The total cost over 10 years associated with new airplane is lower with $1,050,000 as compared to keeping the current airplane $1,675,000. Therefore, it would be more cost-effective for the company to purchase the new airplane.
In order to determine whether the company should purchase new airplane or not. We must analyze cost and benefits associated in both the scenario.
1. Keeping the current plane.
Airplane cost on date of purchase = $250,000
Current value of the airplane = $75,000
Book value loss = Initial cost - Current book value
= $250,000 - $75,000 = $175,000
Annual fuel cost = $80,000.
Annual maintenance cost = $70,000.
Total cost over 10 years with current plane:
Cost = (Book value loss) + (Annual fuel cost × Number of years) + (Annual maintenance cost × Number of years)
$175,000 + ($80,000 × 10) + ($70,000 × 10)
= $1,675,000
2. Purchase of new plane.
Cost of purchasing a new plane = $350,000.
Annual fuel cost = decreases to $45,000.
Annual maintenance cost = decreases to $30,000
Salvage value= $50,000.
Total cost over 10 years with the new airplane:
Cost = (New airplane cost) + (Annual fuel cost × Number of years) + (Annual maintenance cost × Number of years) - (Salvage value of the current airplane)
Cost = $350,000 + ($45,000 × 10) + ($30,000 × 10) - $50,000
= $1,050,000
Therefore, comparing the cost in both the cases. We can conclude that the company must purchase a new plane as it reduces cost and increase efficiency.
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if unions help workers secure pension benefits, so that those workers are less dependent on government social assistance after their retirement, then
If unions help workers secure pension benefits, it reduces their reliance on government social assistance after retirement.
Unions play a crucial role in advocating for workers' rights, including securing pension benefits. By negotiating with employers, unions strive to ensure that workers have access to retirement plans and pension funds. When workers have robust pension benefits, they are less dependent on government social assistance programs after their retirement. These benefits provide them with a stable income stream and financial security in their later years.
Unionized workers often have collective bargaining power, allowing them to negotiate for better retirement benefits, such as employer contributions, defined benefit plans, or retirement savings matching programs. By safeguarding workers' pension benefits, unions contribute to reducing the burden on government social assistance programs and promote self-sufficiency among retired workers.
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1. Besides the fact that the customers have different ways to buy products, what are the major advantages of this kind of omni-channel strategy? 2. Evaluate the opportunities and risks involved when a formerly pure e-commerce company like Zalando opens a brick-and-mortar store. 3. In view of the recent Coronavirus pandemic, how do you think a) brick-and-mortar retailers and b) purely e-tailers (like Amazon) have altered their operational strategy?
1. The major advantages of the omni-channel strategy include better customer engagement, enhanced brand awareness, the ability to attract new customers and retain existing ones, improved customer experience, and increased sales. With the help of an omni-channel strategy, companies can ensure that their customers get access to the same products and services regardless of the channel they choose to shop.
2. Evaluate the opportunities and risks involved when a formerly pure e-commerce company like Zalando opens a brick-and-mortar store.
There are several opportunities and risks involved when an e-commerce company like Zalando opens a brick-and-mortar store. Opportunities include access to new markets, increased brand awareness, and more personalized customer service.
Risks include higher costs, logistical issues, and inventory management challenges. E-commerce companies need to ensure that they have the necessary infrastructure and resources to manage brick-and-mortar stores and that they are not compromising on their online sales.
3. a) Brick-and-mortar retailers have been forced to close their physical stores, resulting in a significant drop in sales. To mitigate this loss, many retailers have shifted their focus to online sales and have invested in online infrastructure.
Some retailers are offering curbside pickups, while others are offering free shipping and delivery options. Retailers are also adopting new ways to interact with customers, such as virtual shopping, chatbots, and virtual assistants.
b) Purely e-tailers like Amazon have experienced an unprecedented surge in demand due to the pandemic. To meet this surge, Amazon has hired more workers, expanded its supply chain and logistics network, and implemented new safety measures.
Amazon has also increased its investment in automation, such as delivery robots, drones, and autonomous vehicles, to reduce the reliance on human workers.
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On January 1, 2020, Sandhill Company leased equipment to Flynn Corporation. The following information pertains to this lease. 1. The term of the non-cancelable lease is 6 years. At the end of the lease term, Flynn has the option to purchase the equipment for $2,000, while the expected residual value at the end of the lease is $5,000. Equal rental payments are due on January 1 of each year, beginning in 2020. 2. 3. The fair value of the equipment on January 1, 2020, is $165,000, and its cost is $120,000. 4. The equipment has an economic life of 8 years. Flynn depreciates all of its equipment on a straight-line basis. 5. Sandhill set the annual rental to ensure a 6% rate of return. Flynn's incremental borrowing rate is 8%, and the implicit rate of the lessor is unknown. 6. Collectibility of lease payments by the lessor is probable. Both the lessor and the lessee's accounting periods end on December 31.
Prepare all the necessary journal entries for Flynn for 2020.
Flynn is a lessee in this case. Below are the necessary journal entries for Flynn for 2020:2020
January 1Leased Equipment$147,727
Lease Liability$147,727(To record the present value of the lease payments due over the lease term using the incremental borrowing rate of 8%, which is higher than the lessor's implicit rate.)
December 31Lease Payment$24,622
Interest Expense on Lease Liability$11,781
Lease Liability$12,841(To record the first lease payment, which consists of $9,900 principal ($165,000 − $2,000 − $153,000 ÷ 6), $11,781
interest ($147,727 × 8%), and a reduction in the lease liability of $12,841 [$24,622 − $11,781].)
Depreciation Expense$15,000
Accumulated Depreciation - Leased Equipment$15,000(To record the straight-line depreciation expense for 2020 ($120,000 ÷ 8).)January 1, 2021
Lease Payment$24,622
Interest Expense on Lease Liability$10,344
Lease Liability$14,278(To record the second lease payment, which consists of $9,900
principal, $10,344
interest ($129,449 × 8%),
and a reduction in the lease liability of $14,278 [$24,622 − $10,344].)
Therefore, Flynn's accounting entries are as follows:January 1, 2020: Leased Equipment $147,727 and Lease Liability $147,727December 31, 2020:
Lease Payment $24,622,
Interest Expense on Lease Liability $11,781,
Lease Liability $12,841,
Depreciation Expense $15,000, and
Accumulated Depreciation - Leased Equipment $15,000.
Journal entries are the first step in the accounting cycle and are used to record business transactions. The journal entries are then posted to the general ledger.
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Abroad Standard, Inc. (ASI)
Abroad Standard, Inc. (ASI), sells its products through the Internet. Erica is one of the biggest buyers of the company's products for her business. Nearly all of the interactions between Erica's company and ASI have been electronic, saving both time and energy.
Although transaction costs are reasonable, ASI has encountered financial problems with high production costs. Ronald, a veteran employee of ASI, suggested to senior management that certain aspects of production may need to be handled by other, more efficient companies. Ronald also suggested that the company might want to create a physical store to possibly increase its visibility and potential profits. He explained many disadvantages of operating solely through the Internet.
Refer to Abroad Standard, Inc. Ronald suggested that the company __ part of production.
a. outsource
b. import
c. export
d. supply-chain
e. barter
Ronald suggested that the company should outsource part of its production. Outsourcing refers to the practice of contracting a third-party company to handle certain aspects of a business's operations. In this case, Ronald recommended that Abroad Standard, Inc. (ASI) should consider assigning certain production tasks to other, more efficient companies.
Outsourcing can provide several benefits to a company, including cost savings, access to specialized expertise, and increased efficiency. By delegating specific production processes to external partners, ASI may be able to reduce its high production costs and improve overall operational effectiveness.
Additionally, in the given scenario, Ronald also proposed the idea of creating a physical store for ASI to increase its visibility and potential profits. This suggests that ASI could explore a multi-channel approach, combining its online presence with a brick-and-mortar store to cater to a wider customer base and enhance its market presence.
Therefore, the correct answer is a. outsource.
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Briefly comment any similarities between the 4P’s marketing mixes About sports shoes
The 4Ps marketing mix are known as product, price, place, and promotion. They are a crucial element of marketing strategy that represents a balance between the business’s goal and customer’s demand.
The similarities between the 4P’s marketing mixes about sports shoes are discussed below:Product: The product element in the 4P's marketing mix is crucial for a company's marketing strategy. The primary similarity between sports shoes is that they provide comfort and convenience to athletes. The quality, design, and color schemes can vary based on the target audience.Price: The second element in the 4P's marketing mix is price. Sports shoes are available in various price ranges, and it depends on the brand, quality, and features of the shoe. For example, Nike, Adidas, Reebok, and Puma offer sports shoes in different price ranges, depending on their target market.Place: The third element in the 4P's marketing mix is place. The place where sports shoes are sold is critical in marketing. Sports shoes can be sold both online and offline. For instance, sports shoes are sold online through Amazon, eBay, etc. They can also be sold in brick-and-mortar stores.Promotion: The final element of the 4P's marketing mix is promotion. The primary similarity between sports shoes is that they are promoted through athletes who wear them. For example, Nike uses famous athletes like Michael Jordan and LeBron James to promote their products.More than 100 words:Marketing Mix is a business strategy that has been created to assist in the decision-making process. Marketing Mix is divided into four components, which include the product, price, promotion, and place. The Marketing Mix is concerned with how a business markets its product or service to consumers. In this essay, we will be exploring the similarities between the 4P's marketing mix about sports shoes.The first similarity is with the product. Sports shoes provide comfort and convenience to athletes. The quality, design, and color schemes can vary based on the target audience. The second similarity is with price. Sports shoes are available in various price ranges, and it depends on the brand, quality, and features of the shoe. For example, Nike, Adidas, Reebok, and Puma offer sports shoes in different price ranges, depending on their target market.The third similarity is with the place. Sports shoes can be sold both online and offline. For instance, sports shoes are sold online through Amazon, eBay, etc. They can also be sold in brick-and-mortar stores. The final similarity is with the promotion. The primary similarity between sports shoes is that they are promoted through athletes who wear them. For example, Nike uses famous athletes like Michael Jordan and LeBron James to promote their products.
In conclusion, the 4P's marketing mix has been successful in marketing sports shoes. The product, price, place, and promotion are all essential elements that have been integrated into the marketing strategy of sports shoes. The similarities between the 4P's marketing mix about sports shoes show that the strategy can be applied to different products and services. The similarities between the 4P's marketing mix about sports shoes will assist in the decision-making process when marketing a product or service.
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Output (Q): 0 1 2 3 4 5 6
Total Cost (TC): $24 $33 $41 $48 $54 $61 $69
Refer to the table shown here. Diminishing marginal returns starts to occur between units:
2 and 3.
3 and 4.
4 and 5.
5 and 6.
The diminishing marginal returns start to occur between units 3 and 4. Option B is correct.
In Scenario 2, the total cost increases as more units are produced, and we can observe the following total cost values;
The total cost for 2 units is $33.
The total cost for 3 units is $41, which is an increase of $8 compared to the cost of 2 units.
The total cost for 4 units is $48, which is an increase of $7 compared to the cost of 3 units.
The total cost for 5 units is $54, which is an increase of $6 compared to the cost of 4 units.
The total cost for 6 units is $61, which is an increase of $7 compared to the cost of 5 units.
Between units 2 and 3, the increase in total cost is $8. However, between units 3 and 4, the increase in total cost decreases to $7. This decrease indicates diminishing marginal returns, as the additional unit (unit 4) contributes less to the increase in total cost compared to the previous unit (unit 3).
Hence, B. is the correct option.
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--The given question is incomplete, the complete question is
"Output (Q): 0 1 2 3 4 5 6
Total Cost (TC): $24 $33 $41 $48 $54 $61 $69
Refer to the table shown here. Diminishing marginal returns starts to occur between units: A) 2 and 3. B) 3 and 4. C) 4 and 5. D) 5 and 6."--
Suppose that two consumers, you and I, have the same homothetic tastes over goods A and B. My endowment of the two goods is Em = (e∧mA, e∧mB) and your endowment of the two goods is Ey = (e∧xA, e∧yB). Assume that e∧mA + e∧mB = e∧mB+ e∧yB and that whenever A = B, the MRS= -1. (a) If goods A and B are not perfect substitutes, explain where the contract curve will lie and what it shows, making sure you refer to the shape of the Edgeworth Box and the MRS in your answer. (6 marks) (b) If goods A and B were instead perfect substitutes for both consumers who continue to have the same tastes, how will this change the contract curve? (6 marks) (c) 'If we have non-convex tastes in a general equilibrium economy, then this may mean that a competitive equilibria cannot exist. But if an equilibrium does exist, we will have Pareto efficiency. It is only when tastes are convex that there will always be some way of redistributing resources to make any Pareto efficient allocation into a competitive equilibrium.' Evaluate the above statement, commenting on whether you think it is an accurate reflection of the first and second welfare theorems.
The First Welfare Theorem claims that under certain conditions, there will be Pareto-efficient allocations in competitive equilibrium, whereas the Second Welfare Theorem indicates that the Pareto-efficient allocation can be achieved by redistributing resources in competitive equilibrium.(a) Suppose that two consumers have homothetic tastes over two goods A and B.
Their endowments of the two goods are given by Em = (e∧mA, e∧mB) and Ey = (e∧xA, e∧yB), respectively. Here, the sum of both consumers' endowments for good A and good B is equal to the sum of both consumers' endowments for good A and good B.So, the equation is: e∧mA + e∧mB = e∧xB+ e∧yB.
The following conditions have been given in the question:Whenever A = B, the MRS= -1.The two goods are not perfect substitutes. It means that their indifference curves are not straight lines. In such a case, the contract curve will be bowed outward (convex to the origin) from the origin. It will be tangent to both consumers' indifference curves.
The contract curve is a set of points that reflects the allocation of two goods that two consumers will agree upon through exchange. This allocation will be Pareto-efficient.
The MRS is equal to the slope of the indifference curve. So, where the two indifference curves are tangent, the MRS of the two consumers will be equal, which is a necessary condition for an efficient allocation.
(b) In this case, suppose that two consumers, you and I, have the same tastes, and goods A and B are perfect substitutes. If the two consumers have the same tastes, it means they will have identical indifference curves.
Since A and B are perfect substitutes, the indifference curves for these two goods will be straight lines.The contract curve will now be a straight line between the two points where both consumers' endowment points lie on the Edgeworth box.
(c) The statement is true. It's because if we have non-convex tastes in a general equilibrium economy, the allocation will no longer be Pareto-efficient. And in such a case, there can be no competitive equilibrium. Nonetheless, if an equilibrium does exist, it will be Pareto-efficient.
Moreover, it is only when tastes are convex that there will always be a way of redistributing resources to make any Pareto-efficient allocation into a competitive equilibrium.The First Welfare Theorem and the Second Welfare Theorem are both represented by the statement.
The First Welfare Theorem claims that under certain conditions, there will be Pareto-efficient allocations in competitive equilibrium, whereas the Second Welfare Theorem indicates that the Pareto-efficient allocation can be achieved by redistributing resources in competitive equilibrium.
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assume that amazon says that they can prove that they are not a monopsony in the labor market. what specific information might they need to find to support their claim?
To support their claim of not being a monopsony in the labor market, Amazon would need to find specific information.
1. Evidence of a competitive labor market with multiple employers actively hiring in the same industry and geographic region.
2. Data showing a sufficient number of job opportunities available for workers within the labor market.
3. Comparison of wage rates offered by Amazon with those offered by other companies in the same industry and region.
4. Employee turnover rates and reasons for leaving employment, indicating alternative job options for workers.
By analyzing these factors, Amazon could demonstrate that there is a competitive labor market where workers have a range of job options, and Amazon's influence on wage rates and employment opportunities is not monopolistic. This evidence would counter the notion of monopsony power, where a single buyer dominates the labor market and exerts significant control over wages and employment conditions.
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Consider a firm running a business in the pure competition setting. This firm's cost function is as follows: c(y) = y2 + 2y + 100 Note that the notations in this quin consistent with the notations used in class What is the range of y in which the firm definitely exits the market?
a. Ay < 10
b. By <5
c. cy<2√5
d. y >= 10
The cost function of a firm running a business in the pure competition setting is given by c(y) = y² + 2y + 100. We have to determine the range of y in which the firm definitely exits the market. The firm will never exit the market, and the correct option is d. y >= 10. Answer: d. y >= 10
The firm will exit the market when its total revenue is less than the total cost. The firm's total revenue is given by TR(y) = py, where p is the price of the product and y is the quantity sold. In the pure competition setting, the firm is a price-taker, and therefore, p is constant. Let's assume that the price p is equal to 10. Therefore, TR(y) = 10y. The firm's total cost is given by [tex]c(y) = y² + 2y + 100[/tex]. Profit is defined as TR(y) - c(y). Therefore, the profit function is given by [tex]P(y) = TR(y) - c(y) = 10y - (y² + 2y + 100) = -y² + 8y - 100[/tex]. The firm will definitely exit the market when its profit is negative.
Therefore, we have to cost function of y for which P(y) < 0. [tex]P(y) < 0 => -y² + 8y - 100 < 0 => y² - 8y + 100 > 0[/tex]The discriminant of the quadratic equation is given by [tex]b² - 4ac = 8² - 4(1)(100) = -64[/tex]. The discriminant is negative, which means that the quadratic equation has no real roots. Therefore, the quadratic equation is always positive. Therefore, y² - 8y + 100 > 0 for all values of y.
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i get help with this
Q5. 7 Points Two technologies are being considered for a rocket motor for space tourist vehicles. Costs are estimated for development and initial production (including the plant to produce the motors)
Costs are estimated for development and initial production (including the plant to produce the motors).The two technologies considered for a rocket motor for space tourist vehicles are Technology A and Technology B.
Costs for development and initial production are as follows:Technology A:Development cost: $2,000,000Initial production cost: $1,000,000 per yearPlant construction cost: $1,500,000Technology B:Development cost: $3,000,000Initial production cost: $900,000 per yearPlant construction cost: $1,000,000The total cost of technology A would be $4,500,000, whereas the total cost of technology B would be $4,900,000.If the initial production period for the rocket motor for space tourist vehicles is five years, then the cost of technology.
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Which statement is true about displaying open Client Retainers in QBO?
(A)Creating the Client Retainers report starts with the Balance Sheet
(B)You can reconcile the Client Retainers account to clear out partially used retainers
(C)The Client Retainers report should use the current period only
(D)The Client Retainers account can be reconciled automatically using Bank feeds
2. Which statement is true about displaying open Client Retainers in QBO?
(A)Creating the Client Retainers report starts with the Balance Sheet
(B)You can reconcile the Client Retainers account to clear out partially used retainers
(C)The Client Retainers report should use the current period only
(D)The Client Retainers account can be reconciled automatically using Bank feeds
The statement that is true about displaying open Client Retainers in QBO is you can reconcile the Client Retainers account to clear out partially used retainers.
This means that in QuickBooks Online (QBO), you have the ability to reconcile the Client Retainers account to ensure accurate tracking of retainers received from clients.
Reconciliation allows you to match the transactions recorded in the Client Retainers account with the corresponding transactions in your bank statement or other financial records. By doing so, you can identify and clear out partially used retainers, ensuring that the account balance accurately represents the remaining retainers available for future use.
Therefore, b is correct.
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For a corporation, a debt-to-enterprise value ratio was calculated to be 65.0%, this value means: a. the corporation's stock is overvalued by 65.0%, b. the corporation is earning 56.0% of necessary to meet its required interest payments c. shows the fraction of each dollar in revenues that is available to equity holders after the firm pays interest and taxes is 65.0%, d. the extent to which corporations relies on debt as a source of financing is 65.0%, e. None of the above
The debt-to-enterprise value ratio for a corporation of 65.0% means that the extent to which corporations relies on debt as a source of financing is 65.0%.(Option D)
Debt-to-enterprise value ratio is an important metric used to evaluate the degree to which a corporation has used debt to finance its operations. It represents the percentage of a corporation's total enterprise value that is financed by debt. A corporation's enterprise value is calculated as the total market value of its debt and equity. When debt-to-enterprise value ratio is calculated, it is expressed as a percentage of enterprise value and indicates the extent to which the corporation relies on debt financing to generate earnings. If the debt-to-enterprise value ratio is higher, it indicates that the corporation has a higher debt burden, implying higher financial risk, and that a larger portion of its earnings is required to be paid to creditors. If the ratio is lower, the corporation is considered financially stable and is less risky. This means that a debt-to-enterprise value ratio of 65.0% suggests that the extent to which corporations relies on debt as a source of financing is 65.0%. Therefore, option (d) is the correct answer: the extent to which corporations relies on debt as a source of financing is 65.0%.
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Oriole Company issues $2,000,000, 10-year, 7% bonds at 98, with interest payable each January 1. Prepare the journal entry to record the sale of these bonds on January 1, 2022.
The issuance of bonds by the Oriole Company is a source of financing for the firm. The journal entry to record the sale of bonds will be credited and debited according to the transaction that has occurred. In this case, since the bonds are sold at a discount, the journal entry will be a discount on the bonds.
A bond is sold at a discount if it has a coupon rate less than the market interest rate. In the given problem, the bond coupon rate is 7%, and the bonds are sold at a discount, i.e., 98.
The market interest rate can be calculated using the formula Market Interest Rate = Coupon Rate / (1 - Discount Rate) = 7% / (1 - 0.98) = 350%.
To record the sale of $2,000,000, 10-year, 7% bonds, Oriole Company would journalize the transaction as follows:
Cash (2,000,000 x 0.98) = $1,960,000Discount on Bonds Payable = $40,000Bonds Payable = $2,000,000
The cash account is debited for the amount received after the bond's discount ($2,000,000 x 0.98). The discount on bonds payable account is credited with the amount of discount, which is calculated as follows:
Bond Face Value x Discount Rate = $2,000,000 x (1 - 0.98) = $40,000.
Finally, the bonds payable account is credited with the bond's face value, which is $2,000,000.The journal entry to record the sale of the bonds is shown below:
Cash$1,960,000Discount on Bonds Payable$40,000
Bonds Payable$2,000,000
In summary, Oriole Company sold $2,000,000, 10-year, 7% bonds at 98, and interest is payable each January 1.
To record the transaction, Oriole Company would journalize the entry for the amount received, the discount on bonds payable, and the bonds payable. The cash account is debited, while the discount on bonds payable account and the bonds payable account are credited.
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suppose we observe the following rates 1r1=8, 1r2=12 and e(2r1) = 14. if the liquidity premium theory of the term structure of interest rates holds, what is the liquidity premium for year 2
The liquidity premium for year 2, according to the liquidity premium theory, would be 2.
The liquidity premium theory suggests that long-term interest rates consist of two components: the expected future short-term interest rates and a liquidity premium. In this case, we are given the rates for year 1: 1r1 (the short-term rate) and e(2r1) (the expected rate for year 2). The difference between these two rates, which is 14 - 8 = 6, represents the expected increase in the short-term rate from year 1 to year 2. Since the liquidity premium is assumed to be constant, we can infer that the liquidity premium for year 2 is equal to the difference in the two observed rates for year 2, which is 12 - 6 = 6. Therefore, the liquidity premium for year 2 is 2 (12 - 6 = 6).
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The define scope input includes:
a. An expert judgment
b. A project charter
c. A project scope statement
c. Project documents updates
The define scope input includes expert judgment, a project charter, a project scope statement and project documents updates. Option a, b, c, and d is correct.
The Define Scope process is a process that is part of the scope management knowledge area. This process is part of the planning phase of a project. The goal of the Define Scope process is to specify, document, and handle the project's boundaries and deliverables.
The Define Scope process is a part of the project planning phase, which precedes project execution.
The Define Scope process has four input components; expert judgment, a project charter, a project scope statement and project documents updates.
Therefore, option a, b, c, and d is correct.
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How to estimate disturbance term and its variance in econometric
model？
In econometrics, the disturbance term (or error term) is an unobserved variable that captures all factors that affect the dependent variable in a model but are not included in the explanatory variables.
To estimate the disturbance term and its variance in an econometric model, the following steps can be taken:1. Collect the data: The first step is to gather the relevant data that will be used to estimate the model. The data should include observations on both the dependent and independent variables.2. Estimate the model: Once the data is collected, the next step is to estimate the econometric model using a statistical software package. The model will typically be estimated using some form of regression analysis.
Calculate the residuals: After the model is estimated, the residuals can be calculated. Residuals are the differences between the observed values of the dependent variable and the values predicted by the model.4. Test for heteroscedasticity: Before estimating the variance of the disturbance term, it is important to test for heteroscedasticity. Heteroscedasticity is a violation of the assumption of equal variance in the error term across observations. If heteroscedasticity is present, the variance of the disturbance term will not be constant across observations.
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Consider the two-period model in our lecture. A student collects some data as follows: y₁ = 4, y2 = 6 G₁ = 1, G₂ = 1 The student is unable to find any information concerning t1, 12. He assumes that the government's lifetime budget is balanced. The interest rate r is determined by market clearing (denoted by r**). Let the utility function be log(c₁) + log(c₂2) so that the discount factor is 1. What is the equilibrium * ? Is it indeterminate?
The equilibrium interest rate (r*) in this scenario is 2/3 or approximately 0.67.
In the two-period model, the equilibrium interest rate (r*) is determined by the equality between savings and investment. Since the government's lifetime budget is assumed to be balanced, we can set government purchases (G) equal to tax revenues (T).
In this case, we are given G₁ = 1 and G₂ = 1. As the discount factor is 1, we can assume that the government's tax revenues in each period are equal to the government purchases:
t₁ = G₁ = 1
t₂ = G₂ = 1
To find the equilibrium interest rate (r*), we need to equate savings and investment:
(1 + r) x (y₁ - t₁) = y₂ - t₂
Substituting the given values, we have:
(1 + r) x (4 - 1) = 6 - 1
Simplifying the equation:
3(1 + r) = 5
Now, let's solve for r:
3 + 3r = 5
3r = 2
r = 2/3
Therefore, the equilibrium interest rate (r*) in this scenario is 2/3 or approximately 0.67.
The correct question is:
Consider the two-period model in our lecture. A student collects some data as follows:
y₁ = 4 , y2 = 6
G₁ = 1 , G₂ = 1
The student is unable to find any information concerning t₁ , t₂. He assumes that the government's lifetime budget is balanced.
The interest rate r is determined by market clearing (denoted by r* ).
Let the utility function be log(c₁) + log(c₂) so that the discount factor is 1.
What is the equilibrium r* ? Is it indeterminate?
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What is Peloton’s strategy? Assess Peloton’s strategy in terms of (a) its fit with its business environment—particularly in relation to its customers’ needs and preferences and competitors’ offerings; (b) its fit with internal resources/capabilities)
Peloton's strategy revolves around providing a comprehensive and immersive fitness experience to its customers through its connected exercise equipment and digital content.
The company aims to create a seamless blend of hardware, software, and content to cater to the evolving needs and preferences of its target market. Peloton's strategy aligns well with the changing trends and demands in the fitness industry. It caters to the needs and preferences of customers who seek convenient and engaging workout options at home.
By offering live and on-demand classes across various fitness disciplines, Peloton provides a personalized and interactive fitness experience. This approach taps into the growing demand for at-home fitness solutions, especially during the COVID-19 pandemic. Additionally, Peloton's competitive pricing and subscription-based revenue model help position it favorably in the market.
Peloton's strategy leverages its internal resources and capabilities effectively. The company has invested heavily in developing high-quality exercise equipment, integrating advanced technology, and curating engaging content. Peloton's robust supply chain and manufacturing capabilities enable it to deliver its products efficiently. Its strong brand and community-building efforts contribute to customer loyalty and engagement. Moreover, Peloton's continuous innovation and focus on data-driven insights enable it to refine its offerings and tailor them to customer preferences.
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Question 1 1 pts What was one detrimental effect caused by chain stores according to anti-chain store activists in the 1920s? Edit View Insert Format Tools Table 12pt Paragraph BIU T²V: р 0 words
According to anti-chain store activists in the 1920s, one detrimental effect caused by chain stores was the loss of independent businesses.
Chain stores threatened small businesses and caused them to go out of business, leading to a decline in local economies. This in turn led to a concentration of wealth and power in the hands of a few large corporations, which many people believed was harmful to the overall health of society.
In the 1920s, the emergence of chain stores threatened local businesses, causing them to go out of business. This led to a decline in local economies and a concentration of wealth and power in the hands of a few large corporations, which many people believed was detrimental to the overall health of society.
As a result, anti-chain store activists pushed for regulations to limit the power and influence of these corporations. Despite their efforts, however, chain stores continued to grow in number and influence throughout the 20th century, leading to the rise of the modern retail industry.
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On January 1, 2021 the national government provided a grant to Brgy ACYFA2 amounting to 24,000,000 intended to construct a new barangay hall provided that the said construction was finihsed August 15, 2021 for an amount of P32,000,000 with best estimate of the useful life at 40 years
On December 31, 2022 how much should be the ending balance of the recorded contra asset against the building barangay hall
The ending balance of the recorded contra asset against the building Barangay Hall as of December 31, 2022 is P22,900,000.
Accounting for building Barangay Hall
Debit:
Building Barangay Hall = P32,000,000
Credit:
Building Barangay Hall (contra asset) = P24,000,000
Credit:
National Government Grant = P24,000,000
In this case, the contra asset account is used to record the grant.
The balance of the contra asset account against the building Barangay Hall as of December 31, 2022 is computed as follows:
Accumulated Depreciation = P32,000,000/40 years
= P800,000 per year
Depreciation expense for year ending December 31, 2021 = P800,000 x 4.5 months
= P300,000
Depreciation expense for year ending December 31, 2022 = P800,000
Depreciation expense for year ending December 31, 2022 is the expense charged against the asset on the balance sheet at the end of the year.
Therefore, the balance of the contra asset account against the building Barangay Hall as of December 31, 2022 is:
P24,000,000 - P300,000 - P800,000 = P22,900,000
Therefore, the ending balance of the recorded contra asset against the building Barangay Hall as of December 31, 2022 is P22,900,000.
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If you were a dictator for the standard OLG model economy, a. What would be your problem to solve? Write down what you think and explain. b. Can you solve for the necessary FOC of the problem that you have defined in part a? Explain?
If I were a dictator for the standard OLG model economy, my problem to solve would be the inequality and the disparities between the young and old population.
The standard OLG model economy is a simple economic framework for studying the interaction between generations and how they impact economic growth. The model is based on the idea that there are two groups in the population: the young and the old.The young population does not receive the same benefits as the old population, which creates a wealth inequality that can lead to social and political instability.
The young population produces goods and services, while the old population consumes them. The young population also saves for their future consumption, which is realized when they become old. However, there is a problem with this model. To solve this problem, I would implement policies that would redistribute wealth and income to the young population.
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Your customer has paid their bill, yet the Accounts Receivable balance has not changed. Which of the following could have caused this error?
A Bypassing the Pay Bills window and writing a check to the vendor
B Running the Open Invoices report before accepting payment
C Deleting the deposit before reconciliation
D Bypassing the Receive Payments window and entering the payment directly in the Bank Deposits window
The option that could have caused the error of a customer having paid their bill yet the Accounts Receivable balance has not changed is D) bypassing the Receive Payments window and entering the payment directly in the Bank Deposits window.
Explanation: Accounts Receivable (AR) is a liability account in accounting that represents money due to a company in the short-term. AR is typically associated with the sale of goods or services on credit. If customers pay their bills on time, AR is reduced, as are the company's overall liabilities. Bypassing the Receive Payments window and entering the payment directly in the Bank Deposits window could have caused this error.
When a customer pays a bill and that payment is not recorded in the Receive Payments window, it will not be applied to the customer's outstanding balance in QuickBooks. When this happens, the accounts receivable balance will not be changed, even though the customer has paid their bill.
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ABS engineering decided to build and new factory to produce electrical parts for computer manufacturers. They will rent a small factory for 2,000dhs per month while utilities will cost 500dhs per month, they had to pay 800Dhs for municipality for water and electricity connection fees. On the other hand they will rent production equipment at a monthly cost of 5,000dhs. they estimated the material cost per unit will 20dhs, and the labor cost will be 10dhs per unit. They need to hire a manager and security for with a salary of 30,000 and 5,000dhs per month each. Advertising and promotion will cost cost them 3,500dhs per month. Required: 6- What is the fixed cost per unit at maximum production?= 7- What is the total variable cost at maximum production?= 8- 1If they set the selling price for 80DHS on max production and managed to reduce the total fixed cost by 3% what is the profit increase percentage= 9- If they set the selling price for 80DHS on max production and managed to reduce the total variable cost by 3% what is the profit increase percentage=
6- The fixed cost per unit at maximum production can be calculated as follows:Fixed Cost Per Unit = (Monthly Fixed Cost + Depreciation) / Total Units Produced per Month Where, Monthly Fixed Cost = Rent + Utilities + Municipality Fees + Production Equipment Rent = 2,000 + 500 + 800 + 5,000 = 8,300Depreciation = 0 (since it is not provided in the given data)Total Units Produced per Month = 10,000
Fixed Cost Per Unit = (8,300 + 0) / 10,000 = 0.83DHS/unitTherefore, the fixed cost per unit at maximum production is 0.83 DHS/unit.7- The total variable cost at maximum production can be calculated as follows:Total Variable Cost = Material Cost per Unit + Labor Cost per UnitWhere, Material Cost per Unit = 20DHS/unitLabor Cost per Unit = 10DHS/unit
Total Variable Cost = 20DHS/unit + 10DHS/unit = 30DHS/unitTherefore, the total variable cost at maximum production is 30DHS/unit.8- If they set the selling price for 80DHS on max production and managed to reduce the total fixed cost by 3%, then the profit increase percentage can be calculated as follows:
Profit Increase Percentage = (New Profit - Old Profit) / Old Profit × 100Where, Old Profit = Selling Price - Total Cost (Fixed Cost + Variable Cost) = 80DHS - (0.83DHS/unit + 30DHS/unit) × 10,000 units = 406,700DHSNew Fixed Cost = 0.97 × 8,300DHS = 8,051DHS
New Profit = Selling Price - Total Cost (New Fixed Cost + Variable Cost) = 80DHS - (8,051DHS + 30DHS/unit) × 10,000 units = 471,700DHSProfit Increase Percentage = (471,700DHS - 406,700DHS) / 406,700DHS × 100 = 16%Therefore, the profit increase percentage is 16%.9- If they set the selling price for 80DHS on max production and managed to reduce the total variable cost by 3%,
Then the profit increase percentage can be calculated as follows:Profit Increase Percentage = (New Profit - Old Profit) / Old Profit × 100Where, Old Profit = Selling Price - Total Cost (Fixed Cost + Variable Cost) = 80DHS - (0.83DHS/unit + 30DHS/unit) × 10,000 units = 406,700DHS New Variable Cost = 0.97 × 30DHS/unit = 29.1DHS/unitNew Profit = Selling Price - Total Cost (Fixed Cost + New Variable Cost) = 80DHS - (0.83DHS/unit + 29.1DHS/unit) × 10,000 units = 413,700DHSProfit Increase Percentage = (413,700DHS - 406,700DHS) / 406,700DHS × 100 = 1.7%
Therefore, the profit increase percentage is 1.7%.
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Nabil is considering buying a house while he is at university. The house costs $220,000 today. Renting out part of the house and living in the rest over his two years at school will net,after expenses,$3500 per month.He estimates that he will sell the house after two years for $230,000.If Nabil's MARR is 6 percent compounded monthly, should he buy the house? Use present worth. Click the icon to view the table of compound interest factors for discrete compounding periods when i= 6% compounded monthly. Nabil buy the house because the present worth of the house is $ (Round to the nearest cent as needed.)
To determine if Nabil should buy the house, we need to calculate the present worth of the house and compare it to the cost of buying it.
Given:
- House cost: $220,000
- Net monthly income after expenses from renting out: $3,500
- Selling price after two years: $230,000
- MARR (Minimum Acceptable Rate of Return): 6% compounded monthly
To calculate the present worth, we'll consider the net monthly income from renting out the house and the selling price after two years. We'll discount these cash flows back to their present values using the MARR.
First, let's calculate the present worth of the net monthly income over the two years. We can use the compound interest factors table for discrete compounding periods to find the appropriate factor for the MARR of 6% compounded monthly over two years. From the table, the factor for two years at 6% compounded monthly is 1.12986.
Present worth of net monthly income = Net monthly income x Present worth factor
Present worth of net monthly income = $3,500 x 1.12986 = $3,964.01
Next, let's calculate the present worth of the selling price after two years. We need to discount the selling price using the same MARR.
Present worth of selling price = Selling price / (1 + MARR)^n
Present worth of selling price = $230,000 / (1 + 0.06/12)^24 = $207,388.29
Now, let's calculate the total present worth of the house by summing the present worth of the net monthly income and the present worth of the selling price:
Total present worth = Present worth of net monthly income + Present worth of selling price
Total present worth = $3,964.01 + $207,388.29 = $211,352.30
Since the total present worth of the house is $211,352.30, which is higher than the cost of the house ($220,000), Nabil should buy the house. The present worth of the house is greater than the initial investment, indicating that it is a financially viable decision according to the given MARR of 6% compounded monthly.
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Morales, president of Tradewind Industries, Inc., would have actual implied authority to:
a. issue corporate stock.
b. remove a vice-president of the company from office.
c. bind the company in a sale in the ordinary course of the company business.
d. set the amount for production bonuses of the other officers.
Morales, president of Tradewind Industries, Inc., would have actual implied authority to bind the company in a sale in the ordinary course of the company business. So the right option is (C) bind the company in a sale in the ordinary course of the company business.
Which of the following would the president of Tradewind Industries, Inc. have actual implied authority to do?The President of Tradewind Industries, Inc., Morales, would have the authority to bind the company in a sale in the ordinary course of the company business.
Implied authority is the authority that someone is understood to have even though it is not written down or stated explicitly. Furthermore, it is based on what is needed to accomplish the job.If the sale is part of the company's regular activities, Morales would have the implied authority to bind the company in that sale.
However, issuing corporate stock, removing a vice-president of the company from office, and setting the amount for production bonuses of the other officers would not be within the scope of Morales' actual implied authority.
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What is a good prediction of future occurrences in global markets?
To make a good prediction of future occurrences in global markets, a few methods and elements should be taken into account:
Economic Indicators: Keeping an eye on important economic indicators like GDP growth rates, inflation, interest rates, employment statistics, and consumer mood can provide us clues about how the world markets will develop. Changes in these variables can affect market movements and aid in the forecasting of upcoming events.
Geopolitical Factors: Because they have a substantial impact on worldwide markets, geopolitical events like trade fights, political stability, regulatory changes, and wars must be closely monitored. Predicting market movements can be made easier by examining the possible effects of these events.
Analysis of individual Industries and Companies: Analysing individual industries and businesses in-depth can aid in spotting trends and forecasting future events within those sectors. Predictions can be made with the use of elements like technical development, competitive environment, market demand, and financial performance.
Expert Opinions: Consulting with financial analysts, economists, and industry experts who closely follow global markets can provide valuable perspectives and insights.
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Selected Stock Transactions Alpha Sounds Corp, an electric guitar retaler, was organized by Michele Kirty, Paul Glenn, and Gretchen Northway The charter authorized 1,000,000 shares of common stock with a par of $1. The following transactions affecting stockholders' equity were completed during the first year of operations Journalize the entries to record the transactions. a. Issued 100,000 shares of stock at par to Paul Glenn for cash. If an amount box does not require an entry, leave it blank. Cosb - 100,000 100,000 Common- stock b. (1) Issued 3,000 shares of stock at par to Michele Kirby for promotional services provided in connection with the organization of the corporation, and (2) issued 45,000 shares of stock at par to Michele Kirby for cash. If an amount box does not require an entry, leave it blank. (1) Organizational 3,000 Expense coob 15,000 3,000 cash 45,000 178 Chmmba 45,000 stock c. Purchased land and a building from Gretchen Northway in exchange for stock issued at par. The building is mortgaged for $160,000 for 20 years at 6%, and there is accrued interest of $5,200 on the mortgage note at the time of the purchase. It is agreed that the land is to be priced at $60,000 and the building at $225,000 and that Gretchen Northway's equity will be exchanged for stock at par. The corporation agreed to assume responsibility for paying the mortgage note and the accrued interest. If an amount box does not require an entry, leave it blank. (2)
Here are the journal entries to record the transactions:
a. Issued 100,000 shares of stock at par to Paul Glenn for cash.
Cash 100,000Common Stock 100,000b. (1) Issued 3,000 shares of stock at par to Michele Kirby for promotional services provided in connection with the organization of the corporation.
Organizational Expense 3,000Common Stock 3,000b. (2) Issued 45,000 shares of stock at par to Michele Kirby for cash.
Cash 45,000Common Stock 45,000c. Purchased land and a building from Gretchen Northway in exchange for stock issued at par. The building is mortgaged for $160,000 for 20 years at 6%, and there is accrued interest of $5,200 on the mortgage note at the time of the purchase. It is agreed that the land is to be priced at $60,000 and the building at $225,000 and that Gretchen Northway's equity will be exchanged for stock at par. The corporation agreed to assume responsibility for paying the mortgage note and the accrued interest.
Land 60,000Building 225,000Mortgage Payable 160,000Accrued Interest Payable 5,200Common Stock 285,200Note: The amounts recorded for the land, building, mortgage payable, and accrued interest payable are based on the information provided in the question.
About JournalJournal are periodic publications in academic publications which are generally in the form of the latest research reports with the aim of advancing science. A scientific journal is a form of media for publishing scientific papers.
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What should a tax practitioner know about his/her client
before
agreeing to do his/her tax return? Explain the importance on
understanding each clients’ circumstances.
A tax practitioner should know about his/her client before agreeing to do his/her tax return is his/her client's financial affairs
In order to ensure accurate compliance with tax laws and regulations, the tax practitioner should be aware of any transactions that might have an impact on the client's tax liability. It's crucial to recognize that each client has different circumstances that require special consideration when preparing a tax return. It's essential to understand each client's situation since each client is unique in terms of their financial circumstances, and as a result, tax liability. A tax practitioner must be familiar with the client's current year financial records, including all bank statements, investment portfolios, credit card statements, and income statements.
The tax practitioner must be aware of the client's tax filing status, exemptions, and any other tax credits that apply to the client's situation. It's essential to provide correct and appropriate guidance to clients on all aspects of their tax returns while providing personalized tax guidance. In summary, the importance of understanding each client's situation before agreeing to do his/her tax return cannot be overstated. It's essential to ask the appropriate questions to ensure that the tax return is correct and that the client gets the best possible outcome.
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The table below provides the total variable cost for a firm. Quantity of Output Total Variable Cost 0 $0 $50 $60 $75 4 $100 If the fixed cost is $60, what is the average total cost of the 3rd unit? $45 0 $25 $35 $135 $75 1 2 3
The average total cost of producing the 3rd unit, taking into account both fixed and variable costs, is $45.
To calculate the average total cost (ATC), we need to divide the total cost (TC) by the quantity of output (Q). In this case, the total cost consists of the sum of fixed cost (FC) and variable cost (VC).
Given that the fixed cost is $60, we can determine the variable cost for each quantity of output using the provided table:
For the 3rd unit, the total variable cost (TVC) is $75.
To calculate the total cost (TC), we sum the fixed cost and the total variable cost: TC = FC + TVC = $60 + $75 = $135.
Since the quantity of output for the 3rd unit is 3, we can calculate the average total cost (ATC) by dividing the total cost by the quantity of output: ATC = TC / Q = $135 / 3 = $45.
Therefore, the average total cost of the 3rd unit is $45.
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Goodwin Technologies, a relatively young company, has been wildly successful but has yet to pay a dividend. An analyst forecasts that Goodwin is likely to pay its first dividend three years from now. She expects Goodwin to pay a $1.25000 dividend at that time (D3 = $1.25000) and believes that the dividend will grow by 6.50000% for the following two years (D4 and D5). However, after the fifth year, she expects Goodwin's dividend to grow at a constant rate of 3.36000% per year. Goodwin's required return is 11.20000%. Fill in the following chart to determine Goodwin's horizon value at the horizon date (when constant growth begins) and the current intrinsic value. To increase the accuracy of your calculations, do not round your intermediate calculations, but round all final answers to two decimal places. Term Value Horizon value ________
Current intrinsic value _________
Assuming that the markets are in equilibrium, Goodwin's current expected dividend yield is_____ , and Goodwin's capital gains yield is ______
Goodwin has been very successful, but it hasn't paid a dividend yet. It circulates a report to its key investors containing the following statement: Investors prefer the deferred tax liability that capital gains offer over dividends. Is this statement a possible explanation for why the firm hasn't paid a dividend yet? a. Yes b. No
The following chart to determine Goodwin's horizon value at the horizon date is given:
The ChartTerm | Value
-------|--------
Horizon value | 26.55
Current intrinsic value | 19.03
Current expected dividend yield | 0.00%
Capital gains yield | 11.60%
The statement that "Investors prefer the deferred tax liability that capital gains offer over dividends" is a possible explanation for why Goodwin has not paid a dividend yet.
Despite capital gains being acquired by a company, there is no obligation to pay taxes on such gains until they become realizable. One effective strategy of minimizing taxes for a business is to reinvest earnings, thereby allowing them to grow through capital gains, and consequently postponing tax payments.
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