We are given that: October's expected sales: $250,000Cost of goods sold = 60% of sales = 60% x $250,000 = $150,000
Budgeted ending inventory for October = 20% of next month's budgeted cost of goods sold = 20% x $150,000 = $30,000.
Required available inventory for October = Cost of goods sold + Budgeted ending inventory = $150,000 + $30,000 = $180,000Budgeted beginning inventory for October = 20% of next month's budgeted cost of goods sold = 20% x $150,000 = $30,000
Required purchases for October = Required available inventory - Budgeted beginning inventory = $180,000 - $30,000 = $150,000
To calculate the expected cash payments for purchases in October, we need to find out the purchases made in August, September, and October, and the payments made for these purchases. For this purpose, we use the information provided in the table given in the question: August purchases = $195,000September purchases = $192,000October purchases = $0Payments made in September = $192,000 x 50% = $96,000Payments made after September = $192,000 x 35% = $67,200 (for October) and $192,000 x 15% = $28,800 (for November)
Therefore, the expected cash payments for purchases in October = Payments made in October + Payments made in November= $67,200 + $0 = $67,200.
Hardy Company has a cost of goods sold that is consistently 60% of sales. The company plans ending merchandise inventory for each month equal to 20% of the next month's budgeted cost of goods sold. All merchandise is purchased on credit, and 50% of the purchases made during a month are paid for in that month. Another 35% is paid for during the first month after purchase, and the remaining 15% is paid for during the second month after purchase. The expected sales for August, September, October, and November are $325,000, $320,000, $250,000, and $310,000, respectively. We can use this information to determine the expected cash payments for purchases in October.
To find out the expected cash payments for purchases in October, we first need to calculate the required purchases for October. For this, we need to find out the required available inventory and the budgeted beginning inventory for October. The cost of goods sold for October is 60% of the expected sales for October, which is $250,000 x 60% = $150,000. The budgeted ending inventory for October is 20% of the next month's budgeted cost of goods sold, which is $150,000 x 20% = $30,000. Therefore, the required available inventory for October is $150,000 + $30,000 = $180,000. The budgeted beginning inventory for October is also 20% of the next month's budgeted cost of goods sold, which is $30,000.
To calculate the required purchases for October, we need to subtract the budgeted beginning inventory from the required available inventory.
Therefore, the required purchases for October are $180,000 - $30,000 = $150,000. To find out the expected cash payments for purchases in October, we need to know the purchases made in August, September, and October, and the payments made for these purchases. From the information given in the question, we know that the purchases made in August and September are $195,000 and $192,000, respectively. The purchases made in October are not given, so we assume them to be zero. We also know that 50% of the purchases made during a month are paid for in that month, 35% is paid for during the first month after purchase, and 15% is paid for during the second month after purchase.
Therefore, the payments made for purchases in August are $195,000 x 50% = $97,500, the payments made for purchases in September are $192,000 x 50% = $96,000, and the payments made for purchases in October are $192,000 x 35% = $67,200. The payments made for purchases in November are $192,000 x 15% = $28,800.
Conclusion:
Therefore, the expected cash payments for purchases in October are $67,200 + $0 = $67,200.
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briefly explain the term gross value added at basic prices
Gross value added (GVA) is defined as output (at basic prices) minus intermediate consumption (at purchaser prices); it is the balancing item of the national accounts' production account. GVA can be broken down by industry and institutional sector.
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Question 13 wered ced out of 9 en Goodwill Millennium Corporation purchases Falcon Inc. for $3.5 M. Falcon has the following assets all recorded at cost: Accounts receivable $ Inventory Land Building (net) Equipment (net) Total Assets Requirements: 125,000 350,000 500,000 350,000 50,000 $1,375,0000 The fair value of the assets is $2,350,000 and Millennium also assumes $600,000 of debt from Falcon. Determine if there is any goodwill related to Millennium's purchase of Falcon and if so what is the value of the goodwill? Show you below. $ Goodwill is captured on the (
Goodwill Millennium Corporation purchases Falcon Inc. for $3.5 M. Falcon has the following assets all recorded at cost: Accounts receivable $ Inventory Land Building (net) Equipment (net) Total Assets Requirements. Goodwill is valued is "$1.15 million".
Goodwill is captured on the balance sheet when the purchase price of an acquired company exceeds the fair value of its identifiable net assets.
To determine if there is any goodwill related to millennium's purchase of Falcon,
we need to compare the purchase price to the fair value of Falcon's identifiable net assets.
Given that,
Purchase price of Falcon = $3.5 million
Fair value of Falcon's identifiable net assets = $2.35 million
To calculate the value of the goodwill,
we subtract the fair value of Falcon's identifiable net assets from the purchase price,
Goodwill's corporation = Purchase Price of asset - Fair Value of the Net Assets
Goodwill = $3.5 million - $2.35 million
Goodwill = $1.15 million
Therefore, Millennium's purchase of Falcon's value is $1.15 million.
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Help me please.. there is no option on here for Human Resources principals, so I jus clicked business as the subject..
Answer:
A. Traditional model
Explanation:
The strategic planning model refers to methods used by companies in setting goals, making decisions and implementing them within their organizations. The traditional or basic model is used by companies with no clearly defined methods of operation. They begin by defining the mission and vision of the company and develop ways to achieve these goals.
They monitor the goals they have set overtime to evaluate the progress they have so far made. The organizations adopting this model might have never done extensive projects before.
The question contains a description of four experiments we performed before.
1. For each of the three experiments, formulate the extensive form game.
2. Find the Nash equilibrium and the subgame perfect equilibrium for each experiment
Experiment 1:ultimatum overview
paired into groups of two; one is the Proposer, the other the Responder
Proposer proposes how to divide $100.
Responder chooses either Accept or Reject
if Accept, then earnings determined by accepted proposal
if Reject, then both players earn $0
Experiment 2: split the pie overview
paired into groups of two; one is randomly selected to be Divider
divider chooses how to divide $100
payoffs are determined by this choice
Experiment 3: an investment game overview
groups of two: Investor and Responder
each starts with $100
Investor chooses how much to send to Responder (the investment)
Responder gets investment × multiplier (3)
Responder chooses how much money to return to Investor
There is a Nash equilibrium in which the investor does not contribute anything, and the responder receives $0.
The given experiments and their solutions are as follows:
Experiment 1: Ultimatum Game- The extensive form game is as follows: The Nash equilibrium is when the proposer offers a 50:50 split, and the responder accepts. Subgame perfect equilibrium is the same as the Nash equilibrium.
Experiment 2: Split the Pie- The extensive form game is as follows: The Nash equilibrium is when the divider offers the other player $0, and the other player accepts the offer. Subgame perfect equilibrium is the same as the Nash equilibrium.Experiment 3: Investment Game- The extensive form game is as follows: The Nash equilibrium is when the investor invests nothing, and the responder returns nothing. Subgame perfect equilibrium is when the investor invests nothing, and the responder returns nothing.
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The exchange rate at the start of the year is $25/€. The
exchange rate now is $30/€. Since the start of the year the dollar
has
Depreciated
Appreciated
Based on the given exchange rate information, the dollar has depreciated against the euro since the start of the year, indicating an increase in the value of the euro relative to the dollar.
Since the exchange rate at the start of the year was $25/€ and it is now $30/€, it means that the value of the euro has increased relative to the dollar. In other words, the dollar has depreciated against the euro since the start of the year.To understand this, let's consider the perspective of a person holding dollars. At the start of the year, this person could exchange 1 euro for $25. However, if they were to exchange 1 euro now, they would receive $30. This indicates that it now takes more dollars to buy the same amount of euros, implying a decrease in the value of the dollar.A depreciation of a currency usually occurs due to various factors, including changes in interest rates, inflation rates, economic growth, political stability, and market speculation.
In this case, it could be influenced by a range of factors, such as a stronger eurozone economy, higher interest rates in the eurozone, or changes in global trade dynamics.The depreciation of the dollar against the euro can have implications for various stakeholders. For individuals or businesses in the United States that import goods or services from the eurozone, the depreciation means that they will have to spend more dollars to purchase the same amount of goods or services, potentially leading to increased costs. On the other hand, for U.S. exporters, a weaker dollar can make their goods or services relatively cheaper for eurozone consumers, potentially boosting exports.
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Myca Corporation has a project with the following cash flows. What is the value of the cash flows today assuming an anual interest rate of 8.8 percent? Year 1234 2 Cash Flow $1,580 1,940 2,220 2,230
Therefore, the value of the cash flows today is $7,863.06 assuming an annual interest rate of 8.8 percent.
When we talk about finance, a cash flow is a record or statement that tracks the amount of cash or cash equivalents moving in and out of a business over time.
The term 'cash flow' is frequently used to describe three different but equivalent concepts: Net cash flow, Free cash flow, Operating cash flow . In this scenario, we are working with net cash flows, which are cash inflows minus cash outflows for a particular period. The calculation of net present value (NPV) involves determining the present value of future cash flows. Future cash flows must be estimated, and the discount rate used to estimate them must be determined.
What is the value of the cash flows today assuming an annual interest rate of 8.8 percent?
Year 1 Cash Flow $1,580
Year 2 Cash Flow $1,940
Year 3 Cash Flow $2,220
Year 4 Cash Flow $2,230
To determine the present value of cash flows, we use the formula;
PV = CF1 / (1 + r)1 + CF2 / (1 + r)2 + CF3 / (1 + r)3 + CF4 / (1 + r)4
Where: PV = Present Value, CF = Cash Flow, r = Discount Rate,
Year 1: $1,580/(1+0.088)¹ = $1,454.11
Year 2: $1,940/(1+0.088)² = $1,702.11
Year 3: $2,220/(1+0.088)³ = $1,849.51
Year 4: $2,230/(1+0.088)⁴ = $1,857.33
Adding the four discounted cash flows will give us the present value of the cash flows today.
PV = $1,454.11 + $1,702.11 + $1,849.51 + $1,857.33PV = $7,863.06
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Make or Buy Terry Incorporated manufactures machine parts for aircraft engines. CEO Bucky Walters is considering an offer from a subcontractor to provide 2,850 units of product OP89 for $316,350. If Terry does not purchase these parts from the subcontractor, it must continue to produce them in-house with these costs: Cost per Unit Direct materials $ 45 Direct labor 35 Variable overhead 33 Allocated fixed overhead 4 Required: 1. What is the relevant cost per unit to make the product internally? 2. What is the estimated increase or decrease in short-term operating profit of producing the product internally versus purchasing the product from a supplier?
The estimated decrease in short-term operating profit of producing the product internally versus purchasing the product from a supplier is
The estimated increase or decrease in short-term operating profit of producing the product internally versus purchasing the product from a supplier will be;
Calculation of the Cost to Make 2,850 Units:Direct Materials: 2,850 × $45 = $128,250
Direct Labor: 2,850 × $35 = $99,750
Variable Overhead: 2,850 × $33 = $94,050
Allocated Fixed Overhead: 2,850 × $4 = $11,400
Total Cost: $333,450
Calculation of the Cost to Buy 2,850 Units:2,850 × $316,350 = $316,350
Thus, the estimated increase or decrease in short-term operating profit of producing the product internally versus purchasing the product from a supplier will be;
By making the product internally:
Total Cost = $333,450
Revenue (2850 units x $130) = $370,500
Profit = Revenue - Total Cost = $370,500 - $333,450 = $37,050
By purchasing the product externally:
Total Cost = $316,350
Revenue (2850 units x $130) = $370,500
Profit = Revenue - Total Cost = $370,500 - $316,350 = $54,150
the estimated decrease in short-term operating profit of producing the product internally versus purchasing the product from a supplier is $54,150 - $37,050 = $17,100.
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the norwegian government uses $500,000 of previously obtained u.s. dollars to buy $500,000 of police cars from a
In this case, the purchase of $500,000 of police cars by the Norwegian government using previously obtained U.S. dollars will have an impact on the U.S. net exports (NX) and net capital outflow (NCO).
Firstly, the purchase of $500,000 worth of police cars from a U.S. company will increase U.S. exports, leading to a positive change in net exports (NX). The transaction represents an export of goods from the U.S., contributing to an increase in the value of U.S. exports and thus boosting NX.
Secondly, since the Norwegian government is using previously obtained U.S. dollars to make the purchase, there will be no change in the U.S. net capital outflow (NCO).
NCO measures the net flow of capital from a country to the rest of the world, taking into account investments and purchases of foreign assets. In this case, there is no new capital outflow from the U.S. as the Norwegian government is utilizing existing U.S. dollars, and therefore, NCO remains unchanged.
In conclusion, the transaction of the Norwegian government purchasing $500,000 of police cars from a U.S. company using previously obtained U.S. dollars will result in an increase in net exports (NX) for the U.S., while the net capital outflow (NCO) remains unaffected.
This transaction contributes positively to the U.S. trade balance by increasing exports and highlights the importance of considering both NX and NCO when analyzing international transactions.
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Complete Question:
Consider the following cases and indicate for each case the direction and amount of changes in NX and NCO for the U.S. (e.g. NX decreases by $2, NCO increases by $3. etc.). The Norwegian government uses $500,000 of previously obtained U.S. dollars to buy $500,000 of police cars from a U.S. company.
A company just issued $195000 of perpetual 7% debt and used the proceeds to repurchase stock. The company expects to generate 113000 of EBIT in perpetuity. The company distributes all its earnings as dividends at the end of each year. The firm’s unlevered cost of capital is 15% and the tax rate is 30%. Use FTE to calculate the value of the company’s equity.
The value of the company's equity using the FTE approach is approximately $726,033.
To calculate the value of the company's equity using the Flow to Equity (FTE) approach, we need to determine the present value of the expected cash flows to equity holders.
First, let's calculate the interest expense on the perpetual debt. The interest expense is given by the perpetual debt amount multiplied by the interest rate, which is $195,000 * 7% = $13,650.
Next, we need to calculate the tax shield from the interest expense. The tax shield is the interest expense multiplied by the tax rate, which is $13,650 * 30% = $4,095.
The unlevered net income is the EBIT minus the tax shield, which is $113,000 - $4,095 = $108,905.
Now, we can calculate the value of the equity using the FTE approach. The value of equity is the unlevered net income divided by the unlevered cost of capital, which is $108,905 / 15% = $726,033.
Therefore, the value of the company's equity using the FTE approach is approximately $726,033.
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The IF for the future value of an annuity is 11.436 at 10% for 8 years. If we wish to accumulate $19,000 by the end of 8 years, how much should the annual payments be? Use Appendix C to calculate the
Using Appendix C or a financial calculator, we can calculate the value of $19,000 divided by 11.436 to find the annual payment amount.
To find the annual payments needed to accumulate $19,000 by the end of 8 years, we can use the future value of an annuity formula:
FV = P × IF,
where FV is the desired future value, P is the annual payment, and IF is the interest factor.
Given:
FV = $19,000,
IF = 11.436.
Substituting these values into the formula, we have:
$19,000 = P × 11.436.
To solve for P, divide both sides of the equation by 11.436:
P = $19,000 / 11.436.
Using Appendix C or a financial calculator, we can calculate the value of $19,000 divided by 11.436 to find the annual payment amount.
Assuming you have access to Appendix C or a financial calculator, please perform the calculation to find the exact annual payment amount.
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One of the main tips to manage successful global assignment is by providing your employees the right training before the task being assigned. Suggest one training that is needed to prepare an employee for global assignment and discuss critically the systematic training process for the training that you have suggested.(500 words)
One of the main tips to manage a successful global assignment is by providing your employees with the right training before the task is assigned. One training that is needed to prepare an employee for global assignment is cultural training.
This training provides an individual with the necessary skills and knowledge to understand, respect, and interact with people from different cultures.
This training is important because when an employee is working in a foreign country, they may experience culture shock, communication barriers, and different work ethics and practices.
Therefore, cultural training prepares an employee to adapt to the new environment and be effective in their job.
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The purchase of land by issuing a long-term note payable for the entire amount is reported on the investing activities section of the statement of cash flows. a. True b. False
b. False. The purchase of land by issuing a long-term note payable for the entire amount is not reported on the investing activities section of the statement of cash flows.
b. False. The purchase of land by issuing a long-term note payable for the entire amount is not reported on the investing activities section of the statement of cash flows. It is actually reported in the financing activities section. The statement of cash flows categorizes cash flows into three main sections: operating activities, investing activities, and financing activities. The investing activities section primarily includes cash flows related to the acquisition and disposal of long-term assets such as property, plant, and equipment. However, the issuance of a long-term note payable to acquire land is not considered an investing activity but rather a financing activity. Financing activities involve cash flows related to obtaining and repaying capital from investors and creditors. Issuing a long-term note payable falls under this category as it represents a borrowing of funds, which is a form of financing for the company. Therefore, the correct statement is that the purchase of land by issuing a long-term note payable for the entire amount is reported on the financing activities section of the statement of cash flows, not the investing activities section.
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Stock A has an expected return of 13% and a standard deviation of 18%. Stock B has an expected return of 15% and a standard deviation of 16%. Which would be preferred by a more risk-averse investor? a
Investors who are more risk-averse, i.e., they would like to avoid risks and are cautious about investing in stocks, would prefer the stock with a lower standard deviation. This is because the standard deviation is a measure of the risk associated with a particular stock.
The stock with a lower standard deviation is expected to have less variation in returns and is considered less risky by investors. Therefore, the more risk-averse investor would prefer Stock B.Stock A:Expected return = 13%Standard deviation = 18%Stock B:Expected return = 15%Standard deviation = 16% The concept of risk and return is essential for investors to make wise investment decisions. The risk and return tradeoff determines how much risk investors are willing to take to earn a specific return. A higher expected return is usually associated with a higher level of risk. However, this risk can be mitigated by diversification and investing in a portfolio of stocks instead of a single stock. Stock A has an expected return of 13% and a standard deviation of 18%. This implies that the returns from Stock A are expected to vary widely around the average return of 13%. The risk associated with Stock A is considered high because the standard deviation is high.Stock B has an expected return of 15% and a standard deviation of 16%.
This means that the returns from Stock B are expected to vary less around the average return of 15% compared to Stock A. The risk associated with Stock B is considered low because the standard deviation is low. Therefore, a more risk-averse investor would prefer Stock B because it has a lower standard deviation and is considered less risky. Investors should always consider the risk and return tradeoff while making investment decisions. A higher expected return is usually associated with a higher level of risk. However, investors can mitigate this risk by diversifying their investments and investing in a portfolio of stocks instead of a single stock. Investors who are more risk-averse would prefer stocks with a lower standard deviation as they are considered less risky and have less variation in returns.
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1. Graph the following price and quantity data for a vacuum (normal good). Label the equilibrium point (E1), make sure quantity is on the x-axis and price on the y-axis, have a legend that identifies
To graph the following price and quantity data for a vacuum (normal good), we need to follow the given instructions.
Locate and label the equilibrium point (E1).Quantity will be on the x-axis, and price will be on the y-axis.Provide a legend that identifies the plotted lines. Equilibrium Point (E1) Price Quantity (Units) 100 60 200 50 300 40 400 30 500 20 600 10 A graph of the given data is as follows.
Image credits: Web Content Lab The equilibrium point (E1) is the point at which the demand and supply curves intersect. It is the price and quantity at which the market clears. In this case, the equilibrium point is where the demand curve and the supply curve meet. It is labeled as E1 on the graph.
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In december, emily sold an antique rug for $4,100. she bought the rug 5 years ago for $1,100. what is her taxable gain and at what maximum rate will it be?
The taxable gain of Emily and at what maximum rate it will be for the sale of an antique rug for $4,100 she bought 5 years ago for $1,100 is $3,000.
Emily's maximum rate will depend on her income tax bracket. The capital gains tax rate depends on the individual's taxable income.
To compute taxable gain, we need to calculate the cost basis of the rug. Here's how:
Cost Basis = Purchase Price + Improvements Made - Depreciation
Emily did not make any improvement on the rug, nor did she use it for business purposes. Hence, the depreciation cost is zero.
Purchase price = $1,100
Improvements = 0
Depreciation = 0
Cost basis = $1,100
Now that we know the cost basis of the antique rug, we can compute the taxable gain:
Taxable gain = Selling Price - Cost Basis
Selling price = $4,100
Cost basis = $1,100
Taxable gain = $4,100 - $1,100 = $3,000
This means that Emily will pay tax on the $3,000 taxable gain. The tax rate on capital gains is not constant. It depends on the individual's income tax bracket. If the taxable gain is $3,000, then Emily will add this amount to her other taxable income (if she has any), and the total will determine the tax bracket.
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Dynondo Incorporated planned to use materials of $11 per unit but actually used materials of $16 per unit, and planned to make 1570 units but actually made 1700 units.
The flexible-budget amount for materials is ________.
$25,120
$27,200
$18,700
$17,270
The flexible-budget amount for materials is $18,700 if the amount of materials used is 1700 units. Thus, option C is correct.
The estimation of flexible-budget amounts for materials is done by the product of actual units produced by the planned cost per unit of materials.
Actual units = 1700 units
Planned cost per unit of materials = $11
The flexible-budget amount = Actual units produced x Planned cost per each unit
Flexible-budget amount for materials = 1700 units x $11 per unit
Flexible-budget amount for materials = $18,700
Therefore, we can conclude that the flexible-budget amount for materials is $18,700.
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The complete question is:
Question
Dynondo Incorporated planned to use materials of $11 per unit but actually used materials of $16 per unit, and planned to make 1570 units but actually made 1700 units.
The flexible-budget amount for materials is ________.
a. $25,120
b. $27,200
c. $18,700
d. $17,270
From the HTS gov website's Harmonized Tariff Schedule:
1. What chapter(s) are associated with machines in general?
2. Work to find an HTS code for computers. What Chapter does the search engine bring you to? Is it clear which HTS is appropriate?
3. Look up computers in the CROSS System. What US Customs ruling(s) do you find that make references to computers? What classification did they use? What was the ruling number?
1. Machines in general are associated with chapters 84, 85, and 90 in the Harmonized Tariff Schedule (HTS) from the HTS gov website.
2. If you search for computers in the HTS search engine, it will bring you to Chapter 84 - Nuclear Reactors, Boilers, Machinery, and Mechanical Appliances; Parts Thereof.
3. When looking up computers in the CROSS System, there are multiple US Customs rulings that make references to computers. One ruling, in particular, is NY J87288
1. Machines in general are associated with chapters 84, 85, and 90 in the Harmonized Tariff Schedule (HTS) from the HTS gov website.2. If you search for computers in the HTS search engine, it will bring you to Chapter 84 - Nuclear Reactors, Boilers, Machinery, and Mechanical Appliances; Parts Thereof. It is clear that the HTS code for computers is in Chapter 84 since computers are considered a type of machinery.
The appropriate HTS code for computers is 8471.30, which covers automatic data processing machines and units thereof, magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included.
3. When looking up computers in the CROSS System, there are multiple US Customs rulings that make references to computers. One ruling, in particular, is NY J87288, which classified a product as an automatic data processing machine under HTSUS 8471.50.00. The product was a card reader and controller for magnetic stripe cards. The ruling number for NY J87288 is HQ 964392, issued on September 25, 1997.
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Question # 02:
Loss intimated amount : Rs. 575,000/=
Sum insured: Rs. 1,500,000/=
Following information available for calculation of assessed value;
1- Market value of asset at the time of insurance arrangement Rs. 1,700,000/=
2- Market value of asset at the time of loss Rs. 500,000/=
3- Depreciation: 5% of loss amount
4- Deductible: Rs. 25,000/= each and every loss
5- Salvage value: 30,000/=
Requirement: Calculate Assessed loss.
For the given set of information, the assessed loss is Rs. 945,000/
The term "assessed loss" refers to the calculated value or sum decided by an insurance company or another party with authority to represent the monetary loss or damage incurred by the insured party as a result of an insured event. It represents the assessed or evaluated value of the loss after taking into account various elements, including the asset's market value at the time of the loss, depreciation, deductibles, salvage value and other pertinent factors.
Actual Loss = Sum Insured - Market Value at the time of loss
Actual Loss = Rs1,500,000 - Rs500,000
Actual Loss = Rs1,000,000
Depreciation = 5% of Actual Loss
Depreciation = 0.05 × Rs1,000,000
Depreciation = Rs50,000
Net Loss = Actual Loss - Salvage Value - Deductible
Net Loss = Rs1,000,000 - Rs30,000 - Rs.25,000
Net Loss = Rs.945,000
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Cherry Corporation had 600,000 shares of common stock outstanding during 2020. In addition, it had 80,000 stock options outstanding, which had been granted to certain executives on January 1, 2020, and which gave them the right to purchase shares of Cherry's stock at an option price of $40 per share. The average market price of Cherry's common stock for 2020 was $50. Net income was $1,000,000.
Compute EPS.
Compute DEPS.
Compute DEPS assuming that the options were granted on September 1, 2020, not January 1.
EPS = $1.67 per share
- DEPS = $0.71 per share
- DEPS (assuming options granted on September 1) = $1.15 per share
1. Compute EPS:
EPS = Net income / Weighted average number of common shares outstanding
Weighted average number of common shares outstanding is calculated by considering the time-weighted proportion of common shares outstanding.
In this case, there were no changes in the number of common shares outstanding during the year, so the weighted average is simply the common shares outstanding.
EPS = $1,000,000 / 600,000 = $1.67 per share
2. Compute DEPS (Diluted Earnings per Share):
DEPS takes into account the potential dilution of earnings from the exercise of stock options.
To calculate DEPS, we need to determine the potential common shares that would be issued if all stock options were exercised. Then, we add these potential shares to the weighted average number of common shares outstanding and recompute EPS.
Number of potential common shares from stock options = Number of stock options * (Fair market value - Option price)
Number of potential common shares = 80,000 * ($50 - $40) = 80,000 * $10 = 800,000
Weighted average number of common shares outstanding (including potential shares) = Common shares outstanding + Potential common shares
Weighted average number of common shares outstanding = 600,000 + 800,000 = 1,400,000
DEPS = Net income / Weighted average number of common shares outstanding DEPS = $1,000,000 / 1,400,000 = $0.71 per share
. ComputeDEPS assuming options were granted on September 1, 2020:
If the options were granted on September 1, 2020, we need to calculate the weighted average number of common shares outstanding considering the time period.
The number of common shares outstanding for January 1 to August 31, 2020, remains the same (600,000 shares). From September 1, 2020, to the end of the year, the potential common shares need to be considered.
Weighted average number of common shares outstanding = (Common shares outstanding * Weighted time period) + (Potential common shares * Weighted time period)
Weighted average number of common shares outstanding = (600,000 * 8/12) + (1,400,000 * 4/12)
Weighted average number of common shares outstanding = 400,000 + 466,667 = 866,667 shares
DEPS (assuming options granted on September 1) = Net income / Weighted average number of common shares outstanding
DEPS = $1,000,000 / 866,667 = $1.15 per share
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What is the importance of smoothing consumption according to the economy?
Smoothing consumption is important for the economy because it helps to maintain stable consumer spending patterns over time. This can be beneficial for both individuals and businesses, as it reduces the volatility of the economy and can help to prevent recessions and other economic downturns.
In addition, smoothing consumption can help to increase overall economic growth by encouraging investment and innovation. When consumers are able to plan their spending more effectively, businesses can make more accurate predictions about future demand and adjust their operations accordingly.
This can help to stimulate economic growth by creating new jobs, increasing consumer spending, and driving innovation and technological development. Smoothing consumption is therefore a key factor in the health and stability of any modern economy.
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How does the cash flow statement assist a user trying to determine whether to invest in the business? (1 mark)
The cash flow statement is an important financial statement that shows the movement of cash into and out of an organization. The statement helps investors understand how well a business is able to generate cash. In addition, it helps them understand whether a business has enough cash to pay for its daily activities, or if it is using too much cash.
The cash flow statement is an important financial statement that shows the movement of cash into and out of an organization. The statement helps investors understand how well a business is able to generate cash. In addition, it helps them understand whether a business has enough cash to pay for its daily activities, or if it is using too much cash. The statement also gives investors an idea of how much cash is invested in the business and how that cash is being used.The statement is important for investors because it provides them with information about the amount of cash that the business has available. This helps them to determine whether they want to invest in the business. If the business has a lot of cash on hand, it is more likely to be a good investment.
If the business is using a lot of cash to pay for its daily operations, then it may not be a good investment.Investors also use the cash flow statement to determine how much money is being spent on capital expenditures, such as equipment or buildings. This helps them to determine whether the business is investing in its future. If the business is spending a lot of money on capital expenditures, then it may be a good investment because it is investing in its future growth.In summary, the cash flow statement is important for investors because it provides them with information about the amount of cash that the business has available, how much cash is being invested in the business, and how that cash is being used. This helps them to determine whether the business is a good investment or not.
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A firm has a capital structure with $100 million in equity and $100 million of debt. The cost of equity capital is 11% and the pretax cost of debt is 7%. If the marginal tax rate of the firm is 25%, compute the weighted average cost of capital of the firm.
Weighted average cost of capital (WACC) is the weighted average cost of all capital invested in a company.
WACC is the average rate of return that an organization is expected to pay to all of its investors and financiers.
The formula for WACC is expressed as follows:
WACC = E/(E + D) * Re + D/(E + D) * Rd * (1 - T)Where:WACC = weighted average cost of capitalRe = cost of equity capitalRd = pretax cost of debtE = market value of the firm’s equityD = market value of the firm’s debtT = corporate tax rate
Given values are:Market value of equity = $100 million Market value of debt = $100 millionCost of equity capital (Re) = 11%Pretax cost of debt (Rd) = 7%Corporate tax rate = 25%WACC = E/(E + D) * Re + D/(E + D) * Rd * (1 - T)WACC = ($100 million / $200 million) * 11% + ($100 million / $200 million) * 7% * (1 - 25%)WACC = 0.5 * 11% + 0.5 * 7% * 0.75WACC = 0.055 + 0.02625WACC = 0.08125 or 8.125%
Therefore, the weighted average cost of capital of the firm is 8.125%.
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What is the term for a legally-binding document outlining the terms and conditions of a business transaction?
Answer:
A contract.
Explanation:
The first step in the incorporation procedure is to a. hold the first organizational meeting. O b. begin conducting business. O c. elect a board of directors d. select a state in which to incorporate.
The first step in the incorporation procedure is to D) select a state in which to incorporate.
Incorporation is the process of creating a legal entity separate from its owners. The entity could be a corporation, a limited liability company, or a non-profit corporation. It is essential to select the state to incorporate, as different states have different requirements for incorporating. The factors to consider when selecting a state include the business structure, taxes, and laws governing corporations.
The business structure determines the state where the company incorporates. For instance, a corporation can incorporate in any state, but a limited liability company must incorporate in its home state. The tax implications in each state can also affect the state's decision to incorporate.
A corporation's articles of incorporation should be filed with the Secretary of State's office, where the corporation will be registered. Each state has different requirements for filing the articles of incorporation, so it's important to research the state's rules before filing.
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1. You are an economic consultant, specializing in evaluating policies quantitatively for clients. 2. The clients ask the following questions and expect to get quantitatively-robust answers. 3. You don't have the luxury of doing random controlled trials - All you can rely on is existing data. Your client can provide data to you. But what kind of data is available? You need to make reasonable assumptions and suggestions. 4. For each question, write down the simplest OLS regression equation (1 mark), and explain why such regressions would have bias in the context of this question by proposing a valid example of omitted variable. You need to explain how this omitted variable gives rise to the bias. (3 marks). 5. Propose ONE method (i.e. difference-in-difference, instrumental variables, or regression discontinuity) to address these questions. You need to write down its implementation details (the type of data you need, potential sources to get the data, equations) (3 marks). its pros and cons, when it works and when it fails, and its intuition (3 marks). 6. In particular, for difference-in-difference, you need to specify the control groups and the treatment groups. For instrumental variable method, you need to propose an instrumental variable and justify for it. For regression discontinuity, you need to specify the running variable and the cutoff. 7. If you can think of multiple methods, please write down ONLY the one you believe to be the best. Here are the clients and their questions: 1. Question 1: Philadelphia implements a youth curfew in order to reduce juvenile crime, such as robbing, stealing, and carjacking. The curfew time is midnight for those 16-19, 10:00 pm for those 14-16, and 9:30 pm for those under 14. After this curfew comes in effect for one year, the Philadelphia mayor wants to evaluate the effect of curfew on the number of juvenile crime incidents. 2. Question 2: The Ontario ministry of education wants to evaluate the effect of outdoor activities on sleeping quality for grade-1 elementary school students in Toronto. Currently, Toronto has two school boards, the Public School Board and the Catholic School Board. The Public School Board requires all students in its eleme schools to have a one-hour outdoor recess every day unless there is heavy rain, lightning, strong winds or temperature lower than -28C. The Catholic School Board allows each school to make its own decision. Assume that all parents keep accurate records on sleeping quality for each child in each night, and both school boards have access to these records.
As an economic consultant, evaluating policies quantitatively for clients, if you are not able to do random controlled trials, all you have to rely on is existing data.
The data provided by your client includes time-series data and cross-sectional data. Cross-sectional data is a type of data in which data are collected on a sample population, at a particular point in time, for example, in a survey conducted in a particular year. Time-series data, on the other hand, is data collected over a period of time, for example, from 1990-2020.
For quantitatively robust answers, you could use econometric modeling. Econometric modeling is a quantitative method that uses statistical techniques to estimate economic way and predict future outcomes. It is used to analyze data and test hypotheses in economics. Econometric modeling typically includes three steps: Model specification: Here, you select the variables that you want to include in your model and decide how to specify way between these variables.
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Competition is high in the fast-food industry, particularly in
the busy areas such as the central business districts. A healthy
food company with a range of healthy fast-food items is evaluating
its b
Competition is high in the fast-food industry, particularly in the busy areas such as the central business districts. A healthy food company with a range of healthy fast-food items is evaluating its business's suitability for entering the fast-food market in the busy areas.
This is a crucial move that requires a lot of thought and planning to succeed. It is critical to recognize and fulfill clients' requirements, including fast food that is healthy, tasty, and readily available. As a result, the healthy food company must investigate the sector and create strategies that will help it survive in the competitive fast-food industry. Long Answer:Healthy fast food items are in high demand, and the market for such products is expanding. The healthy food company must begin by identifying its target audience and analyzing their preferences. They should identify the consumer's taste and dietary requirements to identify the most popular food items.The second step is to evaluate competitors and the strategies they use to succeed in the industry. The analysis should include determining the competitors' strengths, weaknesses, opportunities, and threats.
The analysis will assist in determining the market size, price points, and consumer needs.Finally, the healthy food company must create a marketing strategy that focuses on the food items' unique qualities. They should advertise the food as healthy, delicious, and readily available to attract consumers. The advertising strategy should concentrate on the company's core competency, healthy food. Competition is high in the fast-food industry, particularly in the busy areas such as the central business districts. A healthy food company with a range of healthy fast-food items is evaluating its business's suitability for entering the fast-food market in the busy areas. The healthy food company must investigate the sector and create strategies that will help it survive in the competitive fast-food industry. The company must identify the target audience, analyze their preferences, evaluate competitors and the strategies they use to succeed in the industry, and create a marketing strategy that focuses on the food items' unique qualities.
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SHIRLEY & 4. Olympic Chemicals Ltd wants to purchase cooling systems for its new material-handling equipment in the warehouse. The warehouse is located near a residential district so management wants
Olympic Chemicals Ltd wants to purchase cooling systems for its new material-handling equipment in the warehouse. The warehouse is located near a residential district so management wants to buy a noiseless cooling system.
To fulfill the company's demand, Shirley, an HVAC sales representative, can offer a water-cooled air conditioner, which is a noiseless cooling system with an incredibly low sound level. Water-cooled air conditioning systems can reduce noise levels as they have a more efficient cooling system. It separates the refrigeration mechanism and the air distribution process. The refrigeration process takes place in a cooling tower that is far from the industrial unit, which reduces noise, the cooled water circulates through the pipes to distribute the cold air.
The main disadvantage of the water-cooled system is the initial cost, which is much higher than a traditional system. Another issue is the regular maintenance of the cooling tower. A low pH level in the water and minerals buildup can cause corrosion and reduce the system's efficiency. The company needs to consider the initial cost and maintenance requirements while selecting the cooling system for the new equipment. Despite the high costs, the noiseless water-cooled system can offer many advantages, including improved performance, comfort, and energy savings. So therefore Olympic Chemicals Ltd wants to purchase cooling systems, the warehouse is located near a residential district so management wants to buy a noiseless cooling system.
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Which company is a leader in rating bonds?
a. Goldman Sachs
b. Bloomberg
c. ValueLine
d. Moody's Investor Service
Moody's Investor Service is a leader in rating bonds. Option D is the correct answer.
Bond ratings are a specialty of Moody's Investor Service, a well-known and well-recognized credit rating organization. They offer evaluations and ratings of the creditworthiness and risk attached to various bonds issued by corporations, governments, and other entities.
Insights on the likelihood of timely interest and principal payments on the bonds are provided by these ratings, which aid investors in making wise judgments. ValueLine is well-known for its investment research and analysis, Goldman Sachs is a well-known investment bank, and Bloomberg is a well-known provider of financial data and media.
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a. [2 marks] Using the paragraph preceding question 1 above, draw a
detailed cash flow diagram, from Heidrun’s perspective, that captures
the details of Heidrun’s transactions.
b. [2 marks] Using the paragraph preceding question 8 above, draw a
detailed cash flow diagram, from Priscilla’s perspective, that captures
the details of Priscilla’s transactions.
c. [2 marks] A student answering question 9, above, wants to convert the
effective annual rate of Priscilla’s transactions into a nominal rate of
interest, payable quarterly (i.e., a j4 rate). The student is using Excel
to do the calculation. She has your answer in cell A1 of her spreadsheet.
Write down detailed instructions how she can go from the data in cell
A1 to the correct j4 rate, which is to be located in cell C4.
d. [2 marks] Using the paragraph preceding question 10 above, draw a
detailed cash flow diagram, from Rajesh’s perspective, that captures
the details of Rajesh’s transactions.
e. [2 marks] Using the two paragraphs and table preceding question 13
above, draw a detailed cash flow diagram, from the perspective of AMZ
Life, that captures the details of the issue of one of its life annuities.
a. To draw a detailed cash flow diagram from Heidrun's perspective, we need to capture the details of her transactions. The diagram would include the following:
Initial Investment: An arrow pointing downwards representing the initial cash outflow made by Heidrun to purchase the investment.Coupons/Interest: Arrows pointing upwards at regular intervals representing the cash inflows from the coupon payments or interest received by Heidrun during the investment period.Principal Repayment: An arrow pointing upwards at the end of the investment period representing the cash inflow when Heidrun receives the principal amount back.Sale Proceeds: An arrow pointing upwards if Heidrun decides to sell the investment before maturity, representing the cash inflow from the sale proceeds.b. To draw a detailed cash flow diagram from Priscilla's perspective, capturing the details of her transactions, the diagram would include the following:
Initial Investment: An arrow pointing downwards representing the initial cash outflow made by Priscilla to purchase the investment.Coupons/Interest: Arrows pointing upwards at regular intervals representing the cash inflows from the coupon payments or interest received by Priscilla during the investment period.Principal Repayment: An arrow pointing upwards at the end of the investment period representing the cash inflow when Priscilla receives the principal amount back.Early Redemption Penalty: An arrow pointing upwards if Priscilla decides to redeem the investment before maturity, representing the cash outflow due to any penalty charges.c. To convert the effective annual rate of Priscilla's transactions into a nominal rate of interest payable quarterly, the student can follow these steps in Excel:
In cell C4, use the formula "=A1^(1/4)-1". This will calculate the quarterly interest rate based on the effective annual rate in cell A1.Format cell C4 as a percentage to display the result as a percentage value.d. To draw a detailed cash flow diagram from Rajesh's perspective, capturing the details of his transactions, the diagram would include the following:
Initial Investment: An arrow pointing downwards representing the initial cash outflow made by Rajesh to purchase the investment.Coupons/Interest: Arrows pointing upwards at regular intervals representing the cash inflows from the coupon payments or interest received by Rajesh during the investment period.Principal Repayment: An arrow pointing upwards at the end of the investment period representing the cash inflow when Rajesh receives the principal amount back.Early Redemption Penalty: An arrow pointing upwards if Rajesh decides to redeem the investment before maturity, representing the cash outflow due to any penalty charges.e. To draw a detailed cash flow diagram from the perspective of AMZ Life, capturing the details of the issue of one of its life annuities, the diagram would include the following:
Initial Investment: An arrow pointing downwards representing the initial cash inflow received by AMZ Life from the purchaser of the life annuity.Annuity Payments: Arrows pointing downwards at regular intervals representing the cash outflows from AMZ Life to the annuitant as annuity payments.Death Benefit: An arrow pointing upwards representing the cash inflow to AMZ Life in the event of the annuitant's death before the annuity term ends.Surrender Value: An arrow pointing upwards if the annuitant decides to surrender the annuity before maturity, representing the cash inflow to AMZ Life due to surrender charges or penalties.For such more questions on cash flow
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In order to convert the effective annual rate (EAR) of Priscilla's transactions into a nominal rate of interest payable quarterly (j4 rate) in Excel, you can follow these steps:
How to explain the stepsIn cell B1, enter the number of compounding periods per year. Since the interest is payable quarterly, the compounding periods per year will be 4.
In cell C1, enter the formula =(1+A1)^(1/B1)-1. This formula raises the EAR to the power of 1 divided by the number of compounding periods per year, and then subtracts 1 to get the nominal rate of interest per compounding period.
In cell C4, enter the formula =(1+C1)^(B1/4)-1. This formula raises the nominal rate per compounding period to the power of the number of compounding periods in a year divided by 4 (since interest is payable quarterly), and then subtracts 1 to get the j4 rate.
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Estimates of population parameters, standard error, and confidence intervals assume unbiased sampling the foundation of unbiased sampling is the _____________________________ random sample.
Estimates of population parameters, standard error, and confidence intervals assume unbiased sampling the foundation of unbiased sampling is the simple random sample.
The foundation of unbiased sampling is the simple random sample. In statistics, a simple random sample is a subset of individuals or items selected from a larger population in such a way that every possible sample of the same size has an equal chance of being chosen. This means that each member of the population has an equal probability of being included in the sample.
Unbiased sampling is crucial because it ensures that the estimates and inferences made from the sample accurately represent the population from which it is drawn. By using a simple random sample, we minimize the potential for systematic biases and ensure that the sample is representative of the population as a whole.
The concept of unbiased sampling is essential for estimating population parameters, calculating standard errors, and constructing confidence intervals. When the sample is unbiased, the estimates of population parameters, such as means or proportions, tend to be unbiased as well.
Standard errors, which measure the variability of the estimates, rely on the assumption of unbiased sampling to provide accurate measures of uncertainty. Confidence intervals, which provide a range of plausible values for the population parameter, are also based on the principles of unbiased sampling to ensure their validity.
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