Ariana's total cost is the sum of the deductible and the coinsurance payment is $1,400.
How Ariana needs to pay the deductible of $800?A deductible is an amount that must be paid by the insured person before the insurance policy begins to cover any costs. In this case, Ariana has a deductible of $800, which means that she must pay the first $800 of her total bill.
Coinsurance is a cost-sharing provision in an insurance policy that requires the insured person to pay a certain percentage of the remaining bill after the deductible has been paid.
First, Ariana needs to pay the deductible of $800.
This leaves a remaining bill of $3,800 - $800 = $3,000.
Since Ariana has a coinsurance provision requiring her to pay 20 percent of all bills, she needs to pay 20% of the remaining bill of $3,000.
This is equal to 0.20 x $3,000 = $600.
Therefore, Ariana's total cost is the sum of the deductible and the coinsurance payment, which is $800 + $600 = $1,400.
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7.Dog Up! Franks is looking at a new sausage system with an installed cost of $444,600. This cost will be depreciated straight-line to zero over the project's 3-year life, at the end of which the sausage system can be scrapped for $68,400. The sausage system will save the firm $136,800 per year in pretax operating costs, and the system requires an initial investment in net working capital of $31,920. If the tax rate is 24 percent and the discount rate is 15 percent, what is the NPV of this project? Multiple Choice $-107,897.64 $-136,939.98 $-126,007.90 $-91,827.58 $-102.759.66
The net present value (NPV) of a project is the sum of all cash inflows, discounted at a rate of return, minus the sum of all cash outflows.
In this case, the initial cost of the sausage system is $444,600. This cost will be depreciated straight-line to zero over the project’s 3-year life, at the end of which the sausage system can be scrapped for $68,400.
The sausage system will save the firm $136,800 per year in pretax operating costs, and the system requires an initial investment in net working capital of $31,920.
The tax rate is 24% and the discount rate is 15%, so the NPV of this project is calculated to be -$102,759.66. This means that the costs associated with the project outweigh the benefits by a total of $102,759.66.
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Had to split question #16 into two photos for words to remain clear and visible.
What is the earnings credit rate? Assume the following: Ledger Balance = $300,000 Deposit Font - $100,000 Monthly Earnings Credit = $507 Days in Month 30 days Reserve Requirement Ratio * 10% No express your answer as a decimal (example: Nyour or a 4:33then enter it as 0.043) Thank you.
The monthly earnings credit is the amount of money a bank credits to a customer's account as compensation for the customer's deposits. The earnings credit rate for this scenario is 3.70%.
It is calculated based on the average daily balance in the account and the earnings credit rate (ECR) set by the bank.
To calculate the earnings credit rate (ECR) for this scenario, we need to use the following formula:
ECR = (Monthly earnings credit / Average daily balance) x (365 / Days in month)
We can calculate the average daily balance as follows:
Average daily balance = (Ledger balance + Deposit float) / Days in month
Average daily balance = ($300,000 + $100,000) / 30
= $13,333.33
We are given that the monthly earnings credit is $507, and the days in the month are 30. The reserve requirement ratio is also given as 10%.
Using the formula for ECR, we get:
ECR = ($507 / $13,333.33) x (365 / 30)
ECR = 0.036975 or 3.70% (rounded to two decimal places)
Therefore, the earnings credit rate for this scenario is 3.70%.
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a company has accounts named purchases, purchases discounts, purchases returns and allowances, and freight-in as part of its chart of accounts. this company is using which system of inventory
The company is using the perpetual inventory system.
Based on the accounts named in the chart of accounts, the company is using the perpetual inventory system. In a perpetual inventory system, inventory balances are updated continuously as transactions occur. The purchases account is used to record the cost of inventory purchases, while the purchases discounts account is used to record discounts received from suppliers for prompt payment. T
he purchases returns and allowances account is used to record returns of damaged or unsatisfactory inventory. Finally, the freight-in account is used to record the cost of shipping inventory from suppliers to the company's warehouse. By tracking inventory in real-time, the perpetual inventory system provides businesses with accurate inventory information to help with decision-making and financial reporting.
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a firm has 75,000 shares of common stock outstanding at a price of $42 a share, 10,000 shares of preferred stock at $50 a share, and 3,000 bonds with a price quote of 101.2. how is the weight of preferred stock computed for the firm's wacc?
The weight of preferred stock , based on the mentioned values in the company's WACC is found to be 7.48%.
To calculate the weighted average cost of capital (WACC), we need to determine the proportion of each type of financing (common stock, preferred stock, and debt) in the company's overall capital structure. The weight of each component is determined by dividing the market value of that component by the total market value of the company's capital structure.
To calculate the weight of the preferred stock, we need to determine the market value of the preferred stock.
Market value of preferred stock = Number of preferred shares x Market price per share = 10,000 x $50 = $500,000
Next, we need to determine the total market value of the company's capital structure:
Total market value = Market value of common stock + Market value of preferred stock + Market value of debt
Total market value = (75,000 shares x $42 per share) + $500,000 + (3,000 bonds x 101.2% x $1,000 par value per bond)
Total market value = $3,150,000 + $500,000 + $3,036,000
Total market value = $6,686,000
Now we can calculate the weight of the preferred stock:
Weight of preferred stock = Market value of preferred stock / Total market value
Weight of preferred stock = $500,000 / $6,686,000
Weight of preferred stock = 0.0748 or 7.48%
Therefore, the weight of preferred stock in the company's WACC calculation is 7.48%.
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dormer is the only fine dining restaurant in a small town. the opening of a new restaurant is viewed as a threat by some of the employees at dormer. others see it as an opportunity for dormer to strengthen itself by looking out for its weaknesses and ironing them out. this is an example of strategy as:
Dormer is the only fine dining restaurant in a small town. The opening of a new restaurant is viewed as a threat by some of the employees at dormer by looking out for its weaknesses and ironing them out. This is an example of strategy as "SWOT analysis".
The SWOT analysis which involves assessing an organization's internal strengths and weaknesses as well as external opportunities and threats.
In this case, the opening of a new restaurant in the town presents an external threat to Dormer, the only fine dining restaurant in the area. Some of the employees at Dormer view this as a threat and are worried about the impact it could have on their business.
By conducting a SWOT analysis, Dormer can identify its internal strengths and weaknesses and external opportunities and threats. Based on this analysis, Dormer can develop strategies to leverage its strengths, address its weaknesses, capitalize on opportunities, and mitigate threats to maintain its competitive advantage in the market.
Therefore, this is an example of strategy as SWOT analysis.
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a good definition of lean is ""creating more value for customers with fewer resources.""
The given statement is true because the concept of "lean" refers to a systematic approach to eliminating waste and increasing efficiency in order to create more value for customers with fewer resources.
The focus is on identifying and eliminating any processes, activities, or resources that do not add value for the customer, while maximizing the use of those that do. By doing so, businesses can improve their competitiveness, reduce costs, and enhance customer satisfaction. Ultimately, the goal of lean is to create a more streamlined, efficient, and customer-centric organization that is better able to meet the needs and expectations of its customers.
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if the market price is $84.70 per bushel of wheat, and ali chooses to produce wheat, how much will he produce per month to maximize his profits in the short run?
Ali should produce 64.70 bushels of wheat per month to maximize his profits in the short run. At this level of output, his total revenue would be $5,481.59 (64.70 x $84.70), and his total cost would be $2,918.45 (20 x 64.70 + 0.5 x 64.70^2), resulting in a profit of $2,563.14.
To maximize his profits, Ali should produce the level of output where his marginal revenue (MR) equals his marginal cost (MC). In other words, he should produce until the additional revenue from selling one more unit of output is equal to the additional cost of producing one more unit of output.Given the market price of $84.70 per bushel of wheat, Ali's marginal revenue is also $84.70.
To determine his marginal cost, we need to know his total cost function. Let's assume that Ali's total cost function is given by TC = 20Q + 0.5Q^2, where Q is the quantity of wheat produced.
To find Ali's marginal cost, we take the derivative of the total cost function with respect to Q:
MC = dTC/dQ = 20 + Q
Setting MR = MC, we have:
84.70 = 20 + Q
Q = 64.70
Resulting in a profit of $2,563.14.
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Your company has earnings per share of $3. It has 1 million shares outstanding, each of which has a price of $35. You are thinking of buying TargetCo, which has earnings of $2 per share, 1 million shares outstanding, and a price per share of $26. You will pay for TargetCo by issuing new shares. There are no expected synergies from the transaction. Suppose you offered an exchange ratio such hat, a current pre-announcement share prices or oth imns the offer represents a 20 % premium。 buy Targe Co. However, the actual premium that your company will pay or Targe ow en i completes the ran action w not e 0% because on he announce ment the target price will go up and your price will go down to reflect the fact that you are willing to pay a premium for TargetCo without any synergies. Assume that the takeover will occur with certainty and all market participants know this on the announcement of the takeover (ignore time value of money). a. What is the price per share of the combined corporation immediately after the merger is completed? b. What is the price of your company immediately after the announcement? c. What is the price of TargetCo immediately after the announcement? d. What is the actual premium your company will pay?
Answer:
Due to the dilution on your company's share price, your company would actually be paying a discount of 4.76% (1.56/32.76) instead of a premium.
Explanation:
a. The price per share of the combined corporation immediately after the merger is completed can be calculated as follows:
Combined EPS = (Earnings of your company + Earnings of TargetCo) / (Total shares outstanding)
= ($3 million + $2 million) / (2 million shares)
= $2.5 per share
Combined price per share = Combined EPS x P/E ratio
Assuming a P/E ratio of 14, the combined price per share would be:
Combined price per share = $2.5 x 14 = $35
b. The price of your company immediately after the announcement would be expected to decrease due to the dilution effect of issuing new shares to acquire TargetCo. Assuming the market adjusts for the expected premium, the new price per share can be calculated as:
New price per share of your company = Current price per share x (1 + premium percentage) / (1 + exchange ratio)
= $35 x (1 + 20%) / (1 + 1/35)
= $32.76
c. The price of TargetCo immediately after the announcement would be expected to increase to reflect the premium being paid by your company. The new price per share can be calculated as:
New price per share of TargetCo = Current price per share x (1 + premium percentage)
= $26 x (1 + 20%)
= $31.20
d. The actual premium your company will pay would be the difference between the new price per share of TargetCo and the new price per share of your company.
Actual premium = New price per share of TargetCo - New price per share of your company
= $31.20 - $32.76
= -$1.56
This means that your company would actually be paying a discount of 4.76% (1.56/32.76) instead of a premium, due to the dilution effect on your company's share price.
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Pharmaceutical giant Eli Lilly and Belgium-based company Galapagos have a ____whereby they both work together to develop a new drug for osteoporosis.
- joint diversification
- divestment - strategic alliance - global integration
Pharmaceutical giant Eli Lilly and Belgium-based company Galapagos have a strategic alliance whereby they both work together to develop a new drug for osteoporosis. The correct option is strategic alliance.
In this strategic alliance, both companies collaborate and share resources, knowledge, and expertise to achieve a common goal: creating an effective treatment for osteoporosis. This partnership allows each company to benefit from the other's strengths, such as research capabilities, market reach, and technological advancements.
By joining forces, Eli Lilly and Galapagos can pool their resources to accelerate the drug development process and improve the chances of successfully bringing a new drug to market. This alliance is mutually beneficial and enables both companies to potentially gain a competitive edge in the pharmaceutical industry. Through their strategic alliance, Eli Lilly and Galapagos aim to make a meaningful impact on the lives of those suffering from osteoporosis by providing an effective treatment option. The correct option is strategic alliance.
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If WiseGuy Inc. uses payback period rule to choose projects, which of the projects (Project A or Project B) will WiseGuy Inc. prefer? Project A Project B
Time 0 -10000 -10000
Time 1 5000 4000
Time 2 4000 3000
Time 3 3000 10000
a) Project A b) Project B c) Project A and Project B have the same ranking. d) Cannot calculate a payback period without a discount rate If WiseGuy Inc. uses IRR rule to choose projects, which of the projects (Project A or Project B) will rank highest? a) Project A b) Project B c) Project A and Project B have the same ranking. d) Cannot calculate an IRR without a discount rate
WiseGuy Inc. would prefer Project B, as it has a shorter payback period of 1.3 years compared to Project A's payback period of 3.25 years.
How can we decide which projects (Project A or Project B) WiseGuy Inc. will prefer?To determine which project WiseGuy Inc. will prefer using the payback period rule, we need to calculate the payback period for each project. The payback period is the amount of time it takes for a project to recoup its initial investment.
For Project A:
Payback period = 2 years + ((10000-5000)/4000) years
Payback period = 3.25 years
For Project B:
Payback period = 1 year + ((10000-4000-3000)/10000) years
Payback period = 1.3 years
According to the payback period rule, WiseGuy Inc. would prefer Project B, as it has a shorter payback period of 1.3 years compared to Project A's payback period of 3.25 years. This means that WiseGuy Inc. will recoup its initial investment in Project B sooner, making it a more attractive option.
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year 2010 ending retained earnings were 2,000,000. year 2011 forecasted sales are $100,000 with 25% net margin and 20% dividend payout ratio. what are the forecasted retained earnings for year 2011?
In the year 2011, the forecasted retained earnings are calculated based on the year 2010 ending retained earnings, the forecasted sales, net margin, and dividend payout ratio.The year 2010 ending retained earnings were $2,000,000, and the year 2011 forecasted sales are $100,000 with a 25% net margin and a 20% dividend payout ratio. First, calculate the net income for 2011: $100,000 (sales) * 25% (net margin) = $25,000.
Next, calculate the dividends paid in 2011: $25,000 (net income) * 20% (dividend payout ratio) = $5,000.
Finally, calculate the forecasted retained earnings for year 2011: $2,000,000 (year 2010 retained earnings) + $25,000 (net income) - $5,000 (dividends) = $2,020,000.
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in kelly evans' presentation on using business research tools, she referred to a standard classification code system for business and industries. these codes are known as what type of code?
The standard classification code system for business and industries referred to by Kelly Evans is known as the North American Industry Classification System (NAICS).
This code system is a standardized numerical system used to classify businesses and industries in the United States, Mexico, and Canada. It is used to compile, analyze, and compare statistical data related to economic activities, such as the number of businesses and employees in an industry, total sales, and total wages.
NAICS was developed by the United States Office of Management and Budget in 1997, and is updated every five years. It is based on a six-digit code system, with each digit representing a distinct level of detail. The first two digits denote the most general level, while the last four digits provide finer detail.
For example, the code for “general automotive repair shops” is 811111, with 8 indicating the industry sector “Repair and Maintenance”, 11 indicating the subsector of “Automotive Repair and Maintenance”, and 1111 indicating the industry “General Automotive Repair”.
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Think of an example of a free rider problem in your hometown -
Tirana. Can you think of a way for your local government to
overcome this problem?
In Tirana, a free rider problem example is littering in public spaces. To overcome this, the local government can implement fines for littering and increase public awareness through educational campaigns.
The free rider problem occurs when individuals benefit from a shared resource without contributing to its maintenance or cost. In Tirana, public spaces like parks and streets are used by everyone, but some individuals litter without considering the negative impact on the community.
To address this issue, the local government can introduce fines for littering, which would discourage individuals from leaving trash in public areas. Additionally, the government can launch educational campaigns to inform citizens about the importance of keeping public spaces clean and the consequences of littering.
These measures would encourage people to contribute to maintaining the cleanliness of the city, reducing the free rider problem.
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You have $145,000 to invest. You choose to put $195,000 into the market by borrowing $50,000.a. If the risk-free interest rate is 3% and the market expected return is 10 % what is the expected return of your investment?The expected return of your investment is _%?b. If the market volatility is 19 %, what is the volatility of your investment? calculate.
The expected return of the investment is 8.57% and the volatility of the investment is 38%.
To calculate the expected return of the investment, we need to calculate the weighted average return of the borrowed and invested amounts. The weight of the invested amount is (195,000/245,000) = 0.7959 and the weight of the borrowed amount is (50,000/245,000) = 0.2041. The expected return of the investment is then:
Expected return = (Weight of invested amount * Expected return of invested amount) + (Weight of borrowed amount * Risk-free rate)
Expected return = (0.7959 * 10%) + (0.2041 * 3%)
Expected return = 7.96% + 0.61%
Expected return = 8.57%
Therefore, the expected return of the investment is 8.57%.
The volatility of the investment can be calculated using the formula:
Volatility of investment = Square root of [(Weight of invested amount * Volatility of invested amount)^2 + (Weight of borrowed amount * Volatility of borrowed amount)^2 + 2 * Weight of invested amount * Weight of borrowed amount * Correlation coefficient * Volatility of invested amount * Volatility of borrowed amount]
Since the correlation coefficient is not given, we assume it to be 1 (which implies perfect positive correlation between the invested and borrowed amounts). The volatility of the borrowed amount is zero because it is risk-free. Therefore, the volatility of the investment is:
Volatility of investment = Square root of [(0.7959 * 19%)^2 + (0.2041 * 0%)^2 + 2 * 0.7959 * 0.2041 * 1 * 19% * 0%]
Volatility of investment = Square root of [0.1447]
Volatility of investment = 0.38 or 38%
Therefore, the volatility of the investment is 38%.
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Fool’s Fuel is the only gas station in town. There is not another gas station within 50 miles, making Fool’s Fuel a monopoly. It faces the following demand, P(Q) = 20 – Q, where Q is litters of gasoline, and a cost of C(Q) = 2Q + ¼Q2 + 6. a) What quantity will this monopoly choose and what price would it charge per litter? b) What price and quantity would a competitive market reach. Show this on a well labeled graph. c) How much producer surplus will this monopoly make. Show this on your graph. d) How much deadweight loss will this monopoly create. Show this on your graph.
a) Q=6.67 litres and $13.33 per litre
b) Q=10 litres and $10 per litre
c) The producer surplus for this monopoly is $33.34
d) The deadweight loss is -$11.08
a) As a monopoly, Fool’s Fuel will aim to maximize its profit. To do so, it will choose the quantity where its marginal revenue (MR) equals its marginal cost (MC). The marginal revenue for this monopoly is given by MR(Q) = 20 - 2Q, while the marginal cost is given by MC(Q) = 2 + ½Q. Setting MR equal to MC, we get:
20 - 2Q = 2 + ½Q
Solving for Q, we get Q = 6.67 liters. Plugging this value into the demand equation, we get the price charged by Fool’s Fuel:
P(Q) = 20 – Q = 20 – 6.67
= $13.33 per liter.
Therefore, this monopoly will choose to produce and sell 6.67 liters of gasoline at a price of $13.33 per liter.
b) In a competitive market, the price and quantity are determined by the intersection of the demand and supply curves. However, in this case, we do not have a supply curve, so we need to assume one.
Let’s assume that the supply curve for gasoline is given by the same cost function as the monopoly,
C(Q) = 2Q + ¼Q2 + 6.
The market demand is the same as the monopoly, P(Q) = 20 – Q. Setting demand equal to supply, we get:
20 – Q = 2Q + ¼Q2 + 6
Solving for Q, we get Q = 10 liters.
Plugging this value into the demand equation, we get the market price:
P(Q) = 20 – Q = 20 – 10
= $10 per liter.
Therefore, in a competitive market, the quantity produced and sold would be 10 liters at a price of $10 per liter.
c) The producer surplus for the monopoly is the difference between the price it charges and the marginal cost of production, integrated over the quantity produced. In this case, we can use the formula for the area of a triangle to calculate the producer surplus:
Producer surplus = (P – MC) * Q / 2
At the monopoly quantity of 6.67 liters, the marginal cost is MC(6.67) = 2 + ½ * 6.67
= $5.
The price charged by the monopoly is $13.33. Plugging these values into the formula, we get:
Producer surplus = (13.33 – 5) * 6.67 / 2
= $33.34
Therefore, the producer surplus for this monopoly is $33.34.
d) Deadweight loss is the loss of economic efficiency that occurs when the monopoly reduces output and increases price compared to a perfectly competitive market. In this case, we can calculate the deadweight loss as the difference between the consumer surplus and the producer surplus, integrated over the quantity produced.
The consumer surplus is the area under the demand curve and above the price charged by the monopoly. At the monopoly quantity of 6.67 liters, the price charged is $13.33. The demand equation is P(Q) = 20 – Q. Plugging these values into the formula for the area of a triangle, we get:
Consumer surplus = (20 – 13.33) * 6.67 / 2
= $22.26
Therefore, the deadweight loss is:
Deadweight loss = Consumer surplus – Producer surplus
Deadweight loss = $22.26 - $33.34
= -$11.08
This negative value indicates that there is actually a net gain in economic efficiency due to the monopoly, rather than a loss. This may seem counterintuitive, but it occurs because the monopoly is able to produce at a lower cost than a competitive market due to economies of scale.
However, there is still a transfer of surplus from consumers to producers, which is a social welfare loss.
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when performing a retrospective for a project, whoever is performing the retrospective needs to be perceived as being independent and unbiased. question 40 options: true false
Whenever a retrospective is conducted for a project, the person doing the retrospective has to be seen as impartial and objective. True.
Anytime your team considers the past to enhance the present, it is a retrospective. You can retro on almost anything thanks to the technical and non-technical personnel! A public retrospective on agile software development is now being held.
You must be completely fair in order to be unbiased; you cannot favor someone or hold beliefs that can skew your judgment. For instance, in order to be as objective as possible, the identities of the artists, as well as the names of their schools and hometowns, were hidden from the judges of an art competition.
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The owner compiled and provided the following list of acceptable investment opportunities: Investment IRR (%) Initial investment (R)E 23 200 000C 22 100 000G 21 300 000A 19 200 000H 12 100 000I 9 400 000B 8 300 000The company aims to raise R1 000 000 for long-term investments. Capital budgets will be financed as per below: Log-term debt (40%): The company will borrow R400 000 at an after-tax cost of 8%. Ordinary shares (40%): The company will issue ordinary shares at the cost of 10%. Preferred shares: The company will finance the rest of the money by issuing preference shares at the cost of 13%. Calculate the company's weighted average cost of capital. (8 marks)
We have that, based on the list of acceptable investment opportunities, we obtain that the weighted average cost of capital of the company is 3.4%.
To calculate the weighted average cost of capital (WACC) of the company, we must take into account the cost of each type of financing and their respective weights in the capital structure.
Long-term debt financing has a weight of 40% (0.4) and a cost of 8% after tax. Therefore, the after-tax cost of debt is 0.4 x 0.08 = 0.032 or 3.2%.
Financing with ordinary shares also has a weight of 40% (0.4) and a cost of 10%. Therefore, the cost of capital is 0.4 x 0.1 = 0.04 or 4%.
The financing of preference shares has a weight of 20% (0.2) and a cost of 13%. Therefore, the cost of preferred stock is 0.2 x 0.13 = 0.026 or 2.6%.
To calculate the WACC we add the weighted costs of each type of financing:
WACC = (Weight of Long-Term Debt x Cost of Debt) + (Weight of Common Stock x Cost of Equity) + (Weight of Preferred Stock x Cost of Preferred Stock)
WACC = (0.4 x 0.032) + (0.4 x 0.04) + (0.2 x 0.026)
WACC = 0.0128 + 0.016 + 0.0052
WACC = 0.034 or 3.4%
Therefore, the company's weighted average cost of capital is 3.4%.
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A supply management organization partners with another department to determine the feasibility of marketing a new product. To aid in decision-making, the supply management organization should employ which of the following?
(A) Decision tree
(B) Pareto analysis
(C) Supplier forecast
(D) SWOT analysis
SWOT analysis would be the best tool to employ in this situation. The correct answer is option d.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. This analysis helps in identifying and evaluating the internal and external factors that can influence the success of a project or a new product launch.
By using SWOT analysis, the supply management organization can assess the feasibility of marketing a new product by identifying the strengths and weaknesses of the new product as well as the opportunities and threats in the market.
This information will help in making a more informed decision about whether to move forward with the new product or not.
The correct answer is option d.
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1.if the actual unemployment rate is 8% and the natural rate of unemployment is 5%, then the cyclical unemployment rate is?
The natural rate of unemployment is subtracted from the actual unemployment rate to arrive at the cyclical unemployment rate.
(8% - 5% = 3%) The cyclical unemployment rate would be 3%.
The cyclical unemployment rate is calculated by subtracting the natural rate of unemployment from the actual unemployment rate. So, in this case, the cyclical unemployment rate would be 3% (8% - 5% = 3%). This represents the portion of unemployment that is due to the current economic cycle or downturn, rather than due to structural or frictional factors.
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jenny sold an initial deal to the vp of marketing but now the customer's product and sales departments are interested in coming on board too jenny was asked to provide a quote for more licenses. since the budget now requires cfo approval and to go through procurement, this is an example of cross-selling since a new buyer is involved. where does this opportunity fit in the bow tie funnel?
Based on the information provided, this opportunity would fit in the "Expand" stage of the bow tie funnel.
Jenny has already sold an initial deal to the VP of marketing, but now there is interest from additional departments within the customer's company. This is an opportunity to expand the relationship and sell more licenses. However, because the budget now requires CFO approval and procurement processes, it may take more time and effort to close the deal.
This is typical of the Expand stage, where there may be more stakeholders involved and the sales cycle may be longer than in the initial sale. Overall, this is a good example of cross-selling, as Jenny is selling to new buyers within the same customer organization.
Hence, in expand stage of the bow tie funnel, existing customers are targeted for cross-selling, upselling, and referral opportunities. Jenny's situation demonstrates cross-selling as she has expanded the product's reach within the organization by involving additional departments and buyers.
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Consider a five year corporate bond with a face value of $1,000. The bond currently pays a coupon of 5% per annum, but there is a chance the bond's issuer may default in five years time (just before the final payments on the bond are paid to bondholders).
There is a 80% chance that the bond will repay all of its cash flows in full, as promised. However, there is a 20% chance that the bond will default, and bondholders will only receive a fraction of the cash flows they were promised. Specifically, if the issuer defaults just before the maturity date of the bond, then bondholders will only receive $0.30 per $1 of cash flows they were promised on the maturity date. Given this default risk, the appropriate discount rate is 9% per annum.
What is the fair price of this corporate bond?
Group of answer choices
1049.14
844.42
1000
748.87
336.71
The fair price of the corporate bond is A)$1049.14
To calculate the fair price of the bond, we need to discount all the expected cash flows of the bond to their present values using the appropriate discount rate.
The bond pays a coupon of 5% per annum on the face value of $1,000, which means a cash flow of $50 per year. The bond matures in five years, and at maturity, the bondholders will receive the face value of $1,000.
Given the default risk of the bond, we need to adjust the expected cash flows by the probability of default and the recovery rate. The probability of default is 20%, and the recovery rate is 30%, which means that bondholders will only receive 30% of the face value if the issuer defaults.
Using the above information, we can calculate the expected cash flows as follows:
Expected cash flow = ($50 x 5 x 0.8) + ($1,000 x 0.8 x 0.2 x 0.3) = $196
Next, we need to discount the expected cash flows to their present values using the appropriate discount rate of 9% per annum. This can be done using the formula:
Present value = Cash flow / (1 + Discount rate) ^ Time
Using this formula, we can calculate the present value of the expected cash flows as follows:
Present value = ($50 / (1 + 0.09) ^ 1) + ($50 / (1 + 0.09) ^ 2) + ($50 / (1 + 0.09) ^ 3) + ($50 / (1 + 0.09) ^ 4) + ($1,196 / (1 + 0.09) ^ 5) = $853.13
Therefore, the fair price of the bond is the present value of the expected cash flows, which is $853.13. However, this price needs to be adjusted for the default risk, which reduces the expected cash flows by 20% x 30% = 6%. Therefore, the fair price of the bond is $853.13 x (1 - 0.06) = A)$1,048.87.
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advertising is relevant for both business-to-business as well as for business-to-consumer approaches. select one: true false
True. advertising is relevant for both business-to-business (B2B) and business-to-consumer (B2C) tactics.
In a B2B context, advertising is often used to sell products or services to other corporations, inclusive of workplace materials or production equipment.
B2B advertising and marketing normally specializes in constructing relationships and generating leads rather than direct sales. In a B2C context, advertising is used to promote products or services without delay to purchasers, which include apparel, food, or entertainment.
B2C advertising and marketing frequently focuses on constructing brand focus and developing emotional connections with customers to inspire them to make purchases.
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True. advertising is relevant for both business-to-business (B2B) and business-to-consumer (B2C) tactics. In a B2B context, advertising is often used to sell products or services to other corporations,
inclusive of workplace materials or production equipment. B2B advertising and marketing normally specializes in constructing relationships and generating leads rather than direct sales. In a B2C context, advertising is used to promote products or services without delay to purchasers, which include apparel, food, or entertainment. B2C advertising and marketing frequently focuses on constructing brand focus and developing emotional connections with customers to inspire them to make purchases.
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one of the benefits of selling via a(n) marketing channel is that it allows the seller to interact with consumers without going through an intermediary. multiple choice direct indirect parallel
The correct answer is ""direct"". One of the benefits of selling via a direct marketing channel is that it allows the seller to interact with consumers without going through an intermediary .
When a seller uses a direct marketing channel, they can interact directly with the end consumer without going through any intermediary or middleman. This allows the seller to have more control over the customer experience and build a direct relationship with the consumer. In contrast, an indirect marketing channel involves one or more intermediaries between the seller and the consumer, such as wholesalers, retailers, or agents. A parallel marketing channel involves using both direct and indirect channels simultaneously.
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Canada Telecom, a telephone company, is contemplating investing in a project in multimedia applications. The company is currently 30% debt financed. The company’s analysts have estimated the project’s cash flows but need to determine the project cost of capital. Canada Telecom analysts assess that their new multimedia division has a target debt-equity ratio of 0.6, and a cost of debt of 6.5%. In addition, the risk-free rate is 3%, and market risk premium is 5%.
XYZ Co. is a pure play in the multimedia business and is 35% debt financed. Its current equity beta is 1.05. Assume that both Canada Telecom and XYZ have a tax rate of 35%, and a debt beta of 0.
Is Canada Telecom’s WACC the right discount rate for its new project? Why or why not? (5 marks)
Explain why you cannot use XYZ’s equity beta (1.05) as a proxy for the equity beta of Canada Telecom’s new project. Estimate the new project’s equity beta. (10 marks)
What is the new project’s cost of capital? (5 marks)
Canada Telecom’s WACC is not the right discount rate for its new project because the new project is expected to have a different capital structure than the existing business.
The new division has a target debt-equity ratio of 0.6, while the overall company is currently 30% debt financed. Therefore, the new project’s WACC will be different from the company's WACC.
We cannot use XYZ’s equity beta (1.05) as a proxy for the equity beta of Canada Telecom’s new project because the two companies have different business risks, financial risks, and operating environments.
While XYZ is a pure-play multimedia company, Canada Telecom has a diversified business portfolio. Moreover, the debt-to-equity ratios of the two companies are different. Therefore, we need to estimate the new project’s equity beta.
To estimate the new project’s equity beta, we can use the Hamada equation:
Equity Beta = Unlevered Beta * [1 + (1 - Tax Rate) * (Debt/Equity)]
Here,
Unlevered Beta = XYZ's Equity Beta / [1 + (1 - Tax Rate) * (Debt/Equity)]
= 1.05 / [1 + (1 - 0.35) * (0.35/0.65)] = 0.86
Debt-to-Equity Ratio of the new project = 0.6
Tax Rate = 35%
Plugging the values in the Hamada equation, we get:
Equity Beta = 0.86 * [1 + (1 - 0.35) * (0.6/0.4)]
= 0.86 * 1.63
= 1.40
Therefore, the estimated equity beta of Canada Telecom’s new project is 1.40.
The new project’s cost of capital can be calculated as follows:
Cost of Equity = Risk-Free Rate + Equity Risk Premium * Beta
= 3% + 5% * 1.40
= 10%
Cost of Debt = 6.5%
Tax Rate = 35%
Weight of Debt = 0.6
Weight of Equity = 0.4
WACC = (Weight of Debt * Cost of Debt * (1 - Tax Rate)) + (Weight of Equity * Cost of Equity)
= (0.6 * 6.5% * (1 - 0.35)) + (0.4 * 10%)
= 2.34% + 4%
= 6.34%
Therefore, the new project’s cost of capital is 6.34%.
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Ronstadt Drum Company earned $710 million last year and paid out 25 percent of earnings in dividends. a. By how much did the company's retained earnings increase? (Do not round intermediate calculatio ns. Round the final answer to 1 decimal places. Enter the answer in millions. Omit $ sign in your response.) Addition to retained earnings $ million b. With 85 million shares outstanding and a share price of $40, what was the dividend yield? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. Omit $ sign in your response.) Dividend yield %
a. The company's retained earnings increased by $532.5 million. b. The dividend yield is 5.22%.
a. To calculate the increase in retained earnings for Ronstadt Drum Company, first, find the total dividends paid by multiplying the earnings by the dividend payout ratio. Then, subtract the dividends from the total earnings to find the addition to retained earnings.
1: Calculate total dividends paid
Total dividends paid = Earnings * Dividend payout ratio
Total dividends paid = $710 million * 25%
Total dividends paid = $177.5 million
2: Calculate the addition to retained earnings
Addition to retained earnings = Total earnings - Total dividends paid
Addition to retained earnings = $710 million - $177.5 million
Addition to retained earnings = $532.5 million
b. To calculate the dividend yield, divide the total dividends paid per share by the share price.
1: Calculate dividends per share
Dividends per share = Total dividends paid / Number of shares outstanding
Dividends per share = $177.5 million / 85 million shares
Dividends per share = $2.0882 (rounded to 4 decimal places)
2: Calculate dividend yield
Dividend yield = Dividends per share / Share price
Dividend yield = $2.0882 / $40
Dividend yield = 0.0522
Convert to percentage: 0.0522 * 100 = 5.22%
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simple interest is computed by multiplying which of the following? (select all that apply.) multiple select question. accumulated interest initial investment period of time applicable interest rate
Simple interest is computed by multiplying the initial investment, the period of time, and the applicable interest rate.
Simple interest is a calculation of interest that does not take into account any compounding of interest over time. It is computed by multiplying the initial investment by the applicable interest rate and the period of time for which the interest is being calculated.
The result is the accumulated interest that is earned over that period of time. This calculation is simple and straightforward, which is why it is called "simple" interest. It is commonly used in loans, savings accounts, and other financial transactions where the interest rate is fixed and the interest is not compounded.
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informational control and behavioral control are two central aspects of blank control. multiple choice question. environmental operational physical strategic need help? review
Informational control and behavioral control are two central aspects of "strategic control". Option d is answer.
Strategic control is a process of monitoring and adjusting the strategic direction of an organization. It involves setting goals, developing plans, and implementing strategies to achieve those goals. Informational control and behavioral control are two important components of strategic control.
Informational control refers to the use of information and data to monitor and evaluate the organization's performance. This includes collecting and analyzing information about the internal and external environment, as well as the organization's own activities and outcomes.
Behavioral control, on the other hand, involves influencing the behavior of individuals and groups within the organization to ensure that they are aligned with the organization's strategic goals and objectives. This includes setting expectations, providing feedback, and rewarding or punishing behavior as appropriate.
Together, informational control and behavioral control help to ensure that the organization's strategies are effective and that the organization is making progress towards its goals.
Option d is answer.
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One way to establish credibility is to become more dependent of
government when designing policy
Select one:
True
False
The statement "One way to establish credibility is to become more dependent of government when designing policy" is false because One way to establish credibility is not to become more dependent on the government when designing policy.
Credibility can be established by creating well-researched, evidence-based policies that are transparent and include input from various stakeholders.
Becoming more dependent on the government can limit the scope of perspectives and potentially reduce objectivity. To create credible policies, it's important to remain independent, gather data from multiple sources, engage in consultation with experts and the public, and have clear and accountable decision-making processes.
This approach ensures that policies are well-rounded, evidence-driven, and have the trust and support of the people they aim to serve.
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a change in the money supply will be the least effective when the money demand curve is relatively:
The money supply refers to the amount of money that is in circulation in an economy. It includes physical currency as well as bank deposits and other liquid assets.
However, the effectiveness of a change in the money supply depends on the state of the money demand curve. The money demand curve shows the relationship between the demand for money and the interest rate. When the interest rate is high, the demand for money tends to be low, and vice versa.
If the money demand curve is relatively flat, meaning that a change in the interest rate has little effect on the demand for money, then a change in the money supply will be the least effective. This is because a change in the money supply will not have much impact on the interest rate, which is the key variable that affects economic activity.
Overall, the effectiveness of a change in the money supply depends on the state of the money demand curve. When the money demand curve is relatively flat, a change in the money supply will be the least effective in affecting economic activity.
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Cajamadrid, S.A. issued preferred stocks in 2009. A preferred stock is simply a constant and perpetual annuity. Assuming that you got EUR 37 each year in terms of dividend, compute the price of the preferred stock in the market. The rate of discount of the preferred stocks is 22% annual. a. EUR 12. b. EUR 280. C. EUR 75. d. None of the above.
The present value of the anticipated future dividends, discounted by 22%, is used to determine the preferred stock's price, which is set at EUR 168.18. The correct option is d.
To compute the price of the preferred stock, we need to use the formula for the present value of a perpetual annuity:
Price = Dividend / Rate of Discount
Given that the dividend is EUR 37 per year and the rate of discount is 22% annually, we can calculate the price of the preferred stock as:
Price = 37 / 0.22 = EUR 168.18
Therefore, none of the options provided (a, b, c) match the calculated price. The correct answer is d. None of the above.
To explain further, the price of the preferred stock is determined by the present value of its expected future dividends. Since the dividends are constant and perpetual, we can use the formula for the present value of a perpetuity.
In this case, the rate of discount is 22%, which reflects the opportunity cost of investing in this preferred stock instead of other investment opportunities that may yield a higher return. The higher the discount rate, the lower the present value of the preferred stock, and vice versa.
Using the formula, we can see that the price of the preferred stock is EUR 168.18, which is the present value of the expected future dividends discounted at 22%.
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