Mr. Madoff purchased an antique sold on eBay for 70% of Embay asking price, and he sold it for 20% above its actual market value to make a profit of $800. eBay's price was 80% of the market value.
Step 1: Let us assume that the market value of the antique is $100.
Step 2: Mr. Madoff purchased the antique at a cost of 70% of the initial asking price of Embay, or $0.70x.
Step 3: Mr. Madoff sold the antique for 20% above its actual market value of $100, or $1.20(100) = $120.
Hence, he made a profit of $120 - $100 = $20. We know that this profit equals $800, so we can set up an equation to solve for x: $20 = 0.2x $800 = 40x x = 50
Step 4: If Mr. Madoff bought the antique for $0.70x, he paid $0.70(50) = $35.
Hence, the antique's market value on eBay was $35 / 0.80 = $43.75. Thus, Ebay's original asking price was $43.75. To sum up, Mr. Madoff purchased an antique sold on eBay for 70% of Ebay asking price. He then sold it for 20% above its true market value to make a profit of $800. eBay's price was 80% of the market value.
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the changes) Select one: a. Decrease in the Price Level b. Increase in government spending c. Decrease in expected inflation d. Fall in nominal money supply
The correct answer is b. Increase in government spending.When there is an increase in government spending, it leads to an increase in aggregate demand. This is because the government is spending more money on goods and services, which creates more demand in the economy.
As a result, businesses need to produce more goods and services to meet the increased demand. To do this, they may need to hire more workers and invest in capital, which leads to an increase in employment and investment.With more people employed and earning income, there is an increase in consumer spending as well. This further boosts aggregate demand and economic activity.
Overall, an increase in government spending stimulates the economy and leads to economic growth. It is one of the tools that the government can use to manage the economy and counteract recessions or periods of low economic activity.In summary, an increase in government spending is one of the changes that can have a positive impact on the economy by increasing aggregate demand and stimulating economic growth.
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Saxon Products, Incorporated, is investigating the purchase of a robot for use on the company’s assembly line. Selected data relating to the robot are provided below:
Cost of the robot $ 1,950,000 Installation and software $ 485,000 Annual savings in inventory carrying costs $ 217,000 Annual increase in power and maintenance costs $ 37,000 Salvage value in 5 years $ 77,000 Useful life 5 years
In addition to the data above, engineering studies suggest that use of the robot will result in a savings of 32,000 direct labor-hours each year. The labor rate is $14 per hour. Also, the smoother work flow made possible by the use of automation will allow the company to reduce the amount of inventory on hand by $407,000. This inventory reduction will take place at the end of the first year of operation; the released funds will be available for use elsewhere in the company. Saxon Products has a 15% required rate of return.
Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables.
Required:
1. Determine the annual net cost savings if the robot is purchased. (Do not include the $407,000 inventory reduction or the salvage value in this computation.)
2-a. Compute the net present value of the proposed investment in the robot.
2-b. Based on these data, would you recommend that the robot be purchased?
3-a. Assume that the robot is purchased. However, due to unforeseen problems, software and installation costs were $82,000 more than estimated and direct labor could only be reduced by 26,000 hours per year, rather than the original estimate of 32,000 hours. Assuming that all other cost data is accurate, what would a postaudit suggest is the actual net present value of this investment?
3-b. Does it appear that the company made a wise investment?
4-a. Which of the following are intangible benefits associated with the new automated equipment?
4-b. Based on your analysis in Requirement 3 above, compute for the president the minimum dollar amount of annual cash inflow that would be needed from the benefits in part 4(a) for the automated equipment to yield a 15% rate of return.
The annual net cost savings if the robot is purchased is $180,000. 2-a. The net present value of the proposed investment is $384,406. 2-b. Yes, the robot should be purchased as the net present value is positive. 3-a. The actual net present value of this investment would be $240,137. 3-b. Yes, it still appears to be a wise investment with a positive net present value. 4-a. Improved workflow and reduced inventory carrying costs. 4 b. The minimum annual cash inflow needed from intangible benefits is $82,051.
The company would need to generate at least $ 760,885 in annual cash inflow from the intangible benefits associated with the new automated equipment for the investment to yield a 15% rate of return.
1) The annual net cost savings if the robot is purchased can be determined as follows: Savings in inventory carrying costs = $ 217,000Annual increase in power and maintenance costs = -$ 37,000Savings from reduced direct labor costs = (32,000 hours * $ 14 per hour) = $ 448,000 Total Annual Net Cost Savings = $ 628,000
2-a) Calculation of the net present value of the proposed investment in the robot can be done as follows: Initial investment (Robot + Installation + Software) = $ 1,950,000 + $ 485,000 = $ 2,435,000 Annual net cost savings = $ 628,000 Calculating the Present Value of Annuity of $ 628,000 for 5 years at 15% using Exhibit 14B-1:PV of annuity of $ 1 per year for 5 years at 15% = 3.352PV of an annuity of $ 628,000 per year for 5 years at 15% = $ 628,000 * 3.352 = $ 2,108,256Calculating the Present Value of Salvage Value of $ 77,000 at the end of 5 years at 15% using Exhibit 14B-2:PV of $ 1 at the end of 5 years at 15% = 0.497PV of $ 77,000 at the end of 5 years at 15% = $ 77,000 * 0.497 = $ 38,269Net Present Value (NPV) of the investment = $ 2,108,256 + $ 38,269 - $ 2,435,000 = -$ 288,4752-b) Based on the calculations above, the net present value of the proposed investment in the robot is negative.
Therefore, it would not be recommended to purchase the robot.
3-a) Calculation of the actual net present value of this investment: Actual cost of installation and software = $ 485,000 + $ 82,000 = $ 567,000Actual reduction in direct labor cost = 26,000 hours * $ 14 per hour = $ 364,000Savings in inventory carrying costs = $ 217,000Annual increase in power and maintenance costs = -$ 37,000Calculating the Present Value of Annuity of $ 627,000 for 5 years at 15% using Exhibit 14B-1:PV of annuity of $ 1 per year for 5 years at 15% = 3.352PV of annuity of $ 627,000 per year for 5 years at 15% = $ 627,000 * 3.352 = $ 2,103,904Calculating the Present Value of Salvage Value of $ 77,000 at the end of 5 years at 15% using Exhibit 14B-2:PV of $ 1 at the end of 5 years at 15% = 0.497PV of $ 77,000 at the end of 5 years at 15% = $ 77,000 * 0.497 = $ 38,269Actual Net Present Value (NPV) of the investment = $ 2,103,904 + $ 38,269 - $ 2,567,000 = -$ 424,8273-b) No, it does not appear that the company made a wise investment as the actual net present value is negative.
4-a) The intangible benefits associated with the new automated equipment include:- Increased productivity and efficiency- Improved quality control- Increased safety- Competitive advantage- Enhanced company image4-b) Calculation of the minimum dollar amount of annual cash inflow that would be needed from the benefits in part 4(a) for the automated equipment to yield a 15% rate of return can be done as follows: Minimum Annual Cash Inflow Needed = (Initial Investment + Salvage Value) / Annuity factor for 5 years at 15%- Initial Investment = $ 2,435,000- Salvage Value = $ 77,000- Annuity Factor for 5 years at 15% from Exhibit 14B-1 = 3.352Minimum Annual Cash Inflow Needed = ($ 2,435,000 + $ 77,000) / 3.352 = $ 760,885
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jesse has the comparative advantage in making sweaters. yvette has the comparative advantage and absolute advantage in making pies. yvette also has the absolute advantage in making sweaters, if jesse and yvette were to trade, who would do what?
In the given scenario, Jesse possesses the comparative advantage in making sweaters, while Yvette holds the comparative advantage and absolute advantage in making pies.
Consequently, a mutually beneficial trade arrangement would see Jesse specializing in sweater production and Yvette focusing on pie production. Jesse would be responsible for manufacturing sweaters, as he has a lower opportunity cost in producing them compared to Yvette.
Yvette, on the other hand, would dedicate her efforts to pie production, leveraging her absolute advantage in this area. By engaging in trade, both Jesse and Yvette can optimize their productivity and benefit from the advantages offered by specialization and exchange.
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This question is not complete, Here I am attaching the complete question:
jesse has the comparative advantage in making sweaters. yvette has the comparative advantage and absolute advantage in making pies. yvette also has the absolute advantage in making sweaters, if jesse and yvette were to trade, who would do what? Explain.
It is important to protect trade dress against adoption by a competitor failure to protect the mark can:
a) deceive purchasers into believing they have obtained a comparable product.
b) dilute the originator's resource investment in its product appearance.
c) usurp the business goodwill of the developer of the trade dress.
d) allow the mark pass into the English language (like ‘aspirin’) and become generic.
Failure to protect trade dress can dilute the originator's investment, usurp business goodwill, and risk the mark becoming generic. It is important to prevent deception, dilution, and loss of distinctiveness in the marketplace.
Failure to protect trade dress can have several negative consequences for the originator of the mark. These consequences include:
b) Dilute the originator's resource investment in its product appearance: Trade dress refers to the distinctive visual appearance or packaging of a product that identifies and distinguishes it from others. By failing to protect the trade dress, competitors may adopt a similar or identical appearance, leading to consumer confusion and dilution of the originator's investment in developing and promoting its unique product appearance. This can erode the brand's distinctiveness and diminish its competitive advantage.
c) Usurp the business goodwill of the developer of the trade dress: Trade dress plays a significant role in building brand recognition and consumer loyalty. If a competitor is allowed to freely adopt and imitate the trade dress, it can unfairly capitalize on the goodwill and reputation that the originator has built. This can result in lost sales, customer confusion, and damage to the originator's brand reputation and market position.
d) Allow the mark to pass into the English language and become generic: One of the risks of not protecting a trademark or trade dress is the potential for the mark to become generic. Genericide occurs when a mark loses its distinctiveness and becomes a common term used to describe a general class of products or services. This can happen if the mark is not actively defended and enforced against unauthorized use. Once a mark becomes generic, it can no longer serve as a source identifier and the originator loses the exclusive rights associated with it.
In summary, failure to protect trade dress can result in diluted brand investment, loss of business goodwill, and the risk of the mark becoming generic, all of which can have significant negative impacts on the originator's business and its ability to compete effectively in the market.
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An obligation of a business that represents the claims of others against the assets of the business is called a(n) a asset b expense C liablity d equity
A liability is the answer to the question, "An obligation of a business that represents the claims of others against the assets of the business is called a(n). "A liability is an obligation of a business that represents the claims of others against the assets of the business.
It refers to the amount of money owed by a business to its creditors, including its suppliers, employees, and lenders. These obligations must be paid in the future and are recorded on the balance sheet of a company as a liability. A liability may be classified as either current or long-term.
A liability is an important concept in accounting because it reflects the financial obligations of a business. It also affects a company's financial health and its ability to pay its debts. Thus, it is important for businesses to manage their liabilities carefully by ensuring that they have enough cash to meet their obligations as they become due.
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A project with an initial cost =$500,000, generates a 12% rate of return (lRR) for infinite years, assuming the cost of capital is 10%. Then the economic profit (EVA) and the NPV are? Select one: a. 10,000 and 10,000 b. 500.000 and 600.000 C. 60.000 and 10.000 d. 10.000 and 100.000
The NPV and Economic Value Added (EVA) of the project is to be calculated. The given information about the project is:
Initial cost (I0) = $500,000Rate of return (IRR) = 12%Cost of capital (k) = 10%NPV can be calculated using the formula,NPV = Present Value of future cash inflows - Initial costNPV = ∑(Cash inflow)t/(1+k)t - I0where t = timeThe rate of return (IRR) is more than the cost of capital (k).
The project is viable. Also, the project will generate cash inflows at a rate of 12%.Therefore, NPV = ∑(Cash inflow)t/(1+k)t - I0 = ∑(Cash inflow)t/(1+10%)t - $500,000 = $1,200,000/10% - $500,000 = $7,000,000 - $500,000 = $6,500,000. Therefore, the NPV of the project is $6,500,000.
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Review and comment on risk profiles of organisations in
different industries.
Organizations in the financial sector, such as banks and investment firms, face risks related to market volatility, credit default, regulatory compliance, and cybersecurity.
Different industries have varying levels and types of risks associated with their operations. Here are some key factors that influence risk profiles in different industries:
Financial Industry: Organizations in the financial sector, such as banks and investment firms, face risks related to market volatility, credit default, regulatory compliance, and cybersecurity. They also need to manage risks associated with liquidity, interest rate fluctuations, and financial market stability.
Technology Industry: Technology companies face risks related to rapid technological advancements, intellectual property protection, data security and privacy, product obsolescence, and competitive pressures. They also need to manage risks associated with software bugs, system failures, and project delays.
Healthcare Industry: Healthcare organizations face risks related to patient safety, medical malpractice, regulatory compliance, data breaches, and healthcare policy changes. They also need to manage risks associated with medical liability, healthcare fraud, and operational challenges.
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The approach taken by managers at the fast-food restaurant is
best described as social ________.
options:
Obligation,
Responsibility
Reaction
Obstruction
The approach taken by managers at the fast-food restaurant is best described as social responsibility. Social responsibility is the responsibility of a company for the impact of its decisions and activities on society and the environment, through transparent and ethical behavior that contributes to sustainable development, including health and the well-being of society.
A business that accepts social responsibility positively impacts society in the following ways: Creating jobs for the community Taking responsibility for a company's impact on the environment (clean air, water, and soil)Supporting cultural activities in the community Encouraging the development of products and services that are environmentally friendly (renewable energy, recycled materials)Social responsibility helps businesses to build better relationships with stakeholders, including customers, suppliers, employees, and shareholders.
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Painfree Inc. just issued a semiannual coupon bond, which has a coupon rate of 6.8% and matures in 20 years. The bond's price is $1,870 and the par value is $2,000. Assume a tax rate of 35%. The company's after-tax cost of debt is • 3.47% • 4.46% • 5.11% • 3.71% • 4.83%
Painfree Inc. recently issued a semi-annual coupon bond, which has a 6.8% coupon rate and a 20-year maturity. The bond's price is $1,870, and its par value is $2,000. A tax rate of 35% is assumed.
What is the company's after-tax cost of debt?
The after-tax cost of debt formula is used to calculate the effective after-tax cost of debt for a company. It considers both the interest rate paid on a company's debt and the tax rate paid by the company. The formula for the after-tax cost of debt is:
After-tax cost of debt = pre-tax cost of debt x (1 - tax rate).
Here's how to apply the formula to the problem at hand: The coupon rate is 6.8%, which is the pre-tax cost of debt. As a result, the pre-tax cost of debt equals 6.8%. Because the tax rate is 35%, (1 - 0.35) equals 0.65, which is the after-tax cost of debt.
In other words, after-tax cost of debt = 6.8% x (1 - 0.35)
After-tax cost of debt = 4.42%
This means the after-tax cost of debt for Pain free Inc. is 4.42%.
Therefore, the correct option is 4.46%.
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The following information is available on January 31, 2021. Unpaid utilities for the month of January are $7,800. Supplies at the end of January total $6,700. Depreciation on the equipment for the month of January is calculated using the straightline method. At the time the equipment was purchased, the company estimated a service life of three years and a residual value of $11,600. Accrued income taxes at the end of January are $2,700.
1. Record the following:
a. Closing entry for revenue
b . closing entry for expenses
c. Closing entry for dividends
d. Income statement
e. balance sheet
Debit the revenue account for the total amount of revenue earned during the month.Credit the income summary account for the same amount to transfer the revenue to the income summary account.
Closing entry for expenses:Debit the income summary account for the total amount of expenses incurred during the month.Credit the expense accounts for the same amount to transfer the expenses to the income summary account.Closing entry for dividends:Debit the retained earnings account for the total amount of dividends declared.Credit the dividends account for the same amount to reduce the retained earnings.
To record the closing entries for revenue, you need to debit the revenue account and credit the income summary account. This transfers the revenue from the revenue account to the income summary account, which will later be used to calculate the net income or loss.To record the closing entries for expenses, you need to debit the income summary account and credit the expense accounts.
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How did people trade when there was no currency?
Before the advent of currency, people engaged in trade through various means of exchange, such as barter and the use of commodity money. Here are a few methods that were commonly employed:
Barter: Without the use of money, barter is the direct exchange of commodities or services. On the basis of their shared requirements and preferences, individuals or communities would bargain and exchange one good or service for another. A person with an excess of wheat, for instance, would trade it with a blacksmith or tailor in exchange for tools or clothing.
Commodity Money: A form of commerce in which particular things with inherent worth, like precious metals or cattle, are utilized as a medium of exchange, is known as commodity money. These goods have worth on their own and are commonly used in commerce. For instance, as forms of commodity money, ancient civilizations employed gold, silver, seashells, salt, or cattle.
Gift Economy: Trade was facilitated by means of a gift economy in some communities. People would give gifts to create social bonds and obligations rather than merely exchanging goods or services. The gifts would be passed around the neighborhood, and reciprocity was essential to preserving social harmony.
Credit and Debt: People could enter into credit and debt agreements when an immediate exchange was not possible. The provision of goods or services on credit would result in the debtor owing a debt that may be paid back at a later time. This type of trade depended on reputation and confidence within the neighborhood.
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Westland Manufacturing spends $20,000 to update the lighting in its factory to more energy-efficient LED fixtures. This will save the company $4,000 per year in electricity costs. The company estimates that these fixtures will last for 10 years. What is the IRR of this project?
The IRR (Internal Rate of Return) of the project can be calculated as follows;
We must first calculate the total cash inflows and outflows for the entire project's life.
Cash inflows = $4,000 × 10 years = [tex]$40,000[/tex]
Cash outflows = $20,000
Total cash inflow from the project - Total cash outflow for the project = Net present value (NPV) of the project
NPV = Cash inflow / (1 + i) ^n - Cash outflow
Where i = Internal rate of return of the project
n = Number of years over which cash flow is to be determined
NPV = [tex]$40,000 / (1 + i) ^ 10 - $20,000[/tex]
NPV = [tex]$7,600[/tex]
We can substitute different rates of interest until we get a net present value of zero.
That rate of interest, or IRR, will be the project's internal rate of return.
As the NPV is positive, the rate of interest must be more than the cost of capital.
So, we can try a higher rate of interest, such as 15 percent.
NPV =[tex]$4,000 / (1 + 0.15) ^ 1 + $4,000 / (1 + 0.15) ^ 2 + ......+ $4,000 / (1 + 0.15) ^ 10 - $20,000NPV = $3,481.90[/tex]
IRR of the project = 15%
the Internal Rate of Return (IRR) of the project is 15%.
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he strategic process does not include Group of answer choices a. managing the customer portfolio b. allocating and prioritizing resources c. sponsoring key customers d. selling and negotiating e. enabling organizational learning
The strategic process involves various activities to achieve long-term goals and competitive advantage. However, selling and negotiating are not typically considered part of the strategic process.
Sponsoring key customers: This refers to building relationships with important customers and providing them with additional support, such as exclusive access to products, personalized services, or special discounts. It aims to maintain and strengthen long-term partnerships with key customers.Selling and negotiating: While selling and negotiating are important activities in business operations, they are typically not considered part of the strategic process.
Enabling organizational learning: This involves creating a culture of continuous learning and improvement within the organization. It includes activities such as knowledge sharing, training programs, feedback mechanisms, and learning from past experiences to enhance organizational performance.Therefore, selling and negotiating (option d) are not part of the strategic process, as they focus more on the operational aspect of business rather than long-term strategic planning.
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Alpha Corp is a manufacturing company operating in Europe. In a recent board meeting its directors decided to expand the company’s operations in America by setting up a subsidiary over there. The company’s CFO estimates that the project is going to cost $15 million. The company can get a Euro loan at 4.5% and a Dollar loan at 7.5%.
Beta Corp is a manufacturer of heavy machinery and is based solely in the U.S. The company wants to expand its operations in Europe and estimates that the cost of setting up a factory in Europe is €10 million. The company can get a Dollar loan at 6.5% and a Euro loan at 5.5%.
The current $/€ exchange rate is $1.5/€. Both companies decide to enter into a currency swap.
9. Which of the following statements regarding the payments made at the inception of the swap is most accurate?
A. Alpha Corp will make a payment to Beta Corp amounting to $15 million.
B. Beta Corp will make a payment to Alpha Corp amounting to $15 million.
C. No amount will be exchanged at the inception of the swap.
10. At the first settlement date, Beta Corp will most likely: A. Pay €450,000 to Alpha Corp.
B. Pay €550,000 to Alpha Corp.
C. Receive €550,000 from Alpha Corp.
11. At the second settlement date, Alpha Corp will most likely: A. Pay $975,000 to Beta Corp.
B. Receive $1,125,000 from Beta Corp.
C. Receive €975,000 from Beta Corp.
12. At expiration Beta Corp will most likely: A. Pay €450,000 to Alpha Corp.
B. Receive $15 million from Alpha Corp. C. Receive €10 million from Alpha Corp
9. In a currency swap agreement, two parties agree to exchange payments in one currency with an equivalent payment in another currency. In this case, Alpha Corp is interested in setting up a subsidiary in America, and Beta Corp wants to expand in Europe. Both companies have estimated the costs involved in setting up their operations in the other company's currency.
The exchange rate between US dollars and Euros is $1.5/€. Alpha Corp can borrow in Euros at a rate of 4.5% and in dollars at 7.5%, while Beta Corp can borrow in Euros at 5.5% and in dollars at 6.5%. Therefore, both companies enter into a currency swap agreement.
The terms of the agreement are as follows: Alpha Corp agrees to pay Beta Corp a fixed amount in Euros, and Beta Corp agrees to pay Alpha Corp a fixed amount in US dollars, based on the exchange rate at the inception of the swap.
Since the companies have not started any operations yet, no amount will be exchanged at the inception of the swap.
The correct statement regarding the payments made at the inception of the swap is that C. No amount will be exchanged at the inception of the swap.
10. The first settlement date is when the companies make their first payment to each other. In this case, Beta Corp has agreed to pay Alpha Corp a fixed amount in US dollars, and Alpha Corp has agreed to pay Beta Corp a fixed amount in Euros.
Beta Corp has estimated the cost of setting up a factory in Europe to be €10 million, and it can borrow in Euros at a rate of 5.5%. Therefore, Beta Corp borrows €10 million at 5.5% and pays Alpha Corp the fixed amount of €550,000, based on the exchange rate at the inception of the swap.
At the first settlement date, Beta Corp will most likely Pay €550,000 to Alpha Corp.
11. The second settlement date is when the companies make their second payment to each other. In this case, Alpha Corp has agreed to pay Beta Corp a fixed amount in Euros, and Beta Corp has agreed to pay Alpha Corp a fixed amount in US dollars.
Alpha Corp has estimated the cost of setting up a subsidiary in America to be $15 million, and it can borrow in US dollars at a rate of 7.5%. Therefore, Alpha Corp borrows $15 million at 7.5% and receives the fixed amount of $1,125,000 from Beta Corp, based on the exchange rate at the inception of the swap.
At the second settlement date, Alpha Corp will most likely Receive $1,125,000 from Beta Corp.
12. The expiration date is when the currency swap agreement ends, and the companies make their final payments to each other. In this case, Beta Corp has agreed to pay Alpha Corp a fixed amount in US dollars, and Alpha Corp has agreed to pay Beta Corp a fixed amount in Euros.
Beta Corp estimates the cost of setting up a factory in Europe to be €10 million, and Alpha Corp estimates the cost of setting up a subsidiary in America to be $15 million. At expiration, Alpha Corp pays Beta Corp the fixed amount of $15 million, and Beta Corp pays Alpha Corp the fixed amount of €10 million, based on the exchange rate at the inception of the swap. Therefore, Beta Corp will most likely receive €10 million from Alpha Corp.
At expiration, Beta Corp will most likely Receive €10 million from Alpha Corp.
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Review Concept Box 16.2. The investor-developer would not be comfortable with a 7.8 percent return on cost because the margin for error is too risky. If construction costs are higher or rents are lower than anticipated, the project may not be feasible. The asking price of the project is $7,300,000 and the construction cost per unit is $81,000. The current rent to justify the land acqusition is $1.6 per square foot.
Required:
a. Based on the fact that the project appears to have 9,360 square feet of surface area in excess of zoning requirements, the developer could make an argument to the planning department for an additional 10 units, 250 units in total, or 25 units per acre. What is the percentage return on total cost under the revised proposal? Is the revised proposal financially feasible?
b. Suppose the developer could build a 240-unit luxury apartment complex with a cost of $105,500 per unit. What would such a project have to rent for (per square foot) to make an 8 percent return on total cost?
The revised proposal is not financially feasible because the percentage return on total cost is less than 1.77%.
$9.38, would such a project have to rent for (per square foot) to make an 8 percent return on total cost.
A.
The price of construction is $81,000 per unit.
There are 250 units in total.
The sum of the building costs is equal to the sum of the units.
The entire cost of the project is $81,000 divided by 250.
The entire price of construction is $20,250,000.
The project's asking price is $7,300,000.
If we include the price of the extra 10 units.
$7,300,000 + ($81,000 divided by 10) would equal $7,780,000 as the total asking price.
The project would cost $81,000 250 + ($81,000 10) in total.
The project would cost $20,330,000 in total.
($360,000 / $20,330,000) x 100% = 1.77%
B.
Each unit costs $105,500.
There are 240 units altogether.
The project will cost $25,320,000 ($105,500 x 240).
The project would need to bring in $2,025,600 ($25,320,000 x 8%) to make an 8% return on total investment.
The project's overall square footage is equal to 240 units times 900.
The project encompasses 216,000 square feet in total.
$9.38 per square foot ($2,025,600 divided by 216,000)
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adjustment on 31 December 2014, the close of the annual accounting period: office supplies expense in the income statement is $1050 and office supplies inventory in the balance sheet is $550. office supplies expense in the income statement is $1600 and office supplies inventory in the balance sheet is $0. office supplies expense in the income statement is $550 and office supplies inventory in the balance sheet is $1050. office supplies expense in the income statement is $0 and office supplies inventory in the balance sheet is $1600.
The adjustment that will be made on 31 December 2014, the close of the annual accounting period, is office supplies expense in the income statement is $550 and office supplies inventory in the balance sheet is $1050.
Here’s why:
Office supplies expense in the income statement for the year is the total amount of office supplies used or consumed by the company during the year.
The balance in the office supplies inventory account represents the cost of the office supplies on hand at the end of the year.
As office supplies are used throughout the year, the balance in the office supplies expense account increases, while the balance in the office supplies inventory account decreases.
At the end of the year, an adjustment must be made to account for the office supplies that were used during the year but have not yet been recorded as an expense and to adjust the balance in the office supplies inventory account to its proper year-end balance.
The correct adjusting entry on December 31, 2014, will be as follows:
Debit: Office supplies expense account 550Credit: Office supplies inventory account 1,050
Therefore, the adjustment on 31 December 2014, the close of the annual accounting period, is office supplies expense in the income statement is $550 and office supplies inventory in the balance sheet is $1050.
The expense in the income statement has been increased by $550, while the inventory in the balance sheet has been decreased by $1050.
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As a staff in Airport what the steps you need to do to book a (Flights and hotel) for a customer ?
1- Ask the customer group of questions (Destination, Check-in\out date, number of people, etc...).
As a staff member working at an airport, it's possible that you may be required to assist customers in booking flights and hotels. Below are the steps you should take to successfully book a customer's flight and hotel reservations.
1. Welcome the customer and begin asking questions : Start by greeting the customer, thanking them for choosing your airline/hotel, and asking what you can assist them with. Begin by asking questions such as the destination, check-in/out dates, number of people travelling, and so on. You may also need to ask for additional information such as passport details, frequent flyer number, hotel preferences, and so on.
2. Check for availability : Check to see if there are any available flights and hotels that match the customer's requirements. Use the reservation system to look for available flights and hotels, and provide the customer with options that are within their budget and requirements.
3. Make the booking : Once the customer has selected their preferred flight and hotel options, make the bookings on their behalf. Confirm the booking details, and provide the customer with a summary of the itinerary. Collect payment if necessary and ensure that the customer receives a confirmation of their booking.
4. Provide additional information : Provide the customer with information about baggage allowance, check-in times, airport transfer options, and any other relevant information. If they require any special assistance such as wheelchair assistance, provide them with the necessary information and instructions on how to request it.
5. Follow up : Follow up with the customer a few days before their trip to confirm that everything is in order, and to remind them of their flight and hotel details. Answer any additional questions they may have and provide any further assistance if required.
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beans increases during this week. Coleris parbus, this indicates that: The demand for its own brand of baked beans is inelastic with respect to income. The demand for its own brand of baked beans is vlastio whth respect to income. Its own brand of baked beans is an inferior good. The demand for its own brand of baked beans is inelastic with respect 10 price. The demand for its own brand of baked beans is elastic with respect to price,
According to the given information, the beans' sales have increased by more than 100 units during the current week. When sales increase, the demand is affected, and this information can be used to predict the behavior of consumer demand for the brand.
If the demand is elastic, then an increase in the price of the product would decrease the quantity of the product sold. However, if demand is inelastic, then an increase in the price would not affect the sales significantly. Thus, the answer to this question is that the demand for its brand of baked beans is inelastic with respect to price.
Here are the explanations of other options to help you understand the difference and determine the correct answer:If the demand for its brand of baked beans were an inferior good, it would mean that the sales would decrease when the income of the consumer increases.
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Question 4 ∼ Saved ACME Incorporated uses a perpetual inventory system. Assume GST at 5% and PST at 7%. The following selected transaction occurred: July 5 Sold to Football Co., merchandise with a cost of $4,800 for $6,000 plus applicable taxes, terms 2/10,n/30,FOB destination. Required: Prepare the journal entry to record the above transaction.
Here is the journal entry to record the transaction that occurred on July 5 by ACME Incorporated:
DateAccounts DebitCreditJul 5
Accounts receivable$6,450($6,000 + $240 GST + $210 PST)
Sales revenue$6,000GST receivable$240
Accounts receivable$240PST payable$210
Accounts receivable$210Cost of goods sold$4,800Inventory$4,800
Explanation : In the above transaction, ACME Incorporated sold goods to Football Co. at $6,000, which includes GST and PST applicable at the rate of 5% and 7% respectively.
The cost of the merchandise sold is $4,800.Terms of the transaction:2/10, n/30, FOB destination, which means the buyer will get a discount of 2% if payment is made within 10 days of the invoice date, and payment is due within 30 days of the invoice date.
The seller bears the transportation cost till the goods are delivered to the buyer’s destination.
Therefore, the journal entry will be prepared for the net amount of $6,450, which is inclusive of GST and PST. In this case, $6,000 is credited to the Sales revenue account, and the GST and PST payable are credited to their respective accounts.
The cost of goods sold is debited to the Cost of goods sold account, and the inventory account is debited for the merchandise's cost. The accounts receivable account is credited for the gross amount, i.e., $6,450.
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Elon Motors produces electric automobiles. In recent years, they have been making all components of the cars, excluding the batteries for each vehicle. The company's leadership team has been considering the ways to reduce the cost of producing its cars. They have considered various options and believe that they could reduce the cost of each car if they produce the car batteries instead of purchasing them from their current vendor, Avari Battery Company.
Currently, the cost of each battery is $325 per unit. The company feels that they could greatly reduce the cost if the production team makes each battery. However, to produce these batteries, the company will need to purchase specialized equipment that costs $1,570,000. However, this equipment will have a useful life of 12 years and is expected to have a salvage value of $70,000 at the end of that time.
Currently, the company purchases 3,000 batteries per year, and the company expects that the production will remain the same for the coming 12-year period. To make the batteries, the company expects that they will need to purchase direct materials at a cost of $125 per battery produced. In addition, the company will need to employ three production workers to make the batteries. The workers likely work 2,080 hours per year and make $25 per hour. In addition, health benefits will amount to 20% of the workers' annual wages. In addition, variable manufacturing overhead costs are estimated to be $25 per unit.
Because there is currently unused space in the factory, no additional fixed costs would be incurred if this proposal is accepted. The company's cost of capital (hurdle rate) has been determined to be 10% for all new projects, and the current tax rate of 30% is anticipated to remain unchanged. The pricing for the company's products as well as number of units sold will not be affected by this decision. The straight-line depreciation method would be used if the new equipment is purchased.
Based on the above information and using the provided Excel Template (Links to an external site.), calculate the following items for this proposed equipment purchase.
Annual cash flows over the expected life of the equipment
Payback period
Accounting rate of return
Net present value
Internal rate of return
Modified Internal rate of return
Do you recommend the acceptance of this proposal? Why or why not?
Prepare a two-page minimum, double-spaced Word paper elaborating on and supporting your answer. Be sure to follow APA formatting, as applicable.
Based on the information provided, we can calculate the following items for the proposed equipment purchase:
1. Annual cash flows over the expected life of the equipment:
To calculate the annual cash flows, we need to consider the costs and savings associated with producing the batteries in-house. The costs include direct materials, labor (including health benefits), variable manufacturing overhead, and depreciation expense.
The savings come from eliminating the purchase of batteries from the current vendor. The annual cash flows can be calculated as the difference between the costs and savings.
2. Payback period:
The payback period is the time it takes for the initial investment to be recovered. It can be calculated by dividing the initial investment by the annual cash flow.
The payback period helps assess the time it takes to recoup the investment and determine the project's risk.
3. Accounting rate of return:
The accounting rate of return measures the average annual profit as a percentage of the initial investment. It can be calculated by dividing the average annual profit by the initial investment.
4. Net present value (NPV):
The NPV calculates the present value of cash flows by discounting them using the company's cost of capital. It helps determine the project's profitability and whether it adds value to the company.
A positive NPV indicates that the project is expected to generate more value than the initial investment.
5. Internal rate of return (IRR):
The IRR is the discount rate that makes the NPV equal to zero. It helps determine the project's rate of return and can be compared to the company's cost of capital.
If the IRR is higher than the cost of capital, the project is considered financially attractive.
6. Modified internal rate of return (MIRR):
The MIRR is an alternative measure that addresses some limitations of the IRR. It assumes reinvestment at the company's cost of capital and can provide a more accurate rate of return.
To make a recommendation, we need to assess the results of these calculations. Specifically, we should consider whether the payback period is acceptable, if the accounting rate of return meets the company's requirements, if the NPV is positive, and if the IRR and MIRR exceed the cost of capital.
Additionally, we should evaluate the project's impact on other factors such as production efficiency, quality control, and potential risks.
Based on the results and a thorough analysis of all relevant factors, a recommendation can be made as to whether the proposal should be accepted.
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The Cooling Division of JOY International produces a cooling element that it sells to its customers for $81 per unit. Its variable cost per unit is $25, and its fixed cost per unit is $34. Top management of JOY International would like the Cooling Division to transfer 10,000 cooling units to another division within the company at a price of $60. The Cooling Division currently has excess capacity of 22,000 units.
a. What is the minimum transfer price that the Cooling Division should accept? (Show the price and calculation) b. If the Cooling Division was operating at full capacity, what would be their minimum transfer price the Division should accept? (Show the price and calculation) (4 points
a. Calculation of minimum transfer price that the Cooling Division should accept:- The cooling division of Joy International has been offered a price of $60 per unit to transfer 10,000 cooling units to another division of the company. It is important to determine the minimum transfer price that the cooling division should accept.
The calculation of the minimum transfer price is as follows:
Minimum transfer price = Variable cost per unit + (Fixed cost per unit / units sold). Minimum transfer price = $25 + ($34 / 22,000)Minimum transfer price = $26.55Therefore, the minimum transfer price that the Cooling Division should accept is $26.55.
b. Calculation of minimum transfer price that the Cooling Division should accept if it was operating at full capacity:-The cooling division of Joy International has been offered a price of $60 per unit to transfer 10,000 cooling units to another division of the company. If the Cooling Division were operating at full capacity, it would not be able to manufacture any additional cooling units.
The calculation of the minimum transfer price that the Cooling Division should accept is as follows: Total cost per unit = variable cost per unit + fixed cost per unit.
Total cost per unit = $25 + $34Total cost per unit = $59.
Therefore, if the Cooling Division was operating at full capacity, the minimum transfer price that the Division should accept is $59.
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Briefly answer the following questions pertaining to Zambia’s sovereign debt:
A.What are the causes of the debt crisis in Zambia?
B.What are the effects of the debt crisis
C.Outline some possible solutions to Zambia’s debt crisis other than the IMF program?
A. The debt crisis in Zambia was caused by a number of factors such as external and internal issues. Externally, the decline in global commodity prices which resulted in reduced copper and other mineral exports, led to a loss in Zambia’s foreign currency earnings.
This forced the government to borrow more to finance its expenditure. The country also experienced a drop in aid flows from donor countries that were themselves facing financial difficulties. Internal factors also played a role in Zambia's debt crisis.
A depreciation of the kwacha, which has increased the cost of importing essential goods such as fuel and food. This has contributed to inflation and a reduction in the purchasing power of households.
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comparing a monopolistically competitive firm and a perfeclty competitive firm iwth the same cost curves
In comparing a monopolistically competitive firm and a perfectly competitive firm with the same cost curves, there are a few key differences to consider. They have a steeper marginal revenue curve compared to a perfectly competitive firm.
In a perfectly competitive market, there are many buyers and sellers, and each firm produces an identical product. The firms are price-takers, meaning they have no control over the price and must accept the market price. They have a horizontal demand curve, and their marginal revenue is equal to the price. This leads to a situation where firms produce at the minimum point on their average cost curve in the long run, resulting in zero economic profit.
On the other hand, in a monopolistically competitive market, there are still many firms, but each firm produces a slightly differentiated product, which leads to some degree of market power. Firms in this market have a downward-sloping demand curve, meaning they can set their own price to some extent. They have a steeper marginal revenue curve compared to a perfectly competitive firm. In the long run, monopolistically competitive firms may earn positive economic profit, as they can differentiate their products and create a brand or loyal customer base.
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Q2. St Lawrence Bus Lines is offered a contract for busing schoolchildren that will produce an annual profit of $70,000 for 7 years. To fulfill the contract, St Lawrence Bus Lines would have to buy buses at a total cost of $433,000. At the end of the contract, the resale value of the buses will be $80,000. Using NPV, decide if St Lawrence Bus Lines should sign the contract if the cost of capital is
4.45% p.a . b) 9.75 % p.a. Find the IRR (Internal Rate of Return) , correct to two decimal places.
a)
b)
c)IRR=
St Lawrence Bus Lines should sign the contract if the cost of capital is 4.45% p.a.
St Lawrence Bus Lines should not sign the contract if the cost of capital is 9.75% p.a. The Internal Rate of Return (IRR) is approximately 6.77%. To determine whether St Lawrence Bus Lines should sign the contract, we calculate the Net Present Value (NPV) using the formula NPV = Σ(CF_t / (1 + r)^t) - Initial Investment, where CF_t is the cash flow in year t, r is the discount rate, and t is the year.
If NPV is positive, it is financially viable. For a), the NPV at 4.45% is positive, indicating that the contract should be accepted. For b), the NPV at 9.75% is negative, suggesting that the contract should not be accepted. The IRR is the discount rate at which NPV becomes zero. By using iterative calculations or a financial calculator, we find the IRR to be approximately 6.77%.
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if
the interest rate is 3% and the future value of your one year
investment is $1000. its present value is
Plugging these values in the formula above, we have;
[tex]PV = FV / (1+r)^n= 1000 / (1+0.03)^1= 1000 / 1.03= $970.87[/tex]
Therefore, the present value of the investment is $970.87.
The present value of an investment can be calculated using the formula; PV = FV / (1+r)^n where;
PV = Present Value
FV = Future Value
n = Number of Periods
r = Rate of Interest
Let us use the given information to solve the problem.
Present value of an investment with a 3% interest rate with a future value of $1000 after one year can be calculated using the formula above.
We have; [tex]FV = $1000r = 3% = 0.03n = 1 yea[/tex]r
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David Wallace, Olena Dunn, and Danny Lin were partners in a commercial architect firm and showed the following account balances of December 31,2020 : Due to several unprofitable periods, the partners decided to liquidate the partnership. The equipment was sold for $73,000 on January 1, 2021. The partners share any profit (loss) in the ratio of 2.11 for Wallace, Dunn, and Lin, respectively. Required: 1. Complete the schedule. (Negative answers should be indicated by a minus sign.) Required: 1. Complete the schedule. (Negative answers should be indicated by a minus sign.) e answers should be indicated by a minus sign.) 2. Prepare the liquidation entries (sale of equipment, allocation of gain/loss, payment of creditors, final distribution of cash). 1 Record the sale of equipment. 2 Record the distribution of gain/loss on sale of equipment to partners. 3 Record the payment to creditors. 4 Record the distribution of remaining cash to partners.
The following actions must be completed in order to finish the schedule and get the partnership's liquidation entries ready:
1. Keep track of equipment sales:Cash ($73,000) is debited.Equipment ($73,000) is credited.
2. Keep track of how much profit or loss partners received from the sale of equipment:We require the equipment's initial cost in order to calculate the gain or loss. Suppose the initial price was $80,000.
Gain/Loss Calculation: Loss on Sale of Equipment (-$7,000) = Sale Price of Equipment ($73,000) - Original Cost of Equipment ($80,000).
The partners' respective profit-sharing ratios will determine how the loss is divided among them:
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The journal entry to record the payment of a note payable and the amount of interest owed at the maturity date involves debits to the Notes Receivable and Interest Expense accounts and a credit to the Cash account. a debit to the Notes Payable account and credits to the Interest Expense and Cash accounts. a debit to the Interest Expense account and credits to the Notes Payable and Cash accounts. debits to the Notes Payable and Interest Expense accounts and a credit to the Cash account.
When a note payable is paid, the journal entry involves debits to the Notes Payable and Interest Expense accounts and a credit to the Cash account. Here is the complete journal entry:
Debit Notes Payable Debit Interest Expense Credit Cash The debit to Notes Payable account is made to reduce or eliminate the principal amount of the note.
The debit to Interest Expense account is made to record the interest owed at the maturity date of the note. The credit to Cash account is made to reflect the cash payment made to pay off the note payable.
Therefore, the correct option is: debits to the Notes Payable and Interest Expense accounts and a credit to the Cash account.
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ssess the following statements whether are true or false? Justify your answer making reference to the objectives of the policy maker and please answer the question in 5 lines
a. Economic policy should aim to limit firm-level volatility (4 marks)
b. Economic policy should aim to limit macro-level volatility (4 marks)
a.Economic policy should aim to limit firm-level volatility: This statement is false because the objective of economic policy is not to limit firm-level volatility but to ensure macroeconomic stability and sustainable economic growth.
The policy maker’s objective is to create an environment that is conducive to business growth, innovation, and investment, which would, in turn, lead to job creation and economic prosperity. Therefore, the policy maker should focus on developing policies that support entrepreneurship, innovation, and investment, and reduce barriers to entry for businesses, while also providing a safety net for workers who may be affected by firm-level volatility.
b. Economic policy should aim to limit macro-level volatility: This statement is true because one of the primary objectives of economic policy is to ensure macroeconomic stability. Macroeconomic stability is achieved by minimizing the fluctuations in key economic indicators such as inflation, unemployment, and GDP growth rate.
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Pdf files of the articles are posted in Content - Week 1 - Articles forDiscussion week 1 area."More Americans Work in the ShadowEconomy" by Zumbrun, Joshua"Cultural Implications for the Shadow Economy" by Buszko, Andrzej Tomasz"On Estimating the Size of the Shadow Economy by Kirchgässner, G"Shadow Economies on the Rise Around the World" by Prentice, ChrisIn your initial response to the topic you have to answer all questions: Please format your responses as 1., 2., 3., 4. along with the subsections, i.e. (a), (b)1. Regarding article #3:(a )How are the transactions in the shadow economy measured and accounted for (i.e. are these affects measurable, and if so, how are they measured)?(b) What are the main economic factors influencing the participation in the shadow economy? Discuss the factors and be specific.3. Regarding article #1 and article #4:(a) Why is the shadow economy a challenge for governments? Discuss and be specific.(b) Discuss how the author suggests these challenges can be addressed?(c) Why would these steps be difficult to implement in countries like Georgia and Peru?(d) Why has the operation and structure of a shadow economy become an important focus of economic study?4. With appx 6 million Americans (last year at thistime it was 9.3 million-progress is being made) out of work, do you see the shadow economy at work in your community? Share some insights. 5.
It is important for policymakers to consider the factors that motivate individuals to participate in the shadow economy and address them accordingly to foster greater economic growth and development.
Regarding article #3:
(a) The transactions in the shadow economy are measured and accounted for using different techniques like surveys and econometric models. These are measurable, but the precise amount is often difficult to determine.
(b) There are several economic factors influencing participation in the shadow economy such as high tax rates, cumbersome regulations, and low levels of economic freedom.
These factors lead to reduced economic opportunities and motivate individuals to participate in the shadow economy.
Regarding article #1 and article #4:
(a) The shadow economy is a challenge for governments as it results in reduced tax revenue, which can impact the provision of public goods and services.
It also leads to increased income inequality and can facilitate criminal activity.
(b) The authors suggest that these challenges can be addressed by reducing the regulatory burden on businesses, lowering tax rates, and increasing economic opportunities.
By doing so, individuals will be less incentivized to participate in the shadow economy.
(c) These steps would be difficult to implement in countries like Georgia and Peru due to weak institutions and a lack of political will.
(d) The operation and structure of the shadow economy have become an important focus of economic study due to its impact on economic growth and development, income inequality, and government finances.
With approximately 6 million Americans out of work, the shadow economy is likely at work in many communities.
However, the extent of its impact may vary depending on factors such as local economic conditions and the regulatory environment.
It is important for policymakers to consider the factors that motivate individuals to participate in the shadow economy and address them accordingly to foster greater economic growth and development.
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"Proximity" or closeness implies that a firm should locate "close" to something. What are the three kinds of proximity described in the text? What are the basic conditions under which each is appropriate? What kinds of firms are likely to use each of these, and what metrics should be selected?
Proximity refers to the closeness between a firm and something that can be beneficial to it. The text describes three types of proximity: Geographical proximity, Virtual proximity, and Social proximity. Geographical proximity: This is the physical closeness between a firm and its target.
A company should be located as close as possible to its target market so that it can supply its products and services at a lower cost. For example, a company that produces frozen food should be located close to the market where it sells its products, and a business that offers quick-delivery services should be situated close to the area where it delivers.
This is appropriate in the case of businesses that offer perishable goods and services that require quick delivery, as well as businesses that rely heavily on raw materials.Virtual proximity: This kind of proximity refers to the electronic or virtual closeness between a company and its customers or partners.
A company may establish virtual proximity by using the internet to create an online presence. This method of proximity is particularly effective in today's world of social media. It is appropriate for firms that want to reach out to a wider audience and offer online services or products.Social proximity: Social proximity refers to the closeness between the customers and the business owner.
A business owner who is well-known in the community will have social proximity. Social proximity is appropriate for small and local businesses that rely on community support. It can also be used to create a loyal customer base that will be willing to provide feedback and promote the business through word-of-mouth marketing.Metrics should be selected based on the firm's industry, business model, and target market.
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