The budgeted cost of goods sold for September is $3,700. Option A is the correct answer.
To calculate the budgeted cost of goods sold for September, we need to determine the total cost of lamps sold during the month.
Beginning inventory: $1,500
Purchases in September: $3,400
Expected ending inventory: $1,200
Cost of goods available for sale: Beginning inventory + Purchases = $1,500 + $3,400 = $4,900
Cost of goods sold: Cost of goods available for sale - Expected ending inventory = $4,900 - $1,200 = $3,700
Therefore, the budgeted cost of goods sold for September is $3,700. Option A is the correct answer.
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Which of the following is the BEST example of an institution market? 1) the National Park Service 2) a company that sells exclusively on the Internet 3) JCPenney department stores 4) Vanderbilt Univer
Institutional markets refer to the organizations and institutions that buy goods and services for their own use or to serve their clients. The correct answer is 1) the National Park Service.
These organizations and institutions are large-scale purchasers, and their buying processes are usually characterized by complex decision-making procedures. The best example of an institutional market among the options is the National Park Service. Institutional markets are different from consumer markets in terms of demand, buying process, and the nature of relationships between buyers and sellers.
In an institutional market, the demand is derived from the demand for consumer goods. Institutional purchases are characterized by larger order sizes, multiple buying influences, a more formal buying process, and more extended negotiations between the parties involved. The National Park Service is a federal organization responsible for the preservation and maintenance of various national parks in the US. As such, it is an institution that buys goods and services to maintain these parks.
The purchases made by the National Park Service are on a large scale and require a formal procurement process that involves the evaluation of proposals from multiple vendors. In this context, the National Park Service is a typical example of an institutional market.
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Rosalie Blue, age 22 is a recent university graduate who is looking for employment. Rosalie majored
in Agricultural Engineering and hopes to be able to put her specialized knowledge to work. One
problem that Rosalie is encountering in her job search is that she has had asthma since childhood
and sometimes suffers severe problems in this regard. Thus, she must be especially careful about
the type of job and the environment in which she will work.
Rosalie also fears that when she does accept a job, her new employer’s health insurance plan might
exclude her (either temporarily or perhaps permanently) from coverage for any problems related to
her asthma. While she was in college, Rosalie’s parents’ health insurance provided protection for
her, but that coverage will soon end now that she has graduated.
Rosalie’s parents are urging her to buy an individual health insurance policy as soon as possible.
But Rosalie is afraid that it will be difficult to find an insurer that is willing to sell her coverage, given
her health history. If she does find such an insurer, Rosalie is not confident that she will be able to
choose the appropriate set of coverage options for her circumstances. Plus, she is worried about not
being able to go to the doctors that she feels most comfortable with.
Based on the facts presented in this case, provide responses to the following questions:
1. List the major health insurance providers in your country, whose policies Rosalie could
consider.
2. Present to Rosalie pros and cons of purchasing health insurance considering her medical
history and profession.
3. Based on her Medical History and considering reasonable (basic health insurance) coverage
that the average working adult would purchase, what are some features/coverage that this
plan could include?
a. Include justification for their inclusion in the policy.
4. Should Rosalie consider a Long-term care insurance? Give reasons for your answer.
5. Present to Rosalie reasons why she should consider a Disability income insurance?
a. Include in your response a comparison between the short-term disability insurance
and long-term disability insurance for her consideration and selection.
1. The major health insurance providers in most countries include United Healthcare, Kaiser Permanente, Aetna, Humana, Blue Cross Blue Shield, Cigna, and others. 2. Pros of purchasing health insurance for Rosalie considering her medical history and profession:It provides security and peace of mind in case of any medical emergency.Coverage for medical expenses, including hospitalization, medications, and other medical procedures. 3. Based on her Medical History and considering reasonable coverage that the average working adult would purchase, some features and coverage that this plan could include are:Preventive care services like immunizations, annual physical check-ups, and routine screening tests.Hospitalization expenses and emergency care. 4. Long-term care insurance should be considered by Rosalie because it provides coverage for medical expenses associated with chronic illnesses, disabilities, and injuries that require long-term care. 5. Disability income insurance is a valuable investment because it replaces lost income in case of disability. It ensures that the insured person can continue to meet their daily expenses while they are unable to work. Short-term disability insurance provides coverage for a short period, usually up to six months.
1. The major health insurance providers in most countries include United Healthcare, Kaiser Permanente, Aetna, Humana, Blue Cross Blue Shield, Cigna, and others. Rosalie could consider the policies provided by these health insurance providers.
2. Pros of purchasing health insurance for Rosalie considering her medical history and profession:It provides security and peace of mind in case of any medical emergency.Coverage for medical expenses, including hospitalization, medications, and other medical procedures.Availability of discounts and cashless hospitalization.Cons:It is costly, and premiums can be high.It may have exclusions and limitations on coverage.It may not cover pre-existing conditions, or it may have a waiting period.
3. Based on her Medical History and considering reasonable coverage that the average working adult would purchase, some features and coverage that this plan could include are:Preventive care services like immunizations, annual physical check-ups, and routine screening tests.Hospitalization expenses and emergency care.Coverage for prescription drugs and laboratory services.Coverage for mental health and substance abuse treatment.Justification:These coverages are essential for maintaining a healthy lifestyle and preventing the onset of chronic diseases.
4. Long-term care insurance should be considered by Rosalie because it provides coverage for medical expenses associated with chronic illnesses, disabilities, and injuries that require long-term care. This insurance policy provides benefits that cover care services not covered by medical insurance.
5. Disability income insurance is a valuable investment because it replaces lost income in case of disability. It ensures that the insured person can continue to meet their daily expenses while they are unable to work. Short-term disability insurance provides coverage for a short period, usually up to six months. In contrast, long-term disability insurance covers an extended period, usually more than six months. For Rosalie, considering her medical history, she should consider purchasing long-term disability insurance.
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Which of the following is an important aspect of control over payroll?
A. controls for efficiency in payroll procedures
B. controls to limit salaries and wages so that they are no higher than competitors
C. controls to monitor employee behavior, such as use of security cameras
D. controls to screen potential employees for criminal records
An important aspect of control over payroll is control for efficiency in payroll procedures. The correct option is A. controls for efficiency in payroll procedures.
Controls for efficiency in payroll procedures are an important aspect of control over payroll.
Controls for efficiency are set up to make certain that employees are being paid in a timely and accurate manner.
This can include controls for the computation of employee time, such as the use of time clocks or software.
It may also include the use of other procedures to ensure accuracy, such as auditing and documentation.
Such controls will help reduce the likelihood of errors in the payroll process, and help ensure that employees are receiving the compensation they are entitled to.
Hence, the correct option is A. controls for efficiency in payroll procedures.
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QUESTION 8 A manufacturer is considering to purchase a new processing machine. The initial cost of the machine will be $300 000. The expected increase in net cash inflow as a result of the purchase is $75 000 for the first year and $160 000 for each of the next two years. The machine will have a salvage value of zero. The weighted average cost of capital for the manufacturer is 7%. The manufacturer also note that the prevailing interest rate on loan is 3%, the cash rates set by the RBA is 0.15%, and its current holding of the interest-bearing government bond yields about 2% Based on the information, calculate the followings. a. NPV Case sensitive. Type in 40,000.00 for $40000 b. IRR Case sensitive. Type in 10.00 for 10%
The net present value (NPV) of the investment is $40,000, and the internal rate of return (IRR) is 10%.
The NPV is calculated by discounting the expected cash inflows and subtracting the initial cost of the machine. In this case, the cash inflows are $75,000 for the first year and $160,000 for each of the next two years. The weighted average cost of capital (WACC) is 7%, which represents the minimum required rate of return for the investment. By discounting the cash inflows using the WACC, the present value of the cash inflows is determined. Subtracting the initial cost of the machine, the NPV is calculated to be $40,000.
The IRR is the discount rate that makes the NPV equal to zero. It represents the rate of return that the investment is expected to generate. In this case, the IRR is 10%, indicating that the investment is expected to yield a 10% return.
Overall, the investment in the new processing machine has a positive NPV of $40,000, indicating that it is a financially viable decision. Additionally, the IRR of 10% suggests that the investment is expected to generate a satisfactory rate of return.
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Johnson & Johnson currently pays an annual dividend of
$4.24. If the stock is selling $167.80, what is the dividend
yield?
The dividend yield for Johnson & Johnson stock is approximately 2.52%.
The dividend yield is calculated by dividing the annual dividend per share by the stock price and multiplying by 100 to express it as a percentage. In this case, the annual dividend is $4.24, and the stock price is $167.80.
Dividend Yield = (Annual Dividend / Stock Price) * 100
Substituting the values:
Dividend Yield = ($4.24 / $167.80) * 100 = 0.0252 * 100 = 2.52%
Therefore, the dividend yield for Johnson & Johnson stock is approximately 2.52%. This means that for every dollar invested in the stock, an investor can expect to receive a dividend payment of 2.52 cents per year. The dividend yield is a measure of the return on investment through dividends and is commonly used by investors to assess the income-generating potential of a stock.
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Which of the following is correct? a. Liabilities + Assets = Owners Equity
b. Owners Equity = Liabilities + Assets c. Liability Assets - Owners Equity
d. Assets = Owners Equity - Liability The merchandise inventory on hand at the end of a fiscal period: a. Increases the cost of goods sold. b. Decreases the cost of goods sold.
c. Decreases the gross income. d. Decreases the net income. e. Does none of the above.
The correct statement is option b. Owners Equity = Liabilities + Assets. The merchandise inventory on hand at the end of a fiscal period does not directly impact the cost of goods sold, gross income, or net income, so the correct answer is option e. None of the above.
Option a, Liabilities + Assets = Owners Equity, is not correct. The equation should be Owners Equity = Liabilities + Assets, as stated in option b.
Regarding the merchandise inventory on hand at the end of a fiscal period, it does not directly impact the cost of goods sold.
The cost of goods sold is calculated based on the inventory at the beginning of the period, purchases during the period, and any adjustments for returns or discounts.
The inventory on hand at the end of the period is carried forward to the next period as the beginning inventory.
Similarly, the merchandise inventory on hand does not directly impact gross income or net income.
Gross income is calculated by subtracting the cost of goods sold from revenues, and net income is derived by subtracting all expenses, including the cost of goods sold, from gross income.
Therefore, the correct answer is option e. The merchandise inventory on hand at the end of a fiscal period does none of the above.
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Assume Evco, Inc. has a current stock price of
$54.67
and will pay a
$1.80
dividend in one year; its equity cost of capital is
20%.
What price must you expect Evco stock to sell for immediately
To determine the expected selling price of Evco, Inc. stock immediately, we can use the dividend discount model (DDM) approach.
Considering a dividend of $1.80 to be paid in one year and an equity cost of capital of 20%, the expected selling price can be calculated.
The dividend discount model (DDM) calculates the intrinsic value of a stock by discounting its future cash flows (dividends) back to their present value. The formula for DDM is:
Expected Selling Price = Dividend / (Cost of Capital - Dividend Growth Rate)
In this case, the dividend is $1.80, and the equity cost of capital is 20% or 0.20. However, the question does not provide information about the dividend growth rate. Without the growth rate, we cannot accurately determine the expected selling price. The growth rate represents the expected rate at which dividends will increase in the future. Without this information, it is not possible to calculate the expected selling price accurately.
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Which of the following is not one of Hofstede's four dimensions that explain variation among cultures? (Points : 1)
A.introversion/extraversion
B.masculinity(aggressive)/ femininity (nurturing)
C.low uncertainty avoidance/high uncertainty avoidance
D.individualism/collectivism
Hofstede's cultural dimensions are a framework that helps explain the variation in cultural values and behaviors across different societies.
The four dimensions proposed by Hofstede are:
Masculinity (aggressive)/femininity (nurturing): This dimension reflects the extent to which a society values traditionally masculine or feminine traits, such as assertiveness, competitiveness, and achievement versus nurturing, cooperation, and quality of life.
Uncertainty avoidance (low/high): This dimension refers to the degree to which a society feels threatened by uncertain or ambiguous situations and tries to avoid them. Cultures with high uncertainty avoidance tend to have rigid rules, strong social norms, and a preference for structured environments.
Individualism/collectivism: This dimension explores the degree to which individuals prioritize their own interests and independence versus the interests of the group or community. Individualistic cultures value personal freedom, autonomy, and individual achievement, while collectivistic cultures emphasize group harmony, cooperation, and loyalty.
Power distance (small/large): This dimension examines the extent to which a society accepts and expects power inequalities and hierarchical structures. Cultures with a small power distance value equality, participative decision-making, and a more egalitarian social structure, whereas cultures with a large power distance accept and respect authority, hierarchy, and social status differences.
Among these dimensions, introversion/extraversion is not one of Hofstede's dimensions. It is a personality trait that is not specifically addressed in his framework for understanding cultural differences.
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Chamomile Incorporated processes sugar beets that it purchases from farpners. Sugar beets are processed in batches. A batch of sugar beets costs $31 to buy from farmers and $15 to crush in the company's plant. Two intermediate products, beet fiber and beet juice, emerge from the crushing process. The beet fiber can be sold as is for $27 or processed further for $14 to make the end product industrial fiber that is sold for $44 The beet juice can be sold as is for $26 or processed further for $31 to make the end product refined sugar that is sold for $59. How much more profit (loss) does the company make by processing the intermediate product beet juice into refined sugar rather than seling it as is? Select one O a. $2.00 o b. $33.00 O c. $28.00 0 d. $-5.00
We must analyze revenues and costs to calculate how much more profit the corporation makes by refining beetroot juice rather than selling it as is.
First, calculate the beetroot juice profit:
Beetroot juice sales: $26
Crushing sugar beets: $15.
Profit from selling beetroot juice as is = $26 - $15 = $11.
Next, compute the profit from refining beetroot juice:
Refined sugar sales: $59
Crushing sugar beets: $15.
Refining beetroot juice into sugar: $31.
Profit from refining beetroot juice = Revenue - (Crushing + Processing) = $59 - ($15 + $31) = $13.
We deduct the profit from selling beetroot juice as is from the profit from refining it:
Profit difference = $13 - $11 = $2.
Thus, refining beetroot juice into sugar yields $2 greater profit for the corporation.
Option a—$2.00—is correct.
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Exercise #1 (Write the complete procedure) Determine the future value of a $1,500 payment.
deposited in a savings account that pays 10% annual interest compounded quarterly for a period of 4 years.
We multiply the number of years by the number of times interest is compounded per year, which gives us 16 quarters. Plugging in these values, we can calculate the future value to be $2,236.50.
The future value of a $1,500 payment deposited in a savings account that pays 10% annual interest compounded quarterly for a period of 4 years is given below:First, we need to find the quarterly interest rate. We can use the formula:r = (1 + i/n)^(n/t) - 1where r is the quarterly interest rate, i is the annual interest rate (10%), n is the number of times interest is compounded per year (4), and t is the number of years (4).r = (1 + 0.1/4)^(4/4) - 1= (1 + 0.025)^1 - 1= 0.025 or 2.5%Next, we can use the formula for the future value of a lump sum:FV = PV x (1 + r)^nwhere FV is the future value, PV is the present value (in this case, $1,500), r is the quarterly interest rate (2.5%), and n is the number of quarters (4 x 4 = 16).FV = $1,500 x (1 + 0.025)^16FV = $1,500 x 1.491 = $2,236.50Therefore, the future value of a $1,500 payment deposited in a savings account that pays 10% annual interest compounded quarterly for a period of 4 years is $2,236.50. The process of determining the future value of a payment deposited in a savings account that pays annual interest compounded quarterly for a period of 4 years involves several steps. The first step is to calculate the quarterly interest rate using the formula r = (1 + i/n)^(n/t) - 1, where r is the quarterly interest rate, i is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years. In this case, the annual interest rate is 10%, the number of times interest is compounded per year is 4, and the number of years is 4. Using these values, we can calculate the quarterly interest rate to be 2.5%. The second step is to use the formula FV = PV x (1 + r)^n to find the future value of the payment. In this formula, FV is the future value, PV is the present value (in this case, $1,500), r is the quarterly interest rate, and n is the number of quarters. To find the number of quarters, we multiply the number of years by the number of times interest is compounded per year, which gives us 16 quarters. Plugging in these values, we can calculate the future value to be $2,236.50.
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Q34 give correct answer in 10 mins i will thumb up
thanks
QUESTION 34 Carlin Corporation sells 600 ordinary shares being held as a short-term investment. The shares were acquired six months ago at a cost of $50 a share. Carlin sold the shares for $40 a share
Based on the information provided, here's the correct answer:
When Carlin Corporation sells the 600 ordinary shares as a short-term investment, they will realize a loss on the sale.
To calculate the loss, we need to determine the cost basis and the selling price:
Cost basis per share: $50
Selling price per share: $40
Loss per share: $50 - $40 = $10
Since Carlin sold 600 shares, we can multiply the loss per share by the number of shares sold to find the total loss:
Total loss = Loss per share × Number of shares sold
Total loss = $10 × 600
Total loss = $6,000
Therefore, Carlin Corporation will have a total loss of $6,000 on the sale of the 600 ordinary shares as a short-term investment.
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Waterway Industries’s variance report for the purchasing department reports 1900 units of material A purchased and 3100 units of material B purchased. It also reports standard prices of $2 for Material A and $3 for Material B. Actual prices reported are $2.10 for Material A and $2.80 for Material B. Waterway should report a total price variance of ..............
a. $500 F. b. $500 U. c. $430 U. d. $430 F.
Total price variance: $140 U (Unfavorable).
Total price variance: $140 U?To calculate the total price variance, we need to find the difference between the standard cost and the actual cost for each material, and then multiply that difference by the quantity purchased. The formula for price variance is:
Price Variance = (Actual Price - Standard Price) × Quantity
For Material A:Standard Price for Material A = $2
Actual Price for Material A = $2.10
Quantity of Material A Purchased = 1900 units
Price Variance for Material A = (2.10 - 2) × 1900 = $190
For Material B:Standard Price for Material B = $3
Actual Price for Material B = $2.80
Quantity of Material B Purchased = 3100 units
Price Variance for Material B = (2.80 - 3) × 3100 = -$330
To calculate the total price variance, we sum up the individual price variances:
Total Price Variance = Price Variance for Material A + Price Variance for Material B
Total Price Variance = $190 + (-$330) = -$140
Since the total price variance is negative (-$140), it means that the actual cost is lower than the standard cost. In this case, Waterway Industries should report a total price variance of $140 U (Unfavorable). Therefore, none of the options provided match the correct answer.
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Alpha has both cash sales and credit sales. In addition, customers will often pay in advance for special orders of merchandise. The following information is included in Alpha’s December 31 balance sheets for 2019 and 2020:
Accounts Receivable
2019 - $25,000
2020 - $15,000
Unearned Sales Revenue
2019 - $20,000
2020 - $11,000
During 2020, Alpha received total cash of $180,000 from customers. In its income statement for the year ended December 31, 2020, how much sales revenue should Alpha report on an accrual basis?
So, Alpha should report $160,000 of sales revenue on an accrual basis in its income statement for the year ended December 31, 2020.
To determine how much sales revenue Alpha should report on an accrual basis, we need to recognize the revenue that was earned during the year, even if it hasn't been received yet.
The Unearned Sales Revenue account represents the revenue that has been earned but not yet received from customers. In 2020, Alpha earned $20,000 of Unearned Sales Revenue.
The cash received from customers during the year was $180,000. We can subtract the cash received from the Unearned Sales Revenue to determine the amount of sales revenue that has been earned and should be recognized on an accrual basis:
Accrued Sales Revenue = Cash Received - Unearned Sales Revenue
Accrued Sales Revenue = 180,000−20,000
Accrued Sales Revenue = $160,000
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If a bank has more rate-sensitive assets than liabilities, then OA. A rise in interest rates will raise income. OB. A fall in interest rates will raise income. OC. A fall in interest rates will lower
OC. A fall in interest rates will lower income. Therefore, option OC is correct. A fall in interest rates will lower income for a bank with more rate-sensitive assets than liabilities.
When a bank has more rate-sensitive assets than liabilities, it means that the interest rates on its assets are more responsive to changes in market interest rates compared to its liabilities. In this case, a fall in interest rates would lead to a decrease in the income earned by the bank.
This is because the bank's assets, such as loans or investments, typically have fixed interest rates or rates that adjust slowly. If interest rates fall, the income generated from these assets would decline. On the other hand, the liabilities of the bank, such as deposits or borrowings, may have interest rates that are more stable or have longer durations. Therefore, the cost of funding for the bank would not decrease as much as the income from its assets, resulting in a decrease in net income.
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Describe the template of Design document before
training of Sheraton Hotel in detail.
The design document serves as a blueprint for the Sheraton Hotel training program, providing a comprehensive overview of its objectives, content, methods, logistics, and evaluation.
Design Document Template for Sheraton Hotel Training:
Introduction:
Overview of the training program and its objectives. Background information about Sheraton Hotel and its training needs.
Training Goals and Objectives:
Clearly defined goals and specific learning objectives for the training program. Align the objectives with the needs and challenges of Sheraton Hotel.
Target Audience:
Identify the employees or departments who will participate in the training. Provide a brief profile of the target audience, including their roles and current skill levels.
Training Content and Modules:
Break down the training program into modules or topics. Specify the content to be covered in each module, including key concepts, skills, and knowledge areas. Outline the sequence and duration of each module.
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Vaccid Co is a pharmaceutical company which specializes in the development of vaccines. Recently, they secured a contract to develop a vaccine for the Covid-19 virus. Vaccid Co has estimated that the vaccine will cost about £12 million to develop. The company has also been advised by a corporate finance analyst that its gearing (debt/debt +Equity book values) is too high and is putting the company at a risk of bankruptcy. Therefore, there is a need to repay half of the loan notes. The finance required for the development of the vaccine and the repayment of debt will be raised through a 1 for 5 rights issue at a discount to the current share price of £5.00. Issue costs of the rights issue are estimated at £550,000. The capital structure of Vaccid Co is as follows: fm Em Equity Ordinary Shares (50p) Reserves 20 10 30 Non-Current Liabilities 5% Loan Notes 30 60 Each loan note is redeemable at a premium of 3%. (a) Assuming the rights issue takes place calculate: i) the subscription price of the rights issue (5 marks) ii) the theoretical ex-rights price (TERP) per share (5 marks) ii) the value of a right on one new share for Vaccid: (2 marks) iv) the new gearing (debt/debt equity) after the rights issue (3 marks) b) Miss Wright currently holds 90 000 shares in Vaccid Co and is considering her options. Calculate, in the following scenarios, the effect of the rights issue on Miss Wright's current wealth: (2 marks) (2 marks) DIf she takes up all the right; ii) If she sells all the right, ii) If she chooses not to take part in the rights issue. (2 marks) C) Discuss the merits and demerits to Vaccid Co of paying back half the debt.
a) i) The subscription price of the rights issue can be calculated as follows:
Total amount to be raised = Development cost + Repayment of debt - Issue costs
= £12,000,000 + (£30,000,000/2 * 1.03) - £550,000
= £22,150,000
Number of new shares to be issued = (Existing shares / Rights ratio)
= (20,000,000 / 5) = 4,000,000
Subscription price = (Total amount to be raised / Number of new shares)
= £22,150,000 / 4,000,000
= £5.54
ii) The theoretical ex-rights price (TERP) per share can be calculated as follows:
TERP = (total value of old shares + total value of new shares after rights issue) / (total number of old shares + total number of new shares)
= [(20,000,000 x £5.00) + (4,000,000 x £5.54)] / (20,000,000 + 4,000,000)
= £5.21
iii) The value of a right on one new share is calculated as follows:
Value of a right = TERP – Subscription price
= £5.21 – £5.54
= -£0.33 (negative value indicates that the shareholder will need to pay this amount to exercise the right)
iv) The new gearing (debt/debt equity) after the rights issue can be calculated as follows:
New equity raised = Number of new shares x Subscription price
= 4,000,000 x £5.54
= £22,160,000
New debt = Old debt - Repayment of debt
= £30,000,000/2 - (£30,000,000/2 * 1.03)
= £14,550,000
New total equity = Existing equity + New equity raised
= £20,000,000 + £22,160,000
= £42,160,000
New gearing = (New debt / (New debt + New total equity)) x 100%
= (£14,550,000 / (£14,550,000 + £42,160,000)) x 100%
= 25.68%
b)
i) If Miss Wright takes up all the rights, she will receive 18,000 new shares (assuming she is entitled to one right for every five existing shares). Her total number of shares will increase to 108,000 (90,000 + 18,000). The effect on her current wealth will depend on the market price of the shares at the time of the rights issue. If the market price is higher than the subscription price, she could make a profit by exercising her rights and selling the new shares. If the market price is lower than the subscription price, she may end up with a loss.
ii) If Miss Wright sells all the rights, she will not receive any new shares and her total number of shares will remain at 90,000. However, she can sell her rights on the market, and the effect on her current wealth will depend on the market price of the rights.
iii) If Miss Wright chooses not to take part in the rights issue, she will not receive any new shares and her total number of shares will remain at 90,000. However, her percentage ownership in Vaccid Co will decrease as the company issues new shares to raise capital.
c) The merits of paying back half the debt include reducing the risk of bankruptcy and improving the financial stability of the company. This can improve investor confidence and make it easier for the company to raise capital in the future. Additionally, by reducing its debt, the company can potentially improve its credit rating and reduce its interest expenses.
The demerits of paying back half the debt include the cost of redemption premium which increases the total cost of debt repayment. This can reduce the available funds for other investments or activities. Furthermore, if the company has a high cost of equity, issuing new shares to repay debt may increase the overall cost of capital. Finally, it is also worth noting that taking on some level of debt can be advantageous as it allows the company to take advantage of tax deductibility of interest expenses.
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How will you form exchange rate forecasts based on the covered
interest parity and purchasing power parity, respectively? Explain
your answer with illustrative examples.
Exchange rate forecasts can be formed using two main concepts: covered interest parity (CIP) and purchasing power parity (PPP).
1. Covered Interest Parity (CIP):
Covered interest parity is an economic principle that states that the forward exchange rate should equalize the interest rate differentials between two currencies. Based on CIP, exchange rate forecasts can be formed as follows:
Example:
Let's consider two countries, A and B, with currencies A$ and B$. The interest rate in country A is 4% per annum, and in country B, it is 2% per annum. The current spot exchange rate is A$1 = B$0.50.
According to CIP, the forward exchange rate should be determined by the interest rate differential between the two countries. In this case, the interest rate differential is 4% - 2% = 2%.
If the forward exchange rate does not align with the interest rate differential, an arbitrage opportunity would exist. Investors would borrow in the country with the lower interest rate and convert the funds to the currency of the country with the higher interest rate. They would then invest in that country and lock in a profit. The actions of arbitrageurs would lead to adjustments in the exchange rate to eliminate the arbitrage opportunity.
So, based on CIP, if the interest rate differential is 2% and the current spot exchange rate is A$1 = B$0.50, the exchange rate forecast for the forward rate would be A$1 = B$0.51.
2. Purchasing Power Parity (PPP):
Purchasing power parity is an economic theory that suggests exchange rates should adjust to equalize the prices of a basket of goods between different countries. Based on PPP, exchange rate forecasts can be formed as follows:
Example:
Consider two countries, X and Y, where the price of a particular basket of goods in country X is $100 and in country Y is €80. The exchange rate is currently $1 = €0.80.
According to PPP, the exchange rate should adjust to reflect the relative prices of the basket of goods. In this case, the ratio of prices is $100 / €80 = $1.25 per euro.
If the current exchange rate does not align with the PPP ratio, there would be a misalignment in the purchasing power between the two countries. This would create an opportunity for arbitrage, as goods would be cheaper in one country compared to the other.
Based on PPP, if the ratio of prices is $1.25 per euro and the current exchange rate is $1 = €0.80, the exchange rate forecast would suggest that the euro is undervalued. Therefore, the exchange rate is expected to adjust to reflect the PPP ratio, resulting in a higher exchange rate for the euro.
It's important to note that while CIP and PPP provide frameworks for exchange rate forecasting, actual exchange rates are influenced by numerous factors, including economic indicators, market sentiment, political events, and speculative activities. Therefore, these forecasting methods should be used as guidelines and be supplemented with additional analysis and information.
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Should the BOD limit CEO compensation to a ratio of the
lowest-paid worker?
In the recent years, there has been a concern raised on the compensation of CEOs and whether it should be limited to a ratio of the lowest-paid worker. This issue has emerged due to the rise in CEO compensation, which has attracted a lot of debate and criticism over the years.
The move to limit CEO compensation is meant to promote a more equitable distribution of wealth and bridge the gap between the rich and the poor. This proposal argues that the disparity in wages between top executives and the rest of the workforce is getting out of hand, and it is high time something was done to correct this inequality. According to the Institute for Policy Studies, the CEO-worker pay gap has been on a steady rise, with CEOs earning over 361 times more than the average worker in the US.While the idea of limiting CEO compensation to a ratio of the lowest-paid worker may seem attractive, it is not a practical solution. For instance, the compensation of CEOs is based on the size and complexity of the organization, and the CEO's role in driving the company's success. Limiting CEO compensation would only discourage top talent from taking up leadership positions in organizations. Furthermore, it would not address the underlying issues of inequality in the labor market.The best way to address the issue of wage disparity is to promote policies that promote income equality, such as increasing the minimum wage, strengthening collective bargaining, and improving working conditions. Additionally, organizations can also embrace transparency in their pay structures to promote fairness and equity. In conclusion, the move to limit CEO compensation to a ratio of the lowest-paid worker is not practical and may do more harm than good. Instead, stakeholders should focus on promoting policies that address income inequality in the labor market.
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Consider the Economic Order Quantity formula.
Imagine the fixed ordering cost is twice of what it used to be.
How does the optimum quantity change?
a) It halves
b) It increases by sqrt ((2*S)/H)
c) It increases by sqrt (2)
d) none of the above.
The Economic Order Quantity (EOQ) formula is used by firms to determine the number of units of a product they should purchase in a single order to minimize the cost of ordering and carrying inventories. The answer is (c) It increases by sqrt(2).
It is calculated using the formula below:
EOQ = sqrt((2DS)/H)
Where D is the annual demand for the product, S is the fixed cost of placing an order for the product, and H is the cost of holding the inventory of the product per unit per year.
If the fixed ordering cost is twice what it used to be, the EOQ changes as follows:
EOQ = sqrt((2DS)/(2H))EOQ = sqrt((DS)/H) × sqrt(2)
EOQ = sqrt(2) × EOQ
Since the square root of 2 is greater than 1, the optimum quantity increases by a factor of sqrt(2).
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please answer with steps
The partnership of Winn, Xie, Yang, and Zed has the following balance sheet: Liabilities Cash Other assets $61,000 $ 45,000 284,000 Winn, capital (50% of profits and losses) Xie, capital (30%) 75,000
Total liabilities and capital of the partnership of Winn, Xie, Yang, and Zed is $465,000. The partnership of Winn, Xie, Yang, and Zed has the following balance sheet: Liabilities Cash Other assets $61,000 $ 45,000 284,000Winn, capital (50% of profits and losses) Xie, capital (30%) 75,000Yang, capital (10%) Zed, capital (10%)
1. Winn's capital and Xie's capital are calculated as follows:- Winn's capital = 50% of (Total capital - Xie's capital) = 50% of ($465,000 - $75,000) = $195,000- Xie's capital = 30% of (Total capital) = 30% of $465,000 = $139,5002. Yang and Zed's capitals are equal and can be calculated as follows:- Yang's and Zed's capital = 10% of (Total capital) / 2 = 10% of $465,000 / 2 = $23,250Therefore, the capital of the partnership is as follows: Winn, capital = $195,000Xie, capital = $139,500Yang, capital = $23,250Zed, capital = $23,250Total liabilities and capital = $61,000 + $45,000 + $284,000 + $195,000 + $139,500 + $23,250 + $23,250 = $465,000The total liabilities and capital of the partnership of Winn, Xie, Yang, and Zed is $465,000.
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SP 9 Serial Problem Business Solutions (Algo) LO P2, P3, C2 Following are some transactions and events of Business Solutions. February 26 The company paid cash to Lyn Addie for eight days' work at $150 per day. March 25 The company sold merchandise with a $2,600 cost for $3,200 on credit to Wildcat Services, invoice dated March 25. Required: 1. Assume that Lyn Addie is an unmarried employee. Her $1,200 of wages have deductions for FICA Social Security taxes, FICA Medicare taxes, and federal income taxes. Her federal income taxes for this pay period total $120. Compute her net pay for the eight days' work paid on February 26. 2. Record the journal entry to reflect the payroll payment to Lyn Addie as computed in part 1. 3. Record the journal entry to reflect the (employer) payroll tax expenses for the February 26 payroll payment. Assume Lyn Addie has not met earnings limits for FUTA and SUTA (the FUTA rate is 0.6% and the SUTA rate is 5.4% for the company). 4. Record the entries for the merchandise sold on March 25 if a 4% sales tax rate applies. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Assume that Lyn Addie is an unmarried employee. Her $1,200 of wages have deductions for FICA Social Security taxes, FICA Medicare taxes, and federal income taxes. Her federal income taxes for this pay period total $120. Compute her net pay for the eight days' work paid on February 26.
The correct answer is option A. Lyn Addie is an unmarried employee.
She worked for 8 days at a wage rate of $150 per day.
Her wages are $1,200.
We are required to compute her net pay, given that FICA social security taxes, FICA Medicare taxes, and federal income taxes are withheld.
Her federal income taxes for this pay period total $120.
The FICA tax rate is 7.65% (6.2% social security tax + 1.45% Medicare tax).
Therefore, Lyn Addie’s FICA taxes amount to (7.65% of $1,200) $91.80.
Lyn Addie’s taxable income is $1,080 ($1,200 wages – $120 federal income taxes).
Federal income tax withholding tables are used to determine the federal income tax withheld. The tables are specific to the employee’s gross pay, filing status, and number of withholding allowances.
Here, we are given that Lyn Addie’s federal income taxes for this pay period total $120.
Therefore, the federal income tax withheld is $120.
The net pay for Lyn Addie’s eight days' work paid on February 26 is calculated as follows:
Wages = $1,200
FICA Social Security Taxes = $91.80
FICA Medicare Taxes = $17.40
Federal Income Taxes = $120
Net Pay = Wages – FICA Social Security Taxes – FICA Medicare Taxes – Federal Income Taxes = $1,200 – $91.80 – $17.40 – $120 = $970.80
Therefore, Lyn Addie’s net pay is $970.80. Hence, Option A is the correct answer.
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what+is+the+present+value+of+$500+invested+each+year+for+10+years+at+a+rate+of+5%?
To calculate the present value of $500 invested each year for 10 years at a rate of 5%, we can use the formula for the present value of an annuity. The formula is:
PV = C × [(1 - (1 + r)^(-n)) / r]
Where:
PV = Present Value
C = Cash flow per period
r = Interest rate per period
n = Number of periods
In this case, the cash flow per period (C) is $500, the interest rate per period (r) is 5% (or 0.05), and the number of periods (n) is 10 years.
Plugging the values into the formula, we get:
PV = $500 × [(1 - (1 + 0.05)^(-10)) / 0.05]
Calculating this expression will give us the present value of the annuity.
PV = $500 × [(1 - 1.62889) / 0.05]
PV = $500 × (-0.62889 / 0.05)
PV = $500 × (-12.5778)
PV = -$6,288.89
Therefore, the present value of $500 invested each year for 10 years at a rate of 5% is approximately -$6,288.89.
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Kevin plans to start saving for retirement and has the option of
choosing between two investment opportunities. Option One: Invest
$6,000 per year from ages twenty-five through thirty-two (a total
of
Option One: Invest $6,000 per year from ages twenty-five through thirty-two (a total of eight years) at an annual interest rate of 7%.
Option Two: Invest $3,000 per year from ages thirty-three through sixty-five (a total of thirty-three years) at an annual interest rate of 9%.
a. To determine the total amount of money accumulated at retirement for each option, we can use the formula for the future value of an ordinary annuity:
Future Value = Payment x [(1 + Interest Rate)^Number of Periods - 1] / Interest Rate
For Option One:
Payment = $6,000
Interest Rate = 7%
Number of Periods = 8
Future Value for Option One = $6,000 x [(1 + 0.07)^8 - 1] / 0.07
≈ $62,439.45
For Option Two:
Payment = $3,000
Interest Rate = 9%
Number of Periods = 33
Future Value for Option Two = $3,000 x [(1 + 0.09)^33 - 1] / 0.09
≈ $580,884.78
b. To determine which option will result in a higher total amount at retirement, we compare the future values calculated above.
Option Two (investing from ages thirty-three through sixty-five) leads to a significantly higher future value of approximately $580,884.78. This option allows for a longer investment period, taking advantage of compound interest over a span of 33 years at a higher interest rate. Option One (investing from ages twenty-five through thirty-two) yields a lower future value of approximately $62,439.45 due to a shorter investment period and a lower annual investment amount.
Considering the significantly higher future value, Option Two appears to be the more advantageous choice for Kevin to save for retirement.
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The strategic framework for social media application in organisations recommends that specific steps are examined after posting material on a platform. (4 points) True False
The given statement is false, that after putting material on a platform, the strategic framework for social media application in organizations requires that specific procedures be considered.
The organizational strategy framework for social media apps does not always propose particular activities to be taken after submitting content on a platform.
Instead, it emphasizes pre-planning and strategic considerations before the releasing information on social media. This structure usually contains phases like:
Defining goals and objectives: Outlining the organization's goals for its social media presence.Identifying the target audience entails learning about their demographics, interests, and preferences.Creating a content strategy include planning the sort of content to be released, the frequency with which it will be posted, and the overall tone and messaging.Monitoring and analytics implementation: Putting in place systems to track and measure the success of social media posts and initiatives.While it is critical to monitor and analyze the impact of posted content, it is seldom expressly listed as a stage in organizations' strategic framework for social media applications.
Thus, the given statement is false.
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Consider a variation to the OLG model with elastic labor supply. In each period, the economy is occupied by two cohorts of two generations of households - the young and the old - living for two periods. There is no population growth. Outputs are not storable. The twist here is the production functions for every cohort household: * The young's output of each cohort is produced linearly 1-to-1 using the labor effort, that is Yyoung = Lyoung * The old retires and earn exogenous income of Yold = 0.8 Let ß = 1, each cohort solves the following lifetime problem: max log(Cyoung) — Lyoung +log(Cold) subject to Cyoung + S = Yyoung {Cyoung,Cold,Lyoung} and Cold = 0.8+(1+r)S Competitive equilibrium: Suppose the economy is to have no government intervention. (a) (3 points) Explain why the amount of saving of each cohort is S = 0. (b) (8 points) Knowing from (a) that saving is zero, solve for the competitive equilibrium of each cohort's optimal consumptions when young and old, and labor supply when young. (Hint: It becomes one-period problem!) (c) (2 points) What is the lifetime utility of each cohort in the competitive equilibrium?
In the given variation of the OLG model with elastic labor supply, the competitive equilibrium results in zero savings for each cohort. The optimal consumption for both the young and old cohorts is determined based on their respective production and exogenous income, resulting in a lifetime utility for each cohort.
(a) The amount of saving of each cohort is zero (S = 0) because the competitive equilibrium in this model is characterized by the equality between consumption and income for each cohort. Since the young cohort's production (Yyoung) is equal to their consumption (Cyoung) and there is no exogenous income for the old cohort (Yold = 0.8), the young cohort does not need to save to meet their consumption needs.
(b) With S = 0, the young cohort's consumption (Cyoung) is equal to their production (Yyoung = Lyoung) due to the linear production function. Substituting Cyoung = Yyoung into the old cohort's lifetime problem, we have Cold = 0.8 + (1+r)*0, which simplifies to Cold = 0.8. Thus, the old cohort's consumption is fixed at 0.8.
Since the problem becomes a one-period problem with no savings, the young cohort maximizes their lifetime utility with the objective of log(Cyoung) - Lyoung. The optimal labor supply (Lyoung) is determined by equating the marginal utility of consumption to the marginal disutility of labor. Solving this one-period problem gives the equilibrium consumption and labor supply for the young cohort.
(c) The lifetime utility of each cohort in the competitive equilibrium can be calculated by summing the logarithm of their respective optimal consumptions. For the young cohort, it is log(Cyoung) and for the old cohort, it is log(Cold = 0.8).
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A company will pay 5.25% on long term debt. Its tax rate is 24%.
What is the after tax cost (expressed as an interest rate) of debt
for this company?
The after-tax cost of debt for the company is 3.99%.
The after-tax cost of debt is calculated by multiplying the pre-tax cost of debt by one minus the tax rate.
In this case, the company pays a pre-tax interest rate of 5.25% on its long-term debt, and the tax rate is 24%. To find the after-tax cost of debt, we multiply 5.25% by (1 - 0.24) or 0.76. This calculation results in an after-tax cost of debt of 3.99%. The after-tax cost of debt represents the effective interest rate the company incurs on its debt after accounting for the tax benefits it receives.
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Concord Company purchased merchandise inventory with an invoice price of $6200 and credit terms of 5/10, 1/30. What is the net cost of the goods if Concord Company pays within the discount period? O $
The credit terms 5/10, 1/30 indicate that there is a cash discount available if payment is made within a certain period. In this case, the discount is 5% if paid within 10 days, otherwise, the full amount is due within 30 days.
To calculate the net cost of the goods if Concord Company pays within the discount period, we need to subtract the discount from the invoice price. The discount is calculated as the percentage of the invoice price.
Discount = Invoice Price × Discount Percentage
= $6200 × 5% = $310
Net Cost of Goods = Invoice Price - Discount
= $6200 - $310
= $5890
Therefore, the net cost of the goods if Concord Company pays within the discount period is $5890.
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Which of the following must be obtained in a review of a nonpublic company?
Engagement Letter, Representation Letter
a. Yes, yes
b. Yes, no
c. No, yes
d. No, no
In a review of a both Engagement Letter and Representation Letter must be obtained.Nonpublic company is a private company that does not issue or trade its shares to the general public.
Nonpublic companies are also called private companies. They are usually owned by private investors and are not traded on any stock exchange.An Engagement Letter is a document that states the agreed-upon services, timelines, deliverables, and other engagement details for a professional services engagement. It defines the roles, responsibilities, and expectations of both the client and the firm, setting the tone for a successful relationship.
A Representation Letter is a letter signed by the client's senior management that attests to the accuracy and completeness of information provided to auditors. It is a form of management's assertion about the accuracy and completeness of the financial statements. It confirms that the company's management is responsible for the preparation of the financial statements and that the company's auditors have been informed of all relevant information.In conclusion, both Engagement Letter and Representation Letter must be obtained in a review of a nonpublic company. Thus, the correct answer is a. Yes.
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QS 3-5 (Algo) Prepaid (deferred) expenses adjustments LO P1 For each separate case below, follow the three-step process for adjusting the prepaid asset account at December 31. Step 1: Determine what t
By following these three steps, the prepaid asset account is adjusted to reflect the portion of prepaid expenses that have been used or expired as of December 31, ensuring accurate financial reporting.
Step 1: Determine what the current balance in the prepaid asset account represents.
Step 2: Determine what the current balance should be at December 31.
Step 3: Record the adjusting entry to bring the prepaid asset account to its correct balance at December 31.
Adjusting prepaid (deferred) expenses involves reviewing the current balance in the prepaid asset account and adjusting it to reflect the portion that has been used or expired as of December 31.
In Step 1, we need to determine what the current balance in the prepaid asset account represents. This involves identifying the prepaid expenses that have been previously recorded and examining any related documentation or agreements.
In Step 2, we determine what the current balance should be at December 31 based on the passage of time or the amount of the prepaid expense that has been consumed or expired. This requires reviewing the terms of the prepaid expenses and estimating the portion that should be recognized as an expense for the current period.
Finally, in Step 3, we record the adjusting entry to bring the prepaid asset account to its correct balance at December 31.
This involves debiting the appropriate expense account to recognize the expense incurred and crediting the prepaid asset account to reduce its balance.
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Select a product or service that you enjoy or might like to study. Next, discuss three (3) methods to segment the market for that product/service by geographic, demographic, psychographic and behavioral characteristics . Your answer will include 12 methods, three for each characteristic. Support your response with specific examples
Product/Service: Fitness Wearable Devices
Geographic Segmentation:
a) Region: Segmenting the market based on geographic regions such as North America, Europe, Asia-Pacific, and Latin America. Each region may have different preferences and needs when it comes to fitness wearable devices.
b) Climate: Segmenting the market based on climate conditions, such as targeting customers in warmer climates who may have a higher demand for fitness wearables suitable for outdoor activities.
c) Urban vs. Rural: Segmenting the market based on urban and rural areas, as customers in urban environments might have different preferences and usage patterns compared to those in rural areas.
Demographic Segmentation:
a) Age: Segmenting the market based on age groups, such as targeting fitness wearable devices for younger customers who are more tech-savvy and interested in tracking their fitness goals.
b) Gender: Segmenting the market based on gender, as different genders may have varying fitness goals and preferences. For example, designing fitness wearables with specific features for women, like menstrual cycle tracking.
c) Income Level: Segmenting the market based on income levels, targeting premium fitness wearable devices for high-income customers who value advanced features and technology.
Psychographic Segmentation:
a) Lifestyle: Segmenting the market based on lifestyles, such as targeting fitness enthusiasts who prioritize staying active and living a healthy lifestyle.
b) Personality Traits: Segmenting the market based on personality traits, targeting customers who are competitive and enjoy tracking their progress and achieving fitness goals.
c) Social Class: Segmenting the market based on social class, targeting luxury fitness wearable devices for customers who seek status symbols and exclusivity in their fitness accessories.
Behavioral Segmentation:
a) Usage Occasion: Segmenting the market based on usage occasions, such as targeting fitness wearables specifically designed for sports activities or tracking sleep patterns.
b) Benefits sought: Segmenting the market based on the benefits customers seek from fitness wearables, such as targeting customers interested in weight management, heart rate monitoring, or stress reduction.
c) Loyalty Status: Segmenting the market based on customer loyalty, targeting loyal customers with exclusive offers or rewards programs to encourage repeat purchases.
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