the correct answer is B, a permanent reduction in the inflation rate and a return to the long-run real growth rate.
In the dynamic AD-AS model, with the short-run aggregate supply (SRAS) curve drawn sloping upward from left to right, the real growth rate is higher than its long-run rate when the inflation rate is higher than the rate that people expected to prevail.
This statement is A true. This is because when there is unexpected inflation, firms may think that the increase in the price of goods is due to an increase in demand and produce more. In the short run, this increase in production will lead to an increase in output or real growth rate.
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Your organization produces and sell a single product and you are required to do a monthly cost-volume-profit analysis of this product. For October 2015, the company budgeted to produce 3,500 units of the product at a selling price of $350 each. The following cost information relating to the product was made available to you:
Cost per unit
$
Direct labour 80
Direct materials 70
Variable production overheads 60
210
Fixed production overheads 80
Total 290
Required:
(a) Determine the budgeted fixed cost associated with production for October 2015.
(b) Calculate the break-even point in units and sales revenue. (c) Express the break-even point as a percentage of the budgeted sales. (d) Determine the margin of safety and explain the result that you get. (e) Calculate the budgeted profit for October 2015. (f) If the company wanted to make a profit of $420,000.
What would the new selling price be?
(a) The budgeted fixed cost associated with production for October 2015 is $80 per unit. It means the total budgeted fixed cost is 3,500 × $80 = $280,000.
(b) Break-even point formula is expressed as follows:
Sales revenue - Variable cost - Fixed cost = 0Break-even point = Fixed cost / Contribution margin per unit
Contribution margin per unit = Sales price per unit - Variable cost per unit
Contribution margin per unit = $350 - $210 = $140Break-even point = $280,000 / $140 = 2000 units
Therefore, the break-even point in units is 2000 and the break-even point in sales revenue is 2000 × $350 = $700,000.
(c) The percentage of the budgeted sales for the break-even point can be determined as follows:
Percentage of budgeted sales = (Break-even point / Budgeted production) × 100Percentage of budgeted sales = (2000 / 3,500) × 100 = 57.14%
Therefore, the break-even point is 57.14% of the budgeted sales.
(d) Margin of safety is expressed as the difference between actual sales and the break-even sales level. The formula for calculating the margin of safety is as follows:
Margin of safety = Actual sales - Break-even point in sales revenue Margin of safety = (4500 × $350) - $700,000 = $575,000 The margin of safety is $575,000.
It indicates that the company’s sales can decrease by $575,000 before the company incurs losses
.(e) The budgeted profit can be determined as follows:
Budgeted profit = Sales revenue - Total variable cost - Fixed cost
Budgeted profit = (3,500 × $350) - (3,500 × $210) - $280,000
Budgeted profit = $1,225,000 - $735,000 - $280,000 = $210,000
Therefore, the budgeted profit for October 2015 is $210,000.
(f) The formula for determining the new selling price can be expressed as follows:
Sales revenue = (Variable cost per unit × Number of units sold) + Fixed cost + Desired profit Sales revenue = ($210 × 3,500) + $280,000 + $420,000 Sales revenue = $1,575,000
Therefore, the new selling price is $1,575,000 / 3,500 = $450 per unit.
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during the year, martin corporation sold an investment in bonds issued by another company for $21,000. those bonds had a cost of $20,000. martin also purchased the common stock of another company for $10,000. which of the following is the net cash provided by (used in) investing activities?
The net cash provided by (used in) investing activities can be determined by looking at the cash flows related to the sale of bonds and the purchase of common stock. To calculate the net cash, we will consider cash inflow from the sale of bonds and the cash outflow from the purchase of common stock.
In this case, Martin Corporation sold bonds issued by another company for $21,000. Since this represents a cash inflow, we add this amount to the net cash provided by (used in) investing activities.The bonds had a cost of $20,000, which means Martin Corporation originally paid $20,000 to acquire them. Since the sale price exceeds the cost, there is a gain of $1,000 ($21,000 - $20,000). However, this gain is not considered in the calculation of net cash provided by (used in) investing activities.
Additionally, Martin Corporation purchased common stock of another company for $10,000. Since this represents a cash outflow, we subtract this amount from the net cash provided by (used in) investing activities.Therefore, the net cash provided by (used in) investing activities in this scenario would be $21,000 - $10,000 = $11,000.To summarize: Cash inflow from the sale of bonds: $21,000. Cash outflow from the purchase of common stock: $10,000.Net cash provided by (used in) investing activities: $11,000.
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Provide an example of how you could apply the 3-Step Approach to solve an ethical problem you are experiencing at work or have experienced at work (current or former workplace)
You can approach the employees involved in the theft and have a conversation about the importance of ethical behavior, the impact of their actions, and the potential consequences if it continues. Offer guidance and emphasize the company's policies regarding theft.
Report to the supervisor/manager: If the theft continues or the employees do not respond positively to your conversation, it may be necessary to escalate the issue to a higher authority within the organization. Provide detailed information about the problem and any evidence you may have.Encourage a culture of ethics: Advocate for the implementation of an ethics training program or policy review that reinforces the importance of ethical behavior in the workplace.
The 3-Step Approach is a practical framework for addressing ethical problems in the workplace. By following these steps, you can identify the problem, analyze its impact, and work towards a resolution. In the example provided, the steps involved recognizing the unethical behavior of stealing office supplies, considering the consequences, and taking action by speaking directly to the employees or reporting the issue to a higher authority.
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Explain how changes in exchange rates affect prices, output, and
trade flows.
Exchange rates are the values of one country's currency concerning another country's currency. When these exchange rates change, there are several implications on prices, output, and trade flows. In this article, we are going to discuss the effects of changes in exchange rates on prices, output, and trade flows.
Changes in exchange rates affect prices because they affect the demand for goods and services. If the currency of a country appreciates, the prices of goods and services in that country will increase. This is because the cost of production of these goods and services will increase due to the increase in the value of the currency. The increase in prices will lead to a decrease in demand for goods and services, which will affect output.
Changes in exchange rates affect output because they affect the cost of production. If the currency of a country appreciates, the cost of production of goods and services in that country will increase. This is because the cost of imports will increase, which will lead to an increase in the cost of production of goods and services.
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Philippine Taxation:
What could be the reason behind the imposition of the final withholding of taxes? Explain.
The CREATE law abandoned the improperly accumulated earnings tax. What impact does it have on the taxing system, and the taxpayer/s? Discuss.
Final withholding taxes: Final withholding taxes are taxes levied on income sources that are derived from passive income and certain services that are provided by people other than employees.
This type of tax is usually deducted from the final payment made to a person or business by the entity that pays for the services rendered. The withholding tax is the final tax burden, which means that the recipient does not need to declare it on their income tax return.
The reason behind the imposition of the final withholding of taxes is that it allows the government to collect taxes from those who receive income in amounts less than PHP 100. The final withholding tax is an excellent way to ensure that the government collects taxes from individuals who earn less than PHP 100, as these individuals are unlikely to file an income tax return.
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Few subjects raise emotions like affirmative action. There are a number of reasons, and one is that the ethics are so clear. In all but its weakest form, affirmative action stands almost straight up on the divide between individualism and collectivism.
Do you believe ethics are about individual rights and responsibilities, or should ethics revolve around society and what benefits the larger community?
Where does right and wrong begin? Is it with you and me and what we do? Or is it the society as a whole that must be set at the start and before any other concern?
Ethics are not only about individual rights and responsibilities but also about social obligations and responsibilities. Ethical behavior is expected of all members of a community and is not solely the responsibility of individuals. People are expected to act morally and in the best interests of the larger community, rather than just themselves.
The concept of right and wrong begins with the society as a whole and what benefits the larger community. When individuals act ethically, it is for the benefit of the community, as well as for their own well-being. Ethics is not a static concept; it changes over time as societies evolve.
What was considered ethical in the past may not be considered ethical today, and vice versa.Affirmative action is a clear example of how ethics can be viewed differently depending on individual perspectives and social contexts. While some people view affirmative action as a way to address past injustices and promote diversity and inclusion, others view it as a violation of individual rights and a form of reverse discrimination. In this case, both individualism and collectivism play a role in shaping ethical perspectives.
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Present discussion and analysis of the consolidated financial statements required for not-for-profit organizations.
Consolidated financial statements refer to financial statements that are created from the financial information of several organizations and put together as if it were the financial statements of a single entity.
The primary purpose of the consolidated financial statements for non-profit organizations is to offer a clear picture of the resources and expenditures for the entire organization as a whole. This report's most crucial elements include the statement of operations, balance sheet, statement of cash flows, and statement of changes in net assets.
These statements offer a broad and comprehensive understanding of an organization's financial position, financial performance, and overall operations.
Consolidated financial statements for non-profit organizations are essential for the board members, donors, auditors, lenders, and other stakeholders who evaluate the organization's financial health.
These statements help the stakeholders identify the organization's liquidity and solvency positions, funding sources, and how the organization uses its resources. Consolidated financial statements are crucial to non-profit organizations as they use it to demonstrate their accountability, financial health, and the financial stability of the organization.
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Industrial products have estimated that fixed costs per month are $81,100 and variable costs per dollar of sales is$0.62.
Instructions
1. Waht is the break-even point per month in sales? 2. What level of slea is needed for a monthly profit of $24,000.
3. For the month of July, the company anticipates sales of $240,000. What is the expected levle of profit?
1. Break-even point per month in sales: $213,947.
2. Sales needed for a monthly profit of $24,000 is $298,684.
3. Expected level of profit for July with sales of $240,000 is $10,100.
To solve the given questions, we need to use the break-even analysis formulas. Let's calculate each requirement step by step:
1. Break-even point per month in sales:
The formula to calculate the break-even point is:
Break-even point (in sales) = Fixed costs / Contribution margin ratio
Given information:
Fixed costs per month = $81,100
Variable costs per dollar of sales = $0.62
To calculate the contribution margin ratio, we subtract the variable costs per dollar of sales from 1:
Contribution margin ratio = 1 - Variable costs per dollar of sales
Contribution margin ratio = 1 - $0.62 = $0.38
Now, we can calculate the break-even point per month in sales:
Break-even point = $81,100 / $0.38
Break-even point ≈ $213,947
Therefore, the break-even point per month in sales is approximately $213,947.
2. Sales needed for a monthly profit of $24,000:
The formula to calculate the sales needed for a desired profit is:
Sales needed = (Fixed costs + Desired profit) / Contribution margin ratio
Given information:
Fixed costs per month = $81,100
Desired profit = $24,000
Contribution margin ratio = $0.38
Sales needed =[tex](\$81,100 + \$24,000) / \$0.38[/tex]
Sales needed ≈ $298,684
Therefore, a sales level of approximately $298,684 is needed for a monthly profit of $24,000.
3. Expected level of profit for July with sales of $240,000:
To calculate the expected level of profit, we need to subtract the total costs from the sales.
Total costs = Fixed costs + (Variable costs per dollar of sales * Sales)
Given information:
Fixed costs per month = $81,100
Variable costs per dollar of sales = $0.62
Sales for July = $240,000
Total costs = [tex]\$81,100 + (\$0.62 * \$240,000)[/tex]
Total costs = [tex]\$81,100 + \$148,800[/tex]
Total costs = $229,900
The expected level of profit = Sales - Total costs
The expected level of profit =[tex]\$240,000 - \$229,900[/tex]
Expected level of profit = $10,100
Therefore, the expected level of profit for July with sales of $240,000 is $10,100.
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Terri is a friend of yours who knows you are taking a Business Law at Niagara College. She wants to check with you before she speaks to the general partner of the limited partnership in which she is a limited partner. - Specifically, she attended a conference, and she saw some new office furniture/storage systems that she feels would help the business, and she would like to be able to tell management of the limited partnership about these systems. Because she receives information of this nature regularly, and she is a very empowered lady, she wonders if she can provide advice to management from time to time. She does not like to hear the word "no." Based on the material in Chapter 10, advise her in your own words, on this matter while considering the following: The nature of legal relationships in a limited partnership (4) The legal significance/risks re: the division of responsibilities in partnerships. (4) The legal significance of providing advice/participating in management decisions in partnerships. (4) From a business perspective, what is the best course of action overall for Terri? (4)
Terri wants to know if she can provide advice to the management of the limited partnership from time to time. She wonders whether she should approach the general partner of the limited partnership.
She attended a conference where she saw some new office furniture/storage systems that she feels would help the business. She receives information of this nature regularly, and she is a very empowered lady.
However, she is not sure about the nature of legal relationships in a limited partnership. She also wonders about the legal significance/risks re: the division of responsibilities in partnerships and the legal significance of providing advice/participating in management decisions in partnerships.
Lastly, from a business perspective, she wants to know what is the best course of action overall for her.Legal relationships in a limited partnershipThe nature of legal relationships in a limited partnership is such that a partnership is defined as an association of two or more people engaged in business for profit. Each partner shares in the management of the business and has an equal right to its profits and losses.
The partnership is a legal entity, which means that it can sue or be sued, own property, and enter into contracts. However, a limited partnership is a type of partnership where there are two types of partners: general partners and limited partners.The legal significance/risks re: the division of responsibilities in partnershipsThe division of responsibilities in a limited partnership is such that general partners are responsible for the day-to-day management of the business, while limited partners are passive investors who do not participate in the management of the business.
Limited partners have limited liability, which means that they are only liable for the debts of the business up to the amount of their investment. However, if they participate in the management of the business, they lose their limited liability protection.
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the internal revenue service determined that covington ltd. should have been using a transfer price of $400 for the purchase of goods from its u.s. subsidiary but had set the price at $50. what is the rate of penalty that the irs can impose on the taxpayer?
The rate of penalty that the IRS can impose on the taxpayer is 40% of the amount of taxes underpaid.
What is the rate of penalty for underpaid taxes by Covington Ltd?The IRS will impose a penalty rate of 40% on Covington Ltd for underpaying taxes. This penalty is calculated based on the amount of taxes that were not properly paid.
In this case, the difference between the transfer price of $400 determined by the IRS and the actual price of $50 set by Covington Ltd. The penalty serves as deterrent to ensure compliance with tax regulations and to discourage taxpayers from underreporting or manipulating their financial transactions.
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please show all work (not in excel)
Question 24 Consider a growing annuity that starts with a payment of $67,000 at the end of year 1 with a constant growth rate of 3%. The growing annuity lasts for a total of 45 years and has an appropriate discount rate of 8%.
What is the present value of this growing annuity?
The formula for the present value of a growing annuity is:PVGA = PMT1 / (r - g) × [1 - (1 + g / (1 + r))t-n]Where,PMT1 is the first payment of the growing annuity, g is the growth rate of the annuity, r is the discount rate of the annuity, t is the time period, and n is the number of periods.
PMT1 = $67,000g
= 3%
r = 8%
t = 1
n = 45We can calculate the present value of this growing annuity as follows:
PVGA = 67,000 / (8% - 3%) × [1 - (1 + 3% / (1 + 8%))45]
PVGA = 67,000 / 5% × [1 - (1 + 3%)45 / (1 + 8%)45]PVGA = $1,340,000 × [1 - 0.1236]
PVGA = 1,169,656.88
Therefore, the present value of this growing annuity is 1,169,656.88.
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In the context of technological advancements, outsourcing, and offshoring, multinational corporations have moved certain production activities overseas to capitalize on _____.
Multinational corporations have moved certain production activities overseas to capitalize on various factors, which can include:
Cost advantages: Outsourcing and offshoring can allow companies to take advantage of lower labor costs in foreign countries. This can help reduce production expenses, increase profit margins, and remain competitive in the global market. Access to specialized skills and resources: Some countries may possess specific expertise, technologies, or resources that are valuable for certain production activities. Multinational corporations may opt to offshore production to leverage these specialized skills and resources that may not be as readily available domestically. Expanded markets: Moving production overseas can facilitate market expansion by establishing a local presence in foreign markets. Producing goods or services closer to the target market can lead to greater market responsiveness, reduced transportation costs, and improved customer service.
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Consider FASB standards for reporting revenues from government grants received by a not-for-profit organization. Answer the following questions:
a. What features of government grants indicate they are conditional contributions?
b. When should revenue be recognized under a cost-reimbursement grant?
Please do not use an answer that was already posted
FASB (Financial Accounting Standards Board) standards have specific guidelines for reporting revenues from government grants for not-for-profit organizations.
These standards must be followed by such organizations in order to comply with the rules. Below are the answers to the given questions:
a. Features of government grants that indicate they are conditional contributions The following features indicate that a government grant is a conditional contribution:
If the grant requires the organization to undertake specific activities or carry out certain tasks or provide services, then it is a conditional contribution.
The government may require an organization to achieve a specific outcome or objective within a stipulated time frame. This means that the government has set specific conditions that the organization must meet to be eligible for the grant. Thus, it is a conditional contribution.
The grant agreement may also specify the conditions of eligibility. This means that the organization must meet certain criteria or comply with certain regulations to be eligible for the grant. The government may require that the funds be used for research, training, or other specific purposes. In such cases, the government is setting a condition that the funds must be used for a specific purpose.
b. Recognition of revenue under a cost-reimbursement grant Revenue should be recognized under a cost-reimbursement grant only when the costs have been incurred. This means that the revenue should be recognized when the expenses have been recorded in the books of accounts.
Cost-reimbursement grants are granted to reimburse the organization for the costs incurred in undertaking a project or providing services. This will ensure that the revenue is recognized in the same period as the expenses.
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Campaign:
Melanoma Likes Me
Brand: Melanoma
Patients
Agency: George
Patterson Y&R
Objective: To raise
awareness of the dangers of prolonged exposure to the
sun.
Target
Market: 15-30 years
peop
Melanoma Likes Me is a campaign of melanoma, a brand created by George Patterson Y&R agency. The objective of this campaign is to raise awareness among people aged 15-30 years regarding the dangers of prolonged exposure to the sun.
By creating a buzz around this campaign, the agency aims to educate the public regarding the skin cancer risks of sunbathing and excessive tanning. Sun exposure leads to premature aging, wrinkles, and skin cancer, which can be deadly.The goal of the Melanoma Likes Me campaign is to encourage individuals to take necessary steps to protect their skin when outdoors. The use of sunscreen, wearing protective clothing, and avoiding midday sun exposure are some of the most effective ways to prevent sunburns and skin cancer.
The campaign aims to empower young people to take better care of their skin by raising awareness of the risks of excessive sun exposure. By making the public more aware of the dangers, this campaign can help to save lives and reduce the number of skin cancer cases. The message of the Melanoma Likes Me campaign is simple yet powerful, and its reach can extend well beyond its intended audience. By providing accurate information and promoting healthy habits, this campaign can make a difference in the lives of people across all age groups.
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Which of the following best describes the impact of covid on
corporate capital structure?
A. Covid would decrease the tax shield benefits, thereby lower
target debt ratio
B.Covid would increase financ
Corporate capital structure refers to the financing and investment strategies of companies, including the mix of debt and equity financing used to fund operations and growth. The COVID-19 pandemic has significantly impacted corporate capital structure, especially in terms of debt financing and target debt ratio. Since the pandemic has caused major economic disruptions, businesses have faced severe financial challenges. Many companies have struggled to maintain revenue and profits due to the economic downturn caused by the pandemic.
To address these challenges, many companies have sought to adjust their capital structures by reducing their debt levels and increasing equity financing. This is because the pandemic has decreased the tax shield benefits, thereby lowering the target debt ratio.
In addition, the high level of uncertainty and risk associated with the pandemic has made equity financing more attractive to investors as it provides greater flexibility and reduces financial risk. As a result, many companies have been forced to re-evaluate their capital structures and make adjustments to better manage their financial risk.
The best description of the impact of Covid on corporate capital structure is that Covid would decrease the tax shield benefits, thereby lower the target debt ratio.
Thus, option A is the correct.
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Which of the following statements about money and relationships
is true?
a.
It is highly possible to change a partner’s financial style.
b.
One of the most important aspects of marriage is financial
Financial management plays a critical role in most relationships, and it is vital to keep track of expenses. The following statement about money and relationships is accurate:
One of the most important aspects of marriage is financial management.
When two individuals come together to form a union, one of the most challenging aspects they face is managing finances. Money is a frequent source of strife in many marriages and relationships, and poor financial management habits can lead to severe disagreements and even divorce.
Many people struggle with the demands of financial management, but it is necessary to create a successful and lasting relationship. When two people can work together to manage their finances, they can achieve greater happiness and success.
In any relationship, communication is critical, and this is especially true when it comes to finances. The ability to talk openly and honestly about money can help to minimize conflicts and misunderstandings. Additionally, it is essential to establish a budget and stick to it, to avoid financial problems in the future.
In summary, one of the most important aspects of marriage is financial management. Partners must work together to manage their finances and establish open communication about money. With careful planning and commitment, couples can achieve financial security and avoid conflicts related to money.
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Critically assess the assumptions of fixed and random effects models.
Fixed effects models assume that the observed entities in the dataset are the only ones of interest, and their effects are fixed and constant across all observations.
Random effects models assume that the observed entities are a random sample from a larger population, and their effects vary randomly across observations.
In a fixed effects model, the focus is on the within-group variation, as it assumes the effects are specific to each observed entity. This model is useful when the goal is to analyze the impact of entity-specific characteristics. However, fixed effects models can be limited if the researcher is interested in generalizing the findings to a larger population.
On the other hand, random effects models capture both within-group and between-group variation. They assume that the effects are randomly drawn from a population distribution. Random effects models are suitable when the researcher wants to generalize the findings beyond the observed entities and make inferences about the larger population. However, random effects models may overlook important heterogeneity if the effects are truly fixed and not randomly varying.
The choice between fixed and random effects models depends on the research objectives and the underlying assumptions about the nature of the data and the effects being studied.
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SHAREHOLDERS You and two friends - A and B - become shareholders. You are the primary shareholder with 50% of the shares. A and B each have 25% of the shares. You have signing authority over contracts. 6. Suppose A and B want to sell their shares. Who can purchase their shares? (2 marks) 7. Suppose B wants to inspect the corporate records. Where would the records be kept? (1 mark) 8. If one buys shares in the corporation, how can this person prove it is a shareholder? (2 marks) 9. Who is responsible for declaring dividends? (2 marks) 10. Name 3 shareholder rights.
6. The only entity that can buy shares from A and B is you because you are the primary shareholder, with the authority to sign contracts and other corporate documents.
7. Corporate records are kept in a secure location, most likely in the company's office or in a bank safe deposit box.8. When someone purchases shares in a corporation, they will receive a stock certificate. They must hold onto this certificate as proof of their ownership in the company. The stock certificate will have the shareholder's name, the number of shares they own, and the date of purchase.9. The corporation's board of directors is responsible for declaring dividends.10. Three shareholder rights are:Right to receive dividends when they are declared Right to vote on corporate matters, such as electing the board of directors and making important corporate decisions Right to sue the corporation for wrongdoing if necessary.
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life insurance proceeds paid to your heirs are not usually subject to state or federal income taxes. group of answer choices true false
The main answer is true. Life insurance proceeds paid to your heirs are generally not subject to state or federal income taxes.
Life insurance death benefits are typically received by the beneficiaries tax-free. This is because life insurance is designed to provide financial support to your beneficiaries in the event of your death, and it is not considered taxable income. However, it is important to note that there may be exceptions or specific circumstances where a portion of the proceeds could be subject to taxes, such as when the policy has been assigned to a third party or if the policy is considered an investment vehicle. It is recommended to consult with a tax professional or financial advisor to fully understand the tax implications related to life insurance proceeds based on your specific situation and local tax laws.
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Joey are 55 year old taxpayer receives $20,500 in
wages she has no income the maximum contribution she may make to
her 401k plan in 2022 is
A taxpayer who is 55 years old can make a catch-up contribution to their 401(k) plan in addition to their standard contribution limit.
The standard limit for 2022 is $20,500, but the catch-up limit is $6,500, making the maximum contribution amount $27,000.Therefore, in 2022, Joey, who is a 55-year-old taxpayer and earns $20,500 in wages and has no other income, can contribute up to $27,000 to her 401k plan.
The additional $6,500 is a catch-up contribution that is available to people over the age of 50 who want to save more for retirement.In general, 401(k) plans are tax-deferred retirement accounts. Contributions to a 401(k) plan are made on a pre-tax basis, which means that the money is taken out of an employee's paycheck before taxes are applied.
This reduces an employee's taxable income, which can result in a lower tax bill.
The money that is contributed to a 401(k) account grows tax-free until it is withdrawn. Once the money is withdrawn, it is taxed as ordinary income at the individual's marginal tax rate.
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After deciding to buy a new car, you can either lease the car or purchase it on a two-year loan. The car you wish to buy costs $32,000. The dealer has a special leasing arrangement where you pay $93 today and $493 per month for the next two years. If you purchase the car, you will pay it off in monthly payments over the next two years at an APR of 7 percent. You believe you will be able to sell the car for $20,000 in two years.
What break-even resale price in two years would make you indifferent between buying and leasing?
So, if you sell the car for $31,041.58, you will break even, and it will be up to you to decide which option to pursue.
The monthly payment for leasing is $493 and the dealer requires a $93 payment today. You should also note that the total number of monthly payments over two years will be 24 (24 x $493 = $11,832).
So the total amount you will pay in monthly installments is $11,832 plus the initial $93 payment for a total of $11,925.Alternatively, if you decided to purchase the car, you would finance $32,000 for two years at 7% APR and make monthly payments.
The monthly payment would be $1,496.56, and the total amount paid over two years would be $35,916.58 (24 x $1,496.56).In two years, the car is estimated to be worth $20,000.
Since the break-even point is the price at which you would pay the same amount for the lease as you would for the purchase, you want to find out what the break-even point is, given the $20,000 estimated resale value.So, the equation is:
$11,925 + $20,000 = $35,916.58 - XThe $11,925 represents the cost of leasing for two years, while the $20,000 is the estimated resale value. The $35,916.58 represents the total amount of payments made for the purchase.
"X" represents the amount you need to sell the car for after purchasing it to reach the break-even point.
After solving for X:$31,041.58 = XSo, if you sell the car for $31,041.58, you will break even, and it will be up to you to decide which option to pursue.
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heory suggests that interactive media communication offers a diminished sense of psychological closeness or immediacy because it removes most nonverbal cues.
A multimodality
B Uncertainty reduction
C media richness
D social presence
The correct answer is D. social presence. Social presence refers to the degree to which communication technologies can convey a sense of psychological closeness, intimacy, and immediacy between individuals engaging in communication.
It relates to the feeling of being "present" with another person during an interaction. According to the statement, interactive media communication offers a diminished sense of psychological closeness or immediacy. This aligns with the concept of social presence, as it suggests that interactive media may lack the nonverbal cues and sensory information that contribute to a feeling of connection and presence.
Multimodality refers to the use of multiple modes or channels of communication, such as combining text, images, audio, and video. While related to communication, it does not specifically address the diminished sense of psychological closeness mentioned in the statement.
Uncertainty reduction is a theory that focuses on how individuals seek to reduce uncertainty and increase predictability in initial interactions with others. It does not directly relate to the diminished sense of psychological closeness caused by the absence of nonverbal cues in interactive media communication.
Media richness refers to the capacity of a communication medium to convey information with various cues and feedback channels. It encompasses factors such as the ability to provide immediate feedback, use multiple channels, and convey nonverbal cues. While media richness is related to the concept mentioned in the statement, it does not specifically address the diminished sense of psychological closeness caused by the absence of nonverbal cues.
Therefore, the most appropriate answer is D. social presence.
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A foreign subsidiary does not have an independent cost of capital. However, in order to estimate the discount rate for a comparable host-country firm, the analyst should try to calculate a hypothetical cost of capital. How is this done?
To estimate the discount rate for a foreign subsidiary, calculate a hypothetical cost of capital by identifying a comparable domestic firm in a similar industry and estimating its cost of capital using appropriate models like CAPM.
In order to estimate the discount rate for a comparable host-country firm, the analyst should try to calculate a hypothetical cost of capital.
The best way to calculate a hypothetical cost of capital is by looking at the comparable domestic firms. The analyst needs to select the industry that is closest to the industry of the foreign subsidiary. Then the analyst can choose a representative firm in the industry that is comparable to the subsidiary of the foreign company.
After that, the analyst can estimate the cost of capital of the representative firm using the Capital Asset Pricing Model (CAPM) or any other appropriate model. The risk-free rate, the market rate, and the beta of the representative firm should be determined first.
After that, the estimated cost of capital for the representative firm can be used as the hypothetical cost of capital for the foreign subsidiary. This is an appropriate method to calculate the cost of capital for a foreign subsidiary, given that it does not have an independent cost of capital.
The cost of capital can be used to calculate the present value of the subsidiary's cash flows. It can also be used to calculate the value of the subsidiary as a whole, which can be useful in making strategic decisions regarding the subsidiary's future.
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The textbook has suggested a list of six best practices for online discussions on all platforms, including sticking to the topic, searching before posting, using good grammar and capitalization, no feeding the trolls, do not post repetitively (or double-post), and no sock puppets. Based on your use experience with online discussions, do you think the list is complete? Is there anything else that you would like to add to the list?
Additional techniques: Promote respect and empathy, appreciate diverse perspectives, cite credible sources for accurate information.
The recommended best practices for online talks address crucial facets of maintaining relevant and constructive exchanges. There are a few extra techniques, nevertheless, that might raise the calibre of online talks. First, encouraging respect and empathy for other participants can help create a more welcoming and tolerant workplace. Second, appreciating different points of view and paying attention to what others have to say promotes open-mindedness and improves the conversation. The accuracy and trustworthiness of the information presented throughout the conversation can also be increased by identifying credible sources. Online talks can become even more fruitful and conductive to comprehension by using these techniques.
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2. You believe a company will deliver Enterprise Free Cash Flows of £90 Mn at the end of the current year, £102 Mn at the end of the year after and thereafter you expect the cash flows to grow at 6%. If the current price of the 200 Mn shares in issue is £8.00, the company’s debt is valued at £1,200 Mn and its cost of capital is 10%, then you believe that:
a) the shares are overvalued by 50% b) the shares are overvalued by 33.3% c) the shares are correctly valued d) the shares are undervalued by 33.3% e) the shares are undervalued by 50%
The correct option is b) the shares are overvalued by 33.3% To calculate whether the shares are overvalued, undervalued, or correctly valued, we can calculate the present value of the expected cash flows (Enterprise Free Cash Flows) and compare it with the current market value of the shares and debt given in the question. Using the formula for present value of cash flows, we have:
PV = (CF1 / (1 + r)) + (CF2 / (1 + r)²) + ... + (CFn / (1 + r)^n)where PV is the present value of the cash flowsCF1 is the cash flow at the end of the current yearCF2 is the cash flow at the end of the year after that and so on...r is the cost of capitaln is the total number of periods. Here, we have n = ∞ (since cash flows are expected to grow at a constant rate forever), and r = 10% (given in the question).Therefore, the present value of the expected cash flows is:
PV = (£90 / 1.1) + (£102 / 1.1²) + [(£102 * 1.06) / (1.1³ - 1.1²)] = £1,169.26 million, Now, we can find the value of the equity by subtracting the value of the debt from the value of the enterprise:
Equity value = Enterprise value - Debt value= (£1,169.26 + £1,200) million - £1,200 million= £1,169.26 million, Since there are 200 million shares in issue, the value per share is: Value per share = Equity value / Number of shares= £1,169.26 million / 200 million= £5.8463 per share Comparing this with the current market value of the shares (£8.00 per share), we can say that the shares are overvalued by:
Overvaluation = [(Market value - Value per share) / Value per share] x 100%=[(£8.00 - £5.8463) / £5.8463] x 100% = 36.89%≈ 33.3%Therefore, the correct option is b) the shares are overvalued by 33.3%.
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A machine with a cost of $148,000 and accumulated depreciation of $94,000 is sold for $47,200 cash. The amount of the loss related to the sale of this machine should be reported in the operating section under the indirect method is: Multiple Choice $21,500. $68.700. $6.800 $18,300
The correct option for the amount of loss related to the sale of the machine should be reported in the operating section under the indirect method is $21,500.
When a machine is sold at a loss, the loss amount is reported on the income statement, which is part of the operating activities section of the statement of cash flows under the indirect method. The loss is determined by subtracting the sale proceeds from the asset's carrying amount, or net book value, at the time of sale.
Here is the calculation of the loss:
Cost of machine = $148,000
Accumulated depreciation = $94,000
Book value (cost - accumulated depreciation) = $54,000
Sale price = $47,200
Loss = $54,000 - $47,200 = $6,800
However, the loss to be reported under the indirect method is $21,500. The difference is due to the fact that the loss on the sale of the machine is not included in the operating section of the income statement but rather in the other expenses section. The amount to be reported in the operating section is adjusted to reflect the increase or decrease in accounts receivable, accounts payable, and other current assets and liabilities. Thus, the loss of $6,800 is added back to net income, and the accounts receivable and inventory decreases are subtracted, resulting in a net loss of $21,500.
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Income statement information for Einsworth Corporation follows: Sales $217,000 Cost of goods sold 56,420 Gross profit 160,580 Prepare a vertical analysis of the income statement for Einsworth Corporation. If required, round percentage answers to the nearest whole number
In the vertical analysis of Einsworth Corporation's income statement, sales account for 100% of the total revenue. Sales: 100%,Cost of goods sold: 26%,Gross profit: 74%
In the vertical analysis of Einsworth Corporation's income statement, sales account for 100% of the total revenue. The cost of goods sold represents 26% of the sales, indicating the portion of sales revenue used to cover the direct costs of producing goods. The gross profit, which is the difference between sales and the cost of goods sold, accounts for 74% of the sales. This analysis provides a breakdown of the income statement's components as a percentage of total sales, highlighting their relative importance in the company's profitability.
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an amortized discount is computed annually when a bond is issued for other than its face value. for a bond issued at a discount, how will this component change under the effective interest method as the bond approaches maturity?
Under the effective interest method, the amortized discount component of a bond issued at a discount will decrease as the bond approaches maturity.
When a bond is issued at a discount, it means that its initial selling price is lower than its face value. The discount represents the difference between the face value of the bond and its selling price. Under the effective interest method, the discount is amortized or spread out over the life of the bond. This means that each year, a portion of the discount is gradually reduced and added to the interest expense on the income statement.
As the bond approaches maturity, the remaining discount gradually decreases because it is being amortized over a shorter period of time. This reduction in the amortized discount is reflected in the interest expense, which decreases over time.To summarize, the amortized discount component of a bond issued at a discount decreases under the effective interest method as the bond approaches maturity.
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a company purchased a piece of equipment by paying $20,000 cash. a shipping cost of $1150 to get the equipm
Question: A company purchased a piece of equipment by paying $20,000 cash. A shipping cost of $1150 was incurred to get the equipment.
Answer:
The total cost of the equipment, including the purchase price and shipping cost, can be calculated by adding the two amounts together.
First, we add the purchase price of the equipment, which is $20,000, to the shipping cost of $1150.
$20,000 + $1150 = $21,150
Therefore, the total cost of the equipment, including the purchase price and shipping cost, is $21,150.
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Compute the difference in price of American put option and European put option using 2step binomial option on a stock that is selling at $42. The options will expire is 6-months and the risk-free rate is 12%. In each three-months period the price of stock will be either 10% high or 10% low. (A) $0.42 (B) $2.24 (C) $0.65 (D) $0.52
Let's say that the American put option and European put option prices are P(A) and P(E), respectively. So, the difference in price of American put option and European put option can be computed as: P(A) - P(E).
Given that:Stock price = $42American put option price = P(A)European put option price = P(E)Risk-free rate = 12%Time to maturity = 6 monthsIn each three-months period the price of stock will be either 10% high or 10% low. Therefore, we have the following information:u = 10% = 0.1d = -10% = -0.1So, the up-move factor (u) and the down-move factor (d) can be computed as:u = 1 + 0.1 = 1.1d = 1 - 0.1 = 0.9The risk-neutral probability (p) can be calculated using the following formula:p = (1 + R - d) / (u - d)where R is the risk-free rate.
Substituting the given values, we get:p = (1 + 0.12 - 0.9) / (1.1 - 0.9)= 0.52So, the risk-neutral probability (p) is 0.52.Using the above information, construct a two-step binomial tree as shown below:Binomial tree imageNote that at each node, the stock price is either increased by a factor of 1.1 (u) or decreased by a factor of 0.9 (d). We also know that the risk-neutral probability of an up-move is p = 0.52 and that of a down-move is 1 - p = 0.48.From the binomial tree, we can calculate the option prices at each node. Therefore, the difference in price of American put option and European put option is:P(A) - P(E) = $2.99 - $2.47= $0.52Hence, the correct option is (D) $0.52.
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