The optimal cash replenishment level is $1.5 million.
Reese's Resources faces a smooth annual demand for cash of $15 million, incurs transaction costs of $125 every time they sell marketable securities, and can earn 4.5 percent on their marketable securities.
Optimal cash replenishment level:To find the optimal cash replenishment level, we can use the Miller-Orr model.
Miller-Orr model is used to determine the optimal cash balance of a company to minimize the cost associated with holding or having a shortage of cash.
It is designed to help companies determine when they should transfer cash in and out of their account to keep the account balance close to a specified target.
The Miller-Orr model considers two costs: the opportunity cost of holding cash and the transaction cost of transferring money from one account to another.
Lower limit = 3 × T × σ / 4 × C = 3 × 10 × 0.5 / 4 × 125 = $0.75 millionUpper limit = 3 × Lower Limit = 3 × 0.75 = $2.25 millionThe optimal cash balance is the average of the upper limit and the lower limit, which is ($0.75 million + $2.25 million) / 2 = $1.5 million.
The company should try to keep their cash balance around $1.5 million to minimize the cost associated with holding or having a shortage of cash.
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Assume the following taxpayer information: The taxpayer is a South African manufacturing company (not a small business corporation as defined) with a 31 March 2023 year of assessment. Calculate the recoupment on the disposal of the machine BELOW. Information pertaining to manufacturing machine: Events Sold Purchased Tax value at date of sale Date 30 December 2022 1 August 2020 Amount R 605 000 R 490 000 R 98 000
The depreciation allowances allowed in prior years of R533 665 (recoupment amount)The recoupment amount is included in taxable income.
An asset disposed of in the year of assessment (2022) for proceeds exceeding its tax written down value (TWDV) triggers a recoupment of depreciation allowances. The recoupment is calculated by deducting the TWDV from the proceeds, but limited to the sum of depreciation allowances allowed in respect of the asset less any amount that has been recouped in a prior year.
Manufacturing machine sold R605 000 Purchased R490 000 Tax value at date of sale R98 000Calculate recoupment on the disposal of the machine;
The machine's TWDV is R71 335; this is calculated by taking the original cost of R490 000 less the depreciation allowances allowed in prior years of R34 665.R605 000 (proceeds) - R71 335 (TWDV) = R533 665 (recoupment amount)The recoupment amount is included in taxable income.
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QUESTION 4: PRICING Based on your knowledge of Pricing Strategies, recommend a pricing mix that has the best pricing mix ice Mix 1: • Price MX 2 se Sale Price: $19,500 id-tier Sale Price: $24,55 lly-Loaded Sale Price: 4,999 Price Mix 2: Base Sale Price: $20,000 Mid-tier Sale Price: $25,000 Fully-Loaded Sale Price: $30,000 Price Mix 3: Base Sale Price: $22,000 Mid-tier Sale Price: $24,00 Fully-Loaded Sale Price: $28,999
Price Mix 2 is recommended as the best pricing mix strategy. It includes three price tiers: a base sale price of $20,000, a mid-tier sale price of $25,000, and a fully-loaded sale price of $30,000.
The best pricing mix
This pricing mix caters to different customer segments by offering varying levels of features and benefits at different price points. It allows customers to choose a product based on their budget and desired features, increasing the likelihood of conversion and customer satisfaction.
The balanced pricing structure provides options for both price-sensitive customers and those willing to pay more for additional features. Overall, Price Mix 2 maximizes revenue potential by attracting a wider customer base and potentially facilitating upselling opportunities.
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When an investor is not interested in owning their own business, why do they need to understand entrepreneurship?
Understanding entrepreneurship is important for investors, as it helps them evaluate investment opportunities and make informed decisions.
Why an Investor Need to Understand Entrepreneurship?Even if an investor is not interested in owning their own business, understanding entrepreneurship is still essential. It allows investors to assess the potential of entrepreneurial ventures they may invest in, evaluate the skills and capabilities of entrepreneurs, and make informed investment decisions.
Understanding entrepreneurship helps investors navigate the business landscape, identify innovative and profitable opportunities, and comprehend the risks and challenges associated with entrepreneurial ventures, thereby maximizing their chances of making successful investments.
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Teamwork Skills
And what you can learn from it
Write a 250 word
Individuals that participate in teamwork gain a variety of essential skills, including improved communication, problem-solving, interpersonal, and leadership qualities. These abilities are applicable in many areas of life and may significantly contribute to personal and professional success.
Firstly, teamwork enhances communication skills. Working in a team requires effective and efficient communication to convey ideas, share information, and resolve conflicts. By engaging in collaborative projects, individuals learn to express their thoughts clearly, actively listen to others, and adapt their communication style to different team members. Secondly, teamwork cultivates problem-solving abilities. Teams often encounter challenges and obstacles that require creative and innovative solutions. Through collaboration, individuals learn to analyze problems from different perspectives, brainstorm ideas, and collectively develop strategies to overcome obstacles. This fosters critical thinking, adaptability, and resilience.
Thirdly, teamwork promotes interpersonal skills. Working closely with diverse team members helps individuals develop empathy, understanding, and respect for others' perspectives, backgrounds, and work styles. This leads to enhanced collaboration, effective conflict resolution, and the ability to build strong relationships.
Lastly, teamwork fosters leadership skills. Individuals have the opportunity to take on leadership roles within a team, allowing them to develop skills such as delegation, motivation, and decision-making. They learn to inspire and guide team members towards common goals, fostering a sense of accountability and achievement.
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onsumer Economics: Tutorial
Part E
At what wage rate will there be excess labor supplied in the market?
Excess labor supply in the market occurs when the wage rate is above the equilibrium level.
Consumer economics refers to the study of how individuals and households make decisions about what they consume, how they save and invest, and how they allocate their resources.The wage rate at which there will be an excess supply of labor in the market is known as the equilibrium wage rate. This means that the quantity of labor demanded equals the quantity of labor supplied.
At a wage rate above the equilibrium level, there is a surplus of labor available as the quantity supplied of labor is greater than the quantity demanded for labor. On the other hand, at a wage rate below the equilibrium level, there is a shortage of labor as the quantity demanded of labor is greater than the quantity supplied for labor. Thus, the equilibrium wage rate is essential to maintain stability in the labor market.The equilibrium wage rate is determined by the forces of demand and supply.
The demand for labor arises from the demand for goods and services that labor produces. The supply of labor arises from the willingness of people to work at a particular wage rate. The equilibrium wage rate is the wage rate where the quantity of labor demanded is equal to the quantity of labor supplied in the market.Therefore, excess labor supply in the market occurs when the wage rate is above the equilibrium level.
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