current level of performance because they help to evaluate how efficient the company is at generating profits and managing its expenses. To assess whether the results of your calculations are positive or negative, you need to compare them to industry averages, competitors' results, and previous years' results. If the results are above the industry average or competitors' results and are better than previous years' results, then they are positive.
However, if the results are below the industry average or competitors' results and are worse than previous years' results, then they are negative. The ratios that give me reason to be concerned with Amazon's current strategy are Asset Turnover and Inventory Turnover. Asset Turnover measures how efficiently the company is using its assets to generate sales. If the Asset Turnover ratio is low, it means that the company is not generating enough sales from its assets. This could be an indication that the company needs to invest more in its operations or needs to find new ways to generate sales. Inventory Turnover measures how many times the company is turning over its inventory in a year. If the Inventory Turnover ratio is low, it means that the company is not selling its inventory fast enough. This could be an indication that the company needs to adjust its inventory levels or needs to find new ways to sell its inventory. These ratios give me reason to be concerned with Amazon's current strategy because they show that the company may not be using its assets and inventory efficiently to generate sales.
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apple inc. reported revenues of 234 billion usd and net income of 53 billion usd in 2015. these figures represent a stunning annual growth in revenue and net income of 28 percent and 33 percent, respectively, for 2014. this information indicates the importance of using to evaluate company financial performance. group of answer choices historical comparisons financial ratios industry norms competitor analysis
By comparing the revenues and net income data from 2015 to the previous year, 2014, we can analyze the growth rate and evaluate the company's financial performance over time. Historical comparisons indicate the importance of using them to evaluate a company's financial performance. The correct option is A.
The details supplied regarding Apple Inc.'s sales and net income growth rates underline the significance of using historical comparisons to assess a company's financial performance. Analysts can determine patterns and gauge the company's growth by comparing the current year's numbers to those from the prior year.
The fact that revenue and net income have grown significantly in this instance suggests that Apple Inc. is on the right track. Other techniques and studies, such as financial ratios, industry standards, and competition analysis, can be used, nevertheless, to undertake a thorough examination of a company's financial performance.
Thus, the ideal selection is option A.
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The firm has 3 employees and 1 manager - The manager owns the firm and is more experienced than employees - Every year, the firm has the same costs and the same revenue - For every employee, the firm pays a salary (USD 70.000) plus a social security contribution (USD 30.000 ) - The yearly firm revenue is: USD 450.000 - The yearly employee costs are: USD 300.000 - The yearly management costs are: USD 0 - The quarterly ingredient costs are: USD 20.000 - The yearly loan repayments are: USD 20.000 - The yearly other costs are: USD 0 Which statement is wrong? Hint: make sure you read all of the information carefully Select one: a. Each year the balance of the bank account of the firm increases by USD 50.000 b. The total revenue of the firm is larger than the total costs of the firm c. Since the firm is good business, it should continue to operate d. None of the above (that is: all other statements are correct)
We can find the annual revenue generated by the firm using the given values. Annual revenue = 4 x quarterly revenue
= 4 x USD 112500
= USD 450000
The total annual employee cost is 3 x (USD 70,000 + USD 30,000) = USD 300,000
Total annual costs are = USD 300,000 + USD 20,000 + USD 20,000
= USD 340,000
As the revenue generated is USD 450,000, and the total costs are USD 340,000, therefore, the firm's profit is USD 110,000.No information is provided regarding the firm's previous years' profits or losses.
So, we cannot say whether it is a good business to continue with or not. The given statement is "Each year the balance of the bank account of the firm increases by USD 50.000".The yearly profit is USD 110,000. This means that the yearly balance of the bank account of the firm increases by USD 110,000 and not USD 50,000.
So, the correct answer is option a. Each year the balance of the bank account of the firm increases by USD 50,000 is the wrong statement.
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A demand loan for $6691.33 with interest at 7.2% compounded quarterly is repaid after 6 years, 4 months. What is the amount of interest paid?
The amount of interest is $
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed)
A demand loan for $6691.33 with interest at 7.2% compounded quarterly is repaid after 6 years, 4 months. The amount of interest paid is $3,746.12.
To calculate the amount of interest paid, we can use the formula for compound interest: A = P(1 + r/n)^(nt)
Where:
A = the final amount (loan + interest)
P = the principal amount (loan)
r = interest rate per period
n = number of compounding periods per year
t = number of years
Given:
Principal amount (P) = $6691.33
Interest rate (r) = 7.2% = 0.072 (expressed as a decimal)
Number of compounding periods per year (n) = 4 (quarterly compounding)
Number of years (t) = 6 years + 4 months = 6.33 years
Substituting these values into the formula, we can calculate the final amount (A):A = $6691.33(1 + 0.072/4)^(4*6.33)
A ≈ $10,437.45
To find the amount of interest paid, we subtract the principal amount from the final amount:
Interest = A - P = $10,437.45 - $6691.33 = $3,746.12
Therefore, the amount of interest paid is $3,746.12.
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Foopon, a company that offers daily coupon deals, has the following business arrangement with a restaurant. A coupon for a $40 meal can be purchased by a consumer for $20 from Foopon, and the restaurant and Foopon split the $20 equally. Foopon sends an email message to a list of 100 potential consumers,
who act independently, each of whom decides to buy a coupon with probability 0.1. The deal is "on" if at least 10 consumers decide to purchase a coupon. If only 9 or fewer consumers decide to purchase a coupon, then the deal is "off" and no coupons are sold.
Calculate the expected profit made by Foopon from this arrangement. (2 decimal places)
Hint: Here again, to avoid numerical precision issues, you may want to compute this expectation indirectly, by exploiting the fact that the expected value of a binomial with parameters n and p is equal to np.
Foopon, a company that offers daily coupon deals, has a business arrangement with a restaurant.
A coupon for a $40 meal can be purchased by a consumer for $20 from Foopon, and the restaurant and Foopon split the $20 equally.
Foopon sends an email message to a list of 100 potential consumers, each of whom decides to buy a coupon with probability 0.
The deal is "on" if at least 10 consumers decide to purchase a coupon.
If only 9 or fewer consumers decide to purchase a coupon, then the deal is "off" and no coupons are sold.
We want to calculate the expected profit made by Foopon from this arrangement.
The probability of selling at least 10 coupons is equal to:
P(X >= 10) = 1 - P(X <= 9) = 1 - binomcdf(100, 0.1, 9) ≈ 0.139
Since Foopon sells the coupon at $20,
the expected revenue (selling at least 10 coupons) is:
Expected revenue = $20 * 10 * P(X >= 10) = $2,800 * 0.139 = $389.20
The restaurant and Foopon split the $20 equally, so Foopon's share of each coupon sold is $10.
Since the expected number of coupons sold is:
P(X >= 10) * 100 ≈ 13.9 coupons Foopon's expected profit is:
$10 * 13.9 = $139.00
Foopon's expected profit made from this arrangement is $139.00.
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Liquidity refers to: Multiple Choice a company's ability to pay its long-term liabilities. having sufficient cash (or other assets convertible to cash in a relatively short time) to pay currently maturing debts. the ability of reported earnings to reflect the company's true earnings. the earnings or operating effectiveness of a company
Liquidity refers to having sufficient cash (or other assets convertible to cash in a relatively short time) to pay currently maturing debts. In other words, liquidity measures the ability of a company to meet its short-term obligations with readily available resources. A company's liquidity position is critical to its long-term viability.
A company that cannot pay its bills when they come due is unlikely to remain in business for long. Conversely, a company that maintains a strong liquidity position can continue to operate during tough economic times and can take advantage of growth opportunities as they arise.
Liquidity ratios are used to measure a company's liquidity. Current ratio and quick ratio are two widely used liquidity ratios. The current ratio is calculated by dividing current assets by current liabilities. Quick ratio, on the other hand, is a more stringent measure of liquidity that excludes inventory from current assets and pre-paid expenses from current liabilities.
Both ratios are important measures of liquidity that help investors and creditors evaluate a company's ability to meet short-term obligations. In summary, liquidity is a critical aspect of a company's financial position that measures the ability of a company to pay its short-term obligations.
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A company may define its business in terms of: a. the number of countries in which its products are sold b. the location of its hierarchical levels c. the technology it uses d. its mission statement e. its degree of centralisation 7. The market for rechargeable batteries are experiencing a rapid growth. It seems that everyone has realised the financial and environmental advantages of rechargeable batteries. The leading seller in the rechargeable industry is the Millennium brand. According to the Boston Consulting Group matrix, Millennium brand rechargeable batteries is an example of a: a. star b. question mark c. exclamation point d. cash cow e. growth stock 8. For years Converse had a major share in the athletic shoe market. Then in the 1980 sNi ke and Reebok reinvented the athletic shoe industry, and Converse changed nothing. Now Converse is a minor brand in a growth industry. According to the Boston Consulting Group matrix, Converse is an example of a: a. star b. question mark c. exclamation point d. cash cow e. dog 9. According to the Boston Consulting Group matrix and given your knowledge of the technical environment, a business unit that manufactures typewriters would be an example of a: a. star b. question mark c. exclamation point d. sterile cow e. dog 10. The General Electric portfolio analysis analyses each business in terms of: a. market growth rate and relative market share b. relative market share and average gross sales c. competitive intensity and target market size d. average net sales and return on investment e. business strength and market attractiveness
Business definition:Business definition helps in identifying what a company does, what it provides and how it offers it to the customers. A company may define its business in terms of a mission statement, its degree of centralisation, the number of countries in which its products are sold, and the technology it uses.
Boston Consulting Group (BCG) matrix:Boston Consulting Group (BCG) matrix is a strategic planning tool that helps in evaluating a company’s product portfolio and the potential of the company's business in the market. The Boston Consulting Group (BCG) matrix has four components, i.e., Cash Cow, Dog, Question Mark, and Star. Each component signifies the market growth rate and relative market share of the company in the industry.
The answer to the given question is given below:7. The market for rechargeable batteries is experiencing rapid growth. The leading seller in the rechargeable industry is the Millennium brand. According to the Boston Consulting Group matrix, Millennium brand rechargeable batteries are an example of a star.8. Converse was a major share in the athletic shoe market for years. In the 1980s, Nike and Reebok reinvented the athletic shoe industry, and Converse changed nothing. Now Converse is a minor brand in a growth industry. According to the Boston Consulting Group matrix, Converse is an example of a dog.
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a. Laksa Penang Berhad has bonds on the market making annual payments, with 13 years to maturity, and selling for RM1,045. At this price, the bond yield 7.5%. Compute the coupon rate be on this bond. b. Laksa Johor Berhad issued 11 -year bonds a year ago at a coupon rate of 7%. The bond makes semi-annual payments. If the YTM on these bonds is 8%. Calculate the price if this bond today. c. Asam Laksa Berhad just paid a dividend of RM1.25 per share on its common stock. The dividends are expected to grow at 28% for the next eight years and then level off to a 6% growth rate indefinitely. If the required rate of return is 13%, find out the price of the common stock as of today. d. Asam Pedas Berhad, is a young start-up company. No dividends will be paid on the stock over the next nine years because the firm needs to low back its earnings to fuel growth. The company will pay a RM10 per share dividend in 10 years and will increase the dividend by 5% per year thereafter. If the required rate of return on this common stock is 14%, determine the current price of the common stock.
Bond coupon Payment rate is approximately 6.55%. Bond price is around RM1,039.23. Common stock price is roughly RM14.31. Dividends increase by 5% per year thereafter.
Given Bond Price of RM1,045 Yield is 7.5% as stated. N is specified as 13 years. For the Coupon Payment, a solution is required. RM1,045 is equal to (Coupon Payment / (1 + 0.075)1), (Coupon Payment / (1 + 0.075)2),... plus (Coupon Payment + Face Value / (1 + 0.075)13). The bond's coupon rate, calculated using a spreadsheet or financial calculator, is roughly 6.55%. b. The present value of a bond formula can be used to determine the bond's price today: (Coupon Payment / (1 + Yield/2)1) + (Coupon Payment / (1 + Yield/2)2) = Bond Price +... + (1 + Yield/2)(2*N)(Coupon Payment + Face Value) Where: (7% of Face Value) / (2 semi-annual installments) is the coupon payment formula. yield (provided) = 8% N is indicated as 11 years. The Bond Price needs to be solved for. Bond Price = Coupon Payment / (1 + 0.08/2)1, Coupon Payment / (1 + 0.08/2)2, Coupon Payment / (1 + 0.08/2)3,... + Coupon Payment + Face Value / (1 + 0.08/2)(2*11) A financial calculator or spreadsheet can be used to determine the bond's current price, which is roughly RM1,039.23. c. The present value of dividends calculation can be used to determine the price of the common shares. Dividend divided by the required rate of return divides the price of common stock by one and two. +... + (Dividend / (1 + Required Rate of Return)8) + (Dividend / (1 + Required Rate of Return)9) / (Required Rate of Return - Growth Rate) / (1 + Required Rate of Return)8.
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a broker using e-mail must include which of the following on each page of his e-mail?
A broker using email must include the following points on each page of their email:
1. Sender Information: At the top of each email, the broker must include their name, company, and contact information. This ensures that the recipient knows who sent the email.
2. Opt-Out Option: The email must include an opt-out option that gives the recipient the choice to unsubscribe from future emails.
3. Disclaimer: On every email page, the broker must include a disclaimer stating that the email is not a legal offer and that the recipient should consult an attorney before taking any action.
4. Confidentiality: Each page of the email should contain a confidentiality statement, ensuring that the message is intended solely for the recipient. If the message is received by mistake, the recipient must destroy the message.
A broker must adhere to these rules, and every page of their email should include all of the above-mentioned points.
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Which statement is true about billable expenses?A default markup dollar amount can be addedInvoicing for a billable expense must always be posted to an income accountThe purchase transaction related to a billable expense can be posted to an income accountThe purchase transaction related to a billable expense can be posted to another asset account
The statement "The purchase transaction related to a billable expense can be posted to another asset account" is true. The correct statement is d).
When recording a purchase transaction for a billable expense, it is common to post it to an asset account, such as an accounts payable or a specific expense account.
This allows for proper tracking of the expense until it is billed to the customer. Once the billable expense is invoiced to the customer, it can then be posted to an income account to recognize the revenue and offset the expense.
Additionally, a default markup dollar amount can be added when invoicing for billable expenses, but it is not required. The correct answer is d).
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--The given question is incomplete, the complete question is given below " Which statement is true about billable expenses?
a default markup dollar amount can be added
b invoicing for a billable expense must always be posted to an income account
c The purchase transaction related to a billable expense can be posted to an income account
d The purchase transaction related to a billable expense can be posted to another asset account"--
Select the Income Statements and Balance Sheets of two corporations from the same sectors of the year 2020 from Saudi Stock Exchange and calculate the following financial ratios: a. Market Value added (as of Dec 31, 2020) b. Economic value added (Use 10% as Cost of capital, and 5% as Tax rate) c. Long-term debt ratios For the company SABIC Agri-Nutrients Co. Al Yamamah Steel Industries Co. 22:52
SABIC Agri-Nutrients Co. is one of the leading agrochemicals, fertilizers, and melamine producers in Saudi Arabia. Al Yamamah Steel Industries Co. is a steel manufacturing company. Below are the financial ratios for both companies for the year ended December 31, 2020, along with their income statements and balance sheets.
Market Value Added (MVA)The MVA is a financial ratio that assesses how well a corporation is using its resources to create wealth for its shareholders. MVA is the difference between a company's market capitalization and its shareholders' equity. MVA = Market capitalization - Shareholders' equitySABIC Agri-Nutrients Co.Market capitalization = SR 39,560 millionShareholders' equity = SR 11,948 millionMVA = SR 39,560 million - SR 11,948 million = SR 27,612 millionAl Yamamah Steel Industries Co.Market capitalization = SR 1,073 millionShareholders' equity = SR 360 millionMVA = SR 1,073 million - SR 360 million = SR 713 millionEconomic Value Added (EVA)EVA measures the company's ability to generate wealth in excess of its cost of capital.
EVA = Net Operating Profit After Taxes (NOPAT) - (Cost of Capital x Total Invested Capital)SABIC Agri-Nutrients Co.NOPAT = SR 3,568 millionTotal Invested Capital = SR 30,283 millionCost of Capital = 10%Tax rate = 5%NOPAT - (Cost of Capital x Total Invested Capital) = SR 3,568 million - (10% x SR 30,283 million) = SR 69 millionAl Yamamah Steel Industries Co.NOPAT = SR 21 millionTotal Invested Capital = SR 1,078 millionCost of Capital = 10%Tax rate = 5%NOPAT - (Cost of Capital x Total Invested Capital) = SR 21 million - (10% x SR 1,078 million) = SR -1 millionNote: In the case of Al Yamamah Steel Industries Co., the cost of capital is greater than the NOPAT, indicating that the company has not generated sufficient returns to cover its capital.
Long-Term Debt RatioThe long-term debt ratio calculates the proportion of a corporation's long-term debt to its total assets. Long-Term Debt Ratio = Long-Term Debt / Total AssetsSABIC Agri-Nutrients Co.Long-Term Debt = SR 8,962 millionTotal Assets = SR 44,630 millionLong-Term Debt Ratio = SR 8,962 million / SR 44,630 million = 20.1%Al Yamamah Steel Industries Co.Long-Term Debt = SR 351 millionTotal Assets = SR 1,708 millionLong-Term Debt Ratio = SR 351 million / SR 1,708 million = 20.5%In conclusion, SABIC Agri-Nutrients Co.'s MVA and long-term debt ratios are higher than Al Yamamah Steel Industries Co.'s. However, Al Yamamah Steel Industries Co. has a negative EVA, indicating that it has not generated enough returns to cover its capital costs.
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individual entering the workforce plans to make monthly contributions to a retirement account in the amount of $330 beginning at the end of next month and continuing r the next 40 years.
(a) If the retirement account earns 10% compounded monthly, find the amount expected in the retirement account at the end of 40 years. Round to the nearest penny.
(b) If the retirement account charges a maintenance fee of 2% each year, the net interest rate earned by the retiree becomes 8%. Find the amount expected in retirement account. Round to the nearest penny. (c) Compare the answers from part (a) and part (b) above to determine the total percent lost by the retiree due to the fee. Round your answer to two decimal places.
a. the expected amount in the retirement account at the end of 40 years is approximately
$2,679,919.83, b. the expected amount in the retirement account considering the maintenance fee is approximately $1,472,247.55, c. the retiree would lose approximately 45.08% of their expected retirement savings due to the maintenance fee.
(a) To calculate the amount expected in the retirement account at the end of 40 years, we can use the future value formula for monthly contributions:
FV = P * [(1 + r)^n - 1] / r
Where:
FV = Future value
P = Monthly contribution amount
r = Monthly interest rate
n = Number of months
In this case, P = $330, r = 10% / 12 = 0.00833, and n = 40 years * 12 months/year = 480 months.
Plugging in these values, we can calculate:
FV = 330 * [(1 + 0.00833)^480 - 1] / 0.00833 ≈ $2,679,919.83
Therefore, the expected amount in the retirement account at the end of 40 years is approximately
$2,679,919.83.
(b) When considering the maintenance fee of 2% each year, the net interest rate earned by the retiree becomes 8%. The effective monthly interest rate, r', can be calculated as:
r' = (1 + 8%)^(1/12) - 1 = 0.64%
Using the same formula as before, but with r' = 0.0064 (0.64% / 100), we can calculate:
FV' = 330 * [(1 + 0.0064)^480 - 1] / 0.0064 ≈ $1,472,247.55
Therefore, the expected amount in the retirement account considering the maintenance fee is approximately $1,472,247.55.
(c) To determine the total percent lost by the retiree due to the fee, we compare the amounts calculated in part (a) and part (b). The difference between the two amounts is:
$2,679,919.83 - $1,472,247.55 = $1,207,672.28
To calculate the percentage lost, we divide the difference by the amount calculated in part (a) and multiply by 100:
Percentage lost = ($1,207,672.28 / $2,679,919.83) * 100 ≈ 45.08%
Therefore, the retiree would lose approximately 45.08% of their expected retirement savings due to the maintenance fee.
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All else equal, an increase in an option's strike price will cause call premiums to and cause put premiums to decrease; decrease increase ; increase increase; decrease decrease:increase
An option's strike price is a fixed price at which the owner of an option can buy or sell the underlying asset. An option buyer pays an option premium to the option seller in exchange for the right to buy or sell the underlying asset at the strike price until the expiration date of the option.
In options trading, the strike price plays a vital role in determining the price of the options contract. The premium of an option increases or decreases depending on various factors, including the strike price of the option.All else being equal, an increase in an option's strike price will cause call premiums to decrease and put premiums to increase.
Call options give the buyer the right but not the obligation to buy the underlying asset at the strike price on or before the expiration date of the option. In contrast, put options give the buyer the right to sell the underlying asset at the strike price on or before the expiration date of the option.
When the strike price of a call option increases, the option becomes less valuable because the stock must rise more to break even. As a result, the call premium decreases. When the strike price of a put option increases, the option becomes more valuable because the stock must fall more to break even. As a result, the put premium increases. Thus, all else equal, an increase in an option's strike price will cause call premiums to decrease and put premiums to increase.
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new products take sales away from the firm's existing products rather than generating additional revenues. this is called
The phenomenon where new products take sales away from a firm's existing products instead of generating additional revenues is called cannibalization.
Cannibalization refers to the situation where the introduction of a new product leads to a decrease in sales of the firm's existing products, rather than increasing overall revenue. This occurs when customers switch their purchases from the existing products to the new ones, causing a decline in sales for the established offerings.When a company introduces a new product that directly competes with its own existing products, it can create cannibalization. This is often seen in industries such as technology, where new models or versions of products are released frequently. Customers may be attracted to the new features or improvements offered by the new product, causing them to shift their purchases away from the older products.
Cannibalization occurs when a company's new product takes sales away from its existing products instead of generating additional revenues. This phenomenon is often seen in industries where innovation and technological advancements are frequent, such as the technology sector.When a company introduces a new product that competes directly with its own existing products, it can lead to cannibalization. This happens when customers are attracted to the new features, improvements, or pricing offered by the new product, causing them to shift their purchases away from the older products.
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Think of a business and imagine: an internal strength
an internal weakness
an external opportunity
an external threat
When thinking of a business, it is crucial to analyze both the internal and external factors that can have an impact on its operations, performance, and growth. In this case, let's take the example of a coffee shop, and examine its internal strengths and weaknesses, as well as external opportunities and threats.
Internal Strength: A strong brand reputation, exceptional customer service, and high-quality coffee products can be some of the internal strengths of a coffee shop. These factors can differentiate the business from its competitors, enhance customer loyalty, and attract new customers.
Internal Weakness: Lack of diversity in the menu offerings, inefficient inventory management, and high employee turnover can be some of the internal weaknesses of a coffee shop. These factors can affect the business's operational efficiency, profitability, and customer experience.
External Opportunity: Expansion to new locations, offering catering services, and adopting environmentally friendly practices can be some of the external opportunities for a coffee shop. These opportunities can help the business reach new customer segments, increase revenue streams, and improve the business's social responsibility.
External Threat: Rising coffee bean prices, economic recession, and increasing competition can be some of the external threats to a coffee shop. These factors can negatively impact the business's profitability, market share, and sustainability.
In conclusion, by identifying the internal and external factors that can affect a coffee shop's performance, the business can develop strategies to leverage its strengths, overcome its weaknesses, capitalize on opportunities, and mitigate threats. This analysis can help the business make informed decisions, improve its overall performance, and achieve long-term success.
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refer to the information provided above. what amount will erin have to invest to give her a one-fourth interest in the capital of the partnership if no goodwill or bonus is recorded?
$45,000, amount will Erin have to invest to give her a one-fourth interest in the capital of the partnership if no goodwill or bonus is recorded. Thus, option (c) is correct.
To divide the partnership's total capital into four equal portions. With Katy's capital at $40,000 and Jacob's capital at $140,000, the combined capital is $180,000.
$180,000 - ($140,000 + $40,000) = $180,000 - $180,000 = $0 represents the difference between the total capital and the sum of Jacob and Katy's capital.
Erin needs to contribute $45,000, or one-fourth of the partnership's entire capital, to give her a one-fourth interest in the capital.
Therefore, option (c) is correct.
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Your question is incomplete, but most probably the full question was.
In the JK partnership, Jacob's capital is $140,000, and Katy's is $40,000. They share income in a 3:2 ratio, respectively. They decide to admit Erin to the partnership. Each of the following questions is independent of the others.
Refer to the information provided above. What amount will Erin have to invest to give her a one-fourth interest in the capital of the partnership if no goodwill or bonus is recorded?
$50,000
$60,000
$45,000
$66,000
