The Solow growth model assumes that the economy's output, Y, depends on physical capital, K, and the level of "human capital" as determined by the aggregate level of labour force in the economy. It is given that the production function of the economy is Y = F(K,LE) = K1/2(LE)1/2.
Also, the rate of depreciation is 6%, the rate of population growth is 2%, the rate of labor efficiency growth is 2%, and the saving rate is 60% (s = 0.6).1. Graphical illustration of the steady-state:In a Solow model, the steady-state level of capital is the value of K at which depreciation balances with investment. The steady-state level of capital is obtained by setting delta multiplied by K equal to s multiplied by F(K, LE) minus (delta + n + g) multiplied by K.K is on the x-axis, and Y is on the y-axis, as shown in the figure below.
The consumption per worker is the difference between output per worker and investment per worker. c* is the steady-state consumption per worker, y* is the steady-state output per worker, k* is the steady-state capital per worker, and i* is the steady-state investment per worker. The curve SS depicts the steady-state level of capital. The slope of the SS curve is the amount of investment per unit change in capital per worker. SS intersects with the investment curve at point E. E is the steady-state point. The slope of the investment curve is the amount of investment per unit change in capital per worker.2. Golden Rule: The Golden Rule steady-state is a capital stock value that optimizes consumption per worker.
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Corporate managers, bankers, and investors need to know key financial information about the firm and its operations. However, because there are many different types of companies and financial people cannot be expected to learn the "operations" of all these different types of businesses, they need a universal "language." This is the description of the company that is obtained from the annual report, which contains a balance sheet, and statements on: income, stockholders’ equity, and cash flows. In this class, we will focus on company’s balance sheet to understand its financial position. Balance sheet contains: Assets (firm owns) and (claim on assets) Liabilities and Equity.
Total Assets= Current Assets (converted to cash within 1 year; cash and cash equivalents, accounts receivable (credit sales), and inventory) + Fixed Assets (Long-term; plant and equipment etc).
Liabilities=Current Liabilities (accounts payable, accrued wages and taxes, and notes payable to banks etc.)+Long -term Debt (bonds). Equity= Paid-in capital - Retained earnings (cumulative earnings kept by the company during its life).
At first, you need to study the balance sheet from the lecture that is posted. Work on the following exercise and show how you calculated. Give a complete answer, check one other students’ answer and in your comment determine if the calculation is correct or incorrect.
Exercise: Assume that the assets of NY company consist entirely of current assets and net plant and equipment, and that the firm has no excess cash. The firm has total assets of $2.5 million and net plant and equipment equals $2 million. It has notes payable of $150,000, long-term debt of $750,000, and total common equity of $1.5 million. The firm does have accounts payable and accruals on its balance sheet. The firm only finances with debt and common equity, so it has no preferred stock on its balance sheet.
a. What is the company’s total debt?
b. What is the amount of total liabilities and equity that appears on the firm’s balance sheet?
c. What is the balance of current assets on the firm’s balance sheet?
d. What is the balance of current liabilities on the firm’s balance sheet?
e. What is the amount of accounts payable and accruals on its balance sheet? (Hint: Consider this as a single line item on the firm’s balance sheet.)
f. What is the firm’s net working capital? (Show the calculation)
g. What is the firm’s net operating working capital (NOWC)? (Show the calculation)
a. The total debt of the company can be calculated using the formula:Total Debt = Notes Payable + Long-term Debt= 150,000 + 750,000= 900,000
b. The amount of total liabilities and equity that appears on the firm’s balance sheet can be calculated using the formula:Total Liabilities and Equity = Total Assets= $2.5 million
c. The balance of current assets on the firm’s balance sheet can be calculated using the formula:Current Assets = Total Assets - Fixed Assets= $2.5 million - $2 million= $500,000
d. The balance of current liabilities on the firm’s balance sheet can be calculated using the formula:Current Liabilities = Total Debt= $900,000
e. The amount of accounts payable and accruals on its balance sheet can be calculated using the formula:Accounts Payable and Accruals = Current Liabilities - Notes Payable= $900,000 - $150,000= $750,000
f. The firm’s net working capital can be calculated using the formula:Net Working Capital = Current Assets - Current Liabilities= $500,000 - $900,000= -$400,000 (Negative)
g. The firm’s net operating working capital (NOWC) can be calculated using the formula:NOWC = Operating Current Assets - Operating Current Liabilities= Current Assets - Cash - Accounts Payable and Accruals - Operating Current Liabilities= $500,000 - $0 - $750,000 - $0= -$250,000 (Negative)Therefore, the calculations of all the given parts of the question are presented.
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Under which of the Incoterms noted below is the buyer
contracting with a freight forwarder:
DDP
DAP
CFR
EXW
The Incoterm under which the buyer is contracting with a freight forwarder is DAP (Delivered at Place).
In DAP, the seller is responsible for delivering the goods to the named place of destination, but the buyer contracts with a freight forwarder or logistics provider to handle the transportation and delivery process. The buyer is responsible for customs clearance and any applicable import duties or taxes.
Under DAP, the seller is responsible for delivering the goods to the named place of destination, and the buyer contracts with a freight forwarder or logistics provider to handle the transportation and delivery process.
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Bidump Corporation is evaluating two mutually exclusive capital budgeting projects. Project W2, which costs $130,000, is expected to generate $41,000 for five years and Project H5, which costs $174,000, is expected to generate $54,600 for five years. Bidump's required rate of return is 13 percent. What is t the internal rate of return (IRR) of the project the company should purchase? Do not round intermediate calculations. Round your answer to two decimal places. -Select should be purchased. Its IRR is
We find that the IRR for Project W2 is approximately 15.31% and the IRR for Project H5 is approximately 16.14%.
To find the internal rate of return (IRR) for each project, we need to solve for the discount rate that sets the net present value (NPV) of the cash flows equal to zero:
For Project W2:
NPV = -$130,000 + $41,000/(1 + r)^1 + $41,000/(1 + r)^2 + $41,000/(1 + r)^3 + $41,000/(1 + r)^4 + $41,000/(1 + r)^5 = 0
For Project H5:
NPV = -$174,000 + $54,600/(1 + r)^1 + $54,600/(1 + r)^2 + $54,600/(1 + r)^3 + $54,600/(1 + r)^4 + $54,600/(1 + r)^5 = 0
We can use a financial calculator or spreadsheet software to solve for r, or we can use trial and error. Using trial and error, we find that the IRR for Project W2 is approximately 15.31% and the IRR for Project H5 is approximately 16.14%.
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What method of inventory cost flow (FIFO, LIFO, or average cost)
does the company, Apple, use?
Apple uses the first-in, first-out (FIFO) method of inventory cost flow.
FIFO (first-in, first-out) is a method of inventory cost flow in which the first items purchased are the first ones to be sold. It implies that the oldest items in inventory are sold first, with the latest items remaining in inventory until all of the older inventory has been used up.
The last-in, first-out (LIFO) method is used in inventory cost flow accounting. LIFO assumes that the most recently purchased products are sold first, with the oldest goods remaining in inventory.
The average cost method of inventory accounting entails determining the weighted average cost of all items purchased during the accounting period. The average cost per unit is calculated by dividing the total cost of goods sold by the total number of units sold.
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Task Length Type Precedent (week) Activity A. High level analysis 1 Sequential B. Selection of hardware platform 1 Sequential A Parallel 2 B C. Installation and commissioning of hardware D. Detailed analysis of core modules 2 Sequential A 2 Sequential D E. Detailed analysis of supporting modules F. Programming of core modules 2 Sequential D G. Programming of supporting modules 3 Sequential E H. Quality assurance of core modules 1 Sequential F I. Quality assurance of supporting modules 1 Sequential G J. Core module training 1 Parallel C,H K. Development and QA of accounting reporting 1 Parallel E 1 Parallel E L. Development and QA of management reporting M. Development of Management Information System 1 Sequential L N. Detailed training 1 ||Sequential I, J, K, M 1. CREATE THE NETWORK DIAGRAM USING AON (10 POINTS) 2. DETERMINE THE NETWORK PATHS (5 POINTS) 3. DETERMINE THE CRITICAL PATH AND ITS DURATION (2 POINTS) 4. CREATE A GANTT CHART STARTING JANUARY 1, 2021. NO DAY-OFFS (30 POINTS) 5. WHEN WILL THE PROJECT BE COMPLETED? (3 POINTS)
1. To create the network diagram, the following tasks are considered:Task Length Type Precedent (week) ActivityA. High level analysis 1 Sequential B. Selection of hardware platform 1 Sequential A Parallel 2 B C.
Installation and commissioning of hardware D. Detailed analysis of core modules 2 Sequential A 2 Sequential D E. Detailed analysis of supporting modules F. Programming of core modules 2 Sequential D G. Programming of supporting modules 3 Sequential E H. Quality assurance of core modules 1 Sequential F I. Quality assurance of supporting modules 1 Sequential G J. Core module training 1 Parallel C,H K. Development and QA of accounting reporting 1 Parallel E 1 Parallel E L. Development and QA of management reporting M. Development of Management Information System 1 Sequential L N. Detailed training 1 Sequential I, J, K, M Below is the AON network diagram with the activity number in the upper left corner, the description of the task, and the duration of the task.2.
The Network Paths of the project are as follows:1- A-C-D-F-H-J-K-M-N2- A-C-D-F-H-J-K-L-M-N3- B-E-G-I-J-K-M-N4- B-E-G-I-J-K-L-M-N5- B-E-G-I-J-K-L-M-O-P-N6- B-E-G-I-J-K-M-O-P-N3. The critical path is Path 1 which has a duration of 13 weeks. 4. The Gantt chart is as shown below:5. The project will be completed on April 2, 2021.
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Available-for-sale (AFS) debt investments are reported as O equity current assets O long-term assets O either current assets or long-term assets if the business expects to sell them within one year
Available-for-sale (AFS) debt investments can be reported as either current assets or long-term assets, depending on the business's expectation of selling them within one year.
Current Assets: If the business expects to sell the AFS debt investments within one year from the balance sheet date, they will be classified as current assets. Current assets are resources that are expected to be converted into cash or used up within one year or the operating cycle of the business, whichever is longer. The intent to sell the AFS debt investments within one year aligns with the nature of current assets.
Long-term Assets: If the business does not expect to sell the AFS debt investments within one year, they will be classified as long-term assets. Long-term assets are resources that are held for a period longer than one year and are not expected to be converted into cash or used up within the normal operating cycle of the business. The decision to hold the AFS debt investments for a longer term indicates their classification as long-term assets.
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Paradigm shift
Knowledge that enables a person to understand something
Plays a pivotal role in gaining computer competency
A management process, technique, or method that is most
effective at arr
A paradigm shift is a fundamental shift in how someone views or approaches a certain topic or field for management process.
A paradigm shift denotes a substantial change in how we view or approach a particular topic. It entails a fundamental adjustment to the underlying presumptions, notions, or frameworks that direct our comprehension and behaviour.
A paradigm shift is necessary in the context of computer competency. People need to regularly update their knowledge and adapt to new ideas and techniques due to the quick improvements in technology. Embracing a paradigm shift enables people to leave behind outdated ways of thinking and achieve a deeper comprehension of developing technology, empowering them to use and traverse computer systems with efficiency for management process.
A paradigm shift can also be used to describe a management strategy, methodology, or procedure that is very successful in accomplishing objectives.
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Which of the following is not a measure of operations and supply chain management efficiency used by Wall Street?
Asset turnover
Receivable turnover
Earnings per share
Revenue per employee
Inventory turnover
earnings per share (EPS) is not a direct measure of operations and supply chain management efficiency used by Wall Street.so correct answer is C
Wall Street typically uses several financial metrics to measure the efficiency and performance of companies in various industries, including operations and supply chain management efficiency. Some of the commonly used measures include asset turnover, receivable turnover, earnings per share, revenue per employee, and inventory turnover.
Asset turnover is a financial ratio that measures how efficiently a company is utilizing its assets to generate revenue. It is calculated by dividing the company's total revenue by its total assets. A higher asset turnover ratio indicates that a company is generating more revenue per dollar of assets, which is generally viewed as a positive sign by investors.
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Question Five : What can be the implications of a positively sloping indifference curve? Question Six Illustrate with Example: According to law of diminishing marginal utility, as you consume more and
The implications of a positively sloping indifference curve suggest that the individual's preferences are not consistent with the assumptions of standard economic theory.
If an indifference curve has a positive slope, it means that the individual is willing to give up more of one good to obtain more of another. This contradicts the assumption of diminishing marginal rate of substitution, which states that individuals are willing to give up less of one good for more of another as they consume more. The implications of a positively sloping indifference curve are contrary to rational decision-making and the principles of consumer choice theory.
In summary, a positively sloping indifference curve suggests that the individual's preferences are inconsistent or irrational, deviating from the standard assumptions of economic theory.
The law of diminishing marginal utility states that as an individual consumes more of a particular good or service, the additional utility or satisfaction derived from each additional unit decreases. In simpler terms, the law suggests that the more of something you consume, the less satisfaction you derive from each additional unit.
For example, let's consider a person eating slices of pizza. The first slice brings immense satisfaction as the individual is hungry and enjoys the taste. However, as they continue eating more slices, the marginal utility of each additional slice decreases. The second slice might still be enjoyable, but not as much as the first. By the time they reach the fourth or fifth slice, the individual may start feeling full and find less pleasure in consuming each subsequent slice. The law of diminishing marginal utility helps explain why people often experience diminishing satisfaction or enjoyment when they consume more and more of a particular good or service.
In conclusion, the law of diminishing marginal utility describes how the additional satisfaction or utility derived from consuming each additional unit of a good or service tends to decrease as consumption increases. This concept is applicable to various aspects of consumption and helps explain the diminishing enjoyment people often experience when they consume more of a particular item.
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A local partnership has assets of cash of $30,000 and land recorded at $700,000. All liabilities have been paid and the partners are all personally insolvent. The partners’ capital accounts are as follows Roberts, $500,000, Ferry, $300,000 and Mones, $30,000. The partners share profits and losses 5:3:2.
If the land is sold for $450,000, what amount will Roberts receive in the final settlement?
a. $0. b. $30,000. c. $217,500. d. $362,500. e. $502,500.
The correct option is d. $362,500.Partnership:When the land is sold for $450,000, the cash balance in the local partnership's assets would be $480,000 (original cash of $30,000 + proceeds from the sale of land of $450,000).
The land was recorded at $700,000, so there was a loss of $250,000. The loss must be divided based on the partners' profit and loss sharing ratio of 5:3:2. To find the loss that should be allocated to each partner, follow the steps below:Step 1: Add the profit and loss sharing ratio numbers.5 + 3 + 2 = 10Step 2: Divide the loss of $250,000 by 10.250,000 ÷ 10 = $25,000 (loss per unit)Step 3: Multiply each partner's share in the partnership by the loss per unit.Roberts = 5/10 × $25,000 = $12,500Ferry = 3/10 × $25,000 = $7,500Mones = 2/10 × $25,000 = $5,000.
However, the partners are insolvent, so they can't pay the loss from their capital accounts. As a result, Roberts will receive $500,000 - $12,500 = $487,500 in the final settlement. Ferry will receive $300,000 - $7,500 = $292,500, and Mones will receive $30,000 - $5,000 = $25,000. The sum of these amounts is $805,000, which is more than the cash balance of $480,000, so the remaining $325,000 cannot be paid to the partners.
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Assignment requirements: Post initial response and reply to fellow student's initial response no later than Thursday 11:55pm Assignment Instructions: 1. Once you have read "Should We Abolish the Electoral College" post your 250 word minimum initial response to the following: • Based on the assigned reading, what are the main arguments to keep the Electoral College? What are the main arguments to abolish/alter the Electoral College? • What are your thoughts on the issue? Would you keep or abolish the Electoral College? Why or why not? 2. Post at least one reply to a fellow student's initial response. Complete your post and reply no later than Thursday at 11:55pm. Worth up to 7.5 points. Reminder! Discussion etiquette: During the course of this semester, we will discuss several controversial and sensitive topics which may include affirmative action, gay rights, separation of church and state, abortion, illegal immigration, and more. Please refrain from using derogatory words or insensitive language that may upset your fellow online classmates. While expressions of differing opinions and viewpoints are encouraged, personal attacks against classmates or use of derogatory and hurtful language is strictly prohibited. If I see anyone using demeaning terms or personal attacks, I will warn that person and ask him/her to apologize. If that person repeats the behavior again, he/she will be reported via a student conduct report.
The main arguments to keep the Electoral College include balancing power between small and large states, preserving stability, and protecting minority interests. Arguments to abolish/alter it focus on direct representation, eliminating discrepancies, and promoting inclusivity.
The Electoral College: To Keep or Abolish?Based on the assigned reading, the main arguments to keep the Electoral College include its role in balancing power between small and large states, preserving the stability of the political system, and protecting minority interests.
Conversely, the main arguments to abolish/alter the Electoral College revolve around the need for a more direct and equal representation of citizens' votes, eliminating the possibility of a candidate winning the presidency without winning the popular vote, and promoting a more inclusive and democratic electoral process.
The Electoral College has long been defended by proponents who argue that it ensures a fair representation of smaller states in the presidential election. By assigning electoral votes based on a state's representation in Congress (combining the number of senators and representatives), smaller states have a proportionally larger impact compared to their population size.
This system helps prevent candidates from solely focusing on densely populated urban areas and neglecting the concerns of rural and less populated regions.
Additionally, supporters of the Electoral College contend that it contributes to the stability and continuity of the political system. The indirect election of the president through electors provides a buffer against potential volatility and prevents the emergence of radical or fringe candidates.
This system encourages a broad coalition-building approach, as candidates must seek support from various states and demographics.
On the other hand, critics argue that the Electoral College undermines the principle of "one person, one vote." They assert that every citizen's vote should carry equal weight, regardless of their geographical location.
Abolitionists propose that a national popular vote would better reflect the will of the people, ensuring that the candidate with the most votes wins the presidency. This approach aims to address the issue of candidates winning the Electoral College while losing the popular vote, as has occurred in several instances throughout history.
The call for abolishing or altering the Electoral College also stems from the desire to foster a more inclusive and participatory democracy. Critics argue that the current system discourages voter turnout, particularly in states dominated by a single party, where individual votes may seem inconsequential. They contend that implementing a direct popular vote would encourage voter engagement and increase overall turnout.
In conclusion, the decision to keep or abolish the Electoral College involves a trade-off between different democratic principles. Those in favor argue for the balance of power, stability, and protection of minority interests, while opponents advocate for direct representation, elimination of disparities, and increased democratic participation.
Ultimately, the ongoing debate surrounding the Electoral College revolves around finding the most equitable and effective means of electing the President of the United States.
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An accounting analyst is working on financial forecasts for two publicly traded companies. ABC Corp. does its business in a very competitive industry while XYZ Corp. is looking to enter a market that none of the other players seems to be paying any attention. What growth rates should the analyst assume for each company and why? What data source should she use? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).
For ABC Corp., operating in a competitive industry, the accounting analyst should assume a growth rate that aligns with the industry average or the historical growth rate of similar companies in that industry. This is because competitive industries often experience moderate growth rates due to market saturation and intense competition. The analyst can consider factors such as industry reports, market research, and historical financial data of ABC Corp. and its competitors to determine a reasonable growth rate.
On the other hand, for XYZ Corp., entering an untapped market, the analyst can assume a higher growth rate. Since XYZ Corp. is operating in a market where competitors are not paying attention, there may be significant growth opportunities and potential for market dominance. The analyst can explore market research, industry analysis, and projections for emerging markets to estimate an appropriate growth rate for XYZ Corp. To obtain reliable and up-to-date data, the accounting analyst should use reputable sources such as financial databases, industry reports, government publications, and reliable market research firms. These sources provide valuable insights, industry trends, and financial data that can support the analyst's forecasts for both ABC Corp. and XYZ Corp.
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Calculate the price and cross-price elasticities of demand for coconut oil. The coconut oil demand function is Q = 1200 – 9.5P + 16.2PP + 0.2Y, where Pp is the price of palm oil in cents per pound and Y is the income of consumers. Assume that P is initially 45 cents per pound, Pp is 31 cents per pound, and Q is 1275 thousand metric tons per year.
Since the derivative with respect to Pp is zero, it implies that the cross-price elasticity of demand (XED) with respect to the price of palm oil is zero.
To calculate the price elasticity of demand (PED) and cross-price elasticity of demand (XED) for coconut oil, we need to find the partial derivatives of the demand function with respect to the price of coconut oil (P) and the price of palm oil (Pp), respectively.
Given
demand function:
Q = 1200 – 9.5P + 16.2PP + 0.2Y
We can differentiate it with respect to P to find the price elasticity of demand:
dQ/dP = -9.5 + 16.2(2P) + 0.2(0)
= -9.5 + 32.4P
To find the price elasticity of demand (PED) at the given price (P = 45 cents per pound), we substitute the value into the derivative expression:
PED = (dQ/dP) * (P/Q)
= (-9.5 + 32.4P) * (P/Q)
= (-9.5 + 32.4 * 45) * (45/1275)
= (1386 - 9.5) * (45/1275)
= 1376.5 * (45/1275)
≈ 48.38
The price elasticity of demand (PED) for coconut oil is approximately 48.38. This suggests that coconut oil is relatively elastic, meaning a percentage change in price will result in a larger percentage change in quantity demanded.
Now, let's calculate the cross-price elasticity of demand (XED) with respect to the price of palm oil (Pp). We'll differentiate the demand function with respect to Pp:
dQ/dPp = 0 + 16.2(0) + 0.2(0)
= 0
In summary:
- The price elasticity of demand (PED) for coconut oil is approximately 48.38, indicating elasticity.
- The cross-price elasticity of demand (XED) with respect to the price of palm oil (Pp) is zero, suggesting no significant impact of palm oil price on coconut oil demand.
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On September 2018 the crude oil’s spot price is $54 and its May 2019 futures price is $50.50. On March 2019, the spot price is $55.50 and the May 2019 futures price is $55. A company entered into one futures contracts on September 2018 in order to hedge its purchase of 1,000 barrels of crude oil on March 2019 (one futures contract is for the delivery of 1,000 barrels). It closes out its position in March 2019. What is the effective price (after taking account of hedging) paid by the company? What is the basis on March 2019? How would you describe the impact of the basis on the effective price paid by the company?
The effective price paid by the company, taking into account hedging, is $55.50 per barrel. The basis on March 2019 is $0.50 per barrel.
The company entered into one futures contract on September 2018 to hedge its purchase of 1,000 barrels of crude oil on March 2019. The futures price in September 2018 was $50.50 per barrel, and the spot price at that time was $54 per barrel.
When the company closes out its position in March 2019, the spot price has increased to $55.50 per barrel, while the futures price for May 2019 is $55 per barrel. The effective price paid by the company, after taking into account hedging, is equal to the spot price at the time of closing out the position, which is $55.50 per barrel.
The basis on March 2019 is calculated as the difference between the spot price and the futures price, which is $55.50 - $55 = $0.50 per barrel. This means that the spot price is $0.50 higher than the futures price.
The impact of the basis on the effective price paid by the company is favorable. Since the basis is positive ($0.50), it reduces the price the company pays from the futures price ($55 per barrel) to the spot price ($55.50 per barrel). This results in a lower effective price paid by the company, providing a benefit in terms of cost.
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Janet is a 37-year-old unmarried attorney with an annual income of about $200,000. She currently
has no health insurance coverage and is now considering purchasing some to protect her from
various health-related exposures.
1. List some health-related exposures that she can probably afford to retain.
2. In your opinion, what health-related exposures should she strongly consider transferring to
an insurance company.
Discuss the reasoning behind your answer
1. List of health-related exposures that Janet can probably afford to retain:Some health-related exposures that Janet can probably afford to retain are minor doctor's visits, prescription drugs, and annual check-ups. 2. In your opinion, what health-related exposures should she strongly consider transferring to an insurance company.The health-related exposures that Janet should strongly consider transferring to an insurance company are hospital stays, surgeries, and long-term care because these events can be very expensive and cost-prohibitive without insurance coverage.
Discussing the reasoning behind the answer:Janet is a 37-year-old unmarried attorney with an annual income of about $200,000. She currently has no health insurance coverage and is considering purchasing some to protect herself from various health-related exposures.There are some health-related exposures that Janet can probably afford to retain, such as minor doctor's visits, prescription drugs, and annual check-ups. These are all health-related events that can be paid for out of pocket and are not financially significant enough to require insurance coverage.However, Janet should strongly consider transferring certain health-related exposures to an insurance company. These exposures include hospital stays, surgeries, and long-term care. These events can be very expensive and cost-prohibitive without insurance coverage. A hospital stay, for example, can easily cost thousands of dollars per day. A major surgery can be even more expensive, with the cost running into tens of thousands of dollars. Long-term care can also be very expensive and is often not covered by health insurance policies.Janet's annual income of $200,000 may seem like a lot of money, but the reality is that healthcare costs can quickly add up and become a financial burden. By transferring these health-related exposures to an insurance company, Janet can protect herself from the financial risks associated with these events and ensure that she receives the necessary care without having to worry about the cost.
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Concord, Inc., uses a traditional product costing system to assign overhead costs uniformly to all its packaged multigrain products. To meet Food and Drug Administration requirements and to assure its customers of safe, sanitary, and nutritious food, Concord engages in a high level of quality control. Concord assigns its quality-control overhead costs to all products at a rate of 17% of direct labor costs. Its direct labor cost for the month of June for its low-calorie breakfast line is $70,000. In response to repeated requests from its financial vice president, Concord's management agrees to adopt activity-based costing. Data relating to the low-calorie breakfast line for the month of June are as follows. Overhead Rate Number of Cost Drivers Used per Activity Activity Cost Pools Cost Drivers Inspections of material received Number of pounds $0.90 per pound 6,200 pounds In-process inspections Number of servings $0.33 per serving 10,200 servings FDA certification Customer orders $12.00 per order 410 orders (a) Compute the quality-control overhead cost to be assigned to the low-calorie breakfast product line for the month of June (1) using the traditional product costing system (direct labor cost is the cost driver), and (2) using activity-based costing. Traditional product costing Activity-based costing Quality-control overhead cost to be assigned $
The quality-control overhead cost to be assigned to the low-calorie breakfast product line for the month of June using activity-based costing (ABC) is $13,866 and using the traditional product costing is $11,900.
Activity-based costing: Activity-based costing is a cost accounting method in which a business's overhead costs are allocated or assigned to the goods and services produced or provided based on the activities used to produce them. ABC is a relatively new technique that seeks to reduce the distortions in traditional costing methods that are due to the use of allocation bases that bear little or no relationship to the incurrence of overhead costs.
ABC results in more accurate product costing in a firm’s business operation. Here, a company assigns the cost of each activity individually to each product or service based on the number of resources used in each of them.
Solution: Given that,Direct labor cost for the month of June for its low-calorie breakfast line is $70,000.
Overhead rate for quality-control overhead costs is 17% of direct labor costs.The number of pounds for inspections of material received = 6,200 poundsThe number of servings for in-process inspections = 10,200 servings.
The number of customer orders for FDA certification = 410 orders. Activity-based costing (ABC)Traditional product costingLow-calorie breakfast line costs:
Inspections of material received Number of pounds × Cost per pound6,200 pounds × $0.90 per pound = $5,580
Number of servings for in-process inspections Number of servings × Cost per serving10,200 servings × $0.33 per serving = $3,366FDA certificationCost per order × Number of orders$12.00 per order × 410 orders = $4,920Quality-control overhead cost to be assigned using ABC:
$5,580 + $3,366 + $4,920 = $13,866Quality-control overhead cost to be assigned using traditional product costing: Direct labor cost × Overhead rate$70,000 × 17% = $11,900
Therefore, the quality-control overhead cost to be assigned to the low-calorie breakfast product line for the month of June using activity-based costing (ABC) is $13,866 and using the traditional product costing is $11,900.
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Which one of the following accounts most likely would appear on the income statement of a merchandise company, but not on the income statement of a service company?
a. Cost of Goods Sold
b. Selling Expenses
c. Administrative Expenses
d. Income Tax Expense
Cost of Goods Sold most likely would appear on the income statement of a merchandise company, but not on the income statement of a service company
The Cost of Goods Sold (COGS) represents the direct costs associated with the production or purchase of the goods that a merchandise company sells. It includes expenses such as the cost of raw materials, direct labor, and overhead directly related to the production of goods. Since a service company does not typically sell physical products, it does not have a Cost of Goods Sold account on its income statement. Instead, a service company's income statement may include other expenses such as selling expenses, administrative expenses, and income tax expense.
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1 A i). What is leasing? [3 marks] ii). Discuss five important benefits of leasing. [5 marks] iii). Discuss five important rationales for mergers in recent times. [5.33 marks] [OR] Se Mate Saya pastor
Leasing is a contractual arrangement where a party (lessee) obtains the right to use an asset owned by another party (lessor) in exchange for regular payments over a specified period.
It allows businesses to enjoy the benefits of using an asset without the need for upfront capital investment.
Five important benefits of leasing include capital conservation, flexibility for upgrades, tax advantages, cost control, and efficient asset management. Mergers, on the other hand, serve various rationales in recent times. They include market expansion, synergy and cost efficiency, diversification, access to new technologies or resources, and strategic positioning for competitive advantage. These rationales drive companies to explore mergers as a means of achieving their growth and strategic objectives.
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What happened during the Presidential race in 1876? How did the
Presidential election of 1876 impact the Reconstruction Era?
The republican Hayes defeated the democrat Tilden during the presidential race of 1876. And this impacted in the Reconstrucion Era, because led to the end of Reconstruction and allowed Southern states to revert to old ways.
During the Presidential race in 1876, the democratic nominee was Samuel J. Tilden, and the republican nominee was Rutherford B. Hayes. This races was controversial due to fact that both parties disputed the results in three southern states.
Hayes supporters claimed that democrats intimidated black voters in Florida, South Carolina, and Louisiana, and they hoped to deny those states' electoral votes to Tilden.
Because of the disputed results, a special Electoral Commission was formed to determine the winner. The commission was made up of five representatives, five senators, and five Supreme Court justices.
They voted along party lines, 8–7, in favor of Hayes, giving him 185 electoral votes to Tilden's 184. As a result, the Reconstruction Era ended.
Finally, we can say tha the Reconstruction Era refers to the period between 1865 and 1877 when the US government sought to rebuild and reform the South after the Civil War.
Its primary goals were to rebuild the Southern economy, improve the lives of former slaves, and re-establish the federal government's authority over the former Confederate states.
After the presidential race, many white Southerners used their newfound political power to disenfranchise black voters, pass segregationist laws, and establish sharecropping, leading to a period of racial violence and discrimination.
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Hredit is a trader. To be able to control the full spectrum of that market Hredit acquired 80% of the voting shares of Soll. This transaction happened on 1st April 2014. It is clear that Hredit obtained the control and this transaction was a business combination. Both companies are preparing their financial statements under IFRS.
On 31st December 2014 the individual balance sheets of the two entities are the following:
Hredit (k$)
31/Dec/2014
Soll (k$)
31/Dec/2014
Investment in Soll
700
-
Land and building
300
1 000
Plant and equipment
1 000
400
Inventory
400
300
Receivables
600
200
Cash and equivalent
1 000
100
TOTAL ASSETS:
4 000
2 000
Issued capital
100
50
Share premium
-
100
Retained earnings
1 900
450
Equity:
2 000
600
Long term loans
900
400
Account payables and other short term liabilities
1 100
1 000
Liabilities
2 000
1 400
OWNERS EQUITY + LIABILITY:
4 000
2 000
The following information is relevant (acquisition):
1. The issued capital and share premium of both companies are the same since incorporation.
2. The movement in the retained earnings of the companies were the following during 2014:
Hredit
Soll
1st January 2014 (opening)
1000
150
Net profit (2014)
1500
300
Dividend declared
(600)
31st December 2014 (closing)
1900
450
The profit of Soll is NOT generated equally during the year. The following table illustrates how the profit was generated during 2014 (in percentage):
Period
% of Revenue
Q1 jan-march
20%
Q2 april-june
10%
Q3 july -sep
30%
Q4 oct-dec
40%
Total
100%
The following items – that belong to Soll – were identified at acquisition of the subsidiary:
One of the reasons of the acquisition was to acquire the customer relations of Soll, so Hredit can enter into new markets. These customer relations are recorded in a customer list. A firm that has expertise in this area professionally evaluated the customer list. The fair value of the customer list is said to be 80 k$. The list was extended by Hredit (Hredit wrote up his own information on the list). The list – with this addition – had a value of 120 k$. The useful life of the list – regardless of the fact if it is the extended or the original list – is 4 years.
Soll had an ongoing litigation for years. The legal advisers of Soll said that there is a very little chance that the company will loose the case so this issue was classified being a contingent liability and was not recognized – correctly – as a liability in the separate financial statement of Soll. The fair value of this obligation was evaluated to be 15 k$ at the date of the acquisition. By the end of the year the case was closed and unexpectedly the court decided against Soll. Therefore Soll was obliged to pay 60 k$ to the other party. (Noting was recorded yet in the financial statements of Soll due to this matter.)
The fair value of net assets of Soll was the same with their book value except the land and buildings. Soll only has a land (under the heading land and building). The fair value of this land at the date of the acquisition was 1 200 k$.
Intercompany transactions:
5. The members of the group had the following intercompany transactions:
a. Hredit sold one of his plants to Soll on 1st July 2014. The cost of this asset was 100 k$ and the book value of the asset was 50 k$ at the date of the sale. The selling price was 90 k$. The remaining useful life of the sold asset was four years at the date of the sale. Soll paid only one-third of the invoice until the end of the reporting period.
b. Soll sold inventory to Hredit for 200 k$. The cost of the goods sold was 120 $k. Until the end of the year 25% of these goods were sold to customers outside the entity. On 30th December 2014 Hredit paid 50 k$ to Soll. The payment was only received and credited to the bank account of Soll on 3rd January 2015.
6. Hredit calculated that the goodwill on the acquisition is impaired by 44 k$.
Prepare the consolidated balance sheet of Hredit Group for 31st December 2014
The consolidated balance sheet of Hredit Group on 31st December 2014 shows total assets of $6,000 and total equity of $2,304.
To prepare the consolidated balance sheet, we need to combine the individual balance sheets of Hredit and Soll. Hredit's assets include investments in Soll, land and building, plant and equipment, inventory, receivables, and cash equivalents. Soll's assets consist of land and building, plant and equipment, inventory, receivables, and cash equivalents. Hredit's equity comprises issued capital, share premium, and retained earnings, while Soll's equity includes issued capital, share premium, and retained earnings.
Long-term loans and account payables and other short-term liabilities are included in the consolidated liabilities. The customer list and the land of Soll are recorded at their fair value. Intercompany transactions, such as the sale of a plant and the sale of inventory, are also accounted for. The impairment of goodwill is taken into consideration. The consolidated balance sheet reflects the overall financial position of Hredit Group, with total assets of $6,000 and total equity of $2,304.
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The directors of LayerHay Ltd., (LH) a
medium sized private company have been approached by a large public
listed company, which is interested in acquiring their business.
The Board of Directors have
The Board of Directors of LayerHay Ltd., (LH) which is a medium-sized private company, have been approached by a large publicly listed company that is interested in acquiring their business.
In principle, the board of directors must evaluate the acquisition proposal and determine whether or not it is in the best interests of the company's stakeholders. The board must undertake a cost-benefit analysis to determine whether or not to accept the proposal.
In making the decision whether to sell or not, the board of directors must conduct due diligence on the company making the acquisition proposal. The Board of Directors must evaluate the firm's reputation and the other acquisitions they have made. They should also evaluate the acquirer's financial stability, management practices, and strategic intent. The board of directors should appoint legal advisors and accountants to assist them in reviewing the acquisition proposal. The board must also make a comprehensive evaluation of the company's financial and strategic plans. The board should also evaluate whether the proposed acquisition price is reasonable, and whether there is any scope for negotiation. If the board of directors determine that the acquisition proposal is in the best interests of the company's stakeholders, they must notify the shareholders of the proposal and request their approval.
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New Protectionism in the form of non-tariff, non-quota trade barriers a) are bureaucratic and administrative barriers aimed at reducing imports. b) made illegal by the WTO c) was practiced by Japan d) all correct e) only a and c correct
Option (e), (a) are bureaucratic and administrative barriers aimed at reducing imports.
New protectionism is an idea that refers to protecting the national economy by safeguarding it from foreign imports and expanding domestic production. Non-tariff and non-quota trade barriers have been utilized in the form of this approach to trade protectionism. These barriers are categorized as bureaucratic and administrative hurdles aimed at curbing imports. Hence, the main answer to the question is (a) are bureaucratic and administrative barriers aimed at reducing imports.
Non-tariff trade barriers (NTBs) are regulatory controls other than tariffs that can make imported goods more expensive or difficult to purchase. For example, a country may impose import licensing requirements, and this means that imports of particular items can only be done by authorized importers. NTBs can make it more difficult to buy imports, making them a sort of trade barrier, which is why they are classified as trade obstacles. Hence, option (b) is incorrect.
Most non-tariff barriers, such as import quotas, were outlawed by the World Trade Organization (WTO) when it was founded in 1995. As a result, the statement that new protectionism in the form of non-tariff, non-quota trade barriers made illegal by the WTO is true. As a result, option (b) is incorrect.
The question statement claims that new protectionism in the form of non-tariff, non-quota trade barriers was practiced by Japan. This statement is correct, as Japan used non-tariff trade barriers in order to reduce imports and improve their domestic economy. Hence, option (c) is correct.
Therefore, the correct option is (e) only a and c correct.
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Suppose John has $500 in traveler's checks. He cashes a $200 traveler check, and deposit $300 traveler check into his checking account at a commercial bank. The immediate effect is Group of answer choices
a) a $500 decrease in the M1 money supply, and the M2 money supply also decreases.
b) a $500 increase in the M1 money supply, but the M2 money supply decreases.
c) a $500 increase in the M1 money supply, and the M2 money supply also increases.
d) a $500 decrease in the M1 money supply, but the M2 money supply increases.
e) no change in M1 money supply, and no change in M2 money supply
The correct answer is e) no change in M1 money supply, and no change in M2 money supply. When John cashes a $200 traveler's check, the M1 money supply remains unchanged because traveler's checks are included in M1.
Although the physical form of the money changes, the overall amount of money in circulation remains the same. When John deposits a $300 traveler's check into his checking account, the M1 money supply also remains unchanged. This is because the deposit merely transfers the ownership of the funds from traveler's checks to a checking account, but it does not create or destroy money. As for the M2 money supply, which includes M1 plus certain types of savings accounts and time deposits, there is no change either. The actions of cashing a traveler's check and depositing a traveler's check into a checking account do not affect the components of M2.
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Firms that do not have the ability to price discriminate will sell units equal to the intersection of which two curves? Demand (D) and MC = ATC curves O Demand (D) and marginal revenue (MR) curves Marginal revenue (MR) and MC = ATC curves b. Firms with the ability to first-degree price discriminate will sell units equal to the intersection of which two curves? O Marginal revenue (MR) and MC = ATC curves O Demand (D) and marginal revenue (MR) curves O Demand (D) and MC - ATC curves c. Firms that have the ability to first-degree price discriminate will have profits that are O less than a firm that does not have the ability to price discriminate Ogreater than a firm that does not have the ability to price discriminate equal to a firm that does not have the ability to price discriminate
Firms that do not have the ability to price discriminate will sell units equal to the intersection of the Demand (D) and marginal revenue (MR) curves.
In economics, price discrimination refers to the practice of charging different prices to different customers for the same product or service. Firms that cannot price discriminate typically face a downward-sloping demand curve and must set a single price for all customers. The point where the Demand (D) curve intersects with the marginal revenue (MR) curve represents the optimal quantity of units to sell for maximizing profits. However, firms that have the ability to engage in first-degree price discrimination, also known as perfect price discrimination, can charge each customer their maximum willingness to pay. In this case, the firm's demand curve coincides with the individual customer's willingness to pay curve. The point where the Demand (D) curve intersects with the marginal cost (MC) equals average total cost (ATC) curve represents the quantity of units the firm will sell.
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Emily Turnbull, president of Aerobic Equipment Corporation, is concerned about her employees’ well-being. The company offers its employees free medical, dental, and life insurance coverage. It also matches employee contributions to a voluntary retirement plan up to 6% of their salaries. Assume that no employee’s cumulative wages exceed the relevant wage bases. Payroll information for the biweekly payroll period ending January 24 is listed below.
Emily Turnbull, the president of Aerobic Equipment Corporation, is worried about her employees' well-being. In this respect, the organization offers its employees a free medical, dental, and life insurance coverage.
Furthermore, the company also matches employee contributions to a voluntary retirement plan up to 6% of their salaries. Emily Turnbull, president of Aerobic Equipment Corporation, is concerned about her employees' well-being. The company offers its employees free medical, dental, and life insurance coverage. It also matches employee contributions to a voluntary retirement plan up to 6% of their salaries. Payroll information for the biweekly payroll period ending January 24 is listed below.
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the ability of the customer to track their order from placement to delivery is
Order tracking or shipment tracking are terms used to describe the capability for clients to follow their order from placement to delivery.
Many companies today provide clients the convenience of following their orders from the time they are placed until they are delivered, especially in the digital age. Customers may check the status and location of their shipments using order tracking systems, which offers transparency and peace of mind.
A special tracking number or code is often given to the consumer when they place an order. This tracking number can be used as a quick reference to find out the status and location of the order. For real-time updates on their cargo, customers can input the tracking number on the business website or through a designated tracking provide for the placement.
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Reflect on positive
experiences you have had as a customer. Pick one
experience that was particularly enjoyable for you (preferably with
a hospitality or tourism-related company) and reflect on what
One of the most enjoyable customer experiences I had was with a luxury hotel during a vacation.
The level of personalized service left a lasting impression. The staff anticipated my needs, creating a seamless and comfortable stay. From a warm welcome to the attention to detail in-room amenities, the experience was exceptional. The staff's genuine interest in ensuring my comfort and satisfaction made me feel valued as a guest.
This experience highlighted the significance of hospitality in creating memorable moments. It reinforced the importance of going beyond expectations and tailoring services to individual preferences, setting a benchmark for outstanding customer service.
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Consider a country populated by many identical infinitely lived households where utility at each instant depends on per capita consumption. It has a growing population and a production technology enabling it to produce output from capital and labour under constant returns to scale. Give a thorough explanation of how a social planner would allocate resources in such a country.
A social planner in a country with identical infinitely lived households, a growing population, and a production technology enabling constant returns to scale would allocate resources by considering the welfare of all individuals in the society. The planner would aim to maximize social welfare by balancing consumption, investment, and population growth while taking into account the preferences and needs of the households.
The social planner's objective is to maximize social welfare, which is typically measured by the sum of individual utilities in the society. Since utility depends on per capita consumption, the planner would allocate resources to ensure an equitable distribution of consumption among households. Given the production technology with constant returns to scale, the planner would allocate resources efficiently by determining the optimal combination of capital and labor inputs to maximize output. This would involve considering the trade-off between current consumption and investment in order to achieve sustained economic growth over time.
Furthermore, the growing population would require the social planner to take into account the implications of population growth on resource allocation. This may involve decisions regarding investment in human capital, infrastructure, and public services to support the expanding population. Overall, the social planner would need to consider various factors, such as consumption, investment, population growth, and distributional concerns, to allocate resources efficiently and maximize social welfare in a country with identical infinitely lived households and constant returns to scale production technology.
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Recommendations for improving recruiting First Peoples
What actions will be taken to reach these goals?
Who will be responsible for these actions?
Do these actions have a time frame?
Etc.
Improving recruiting First Peoples requires a commitment to diversity and inclusion, a willingness to engage with Indigenous communities, and a dedicated effort from all levels of the organization.
To improve recruiting First Peoples, it is recommended to establish partnerships with First Nations organizations, engage with local Indigenous communities, and prioritize diversity and inclusion in the recruitment process. These actions will require collaboration between human resources departments and hiring managers, as well as ongoing training to ensure cultural competency. The responsibility for these actions should be shared across the organization, with designated individuals accountable for specific initiatives. A timeline should also be established to track progress and ensure that goals are being met. It is important to note that these actions should be ongoing, and not just a one-time initiative.
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Target Profit Trailblazer Company sells a product for $170 per unit. The variable cost is $80 per unit, and fixed costs are $405,000. Determine (a) the break-even point in sales units and (b) the sale
To calculate the break-even point in sales units, we need to find the number of units that need to be sold in order to cover the fixed costs. (a) The break-even point in sales units can be calculated by dividing the fixed costs by the contribution margin per unit.
Selling price per unit: $170 Variable cost per unit: $80 Fixed costs: $405,000 Contribution margin per unit = Selling price per unit - Variable cost per unit Contribution margin per unit = $170 - $80 = $90 Break-even point in sales units = Fixed costs / Contribution margin per unit Break-even point in sales units = $405,000 / $90 Break-even point in sales units = 4,500 units Therefore, the break-even point in sales units for Trailblazer Company is 4,500 units. (b) To determine the sales revenue needed to achieve a target profit, we need to consider both the fixed costs and the desired profit amount. Target profit = Fixed costs + Desired profit Target profit = $405,000 + Desired profit Contribution margin ratio = Contribution margin per unit / Selling price per unit Contribution margin ratio = $90 / $170 Sales revenue = (Fixed costs + Target profit) / Contribution margin ratio Sales revenue = ($405,000 + Desired profit) / (90/170)
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