The budgeted direct labour hours and the $541,200 total manufacturing overhead cost are used to compute the budgeted manufacturing overhead for each quarter.
The manufacturing overhead rate for Q1 is $16.40 per hour, with 33,000 direct labour hours allocated in the budget. Therefore, $541,200 has been budgeted for manufacturing overhead for Q1. The manufacturing overhead rate for Q2 is $20.81 per hour, with 26,000 direct labour hours allocated in the budget. As a result, $540,060 has been budgeted for manufacturing overhead for the second quarter. The 50,000 direct labour hours allocated for Q3 translate into a manufacturing overhead rate of $10.82 per hour. For Q3, $541,000 has been budgeted for manufacturing overhead. Finally, 55,000 direct labour hours are allocated for Q4, which results in a manufacturing overhead cost of $9.84 per hour. As a result, the planned production expenses $541,200 is the total for Q4. The budgeted manufacturing overhead is as follows for each quarter: Q1: $541,200 Q2: $540,060 Q3: $541,000 Q4: $541,200 The $541,200 annual budgeted amount for manufacturing overhead remains unchanged.
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Suppose the market for soft drinks is given by: Demand: P=181−1.7Q Supply: P=1.3Q The government wants to discourage unhealthy eating habits and so imposes a tax that reduces the market equilibrium quantity by 11 . How much of the tax revenue generated was previously captured by producers at equilibrium? a. $314.60 b. $170.00 c. $705.47 d. $117.97
The amount previously captured by producers at market equilibrium is found as $705.47. The correct option is c.
To solve the problem, we need to find out the market equilibrium before and after the imposition of the tax and then calculate the change in revenue for both consumers and producers.
We will use the following formulae:
Qd = 181 - 1.7
QP = 181 - 1.7
Q - T (after the imposition of the tax)
Qs = 1.3
QP = 1.3Q + T (after the imposition of the tax)
where
Qd is the quantity demanded
Qs is the quantity supplied
T is the tax per unit
Q is the quantity sold
P is the price per unit
Let’s solve for equilibrium without the tax, then use that to solve for equilibrium after the imposition of the tax.
At equilibrium:
Qd = Qs
181 - 1.7Q = 1.3Q
Q = 67.06
Substitute Q in either Qd or Qs equation to get the equilibrium price:
Q = 67.06
P = 181 - 1.7(67.06)
P = $81.47
After the imposition of the tax, the equilibrium quantity reduced by 11 units, so the new quantity is
67.06 - 11 = 56.06
Qd = 181 - 1.7
QP = 181 - 1.7
Q - T56.06 = 1.3
QP = 1.3Q + T
Substituting P in both equations we get:T = $1.97
Now we can calculate the change in revenue for both consumers and producers. For consumers, we have:
Change in revenue for consumers = Tax x Change in quantity
= $1.97 x 11
= $21.67
For producers, the change in revenue will be the tax minus the reduction in their sales revenue:
Change in revenue for producers = Tax - (Price before tax - Price after tax) x Quantity
= $1.97 - ($81.47 - $83.44) x 56.06
= $705.47 - This is the amount previously captured by producers at equilibrium.
The correct option is c.
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Carla Vista Company begins operations on July 1,2022. Information from job cost sheets shows the following:
Manufacturing Costs Assigned
Job No.
July
August
September
100
$11.520
$8,448
101
10,368
9,312
102
4,800
103
11.328
104
5.568
$11.520
5.760
6,720
Job 102 was completed in July. Job 100 was completed in August, and Jobs 101 and 103 were completed in September. Each job was sold for 60% above its cost in the month following completions
The manufacturing costs associated with each work must be added up in order to determine the price of each job and its cost. Job 100: The July manufacturing cost assignment came to $11,520.
We only take into account the expense incurred in July because the project was finished in August. Job 101: The July manufacturing cost assignment came to $10,368. $9,312 was the manufacturing cost budgeted for August. Since the work was finished in September, we take both the costs from July and August into account. Job 102: The July manufacturing cost assignment was $4,800. Since the work was finished in July, we simply take that month's expenses into account. Job 103: The July manufacturing cost allocation was $11,328. We only take into account the money incurred in July because the work was finished in September. Job 104: $5,568 was the manufacturing cost awarded in September. Since the work was finished in September, we only take that month's expenses into account. Let's now figure up the overall expense and the selling price for each job. Job 100: $11,520 in total expenses Selling Price: $11,520 plus ($1,520 * 60%) to get $18,432 Job 101: The total cost is $10,368 plus $9,312 and the selling price is $19,680 plus 60% of that amount, or $31,488. Work Order No. 102: Total Cost: $4,800 Selling Price: $4,800 + (60% * $4,800) = $7,680 Work Order 103: Total Cost: $11,328 Selling Price: $11,328 + (60% * $11,328) = $18,124.80 Task 104: Total Cost: $5,568 Selling Price: $5,568 + (60% * $5,568) = $8,908.80 The selling prices are therefore $18,432, $31,488, $7,680, $18,124.80, and $8,908.80 for Jobs 100, 101, 102, 103, and 104, respectively. These prices are 60% more than what each job would normally cost.
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because hard feelings about group leadership and assignments have passed, the members of maya's group now seem to be relating much better. at the meeting tomorrow, she should take advantage of this moment by
Robin should facilitate a discussion to help the team identify group goals and values, building upon the improved group dynamics.
How can Robin capitalize on the improved group dynamics?During the meeting, Robin can seize the opportunity to guide the team in identifying group goals and values. She can encourage open and inclusive dialogue allowing each member to express their thoughts and perspectives.
By facilitating this discussion, Robin will help the team collectively define their shared purpose and values, fostering a sense of unity and common vision. This exercise will provide a foundation for effective collaboration and decision-making moving forward.
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crecit risk. If is considering the foliowing financing solution. Phang's bank issues a letter of credit on behali of Ptiang and agrees to accept Whatchamachit's draft for $118.000 due in. seven manthe. The acceptarice faie anrum discount in the money market. What is the anmuaized percontage all-in cost io Whatchamacaliet of this barkers' accoptance firancing? (NOTE Ansume a 360-day yoar.) The discount on the sale of accoptance to t (Round to the nearest cent) Calculato the net procoeds below: credit risk. It is considering the following firancing solution. Phang's bank issues a lefter of credit on bohalf of Phang and agrees to accopt Whatcharhacautits altalt for 5116 Co0 dive in seren monthe The sabetarce fos would cost Whatchamacalit $525, plus reduce Phang's avalable credit line by $118.000. The bankors' acoeplacke nole of $11 is 000 would be achd at a 21 the per 360-day yoar.) Calculate the net proceods below: The annualized percentage all-in cost (AlC) is %. (Round to three decimal places.)
The Annualized Percentage All-In Cost (AIC) to Whatchamacallit for this bankers' acceptance financing is 184.55% (rounded to three decimal places).
The credit risk considers the bankers' acceptance financing solution. Phang's bank agrees to accept the Whatchamacallit's draft due in seven months.
The acceptance faces an annual discount of $11,000 in the money market. Find the annualized percentage all-in cost (AIC) to Whatchamacallit for this bankers' acceptance financing.
The net proceeds of Whatchamacallit is calculated as follows:
Amount of Acceptance = $118,000
Discount Fee = $11,000
Bank Fee = $525
Total Cost = Discount Fee + Bank Fee = $11,000 + $525 = $11,525
Net Proceeds = Amount of Acceptance - Total Cost = $118,000 - $11,525 = $106,475
The Annualized Percentage All-In Cost (AIC) is given by;
AIC = [(Total Interest / Net Proceeds) / (Number of Days / 360)] x 100
We are to find the Annualized Percentage All-In Cost (AIC) to Whatchamacallit for this bankers' acceptance financing.
The Total Interest earned by the bank for seven months is;
Total Interest = Acceptance Face x Discount Rate x TimeTotal
Interest = $118,000 x 0.021 x (7 / 12)Total Interest = $1,144.50
Therefore;
AIC = [(Total Interest / Net Proceeds) / (Number of Days / 360)] x 100AIC = [($1,144.50 / $106,475) / (210 / 360)] x 100AIC = [0.0107499 / 0.583333] x 100AIC = 1.8455 x 100AIC = 184.55%
Thus, the Annualized Percentage All-In Cost (AIC) to Whatchamacallit for this bankers' acceptance financing is 184.55% (rounded to three decimal places).
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a farmer awoke at 5 am to tend his crops, allowing joey, who lives 100 miles away, to enjoy healthful vegetables. in this case:
In this case, the farmer's action of waking up at 5 am to tend his crops demonstrates his commitment and dedication to cultivating healthful vegetables. By doing so, he ensures that Joey, who lives 100 miles away, can enjoy the benefits of fresh and nutritious produce.
The farmer's early morning routine highlights his sense of responsibility towards his farming profession and the community he serves. By tending to his crops diligently, he contributes to the availability of locally grown vegetables, promoting health and well-being for individuals like Joey.
Additionally, the farmer's efforts reflect the interconnectedness of food production and consumption. Despite the physical distance between the farmer and Joey, the farmer's actions have a direct impact on Joey's access to healthful vegetables. This illustrates the significance of agricultural practices and the role farmers play in providing essential food resources to consumers.
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Farmland County Bank offers to lend money to Gino, the owner of Home Hardware Store, at 15 percent interest. Before Gino accepts, a state statute is enacted prohibiting loans at rates greater than 12 percent. Gino and the bank have
a. a contract for a loan at 15 percent interest.
b. a contract for a loan at 12 percent interest.
c. a contract for a loan at 0 percent interest.
d. no contract for a loan.
Gino and the Farmland County Bank do not have a valid contract for a loan. The correct answer is d. no contract for a loan.
The reason is that a state statute has been enacted, prohibiting loans at rates greater than 12 percent. This means that the initial agreement between Gino and the bank, which stated a 15 percent interest rate, is no longer valid.
Contracts are legally binding agreements between parties, and in this case, the state statute takes precedence over the initial agreement. The law restricts the maximum interest rate that can be charged, and since the agreed-upon rate exceeds this limit, the contract is not enforceable.
Therefore, the correct answer is d. no contract for a loan.
It's important to note that state statutes vary, and the specific terms and conditions may depend on the jurisdiction. In this case, the state statute restricts the interest rate to 12 percent. However, it's always a good idea to consult legal professionals or relevant authorities for specific information regarding laws and regulations in a particular jurisdiction.
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Some of your clients will be thinking about pursuing B Corp certification. This is a long and quite expensive process - in terms of time taken - but may be beneficial as described in the text.
B Corp certification is a long and quite expensive process.
Although, it is considered beneficial in terms of the positive image it creates of the company. The B Corp certification helps companies to showcase their commitment towards the environmental and social impacts.
It also provides companies with a unique competitive edge to market their business to customers who are environmentally and socially conscious. Thus, this certification acts as a tool for sustainable development for companies which can lead to an increase in profitability by enhancing customer loyalty.
It is essential to note that, B Corp certification requires more than 100 words to be discussed in detail as it is a complex process that needs to be handled carefully.
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Question 3 Aupa Mutumbula qualified as a accounted in June 2014, and 1 July 2014 began a new auditing and accounting work by investing N$20000 in cash and accounting books with a N\$ 4000 fair value that he had used at university. The practice trades under the name Ouatjiri AM Accounted. The following transactions relate to July: 1 Rent the furnished office of accounted who was retiring, paying N\$ 9000 cash for six month rent in advance. Purchased office supplies for cash N\$ 250 Bought the accounting package of the retiring accounted for N$20000, paying N\$ 5000 cash and agreeing to pay the balance within six months. The system has a useful life of ten years after which they will have no value. 5 Completed legal work for a client and immediately collected N\$ 500 in cash for the work done 7 Purchased additional office supplies on credit N\$ 400. 10 Completed accounting work for client on credit N\$ 6000. 15 Paid cleaning service to clean the office for the month N$750 15 Paid for repairs and painting of the office, N$1250 16 Paid the salary of the part-time legal adviser N $3000. 17 Paid for the office supplies purchased on 7 July. 18 Completed accounting service for aq client on credit, N$4000 20 Received payment in full for the accounting work completed on 10 July 22 Completed additional legal work for the same client on credit, NS 3500 . 27 Received payment in full for the accounting service completed on 18 July. 31 Paid the July telephone bill, N\$ 250 Paid the July electricity and water account, N\$ 200.Paid the office secretary salary, N$3000 Recognised rent and depreciation expense and supplies used of N\$ Required a) Arrange the following asset, liability and owners' equity headings on accounting equation worksheet: Bank, Account receivable, Rent paid in advance, Office supplies, Accounting system, Account payable, Capital, Income and Expense's, and show the effects of the transactions on theelements of the equation by recording increase and decrease in the appropriate columns. b) Prepare a statement of profit or loss for Ouatjiri AM Accounted for the period ended 31 July 2014. c) Prepare a statement of financial position for Ouatjiri AM Accounted as at 31 Marc 2014. The accounting equation is Assets=capital +liabilities
A fixed mortgage interest rate remains unchanged throughout the loan term, providing stability in monthly payments. In contrast, a variable mortgage interest rate fluctuates based on market conditions, potentially leading to changes in monthly payments.
A fixed mortgage interest rate remains unchanged throughout the loan term, providing stability in monthly payments. In contrast, a variable mortgage interest rate fluctuates based on market conditions, potentially leading to changes in monthly payments.
A fixed interest rate offers predictability and helps borrowers effectively plan their budget since it remains constant over the loan duration. In contrast, a variable interest rate exposes borrowers to market fluctuations, which can result in varying monthly payments. While variable rates may initially be lower, they come with the risk of increasing over time. Therefore, borrowers should carefully consider their financial situation and risk tolerance when deciding between fixed and variable mortgage interest rates.
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IBM reports that, for the years 2009 and 2008 , the gross profit margins are 45.72% and Not yet answered 44.06% respectively. Both the net profit and the gross profit margins indicated stronger financial positions for IBM from 2008 until 2010. Which one of the following equations Flag question would IBM have used to calculate the gross profit margins? Select one: a. Gross profit/Sales ×100/1 b. Net income/Sales ×100/1 c. Gross profit/Net income ×100/1 d. Sales/Gross profit ×100/1
Therefore, the equation Flag question IBM would have used to calculate the gross profit margins is option d. Sales/Gross profit ×100/1.
Gross profit margin, which is also known as gross margin, is the ratio of gross profit to net sales and is expressed as a percentage. Gross profit margin is an indicator of a company's overall profitability. In accounting, gross profit margin is computed using the following formula:
Gross Profit Margin = (Gross Profit/Net Sales) × 100%
Where Gross profit is the profit that a company makes after deducting the cost of goods sold (COGS) from its total revenues, and net sales are the total sales revenue of a company minus all the discounts, refunds, and returns.
IBM reports that, for the years 2009 and 2008, the gross profit margins are 45.72% and 44.06%, respectively.
To calculate the gross profit margin, IBM would have used the formula:
Gross Profit Margin = (Gross Profit/Net Sales) × 100%
Therefore, the equation Flag question IBM would have used to calculate the gross profit margins is option d. Sales/Gross profit ×100/1.
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A global shipping company –ZECO-ZECO- is working around the world in 100 countries. Three of its ships in South Africa have sunk and ten sailors have killed and other fifteen have injured.
The media has targeted the company for a week asking for closing this branch because of low quality assurance.
The public opinion is against the company and pressured to review all the quality assurance system of the company around the world.
This decision either to close the branch or to review the ships will cost the company a massive amount of money and hurt its reputation.
In addition, it will allow all workers to ask for compensation and wages raise for safety. And legal obligations will be increased for any accident that happened now or at the past. –
If you are the CEO of the company, do you agree or disagree that the company should close the branch and review all the quality assurance regulations? Why? Justify your answer
Give a complete answer, How does the company overcome and mitigate this situation?
If I were the CEO of the company, I would agree that the company should close the branch and review all the quality assurance regulations.
How to explain the informationClosing the branch is the most immediate way to address the public's concerns about safety. It would also send a message to the company's employees and customers that the company is taking the sinkings seriously and is committed to safety.
Reviewing all the quality assurance regulations is also important. It will help to identify any areas where the company can improve its safety standards. This will help to prevent future accidents and protect the company's reputation.
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How portfolio management service is useful? (400
words)
Portfolio management services are beneficial to both individuals and businesses with investment portfolios. Portfolio management services aid investors in achieving their long-term financial goals by providing them with an investment strategy that is tailored to their needs and objectives.
Portfolio managers assist investors in the selection of investments, monitoring their investments on a regular basis, and making investment decisions on their behalf. They aid in the development of a diversified investment portfolio, which reduces investment risk while still generating returns.
Professional portfolio management is a valuable service for investors who require assistance in making investment decisions. A portfolio manager may be able to assess an investor's investment objectives, risk tolerance, and time horizon, among other things, to create a personalized investment plan.
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FILL IN THE BLANK. a(n)___is used to give background information about an organization, product, or service, whereas a(n)___is used primarily to sell a product or service.
A(n) brochure is used to give background information about an organization, product, or service, whereas a(n) advertisement is used primarily to sell a product or service.
Brochure refers to a printed or digital document that provides detailed information and background about an organization, product, or service. Brochures are designed to educate and inform the reader, offering a comprehensive overview of features, benefits, and key details.
They serve as a marketing tool to create awareness and generate interest. Brochures often include visuals, descriptions, specifications, and contact information.
By presenting a holistic view, brochures aim to convey a deeper understanding of the subject matter.
They are commonly used in trade shows, meetings, or as handouts to potential customers or clients.
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which one of the following is recommended advice for conducting an effective interview?
To conduct an effective interview, it is recommended to ensure that you ask open-ended questions, avoid leading questions, and actively listen to the interviewee. Additionally, it is advised to remain objective, refrain from making assumptions, and maintain a professional demeanor.
The answer to the question is: Ensure that you ask open-ended questions, avoid leading questions, and actively listen to the interviewee.The following are some of the recommended advice for conducting an effective interview:1. Prepare beforehand: Plan your questions ahead of time.2. Put the candidate at ease: Greet them warmly and make small talk before you start asking the interview questions. This will make them feel at ease, allowing you to get a more accurate reading of their personality and behavior.3. Ask open-ended questions: These questions prompt the interviewee to give a more detailed response than yes or no. They are more revealing and enable you to evaluate their skills and work experiences.4. Avoid leading questions: Leading questions, unlike open-ended questions, are ones that suggest or imply the answer. It is critical to avoid asking leading questions to receive a truthful response.5. Listen actively: Pay close attention to the interviewee's responses. Give them your undivided attention, making eye contact, and jotting down notes when necessary. This will show that you respect them, and it will enable you to comprehend them better.
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Select a motivational theory from Chapter 5 (Needs and Process Theories of Motivation) in the textbook that best describes your personal motivation in your career. Select from the following theories:
Maslow’s Hierarchy of Needs
Alderfer’s ERG Theory
McClelland’s Manifest Needs Theory
Lawrence & Nohria’s Emotional Drives or Needs Theory
Vroom’s Expectancy Theory
Locke & Latham’s Goal-Setting Theory
Then, address the following:
Why does this theory best fit your style and approach?
Explain why the other theories do not fit your approach to motivation (two to three sentences for each theory will suffice).
How does your theory relate to your personality?
The motivational theory that best describes personal motivation in one's career is the Vroom's Expectancy Theory. This theory best fits the style and approach of a person's personal motivation in a career.
According to this theory, employees' motivation is based on three principles. They are Expectancy, Instrumentality, and Valence.Alderfer’s ERG Theory: This theory doesn't fit a person's approach to motivation because it is similar to Maslow's hierarchy of needs theory.
Mc Clelland’s Manifest Needs Theory: This theory doesn't fit a person's approach to motivation because it focuses on three needs such as affiliation, power, and achievement. It doesn't show how these needs are connected to a person's motivation in the workplace.Lawrence & Nohria’s Emotional Drives or Needs Theory: This theory doesn't fit a person's approach to motivation because it focuses on four emotional drives such as the drive to acquire, bond, learn, and defend.
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Part II. Game Theory (25 points) Due to the COVID pandemic, there is urgent need for a medical product that only two firms have the capabilities to produce. It is understood that this is a "one shot game" in that once the initial need is filed, there will be no further need for this product. Assume that the two firms are current "colluding together" to set price so to maximize the industry profit. At this collusive price, the industry profit is $400 million - and that profit is split evenly between the two firms. Assume also that if one firm were to cut their price, then the industry profit would fall to $300 million, but the firm that cut the price would take 75% of the market. Finally, if both firms cut their price the industry profit would fall to $200 million and that profit would be split evenly. (a) Is game theory is an appropriate tool for analyzing this competitive situation? If so, why? (b) Would you recommend that a firm cut its price or hold to the current price? Explain your argument - using Game Theory Cut Price or Hold Price (Circle One) (c) How, if at all, does this relate to the notion of a "prisoner's dilemma"?
Game theory is an appropriate tool for analyzing this competitive situation as there are two firms that have the capabilities to produce a medical product that has a one-shot game where there will be no further need for this product.
A firm should cut its price because if one firm were to cut their price, then the industry profit would fall to $300 million, but the firm that cut the price would take 75% of the market. Thus the firm that cut the price would gain a higher profit than maintaining the same price.
This relates to the notion of a "prisoner's dilemma" in which both firms have to decide independently whether to cut their price or hold to the current price. If they both maintain the same price, they get a shared profit of $400 million, but if one firm cuts its price, then the industry profit would fall to $300 million, but the firm that cut the price would take 75% of the market.
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Kevin purchases 250 shares at ABC Corp. for $37.60 per share. ABC Corp. pays the annual dividend of $1.80 per share. One year later, Jimmy sells his ABC Corp. shares for $41.10. What was Jimmy's total return on his investment on ABC Corp.?
$805
O $414
$1.219
$1,152
Jimmy's total return on his investment in ABC Corp. was $1,325.
By taking into account the purchase price, dividend received, and selling price, Jimmy may determine the overall return on his investment in ABC Corp.
Kevin invested a total of $9,400 in 250 shares at a price of $37.60 a share, or 250 * $37.60.
Given that the yearly dividend was $1.80 per share, Kevin received a total dividend of $450 ($250 * $1.80).
Jimmy sold his shares after a year for $41.10 each, for a total selling price of 250 * $41.10 = $10,275.
We must add the dividend received and the capital gain (selling price minus purchase price) to determine the overall return:
Dividend received plus capital gain equals total return.
Return total: $450 plus ($10,275 - $9,400)
Total profit = $450 plus $875.
Return overall: $1,325
Consequently, Jimmy's overall return on investment in ABC Corp. was $1,325.
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you are the project manager for the project below. you have two civil engineers to do the tasks. the gantt chart after the initial phase of planning shows the project will finish in 24 days. the numbers in the gantt chart below represents the number of civil engineers needed for the task. (the gantt chart is displayed in increments of 4 days). business center project precedence 4 8 12 16 20 24 (a) create construction plans - 2 2 2 (b) traffic study - 2 2 (c) service availability check - 1 (d) staff report a, b 1 (e) make revisions a, b, c 2 2 (f) finalize the construction plan e
Based on the given information, the project consists of several tasks that need to be completed by two civil engineers. The Gantt chart shows the duration of each task and the number of civil engineers required for each task.
(a) The task "Create construction plans" requires 2 civil engineers for the entire duration of the project, which is 24 days.
(b) The task "Traffic study" also requires 2 civil engineers, but only for the duration of 8 days.
(c) The task "Service availability check" requires 1 civil engineer and can be completed within 12 days.
(d) The task "Staff report" requires 1 civil engineer and is dependent on the completion of tasks (a) and (b).
(e) The task "Make revisions" requires 2 civil engineers and is dependent on the completion of tasks (a), (b), and (c). This task has a duration of 16 days.
(f) The final task "Finalize the construction plan" requires 2 civil engineers and can only start once task (e) is completed. It will take 4 days to finish.
To calculate the total number of civil engineers needed for each day, you can add up the number of civil engineers required for each task that is ongoing on that day.
Here is an example of how you can calculate the number of civil engineers needed for each day:
Day 4: 2 civil engineers needed for task (a) and 2 civil engineers needed for task (b), so a total of 4 civil engineers are needed.
Day 8: 2 civil engineers needed for task (a), 2 civil engineers needed for task (b), and 2 civil engineers needed for task (e), so a total of 6 civil engineers are needed.
Day 12: 2 civil engineers needed for task (a), 2 civil engineers needed for task (b), 1 civil engineer needed for task (c), and 2 civil engineers needed for task (e), so a total of 7 civil engineers are needed.
Continuing this calculation for each day, you can determine the number of civil engineers needed at any given time during the project.
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When Alphonse died his wife Antonia applied for the $200,000 death benefit under his whole life non-participating policy as she was named as beneficiary under the contract. Unknown to Antonia Alphonse had collaterally assigned $45,000 of the death benefit and the $22,000 cash surrender value to the bank as security for a business loan he had taken out the previous year. The loan was still outstanding when Alphonse died and the assignment had been registered with the insurance company. What would the insurance company have paid under the death claim and to whom? a) \$67,000 would have been paid to the bank and $133,000 to Antonia. b) $45,000 would have been paid to the bank and $155,000 to Antonia. c) The $200,000 would have been paid to the bank and Antonia jointly, for them to sort out. d) he entire $200,000 would have been paid to the bank. Antonia would have to claim against the bank for her share. Alex is a member of a contributory, best-earnings, defined-benefit plan. For 2019, Alex's contributory earnings were $63,110 and the YMPE was $57,400. The first contribution rate on amounts to the YMPE is 5% and the second contribution rate is 9% on amounts above YMPE. How much is Alex required to contribute to the plan? a) $3,383,90 b) $3,669.40 C) $8,036,00 d) $8,835.40
Therefore, Alex is required to contribute a total of $3,383.90 (i.e., $2,870 + $513.90) to the plan. Thus, option (a) is the correct answer.
Alphonse’s wife Antonia applied for the $200,000 death benefit under his whole life non-participating policy as she was named as a beneficiary under the contract.
She was unaware of the fact that Alphonse had collaterally assigned $45,000 of the death benefit and the $22,000 cash surrender value to the bank as security for a business loan he had taken out the previous year.
The loan was still outstanding when Alphonse died, and the assignment had been registered with the insurance company. In this scenario, the insurance company would have paid $155,000 to Antonia and $45,000 to the bank. Thus, option (b) is correct.
Alex is a member of a contributory, best-earnings, defined-benefit plan.
For 2019, Alex's contributory earnings were $63,110, and the YMPE (Yearly Maximum Pensionable Earnings) was $57,400.
The first contribution rate on amounts to the YMPE is 5%, and the second contribution rate is 9% on amounts above YMPE.
Hence, the calculation is as follows:
Amount above YMPE = $63,110 - $57,400
= $5,710
Total contribution rate = 5% + 9%
= 14%
Amount up to the YMPE = 5% × $57,400
= $2,870
Amount above
YMPE = 9% × $5,710
= $513.90
Therefore, Alex is required to contribute a total of $3,383.90 (i.e., $2,870 + $513.90) to the plan. Thus, option (a) is the correct answer.
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Given the state of the economy and the causes of that
state—think back to earlier discussions about the current
economy—what should be the appropriate mix of fiscal and monetary
policy?
The appropriate mix of fiscal and monetary policy would depend on the specific conditions of the economy.
However, in general, a balanced approach is recommended, with fiscal policy focusing on targeted government spending to stimulate demand and promote economic growth, while monetary policy aims to control inflation and stabilize the financial system through interest rate adjustments and open market operations.
In a weak economy with low demand and high unemployment, expansionary fiscal policy can be effective. Increased government spending on infrastructure projects, education, or healthcare can boost employment, stimulate consumer spending, and drive economic growth. This can be complemented by accommodative monetary policy, with lower interest rates and open market purchases of government bonds, to provide liquidity and encourage borrowing and investment.
Conversely, in an overheating economy with high inflation, contractionary fiscal policy may be necessary. Government spending can be restrained, reducing demand and curbing inflationary pressures. Tightening monetary policy through higher interest rates and reducing the money supply can further control inflation and stabilize the economy.
The appropriate mix of fiscal and monetary policy should be flexible and responsive to changing economic conditions. It requires careful coordination and monitoring to achieve the desired outcomes of stable economic growth, low inflation, and a well-functioning financial system.
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the phases of the life course that the government has had the greatest impact on are
The government has had the greatest impact on three phases of the life course: infancy, childhood, and old age.
Infancy, the first phase of life, is a period where individuals are entirely reliant on others for their survival. Governments play a crucial role during this phase by providing healthcare services, immunizations, and infant care programs. These initiatives are aimed at safeguarding the health and well-being of infants and ensuring their survival.
Childhood, the second phase of life, is characterized by growth and development. Governments have had a significant impact on childhood by offering various services such as education, child protection programs, healthcare provisions, and other essential resources. These interventions are designed to support children in their physical, emotional, and cognitive development, enabling them to thrive and reach their full potential.
Old age, the third phase of life, brings about a decline in physical and cognitive abilities. During this phase, governments have a profound impact on the lives of the elderly by providing healthcare services, pensions, and other social programs. These initiatives aim to address the specific needs of the elderly population, ensuring their well-being and quality of life during their later years.
In conclusion, the government plays a pivotal role in different phases of the life course, particularly in infancy, childhood, and old age. By providing essential services and support, governments strive to promote the welfare and enhance the experiences of individuals throughout these critical stages of life.
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Task 2 - Weightage 15% - Write a Formal email: Effective workplace writing is a critical skill to develop and one that you will be using on a daily basis as an IT professional. Developing these skills will be important in creating a good first impression and maintaining your professional reputation with internal and external stakeholders. Scenario: You are a Talent Acquisition specialist of a successful Global Talent recruitment firm. A month ago, you were asked to send a potential Director Level candidate, one of your client's role and job description for their interest. You did this but you have not received a response from them. Write a follow up email to this candidate. In your email you must: - Remind the candidate of the original email you sent to them. - Explain the benefits of joining your client company. - Request a response from them. Prepare an appropriate follow up email to this senior candidate. Remember the time schedule and seniority of their position. Special attention should be paid to clarity of the information, structure, grammar, and professionalism.
The email is a concise follow-up message to a potential Director Level candidate. It includes the necessary elements while maintaining a professional tone:
Subject: Follow-up: Director Level Role at [Client Company]
Dear [Candidate's Name],
I hope this email finds you well. I wanted to follow up on the email I sent you a month ago regarding the Director Level opportunity at our client company. I understand your time is valuable, and I apologize if my previous email went unnoticed.
In my previous communication, I provided you with detailed information about the role and the job description. Our client company is highly interested in your candidacy for this position, considering your experience and expertise. Joining our client's team would offer you the chance to make a significant impact on their strategic direction and benefit from a competitive compensation package, comprehensive benefits, and a supportive work culture.
I kindly request an update on your level of interest in the Director Level role. If you need any additional information or have specific questions, please let me know. Your prompt response would be greatly appreciated as our client is eager to move forward with the selection process.
Thank you for your attention, and I look forward to hearing from you soon.
Best regards,
[Your Name]
Talent Acquisition Specialist
[Your Company Name]
[Your Contact Information]
The email is a concise follow-up message to a potential Director Level candidate. It includes the necessary elements while maintaining a professional tone:
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649 (SCA) by a full bench elucidated on the requirements for delinquency. The appeal concerned, inter alia, relief against an order granted in the Western Cape High Court in declaring two directors in question delinquent in terms of section 162 of the Act. The directors sought for their own personal enrichment to the detriment of their company, upon entering into a transaction to secure a 58% interest in a Special Vehicle Company, which had been incorporated by a property loan stock company listed on the Johannesburg Stock Exchange for the purpose of expanding their shareholder base within the black community for Black Economic Empowerment Purposes.
They used repaid amounts of loans to their company to invest in a separate business venture to secure 50% profit; issued payment to themselves of the full amount of the first dividend received from the SPV in excess of R5 million; issued director's fees of R750 000 each from the SPV to the detriment of SM/; issued director's fees of R2. 75 million from SM/ together with surety fees in excess of R1 million.
2.1 Outline the Sections of the Companies Act, 2008, that the directors contravened and discuss the ways in which they breached their fiduciary
duties.
The directors in question breached their fiduciary duties and contravened sections of the Companies Act, 2008. They engaged in actions that were detrimental to their company, including personal enrichment, unauthorized investments, improper payment of dividends and fees, and misuse of company funds. These actions violated their duties of loyalty, care, and good faith towards the company and its shareholders.
The directors contravened several sections of the Companies Act, 2008 and breached their fiduciary duties. Firstly, their personal enrichment and investment in a separate business venture using repaid amounts of loans to their company likely contravened Section 76 of the Act, which prohibits directors from using company funds for personal gain. Secondly, issuing payment to themselves of the full amount of the first dividend received from the Special Vehicle Company (SPV) in excess of R5 million likely contravened Section 46 of the Act, which requires that dividends be declared and paid in accordance with the company's memorandum of incorporation and the solvency and liquidity test.
Thirdly, issuing director's fees from the SPV and SM/ without proper authorization likely breached Section 66(1) of the Act, which requires that director's remuneration be determined and approved by shareholders. Finally, issuing surety fees in excess of R1 million likely contravened Section 45(2)(a) of the Act, which restricts a company's ability to provide financial assistance to its directors.
In breaching their fiduciary duties, the directors violated their obligations of loyalty, care, and good faith towards the company and its shareholders. Fiduciary duties require directors to act in the best interests of the company, exercise reasonable care and skill, and avoid conflicts of interest. By seeking personal enrichment, making unauthorized investments, improperly paying dividends and fees, and misusing company funds, the directors failed to fulfill these obligations. Such breaches of fiduciary duties can lead to legal consequences and potential liability for the directors.
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The directors in question breached their fiduciary duties and contravened sections of the Companies Act, 2008. They engaged in actions that were detrimental to their company, including personal enrichment, unauthorized investments, improper payment of dividends and fees, and misuse of company funds. These actions violated their duties of loyalty, care, and good faith towards the company and its shareholders.
The directors contravened several sections of the Companies Act, 2008 and breached their fiduciary duties. Firstly, their personal enrichment and investment in a separate business venture using repaid amounts of loans to their company likely contravened Section 76 of the Act, which prohibits directors from using company funds for personal gain. Secondly, issuing payment to themselves of the full amount of the first dividend received from the Special Vehicle Company (SPV) in excess of R5 million likely contravened Section 46 of the Act, which requires that dividends be declared and paid in accordance with the company's memorandum of incorporation and the solvency and liquidity test.
Thirdly, issuing director's fees from the SPV and SM/ without proper authorization likely breached Section 66(1) of the Act, which requires that director's remuneration be determined and approved by shareholders. Finally, issuing surety fees in excess of R1 million likely contravened Section 45(2)(a) of the Act, which restricts a company's ability to provide financial assistance to its directors.
In breaching their fiduciary duties, the directors violated their obligations of loyalty, care, and good faith towards the company and its shareholders. Fiduciary duties require directors to act in the best interests of the company, exercise reasonable care and skill, and avoid conflicts of interest. By seeking personal enrichment, making unauthorized investments, improperly paying dividends and fees, and misusing company funds, the directors failed to fulfill these obligations. Such breaches of fiduciary duties can lead to legal consequences and potential liability for the directors.
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State whether following constitute a contract of bailment under the contract Act 1872?
a) Seizure of goods by custom authorities?
b) Amjad parks his car at parking lot, locks it and keeps keys with himself
A bailment is a legal term that refers to the transfer of possession of personal property, or chattels, from one person to another for some specific purpose.
The Indian Contract Act, 1872 defines a bailment as the delivery of goods by one person to another for some specific purpose, upon a contract that they shall, when the purpose is accomplished, be returned or disposed of according to the directions of the person delivering them (the bailor).
Now, let's analyze whether the following cases are bailments or not:a) Seizure of goods by custom authorities.
It is not considered a contract of bailment under the Contract Act of 1872.
It occurs as a result of a statutory right, and there is no specific purpose involved in it.
When goods are confiscated by a statutory authority, they do not have the consent of the original owner.
Thus, the seizure of goods by custom authorities cannot be considered a bailment.b) Amjad parks his car at the parking lot, locks it, and keeps the keys with himself.
Yes, it can be considered a contract of bailment.
When Amjad parks his car at a parking lot, he temporarily transfers his vehicle's possession to the parking lot's owner.
The car is parked for a specific purpose (to keep it safe and secure), and there is an implied agreement between the owner of the parking lot and Amjad that the car will be kept safely.
Therefore, Amjad's parking of his car at the parking lot is a clear instance of bailment.
Bailment is of two types, namely, Gratuitous Bailment and Bailment for reward.
Gratuitous Bailment is when the bailee gets no remuneration for their services, and Bailment for reward is when the bailee receives a payment for the services they provide.
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Financial Industry Regulatory Authority (FINRA) Rule 3310 requires that members develop and implement a written Anti-Money Laundering (AML) program reasonably designed to comply with the requirements of the BSA, and the implementing regulations promulgated thereunder by the Department of the Treasury.
FINRA observed that firms with effective AML programs actively tailor their risk-based AML program to the firm’s business model and associated AML risks as opposed to simply implementing a more "generic" program. They also conducted independent testing that included sampling customer accounts in order to test whether the firm was collecting and verifying customer identification information on all individuals and entities that would be considered customers under the BSA, as well as trading and money movement activity to test whether the firm was performing adequate monitoring for and investigations of potentially suspicious activity. In addition, they designed training programs that were specific to the roles and responsibilities of the participating employees and captured current and evolving aspects of the AML landscape.
REQUIRED:
(a) State and elaborate the FIVE (5) FINRA observed instances where firms failed to establish and implement an AML program reasonably designed to detect, and cause the reporting of, suspicious activity.
(20 marks)
(b) Elaborate on the benefits of having a risk-based AML program.
a) Five FINRA observed instances where firms failed to establish and implement an AML program reasonably designed to detect and cause the reporting of suspicious activity are:
Inadequate transaction monitoring: The firm did not have appropriate policies and procedures to monitor and track suspicious activity and did not detect red flags identified in their monitoring system. Inadequate independent testing: The firm’s testing procedures were not reasonable or adequate to detect potential AML violations. Inadequate training: The firm failed to provide training on the AML program to employees or provided inappropriate training.
b) A risk-based AML program tailored to a firm's business model and associated AML risks can provide many benefits. These include:Improved efficiency in the allocation of resources: This approach allows a firm to focus its resources on higher-risk activities, customers, and products, rather than devoting them to lower-risk ones.
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Jasper Auto Inc is going to invest in a new machine to produce Part A. The cost of the machine is $400,000. Part A will have variable cost per unit of $75.00 and the sales price per unit will be $140.00. Fixed costs will be $80,000. The machine is expected to have a life of eight years. Jasper Auto requires a return of 10% on their investments.
Required:
Ignoring the effect of taxes, calculate the following . Round all your answers to two decimal points.
Accounting Break-even quantity (2 marks)
Cash Break-even quantity (2 marks)
Financial Break-even quantity (4 marks)
Degree of operating leverage. (2 mark
Accounting Break-even quantity:The accounting break-even quantity of an investment is a calculation that can determine the quantity of products that must be sold to cover the variable and fixed expenses of the investment. The equation is as follows:
Accounting Break-even Quantity = Fixed Costs / Sales Price per Unit - Variable Costs per Unit
Here the fixed costs are $80,000 Variable costs per unit are $75.00Sales Price per unit will be $140.00.Accounting Break-even Quantity = $80,000 / $140 - $75 = 2667.74
Cash Break-even quantity:Cash Break-even quantity= (Fixed costs + Depreciation) / Sales Price per Unit - Variable Costs per UnitSince the machine is going to have a life of eight years, the depreciation will be ($400,000 / 8) $50,000 per year.
Thus, Fixed costs will be $80,000+$50,000 = $130,000.Cash Break-even quantity = ($130,000) / ($140 - $75) = 2,600 Financial Break-even quantity:Financial Break-even quantity = (Fixed Costs + Interest Costs) / Contribution Margin per UnitContribution Margin per Unit = Sales Price per Unit - Variable Costs per UnitHere, we know, the fixed cost is $80,000, the Interest rate is 10%, thus, Interest Costs = $400,000 x 10% = $40,000.Contribution Margin per Unit = $140 - $75 = $65Financial Break-even quantity = ($80,000 + $40,000) / $65 = 1692.31Degree of operating leverage:Degree of operating leverage (DOL) is a measurement of how much the income of an enterprise changes when sales rise or decrease. DOL is equal to Contribution Margin / Net Income. In the above question, contribution margin is $65, fixed costs $80,000, and the income tax rate is not given, so we can’t calculate the net income. Thus, we can’t find the Degree of Operating Leverage. Therefore, the answer is not possible to calculate.
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Prepare entries to record the following non-strategic investment transactions of Arrowhead investment Corporation. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answerș to the nearest whole dollar amount.) 2020 Mar. I Paid $64,980 to purchase a $64,000, two-year, 9.0% bond payable of Action Corporation dated March 1 , Interest is paid quarterly beginning June 1. Management intends to actively trade bond purchases. Apr. 16 Bought 2,200 common shares of Brandon Motors at $27,50. May 2 Paid $42,968 to purchase a five-year, 6.50 s,$44,000 bond payable of Collingwood Corporation. Interest is paid annually each April 30 . June 1 Received a cheque from Action Corporation regarding quarterly interest. Aug. I Brandon Motors' board of directors declared a dividend of $0.75 pst share to shareholders of record on August 10, payable August 15 . 15 Received the Brandon Motors dividend. Sept. I Received a cheque fron Action Carporation regarding quarterly interest. 17 Purchased 25,400 Dauphin Inc. common shares at $3.60. 0ct. 20 Sold the Brandon Motors shares at $31.40. Dec. 1. Received a cheque from Action Corporation regarding quarterly interest. 1. Sold the Action Corporation bond at 101 . 41 Accrued Interest on the Collingrood bond. The fair value of the equity necurity on this date was Dauphin. 53.90. The carrying value equalled the fair value fur the Collingwood bond. Apr. 30 pecelved a cheque from collingwood corporation regarding annual interest.
Accounts Debit Credit Cash $2,860 Interest Receivable - Collingwood Corporation $ 2,860 These are the entries to record the non-strategic investment transactions of Arrowhead Investment Corporation.
Investment transactions are transactions that involve the buying and selling of securities such as shares, bonds, and other similar investments.
The following are the transactions undertaken by Arrowhead Investment Corporation, and we will prepare the entries to record each transaction:
Transaction 1: Arrowhead Investment Corporation paid $64,980 to purchase a $64,000, two-year, 9.0% bond payable of Action Corporation dated March 1. Interest is paid quarterly beginning June 1. Management intends to actively trade bond purchases.
Accounts Debit Credit Bond Payable - Action Corporation $64,000 Cash $64,000
Transaction 2: Arrowhead Investment Corporation bought 2,200 common shares of Brandon Motors at $27.50.Accounts Debit CreditBrandon Motors $60,500Cash $60,500
Transaction 3: Arrowhead Investment Corporation paid $42,968 to purchase a five-year, 6.50 s,$44,000 bond payable of Collingwood Corporation. Interest is paid annually each April 30.
Accounts Debit CreditBond Payable - Collingwood Corporation $44,000Cash $42,968Discount on Bond Payable - Collingwood Corporation $1,032
Transaction 4: Arrowhead Investment Corporation received a cheque from Action Corporation regarding quarterly interest.Accounts Debit CreditCash $1,440Interest Revenue - Action Corporation $1,440
Transaction 5: Brandon Motors' board of directors declared a dividend of $0.75 per share to shareholders of record on August 10, payable August 15.Accounts Debit CreditDividend Receivable - Brandon Motors $1,650Dividend Revenue $1,650
Transaction 6: Arrowhead Investment Corporation received the Brandon Motors dividend.Accounts Debit CreditCash $1,650Dividend Receivable - Brandon Motors $1,650
Transaction 7: Arrowhead Investment Corporation received a cheque from Action Corporation regarding quarterly interest.Accounts Debit CreditCash $1,440 Interest Revenue - Action Corporation $1,440
Transaction 8: Arrowhead Investment Corporation purchased 25,400 Dauphin Inc. common shares at $3.60.Accounts Debit CreditDauphin Inc. $91,440Cash $91,440
Transaction 9: Arrowhead Investment Corporation sold the Brandon Motors shares at $31.40.Accounts Debit Credit Cash $68,680 Gain on Sale of Investment $8,180 Brandon Motors $60,500
Transaction 10: Arrowhead Investment Corporation received a cheque from Action Corporation regarding quarterly interest.Accounts Debit CreditCash $1,440Interest Revenue - Action Corporation $1,440
Transaction 11: Arrowhead Investment Corporation sold the Action Corporation bond at 101.Accounts Debit CreditCash $ 64,640 Premium on Bond Payable - Action Corporation $1,640Bond Payable - Action Corporation $64,000
Transaction 12: Arrowhead Investment Corporation accrued Interest on the Collingwood bond. The fair value of the equity security on this date was Dauphin. 53.90. The carrying value equals the fair value for the Collingwood bond. Accounts Debit CreditInterest Receivable - Collingwood Corporation $2,860Interest Revenue - Collingwood Corporation $2,860
Transaction 13: Arrowhead Investment Corporation received a cheque from Collingwood Corporation regarding annual interest.
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The possibility of losing an investment because of the rise in
an interest rate is known as what?
1.Interest rate risk
2.Market risk
3.Systematic risk
4.Reinvestment rate risk
The possibility of losing an investment because of the rise in an interest rate is known as interest rate risk.
Interest rate risk is the risk of an investment losing value as a result of changes in interest rates. When interest rates increase, the value of fixed-income securities, such as bonds, falls. The risk that interest rate fluctuations will cause a security to lose value is referred to as interest rate risk. The risk that an investment's value will fluctuate as a result of changes in market interest rates is known as interest rate risk. When interest rates rise, bond prices fall, and vice versa, making interest rate risk a significant concern for bond investors.
Market risk is the risk that arises from changes in market prices or rates. In financial markets, this refers to the risk of a decline in the value of financial instruments such as bonds, equities, or currencies. This risk arises from a variety of factors such as economic conditions, political events, and changes in market sentiment. Systematic risk, on the other hand, refers to the risk that affects all firms in a particular market sector or the market as a whole. Reinvestment rate risk is the risk that arises from reinvesting cash flows from fixed-income securities such as bonds at a lower rate than the original investment.
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Liam is deciding whether to buy a $5 sandwich at the nearby café or line up at the sushi store where they’re giving away free salmon sushi for the first 120 customers.
This is not a Microeconomic decision because the salmon sushi does not have any monetary value. The sandwich and salmon sushi are both considered scarce goods. Salmon sushi can sometimes be scarce. Which of the above statements are true?
Only 1 is true.
Only 2 is true.
Only 3 is true.
Both 1 and 2 are true.
Both 1 and 3 are true.
The correct option is Both 1 and 3 are true.Explanation:Microeconomics is the study of how individuals, households, and businesses make decisions on how to allocate resources, known as the allocation of goods and services. T
The decision is based on scarcity; both goods are limited in quantity.The statement "the sandwich and salmon sushi are both considered scarce goods" is accurate. This is because the cafe and the sushi store have limited quantities of both goods to offer their customers.
The statement "this is not a microeconomic decision because the salmon sushi does not have any monetary value" is correct. Monetary value is not the only factor to consider when determining whether a decision is microeconomic or not. The scarcity of the goods is the crucial factor.
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You know the following about Company J’s equity and the stock market (on an annual basis): Company J recently issued preferred for $750.00 net of floatation costs. The preferred pays a quarterly dividend of $9.75. Please round to four places in your calculations. Q 9 Question 9 (4 points) The annual required return on the common stock is Select one: .0433 .0510 .0667 .0770 .0792 .0855 .0998 Q 10 Question 10 (4 points) The annual required return on the preferred, taking floatation costs into account, is Select one: .0052 .0130 .0395 .0476 .0520 .0530 .0568
Company J recently issued preferred stocks for $750.00 net of floatation costs. The preferred stocks pays a quarterly dividend of $9.75. Using the given data, we need to find the annual required return on the common stock and the annual required return on the preferred, taking floatation costs into account. We can use the capital asset pricing model (CAPM) to calculate the annual required return on the common stock:
CAPM formula is: Kc = Rf + B(Rm-Rf)where,
Kc = Required return on equity
Rf = Risk-free rateB = Beta of equity
Rm = Expected market return
For common stocks, the beta is normally given. Here, beta is not given so we have to assume it.
Let us assume the beta as 1.3:
Kc = 0.022 + 1.3(0.076 - 0.022)
Kc = 0.077 or 7.70%
Therefore, the annual required return on the common stock is 7.70%.
The annual required return on the preferred stock, taking floatation costs into account, can be calculated using the following formula:
Kp = Dp / (Net proceeds - F)where,
Kp = Required return on preferred stock
Dp = Preferred dividend
Net proceeds = Issue price - Floatation cost
F = Floatation cost per share
Dp = $9.75 x 4Dp = $39.00
Net proceeds = $750.00
F = (0.02 x $750.00) / 100
F = $15.00
Kp = 39 / (750 - 15)
Kp = 0.052 or 5.20%
Therefore, the annual required return on the preferred, taking floatation costs into account, is 5.20%. or 0.0520
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With a Giffen good, a price reduction: creates a small and positive income effect. leads to a negative income effect which exceeds the positive substitution effect leads to a higher demand for this good leads to a positive income and a positive substitution effect has zero effect on demand because the demand curve is perfectly price inelastic
A Giffen good is a product or service that experiences an increase in demand when its price rises and a decrease in demand when its price falls.
Giffen goods have a "backward-sloping demand curve," which means that as the price rises, so does the quantity demanded, and as the price falls, the quantity demanded decreases. The answer to the given question is: leads to a negative income effect which exceeds the positive substitution effect.A Giffen good is an exception to the law of demand, which states that demand decreases as price rises.
A Giffen good exists when the quantity demanded rises when the price rises, and the quantity demanded decreases when the price falls. The income effect is negative, which means that when the price of a Giffen good rises, the consumer's ability to purchase other goods decreases. As a result, the quantity demanded of the Giffen good increases to offset the decrease in purchasing power.
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