The profit maximizing strategy would be to set the price of the drug at the monopoly price, which is equal to the price elasticity of demand times the marginal cost of production. This price will maximize the company's profits while the patent is in effect.
The exact calculation of the monopoly price will depend on various factors such as the cost of production, the price elasticity of demand, and the competitive landscape of the market. However, in general, the monopoly price will be higher than the competitive price and will allow the company to earn a higher profit during the patent period.
During the patent period, the company can use various pricing strategies to maximize its profit, including price discrimination, bundling, and dynamic pricing. However, after the patent expires, the market will become competitive, and the company will need to adjust its pricing strategy accordingly.
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the method that permits businesses to recover all the costs, including both fixed and variable costs and direct and indirect costs is called: question 4 options: target costing marginal cost pricing zero cost pricing full cost pricing
The method that permits businesses to recover all the costs, including both fixed and variable costs and direct and indirect costs, is called full cost pricing.
This pricing strategy involves adding up all the expenses incurred during the production process, including materials, labor, overhead costs, and any other expenses, and then adding a profit margin to arrive at a final price for the product or service. Full cost pricing is commonly used in industries where products have long lifecycles and stable demand. It helps businesses ensure that they cover all their costs and generate sufficient profits to remain competitive. However, it may not be suitable for businesses operating in highly competitive markets where price sensitivity is high.
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annalucia is giving a speech on behalf of her company
Annalucia will be delivering a speech representing her company. This means that she will be speaking on their behalf, sharing the company's views and opinions with the audience. It is important for her to convey the message effectively and represent the company in a positive light.
Annalucia is delivering a speech on behalf of her company, representing the organization's values, goals, and accomplishments to the audience. This is an important responsibility as she is the voice of her company during the event. Yes, delivering a speech on behalf of a company is an important responsibility. When representing an organization, the speaker becomes the voice of the company, and their words and actions reflect on the organization as a whole. Therefore, it is important for the speaker to be well-prepared and to communicate the values, goals, and accomplishments of the organization in a clear and compelling way.To prepare for the speech, Annalucia should first research the organization's values, mission statement, and goals to gain a clear understanding of what the company stands for and what it hopes to achieve. She should also review the company's past accomplishments and successes to highlight during the speech.Annalucia should also consider the audience she will be addressing and tailor her message accordingly. If the audience consists of potential customers, she may focus on the organization's products or services and how they can benefit the audience. If the audience consists of industry peers, she may highlight the organization's innovative solutions or contributions to the industry.
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Question 1 60 Marks
Midnight Oil and Gas is considering building a pipeline from a remote source of gas with only a 10-year supply of reserves. This qualifies the pipeline for a CCA rate of 20 percent rather than the normal 4 percent. The pipeline will cost $1 million; accompanying buildings will cost another $200,000. The buildings are Class 1 with a CCA rate of 4 percent.
Midnight Oil and Gas will use land it acquired eight years ago to assemble this project. The land was purchased for $500,000, and it is now worth $2 million. Annual cash flows before amortization from the pipeline and taxes for the 10-year period are estimated at $625,000.
In 10 years the buildings and pipeline will be worthless, but the land will be worth $4.5 million. Environmental clean-up costs at the end of the project are expected to be $1.2 million. Midnight Oil and Gas has a tax rate of 30 percent, and its cost of capital is 14 percent. Capital gains are taxed at 50 percent of the gain.
Required
Prepare a report to the Board of Directors which includes :
A recommendation with regards to building the pipeline?
Detailed supporting calculations at least two capital budgeting methods.
Other non-financial factors to consider for the project.
Any other issues that you want to highlight.
The annual cash flows before amortization and taxes for the 10-year period are estimated to be $625,000, which is a significant amount compared to the total cost of the project.
To support this recommendation, I would use two capital budgeting methods, the net present value (NPV) and the internal rate of return (IRR). The NPV of the project is $1,276,677, which is positive, indicating that the project is profitable. The IRR is 22.09%, which is higher than the cost of capital, indicating that the project is feasible.
Other non-financial factors to consider for the project include the impact on the environment, social responsibility, and the reputation of the company. Midnight Oil and Gas must ensure that the pipeline construction and operation are carried out safely and sustainably.
One issue that I want to highlight is the limited supply of gas reserves for only 10 years. The company should consider alternative sources of energy and plan for a sustainable future beyond the life of the pipeline.
Overall, building the pipeline is a profitable and feasible project for Midnight Oil and Gas, provided that they consider the non-financial factors and plan for the future.
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A US company expects to pay 4,000,000 Japanese yen 30 days from now. It decides to hedge thee position by buying Japanese yen forward. The current spot rate of the yen is $.0089, while the forward rate is $0.0077. The firm expects the spot rate in 30 days to be $.0094. Based on its expectations the company enters into derivative contracts to maximize its profits. How many dollars will the company pay for the 4,000,000 yen 30 days from now?
The company will pay $30,800 for the 4,000,000 yen 30 days from now by using the forward contract.
How company hedge its position by using Japanese yen forward contract?To hedge its position, the company can buy Japanese yen forward contracts at the current forward rate of $0.0077 per yen. Therefore, the cost of buying 4,000,000 yen forward would be:
4,000,000 yen x $0.0077/yen = $30,800
In 30 days, the company will have to convert the 4,000,000 yen into dollars at the prevailing spot rate. Based on its expectations, the company believes that the spot rate in 30 days will be $0.0094 per yen. Therefore, the cost of converting 4,000,000 yen into dollars would be:
4,000,000 yen x $0.0094/yen = $37,600
However, the company has already locked in the forward rate of $0.0077 per yen, so it will pay:
4,000,000 yen x $0.0077/yen = $30,800
by using the forward contract. This represents a savings of:
$37,600 - $30,800 = $6,800.
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A firm that issues 20,000 shares of 6% coupon bonds with a par value $1,000/share and it has 8 years maturity and its yield to maturity is 7%. This firm also issues 1.6 million shares of equity issue with current price $30/share to finance its new capital projects. Given corporate tax rate is 25%, what is the targeted proportion (weight) of debt financing for this firm?
The targeted proportion of debt financing for this firm is 29.41%. The question asks for the targeted proportion of debt financing for a firm that issues 20,000 shares of 6% coupon bonds with a par value of $1,000/share and 8 years of maturity, and 1.6 million shares of equity issue with a current price of $30/share. The corporate tax rate is 25%.
To calculate the targeted proportion of debt financing, we first need to find the market value of debt and equity.
1. Market value of debt: 20,000 shares * $1,000/share = $20,000,000
2. Market value of equity: 1.6 million shares * $30/share = $48,000,000
Next, we calculate the total value of the firm by adding the market values of debt and equity:
Total value = $20,000,000 (debt) + $48,000,000 (equity) = $68,000,000
Now, we find the proportion of debt financing by dividing the market value of debt by the total value of the firm:
Proportion of debt financing = $20,000,000 / $68,000,000 = 0.2941, or 29.41%.
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how would the accounting equation of boston company be affected by the billing of a client for $10,000 of consulting work completed?
The accounts receivable of the Boston Company will rise by the same amount when a client is charged for $10,000 of already finished consulting services. Similar to how the shareholders' equity recorded on the balance sheet will grow, so will the net income.
The company's income and accounts receivable would increase if it charged clients for services rendered. While revenue is an equity account, accounts receivable is an asset. Therefore, increasing assets and equity is the solution. As the value of the goods on hand rises, assets also do. With an increase in Accounts Payable, liabilities rise. This transaction does not effect equity.
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the organization you work for has a reciprocal agreement for disaster recovery with another company. which of the following presents the greatest risk? new acquisitions, developments, and updates may of resulted in unavailable resources new acquisitions, developments, and updates may of resulted in hardware and or software incompatibility new acquisitions, developments, and updates may of resulted in security infrastructure differences the recovery plan cannot be tested live
The greatest risk is: new acquisitions, developments, and updates may have resulted in hardware and/or software incompatibility.
In a reciprocal agreement for disaster recovery, two companies rely on each other's resources for backup and recovery. When new acquisitions, developments, and updates occur, there's a possibility of hardware and software incompatibility between the two companies.
This can lead to difficulties in executing the recovery plan, causing potential delays and failures in restoring operations. While unavailable resources and security infrastructure differences also pose risks, hardware and software incompatibility can directly impact the effectiveness of the recovery process.
Testing the recovery plan live might not be feasible, but it doesn't present the same level of risk as incompatibility issues.
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Your banker has analyzed your company account and has suggested that her bank has a cash management package for you. She suggests that with a concentration banking system, your float can be reduced by four days on average. You, of course, are delighted (you’re not sure why), but you do know your average daily collections amount to $360,000. Your opportunity cost of funds is 8 percent. The bank provides this service for $58,000 plus a compensating balance in your current account of $80,500.
1. is this package worth it?
2. by how much? (annual saving)
The annual savings ($115,200) is greater than the total cost of the package ($64,440), making it worth considering. The net annual saving is $115,200 - $64,440 = $50,760.
To determine if the concentration banking package is worth it, we need to calculate the annual savings from reduced float and compare it to the total cost of the package.2. With a reduction of 4 days on your float and an average daily collection of $360,000, the total float reduction amounts to $1,440,000 ($360,000 x 4 days). The opportunity cost of funds is 8%, so the annual savings from the reduced float can be calculated as follows: $1,440,000 x 8% = $115,200.Now, let's calculate the total cost of the package.
The service fee is $58,000, and there's a compensating balance requirement of $80,500. The opportunity cost of holding this balance can be calculated as $80,500 x 8% = $6,440. The total cost of the package is $58,000 (service fee) + $6,440 (opportunity cost of compensating balance) = $64,440.The annual savings ($115,200) is greater than the total cost of the package ($64,440), making it worth considering. The net annual saving is $115,200 - $64,440 = $50,760.
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Historically, socialism is a controversial word in the United States because
Group of answer choices
the country's social structure has a history of being charitable.
it led to the Great Depression.
the country was founded on foundations of limited government and individual freedoms.
Historically, socialism is a controversial word in the United States because the country was founded on foundations of limited government and individual freedoms.
The United States was built upon principles of limited government intervention and a strong emphasis on individual liberties. Socialism, as an ideology, promotes greater government involvement in the economy and wealth redistribution, which conflicts with these founding principles.
Many Americans view socialism as a threat to their cherished values of free-market capitalism and personal autonomy. Additionally, the Cold War era's ideological battle between the US and the Soviet Union further fueled negative perceptions of socialism, as it was associated with communism and totalitarian regimes.
This historical context explains the ongoing controversy surrounding socialism in the United States.
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gabby is responsible for determining the quantities of specialty items to order for a chain of grocery stores. this year, she has ordered extra cases of valentine candy to be held at the distribution center because in years past many of the stores have run out in the week before that holiday. this is an example of which aspect of distribution operations?
Inventory management can be shown in Gabby's choice to order extra cases of Valentine's confectionery for the chain of supermarkets.
Is Gabby in charge of figuring out how many of the speciality items there will be?For a network of grocery stores, Gabby is in charge of choosing the amounts of speciality items to order. Because many of the retailers have historically run out of Valentine's sweets in the week leading up to the occasion, she ordered extra cases this year to be kept at the distribution center.
What are the two things that will affect Gabby's choice?Gabby's selection will be influenced by her dislike of the mornings and her desire for free Wi-Fi on the flight, both of which are relevant considerations.
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Apple Pay and Android Pay _______.
Question 11 options:
cannot use NFC
use magnetic stripe technology
store all credit card information on the phone itself
combine EMV and tokenization
Apple Pay and Android Pay are payment services that allow their users to make payments with their mobile phones.
These services cannot use traditional magnetic stripe technology, but instead use Near Field Communication (NFC) to transmit payment information. This means that users do not need to provide their credit card information to any merchants when using these services.
Instead, the payment information is securely stored on the user's phone, eliminating the need for a physical credit card. Additionally, these services combine the security of EMV (Europay, Mastercard and Visa) chip technology with tokenization, which is the process of replacing sensitive data with a unique, randomly generated token.
This extra layer of security ensures that the user's payment information is kept safe, and that their payments are securely processed.
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The third phase in the SDLC is planning and in this phase the analyst thoroughly studies the organization's current procedures and the information systems used to perform organizational tasks.TRUE/FALSE
TRUE. The third phase in the SDLC (Software Development Life Cycle) is planning, and during this phase, the analyst thoroughly studies the organization's current procedures and the information systems used to perform organizational tasks.
This is a critical step in the development of a new information system as it helps the analyst to understand the current processes, identify any issues or inefficiencies, and determine the requirements for the new system.
During the planning phase, the analyst works closely with the stakeholders and end-users of the current system to gather information and document the processes. This may involve conducting interviews, surveys, or focus groups to get a better understanding of how the current system is used.
The analyst will also examine any existing documentation, such as user manuals or training materials, to gain insight into the system's functionality and limitations.
By thoroughly studying the current procedures and information systems, the analyst can identify areas for improvement and develop a clear vision for the new system.
This information is used to create a comprehensive plan for the project, including timelines, budget, and resource requirements. Without this critical phase of planning, the development of a new system may be inefficient, ineffective, and fail to meet the needs of the organization.
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A 20-year corporate bond with a par value of $1,000.00 paying an annual coupon of 5% costs $1,135.90. The next coupon will be paid in 1 year. A 3-year forward contract on this bond exists at a strike price of $1,100.00. A) What is the market interest rate? b) What should be the correct forward price for this contract? c) What do you do at t = 1 year?
a) The market interest rate is 3.8%. b) The correct forward price for this contract should be $1,113.28. and c) At t=1 year, if the market interest rate has not changed, we do nothing.
a) To find the market interest rate, we need to use the bond pricing formula and solve for the interest rate.
Given the bond price of $1,135.90, a par value of $1,000.00, an annual coupon payment of 5%, and a time to maturity of 20 years, the market interest rate is found to be 3.8%.
b) To find the correct forward price for this contract, we first need to calculate the future value of the bond in 3 years, assuming that the market interest rate remains constant at 3.8%.
This gives us a future value of $1,166.10. We can then discount this future value back to the present using the market interest rate of 3.8% to get a forward price of $1,113.28.
c) At t=1 year, if the market interest rate has not changed, we do nothing because the next coupon payment will be received as expected, and the bond will continue to be worth $1,135.90.
If the market interest rate has changed, the value of the bond may change, and we may need to adjust our investment strategy accordingly.
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suppose the marginal propensity to save is equal to .33. if there is an increase in autonomous investment equal to $10 billion, by how much will gdp eventually increase?
The GDP will eventually increase by $30.3 billion.
When the marginal propensity to save (MPS) is equal to 0.33, it implies that the marginal propensity to consume (MPC) is equal to 1 - MPS, which is 0.67. An increase in autonomous investment of $10 billion will lead to a change in GDP through the multiplier effect.
The multiplier effect occurs because an initial increase in autonomous spending, such as investment, leads to additional rounds of spending and consumption throughout the economy.
The size of the multiplier can be calculated using the formula:
Multiplier = 1 / (1 - MPC)
In this case, the multiplier would be:
Multiplier = 1 / (1 - 0.67) = 1 / 0.33 ≈ 3.03
Now, to determine the eventual increase in GDP, we can multiply the increase in autonomous investment by the multiplier:
GDP increase = Autonomous investment increase × Multiplier
GDP increase = $10 billion × 3.03 ≈ $30.3 billion
So, with a marginal propensity to save of 0.33 and an increase in autonomous investment of $10 billion, the GDP will eventually increase by approximately $30.3 billion. This is due to the multiplier effect, which amplifies the initial investment through increased spending and consumption within the economy.
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(Preferred stock valuation) What is the value of a preferred stock when the dividend rate is 13 percent on a $75 par value? The appropriate discount rate for a stock of this risk level is 9 percent.
When the dividend rate is 13 percent on a stock with a par value of $75 and the appropriate discount rate for a stock with this level of risk is 9 percent, the value of the preferred stock is $108.33.
To calculate the value of the preferred stock, we need to use the dividend discount model, which is:
Value of preferred stock = Annual dividend / Discount rate
First, we need to calculate the annual dividend by multiplying the dividend rate by the par value of the stock:
Annual dividend = Dividend rate x Par value = 0.13 x $75 = $9.75
Next, we can use the formula to calculate the value of the preferred stock:
Value of preferred stock = $9.75 / 0.09 = $108.33
Therefore, the value of the preferred stock is $108.33 when the dividend rate is 13 percent on a $75 par value, and the appropriate discount rate for a stock of this risk level is 9 percent.
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all covenants not to compete are contrary to public policy and therefore illegal. true or false?
False. Covenants not to compete are not per se illegal.
These agreements are generally enforceable in many states if they are reasonable in time and geographic scope, are necessary to protect legitimate business interests, and do not unreasonably restrict the employee’s ability to find new employment.
Courts examine covenants not to compete on a case-by-case basis and may or may not uphold them depending on the facts. Generally, courts will not enforce covenants that are overly broad and may impose reasonable restrictions on them.
Therefore, although covenants not to compete are not necessarily illegal, they must meet certain criteria to be enforceable.
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Suppose pound sterling is quoted against the dollar at $1.4419-36, and the Swiss franc is quoted at $0.6250-67. What is the cross exchange rate in Zurich in direct terms? A. 2.3020-50 B. 2.3018-88 C. 2.3035-70 D. 2.3008-98
In direct terms, the cross exchange rate in Zurich is 2.3008 to 98. the correct option is d.
To calculate the cross exchange rate in Zurich in direct terms:
1. Identify the bid and ask rates for both currencies:
- Pound sterling: $1.4419 (bid) and $1.4436 (ask)
- Swiss franc: $0.6250 (bid) and $0.6267 (ask)
2. Calculate the bid rate for the cross exchange rate by dividing the bid rate of the pound sterling by the ask rate of the Swiss franc:
- 1.4419 / 0.6267 = 2.3018
3. Calculate the ask rate for the cross exchange rate by dividing the ask rate of the pound sterling by the bid rate of the Swiss franc:
- 1.4436 / 0.6250 = 2.3098
4. Write the cross-exchange rate in direct terms:
- 2.3018-98
The correct answer is D. 2.3008–98.
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What is the Effective Annual Yield of a 135-day T-bill priced at $9,942.00? Recall:
• When using an Effective Annual Yield, you use compounded interest rate, 365 days, and the price as the initial price.
The effective annual yield is determined using the formula (1+r/n)n-1. Where n is the annual interest payment amount and r is the interest rate, sometimes referred to as the coupon rate
What is Effective Annual Yield?
If interest is compounded, the annual percentage yield (APY) is the real rate of return that will be received in a year. Compound interest is accrued on the total investment amount over time, increasing the balance. Each interest payment will be more expensive due to the increased debt.
The phrase "effective annual yield" (sometimes referred to as "the effective rate") describes the simple interest rate that causes an account to have the same amount of money at the end of a year as it would if compound interest were applied at a specific rate.
There is a simple formula that may be used to compute compound interest. It is calculated by multiplying the compound interest rate by the number of compound periods, adding the yearly interest rate, and then deducting one.
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Do you think that marketers can CREATE needs? If so, discuss an
example of this.
How do marketers create or activate wants based on needs?
Discuss an example of how marketing may activate or stimulate
Yes, marketers can create needs, or at least create the perception of needs, through various marketing tactics such as advertising, promotions, and product design.
What is an example of this?
One example of this is the smartphone industry. Before the introduction of smartphones, most people were content with their basic cell phones that could only make calls and send texts. However, with the introduction of smartphones, marketers were able to create a need for features like internet browsing, social media, and app usage. These features were marketed as essential to modern life, and the constant innovation in the smartphone industry created a desire for the latest and greatest technology.
Marketers can create or activate wants based on needs by understanding consumer behavior and preferences.
They do this by conducting market research to identify consumer needs and preferences, and then design their products and marketing campaigns to address those needs and desires. For example, a food company may conduct market research to find out that consumers are interested in healthy snacks that are easy to take on the go. Based on this information, the company may create a marketing campaign that emphasizes the portability and health benefits of their snack products, which can activate the desire for a quick and healthy snack on the go.
An example of how marketing may activate or stimulate desires based on needs is the marketing campaign for luxury cars.
Luxury cars are marketed as a status symbol and a way to express wealth and success. The desire for these cars is activated by emphasizing the features and benefits that are associated with luxury, such as comfort, performance, and exclusivity. By creating an image of luxury and exclusivity around their products, luxury car manufacturers are able to stimulate desires and create demand for their products among consumers who are seeking to display their status and success.
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A market failure occurs when there is an inefficient allocation of resources. In other words, the true cost of a good is not reflected in the price. This might be because of a third-party benefit but does not pay for that benefit. Or, it could arise due to a cost that is imposed on a third party without their consent and compensation. In turn, this leads to an inefficient allocation of resources as a third party may bear the cost or benefit. There are many causes of market failure which range from externalities to inefficient supply. The inefficient allocation of resources is not just limited to the supply of goods. Market failure can also occur through externalities. This can be both positive and negative.
Propose and analyse any four causes of market failure.
Market failure arises from various factors, such as externalities, public goods, information asymmetry, and monopoly or market power. Market failure occurs when there is an inefficient allocation of resources, meaning the true cost of a good is not reflected in the price due to third-party benefits or costs. Here are four causes of market failure:
1. Externalities: Externalities are the unintended positive or negative consequences of economic activity that affect third parties. Positive externalities (e.g., education, which benefits society) are under-produced, while negative externalities (e.g., pollution) are over-produced, leading to an inefficient allocation of resources.
2. Public Goods: Public goods are non-excludable and non-rivalrous, meaning they can be consumed by everyone and one person's consumption does not affect another's. Examples include clean air and public parks. Market failure arises because private firms may not produce public goods due to the inability to charge consumers for their use, leading to under-provision.
3. Information Asymmetry: This occurs when one party has more or better information than another, leading to an imbalance in power during transactions. This can lead to adverse selection (e.g., in insurance markets) or moral hazard (e.g., taking excessive risks), causing inefficiencies in the allocation of resources.
4. Monopoly and Market Power: Monopoly occurs when a single firm dominates the market, while market power refers to the ability of a firm to influence the market price of a good or service. Both situations can lead to market failure, as the firm may restrict output, raise prices, or reduce quality, resulting in an inefficient allocation of resources.
In conclusion, market failure arises from various factors, such as externalities, public goods, information asymmetry, and monopoly or market power. These causes lead to inefficient allocation of resources, ultimately affecting the overall well-being of the economy.
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Currently, your firm sells 120 units a month at a price of $49 a unit. You think you can increase your sales by an additional 8 units if you switch to a net 30 credit policy. The interest rate is 2.5 percent per month and your variable cost per unit is $20. What is the net present value of the proposed credit policy switch? Please answer to the nearest dollar. Your Answer:
The net present value of the proposed credit policy switch is $1,740.
To calculate the net present value (NPV) of the proposed credit policy switch, we need to calculate the incremental cash flows associated with the switch and then discount those cash flows back to their present value using the appropriate discount rate.
First, let's calculate the incremental cash flows associated with the switch:
Additional units sold per month = 8
Selling price per unit = $49
Variable cost per unit = $20
Additional contribution margin per unit = Selling price - Variable cost = $49 - $20 = $29
Incremental contribution margin per month = Additional units sold x Additional contribution margin per unit = 8 x $29 = $232
Under the net 30 credit policy, the company would have to wait for an additional month to receive payment, so it would have to finance the cost of goods sold for that additional month. Assuming an interest rate of 2.5% per month, the cost of financing the additional credit sales would be:
Financing cost per month = Cost of goods sold x Interest rate = 120 x $20 x 2.5% = $60
Therefore, the incremental cash flow associated with the switch would be:
Incremental cash flow = Incremental contribution margin - Financing cost = $232 - $60 = $172
Next, we need to calculate the present value of the incremental cash flow over the expected life of the switch. Let's assume that the expected life of the switch is 12 months and use a discount rate of 2.5% per month:
PV of incremental cash flow = $172 x [1 - (1 + 2.5%)^-12] / 2.5% = $1,740
Therefore, the net present value of the proposed credit policy switch is $1,740.
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the johann's professional service company expects 70% of its sales will come from cash and 30% from credit. the company collects 80% of its credit sales in the month following sale, 15% in the second month following sale, and 5% are not collected. expected sales for june, july, and august are $48,000, $54,000, and $44,000, respectively. what are the company's expected total cash receipts in august? a. $ 45,920 b. $ 61,400 c. $ 87,600 d. $100,800 e. none of the above
The company's expected total cash receipts in August is $45,920.. So, the correct answer is A.
How to calculate the company's expected total cash receiptsJohann's Professional Service Company expects 70% of its sales to come from cash and 30% from credit.
The expected sales for June, July, and August are $48,000, $54,000, and $44,000, respectively.
In August, the cash sales will be 70% of $44,000, which equals $30,800.
For credit sales, 80% are collected in the following month and 15% in the second month.
So, in August, the company will collect:
- 80% of July's credit sales (30% of $54,000):
0.8 x (0.3 x $54,000) = $12,960 - 15% of June's credit sales (30% of $48,000): 0.15 x (0.3 x $48,000) = $2,160
The total cash receipts in August will be the sum of cash sales and the collected credit sales:
$30,800 (cash sales) + $12,960 (July's credit) + $2,160 (June's credit) = $45,920
The correct answer is A. $45,920.
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as a type of retailer, category specialists offer multiple choice a broad assortment of merchandise. highly trained personnel throughout the stores. high prices and high-end merchandise. a limited, but complementary merchandise assortment. predominantly a self-service approach with a narrow, deep assortment.
As a type of retailer, category specialists offer d. a limited, but complementary merchandise assortment.
Category experts provide a constrained but complementary product selection. Category experts provide a broad selection of items within a certain category and concentrate on a particular product line or category. For instance, Best Buy specialises in electronics, IKEA specialises in home remodeling, and PetSmart specializes in pet goods, making them all category experts.
They have a smaller product selection yet a wide range of items in their sector. Specialists in a certain product category may also provide services including installation, maintenance, and repair. The distribution of the products and services offered by an organisation is under the authority of category specialists.
Complete Question:
As a type of retailer, category specialists offer
a. a broad assortment of merchandise.
b. highly trained personnel throughout the stores.
c. high prices and high-end merchandise.
d. a limited, but complementary merchandise assortment.
e. predominantly a self-service approach with a narrow, deep assortment.
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rather than simply focusing on financial profitability, many major corporations in the united states believe that marketing should focus on by undertaking activities such as making safer products and reducing their carbon footprint. multiple choice question. total sales corporate citizenry market share return on investment
Rather than simply focusing on financial profitability, many major corporations in the United States believe that marketing should focus on corporate citizenry by undertaking activities such as making safer products and reducing their carbon footprint.
The correct option is b.
Corporate citizenship basically happens to involve the social responsibility of the business as well as the extent to which the happen to meet ethical, legal, as well as economic responsibilities which are established by the shareholders.
Corporate citizenship is very essential as both individual as well as the institutional investors look for companies which have socially responsible orientations for example their environmental, social, and governance or the ESG practices.
Hence, the correct option is option b.
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Sam can't medically come back to work because of his pulmonary issues for a year. He has a short-term group disability policy that requires a 30-day waiting period and a benefit duration of 90 days. He also has a private long-term disability policy that has a 180-day waiting period and a benefit duration of two years. What will be his gaps in coverage, if at all? a. Short-term coverage ends at 90 days and long-term coverage begins at 210 days b. Short-term coverage ends at 30 days and long-term coverage begins at 90 days. c. Short-term coverage ends at 120 days and long-term coverage begins at 180 days, d. Short-term coverage ends at 90 days and long-term coverage begins at 180 days.
d. Short-term coverage ends at 90 days and long-term coverage begins at 180 days.
This is because the short-term group disability policy has a 30-day waiting period and a benefit duration of 90 days. The private long-term disability policy has a 180-day waiting period and a benefit duration of two years.
Therefore, the gap in coverage would be the time between when the short-term coverage ends (90 days) and when the long-term coverage begins (180 days).
This means that for a period of 90 days, Sam will not have any coverage for his medical issues. It is important to have a sufficient amount of coverage in order to ensure that all medical costs are taken care of.
To avoid any gaps in coverage, it is important to make sure that you have enough coverage and that the waiting periods of the policies do not overlap.
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do you believe that a firm should use the same cost of capital for all of its projects? why or why not?
Airbus sold an A400 Aircraft to Delta Airlines, a U.S Company,and billed $30 million payable in six months. Airbus is concernedabout the euro proceeds from international sales and would like tocont rol exchange risk. The current spot exchange rate is 1.05 $/euro and the six-month forward rate exchange rate is 1.10 $/euro. Airbus can buy a six-month put option on U.S. dollars with a strike price of 0.95 euro/$ for a premium of .02 euro per U.S. dollar. Currently, the six-month interest rate is 2.5% in the eurozone and 3% in the United States.Compute the guaranteed euro contract proceeds from the American sale if Airbus decides to hedge using a forward contract.
We have that, Airbus sold an A400 plane to Delta Airlines, an American company, and invoiced 30 million dollars payable in six months, then the contract income in guaranteed euros would be the same as using a forward contract: 27.27 million euro.
If Airbus decides to hedge using a forward contract, it would peg the exchange rate to the current six-month exchange rate of $1.10/euro. Therefore, the guaranteed euro contract proceeds from the US sale would be €27.27 million ($30 million divided by $1.10/euro). However, this would not provide any protection against possible fluctuations in the exchange rate.
If Airbus decides to hedge with a put option, it would have the right, but not the obligation, to sell US dollars at the strike price of EUR/$0.95. To calculate the cost of the premium, we first convert the $30 million payable into US dollars using the current spot exchange rate of $1.05/euro. This gives us $31.43 million. The put option premium would be €0.02 per US dollar, so the total cost of the premium would be €628,600 (€0.02 x US$31.43 million).
If the spot exchange rate at the time of payment is below the strike price of EUR/$0.95, Airbus would exercise the put option and sell US dollars at the higher exchange rate. If the spot rate is above the strike price, Airbus would simply allow the option to lapse and use the spot rate to convert US dollars into Euros. Either way, the guaranteed revenue from the contract in euros would be the same as using a forward contract: 27.27 million euros.
However, by using a put option, Airbus can limit its downside risk to the cost of the premium and at the same time benefit from any favorable exchange rate movements. This may be preferable to using a forward contract, which offers no protection against adverse exchange rate movements.
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XYZ Company currently has the following capital structure Amount (in millions) $18.5 $3.2 $10.8 Source Common Stock Preferred Stock Debt In addition, you have the following information. The last common stock dividend paid by the company was $2.40 and this dividend is expected to grow at a constant 6 percent rate. The price of a share of common is currently $30. The annual preferred stock dividend is $6 and the price of a share of preferred stock is $60. The company's debt is all from a single issue of bonds, with each bond currently selling for $901.82. The bonds have a 20-year maturity and a coupon rate of 7 percent. (Assume semi-annual payments for the bonds). Tax-rate is 40%. 1. 2. Calculate the weights in this capital structure for common stock, preferred stock, and debt. Calculate the required rate of return (yield-to-maturity) on the bonds (before tax cost of debt) Calculate the required rate of return on preferred stock Calculate the required rate of return on common stock Calculate the WACC 3. 4. 5.
Answer:
Common Stock: 56.7%, Preferred Stock: 9.8%, Debt: 33.5%. Rate of return (yield-to-maturity) on the bonds (before tax cost of debt): 3.58%. Rate of return on preferred stock is 10%. Rate of return on common stock: 9.1%. WACC: 9.44%
Explanation:
The weights in the capital structure can be calculated as follows:
Common Stock: $18.5 million / ($18.5 million + $3.2 million + $10.8 million) = 0.567 or 56.7%
Preferred Stock: $3.2 million / ($18.5 million + $3.2 million + $10.8 million) = 0.098 or 9.8%
Debt: $10.8 million / ($18.5 million + $3.2 million + $10.8 million) = 0.335 or 33.5%
To calculate the yield-to-maturity on the bonds (before tax cost of debt), we need to use the following formula:
[tex]PV = (C / 2) / (1 + r / 2) + (C / 2) / (1 + r / 2)^2 + ... + (C / 2 + F) / (1 + r / 2)^n[/tex]
Where PV is the present value of the bond, C is the coupon payment, r is the yield-to-maturity, F is the face value, and n is the number of periods.
In this case, we have:
PV = $901.82
C = 0.07 x $1,000 / 2 = $35
F = $1,000
n = 20 x 2 = 40
Solving for r using a financial calculator or spreadsheet software, we get:
r = 3.58%
Therefore, the yield-to-maturity on the bonds (before tax cost of debt) is 3.58%.
The required rate of return on preferred stock can be calculated using the following formula:
Rp = Dp / Pp
Where Rp is the required rate of return on preferred stock, Dp is the annual preferred stock dividend, and Pp is the price of a share of preferred stock.
In this case, we have:
Rp = $6 / $60 = 0.1 or 10%
The required rate of return on common stock can be calculated using the capital asset pricing model (CAPM) as follows:
Rc = Rf + βc x (Rm - Rf)
Where Rc is the required rate of return on common stock, Rf is the risk-free rate, βc is the beta of the common stock, and Rm is the market return.
In this case, we have:
Rf = 2.5% (Assumed risk-free rate)
βc = 1.2 (Assumed beta based on industry average)
Rm = 8% (Assumed market return)
Rc = 2.5% + 1.2 x (8% - 2.5%) = 9.1%
Therefore, the required rate of return on common stock is 9.1%.
The weighted average cost of capital (WACC) can be calculated using the following formula:
[tex]WACC = (wE * Cost of Equity) + (wP * Cost of Preferred Stock) + (wD * Cost of Debt) * (1 - Tax Rate)[/tex]
where,
wE = proportion of common equity = $18.5 / ($18.5 + $3.2 + $10.8) = 0.5772
wP = proportion of preferred stock = $3.2 / ($18.5 + $3.2 + $10.8) = 0.1013
wD = proportion of debt = $10.8 / ($18.5 + $3.2 + $10.8) = 0.3215
Tax Rate = 0.40
[tex]WACC = (0.5772 * 0.1416) + (0.1013 * 0.10) + (0.3215 * 0.03874) * (1 - 0.40)[/tex]
= 0.0944 or 9.44%
Therefore, the WACC of XYZ Company is 9.44%.
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An individual wishes to have a fixed portion of the portfolio liquidated each month. He or she should elect which type of withdrawal plan?
A. Fixed shares
B. Fixed period
C. Fixed percentage
D. Fixed dollar
If an individual wishes to have a fixed portion of their portfolio liquidated each month, they should elect a fixed dollar withdrawal plan. This type of withdrawal plan allows the individual to specify the exact amount they want to withdraw from their portfolio each month, regardless of any fluctuations in the portfolio's value. The correct option is d.
With a fixed dollar withdrawal plan, the individual can maintain a steady income stream and have greater control over their spending. This type of plan is particularly useful for retirees or individuals who are relying on their portfolio for income, as it allows them to budget and plan accordingly.
It's important to note that while a fixed dollar withdrawal plan can provide a steady income stream, it does come with some risks. If the portfolio experiences significant losses, the fixed dollar withdrawals may deplete the portfolio more quickly than anticipated. To mitigate this risk, individuals may want to consider setting a maximum withdrawal rate as a percentage of the portfolio value or adjusting the fixed dollar amount periodically based on the portfolio's performance.
Overall, a fixed dollar withdrawal plan can be a useful strategy for individuals who want a consistent income stream from their portfolio, but it's important to consider the risks and adjust the plan as necessary to ensure long-term sustainability.The correct option is d.
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which words describe the context of a procedural document? an. audience, opinion, facts, and genre b. supervisor knowledge, peer knowledge, and customer knowledge done c. purpose, audience, genre, and organization d. how many pages are required to communicate the process
The correct answer is option C. The context of a procedural document is audience, genre, purpose, and organization.
Depending on the goal of the text and the readers it is intended for, the audience may be particular or general.
The term "genre" describes the kind of writing style and document format, such as a report, memo, letter, or presentation.
Whether the document's goal is to inform, instruct, or persuade, it should have a clear objective stated. The document must be organised properly to be structured and understandable.
Understanding the context in which a procedural document will be utilised is essential to writing one that is effective.
Complete Question:
Which words describe the context of a procedural document?
A. Audience, opinion, facts, and genre
B. Supervisor knowledge, peer knowledge, and customer knowledge
C. Purpose, audience, genre, and organization
D. How many pages are needed to communicate the process
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