With a 7% growth rate, the required rate of return is 11.39%, and with a 12% growth rate, the required rate of return is 16.46% for a price per share of $24.
To calculate the required rate of return for McCracken Roofing, Inc.'s common stock with a constant growth rate, we can use the Gordon Growth Model. The formula for this model is:
Price per share = (Dividend per share * (1 + Growth rate)) / (Required rate of return - Growth rate)
a. With a dividend of $1.07, a growth rate of 7%, and a price per share of $24, we can rearrange the formula to find the required rate of return:
$24 = ($1.07 * (1 + 0.07)) / (Required rate of return - 0.07)
Required rate of return = (1.07 * 1.07) / 24 + 0.07 ≈ 0.1139 or 11.39%
b. If earnings and dividends grow at 12%, we can recalculate the required rate of return with the new growth rate:
$24 = ($1.07 * (1 + 0.12)) / (Required rate of return - 0.12)
Required rate of return = (1.07 * 1.12) / 24 + 0.12 ≈ 0.1646 or 16.46%
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Give an example where people or society have used money as a measure for success but ended up losing something more important. This can be any situation, something you saw in your personal life or in the news. Bokbluster.com CREATORS.COM Ref U.S.A. WHAT'S THAT ALL ABOUT STOCKS JOBS ECONOMIC OFTIMISM LIFE EXPECTANCY Efson
The 2008 financial crisis is an example where society used money as a measure for success but ended up losing not only their financial stability but also their trust in the financial system and institutions.
The 2008 financial crisis was a result of the over-reliance on the housing market and the excessive borrowing and lending of money. The societal emphasis on making money and achieving financial success led to the creation of complex financial instruments and practices that were inherently unstable and unsustainable.
When the housing market collapsed, it triggered a chain reaction that resulted in widespread job loss, foreclosures, and economic downturns. The crisis not only caused financial losses but also eroded people's trust in the financial system and institutions, highlighting the importance of not solely relying on money as a measure of success.
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a company's 6% coupon rate, semiannual payment, $1,000 par value bond that matures in 20 years sells at a price of $548.61. the company's federal-plus-state tax rate is 25%. what is the firm's after-tax component cost of debt for
The firm's after-tax component cost of debt is approximately 2.55%.
Calculate the annual coupon payment.
The coupon rate is 6% and the par value is $1,000, so the annual coupon payment is $1,000 x 6% = $60.
Determine the number of coupon payments.
Since the bond has semiannual payments, it will have 2 x 20 = 40 coupon payments over its life.
Calculate the before-tax cost of debt.
The price of the bond is $548.61, which is less than the par value of $1,000, so it is selling at a discount. The before-tax cost of debt is the yield to maturity, which can be calculated using a financial calculator or spreadsheet software. In this case, the yield to maturity is approximately 7.36%.
Calculate the after-tax cost of debt.
The after-tax cost of debt is calculated as the before-tax cost of debt multiplied by one minus the tax rate. In this case, the tax rate is 25%, so the after-tax cost of debt is 7.36% x (1 - 0.25) = 5.52%.
Calculate the semiannual after-tax cost of debt.
Since the coupon payments are semiannual, the after-tax cost of debt needs to be adjusted accordingly. The semiannual after-tax cost of debt is 5.52% / 2 = 2.76%.
Calculate the annual after-tax cost of debt.
To get the annual after-tax cost of debt, the semiannual after-tax cost of debt needs to be converted back to an annual rate. This is done by multiplying the semiannual rate by 2. In this case, the annual after-tax cost of debt is 2.76% x 2 = 5.52%.
Therefore, the firm's after-tax component cost of debt is approximately 2.55%.
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what is the name of the portal that amazon sellers use to create listings, manage orders, and correspond with buyers?
The portal that Amazon sellers use to create listings, manage orders, and correspond with buyers is called the Seller Central.
This is a web-based platform that allows sellers to access all aspects of their business on Amazon, from product listing to order fulfillment. Through Seller Central, sellers can create and edit their product listings, monitor inventory, track orders, and communicate with customers through the messaging system.
Additionally, sellers can access performance metrics, payment reports, and tools to manage their business finances. With Seller Central, sellers have a centralized location for managing all aspects of their Amazon business, allowing them to streamline their operations and focus on growing their sales.
Overall, Seller Central is a critical tool for any Amazon seller, providing a comprehensive and user-friendly platform for managing their business on the world's largest online marketplace.
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kando company currently pays $15 per unit to buy a part for a product it manufactures. instead, kando could make the part for per unit costs of $6 for direct materials, $4 for direct labor, and $2 for incremental overhead. kando normally applies overhead costs using a predetermined rate of 200% of direct labor cost.(a) prepare a make or buy analysis of costs for this part.(b) should kando make or buy the part?
The make or buy analysis of costs for the part is as follows:
Current cost of buying the part = $15 per unit
Cost of making the part = $6 for direct materials + $4 for direct labor + $2 for incremental overhead = $12 per unit
Total cost of making the part including overhead = $12 + (200% x $4) = $20 per unit.
Based on the analysis, it would be cheaper for Kando to buy the part at $15 per unit rather than making it at $20 per unit.
Therefore, Kando should continue to buy the part instead of manufacturing it.To make the decision, we need to compare the buy cost per unit with the make cost per unit.
The total overhead cost per unit is calculated as:
Overhead cost per unit = 200% x Direct labor cost per unit
= 200% x $4
= $8
The total make cost per unit is:
Total make cost per unit = Direct materials cost per unit + Direct labor cost per unit + Overhead cost per unit
= $6 + $4 + $8
= $18
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define the generic business-level strategies companies pursue. provide an example of a company that represents each type of strategy.
Generic business-level strategies are broad approaches that companies can take to gain a competitive advantage in their industry. The four main types of generic strategies are cost leadership, differentiation, focused low cost, and focused differentiation.
Cost leadership involves producing products or services at a lower cost than competitors. This allows the company to offer lower prices to customers and still make a profit. An example of a company that pursues this strategy is Walmart.
Differentiation involves offering products or services that are unique or of higher quality than competitors. This allows the company to charge higher prices and attract customers who value these differences. An example of a company that pursues this strategy is Apple.
Focused low cost involves targeting a specific market segment and offering products or services at a lower cost than competitors. This allows the company to compete in a smaller, niche market. An example of a company that pursues this strategy is Dollar General.
Focused differentiation involves targeting a specific market segment and offering unique or high-quality products or services that meet the needs of that segment. This allows the company to charge higher prices and attract loyal customers. An example of a company that pursues this strategy is Tesla.
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when looking for capital, bankers and other lenders will usually feel most comfortable investing in a/an
When looking for capital, bankers and other lenders will usually feel most comfortable investing in a business that has a strong financial track record and a solid business plan.
When looking for capital, bankers and other lenders will usually feel most comfortable investing in a business that has a strong financial track record and a solid business plan. They will also look for businesses that have collateral or assets that can be used as security for the loan. Additionally, businesses that have a proven ability to generate steady cash flow and have a low level of risk will be more attractive to lenders. Overall, lenders are most comfortable investing in businesses that have a low risk profile and a high likelihood of generating consistent returns.
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192. An analyst gathered the following data about a company:
Source of Capital
Book Value
Market Value
Debt
$27 Mil.
$20 Mil.
Preferred Stocks
$18 Mil.
$28 Mil.
Common Stock
$45 Mil.
$32 Mil.
Before-tax cost of debt = 6%
Cost of common equity = 8%
Cost of preferred equity = 10%
Marginal tax rate = 30%
The company’s weighted average cost of capital is closest to:
A. 0.073
B. 0.078
C. 0.082
In this case, the cost of debt is 6%, the cost of common equity is 8%, and the cost of preferred equity is 10%. The marginal tax rate is 30%. Using this information, we can calculate the company's WACC.
The weighted average cost of capital (WACC) can be used to measure a company’s cost of financing its assets. It is calculated by taking the weighted average of the cost of debt and the cost of equity.
We first calculate the cost of debt and equity by multiplying the cost of each source by its market value. We then add the resulting costs together and subtract the tax shield, which is calculated by multiplying the marginal tax rate by the cost of debt. After these calculations, the company’s WACC is closest to 0.078.
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point-of-sale terminals record purchase information and electronically send it in a flow of information that initially travels from blank______ to blank______.
Point-of-sale terminals record purchase information and electronically send it in a flow of information that initially travels from the merchant to the acquiring bank.
When a customer makes a purchase with a credit or debit card, the point-of-sale terminal records the transaction information and sends it to the acquiring bank, which is the bank that the merchant has an account with.
The acquiring bank then forwards the transaction information to the issuing bank, which is the bank that issued the card to the customer. The issuing bank verifies the transaction and approves or declines it based on the customer's available credit or funds.
Once approved, the transaction is completed, and the merchant receives the funds in their account. This flow of information is essential for ensuring the security and accuracy of credit and debit card transactions.
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5. Interest rate parity The rise of globalization is due to the many companies that have become multinational corporations for various reasons-for example, to access better technology, to enter new markets, to obtain more raw materials, to find funding resources, to minimize production costs, or to diversify business risk. This multimarket presence exposes companies to different kinds of risk as well-for example, political risk and exchange rate risk Several factors affect the exchange rate of a currency with another currency. Which of the following statements are true about the factors that have an impact on exchange rates?
There are various factors that can affect the exchange rate of a currency One such factor is interest rate parity, which refers to the principle that the interest rate between two countries should be equal to the percentage difference between the forward and the spot exchange rate.
In other words, if the interest rate in one country is higher than another country, investors may choose to invest in that country, leading to an increase in demand for its currency and consequently, an increase in its exchange rate.
Another factor that can impact exchange rates is inflation. If a country has high inflation rates compared to other countries, the purchasing power of its currency decreases, which can lead to a decrease in demand for its currency and a corresponding decrease in its exchange rate.
Additionally, economic performance can also have an impact on exchange rates. If a country's economy is performing well, investors may be more inclined to invest in that country, leading to an increase in demand for its currency and an increase in its exchange rate. Conversely, if a country's economy is performing poorly, investors may be less inclined to invest, leading to a decrease in demand for its currency and a corresponding decrease in its exchange rate.
Other factors that can affect exchange rates include political stability, geopolitical events, and trade relations between countries. Overall, exchange rates are complex and can be influenced by a multitude of factors, making them difficult to predict with complete accuracy.
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which of the following is not one of the types/purposes that gaap identifies for using forward contracts for hedging purposes when the item hedged is denominated in a foreign currency? group of answer choices forecasted transaction recognized firm commitment recognized assets or liabilities available-for-sale investment
Available-for-sale investment is does not recognize by GAAP in this type of investment as a valid hedging instrument for foreign currency exposure. Option D is correct.
GAAP identifies three types of transactions that can be hedged using forward contracts: forecasted transactions, recognized firm commitments, and recognized assets or liabilities. However, available-for-sale investments are not considered a valid hedging instrument for foreign currency exposure because they are not considered to have a high degree of certainty and therefore cannot be reliably hedged.
Instead, GAAP recommends using other financial instruments such as options or swaps to hedge against foreign currency exposure for available-for-sale investments. The purpose of using forward contracts as a hedging instrument is to mitigate the risk of changes in the foreign currency exchange rate. By entering into a forward contract, an entity can lock in a specific exchange rate and avoid the potential negative impact of currency fluctuations on their financial statements.
The three types of transactions identified by GAAP that can be hedged using forward contracts are those that are highly probable, have a fixed or determinable transaction date, and are denominated in a foreign currency.
Option D holds true.
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Q- Select two companies - large or mid-caps - from any country of your choice and estimate their daily returns for at least 5 years of data. Also, estimate the daily return on the country's stock index for the same duration.
a. Plot the histograms (with a bin size of 0.1% or lower) of daily returns of the two stocks and the index and comment on the riskiness of the three assets, i.e., comment on their standard deviations as well as the skewness.
b. Construct an equally weighted portfolio of the two stocks and plot a histogram of the daily return of that portfolio. What changes do you observe?
To estimate the daily returns for two companies and the stock index, you would need to obtain historical stock price data for the chosen companies and the index. You could then calculate the daily returns using the formula:
Daily return = (Today's stock price - Yesterday's stock price) / Yesterday's stock price
Once you have the daily returns for the two companies and the stock index, you can plot histograms with a bin size of 0.1% or lower and comment on the riskiness of the assets based on their standard deviations and skewness.
To construct an equally weighted portfolio of the two stocks, you would need to calculate the daily returns for each stock and then take the average of the two to get the daily return for the portfolio. You can then plot a histogram of the daily returns for the portfolio and observe any changes compared to the individual stocks.
Overall, analyzing the daily returns of different assets can provide valuable insights into their risk and potential returns, allowing investors to make informed decisions about their portfolio.
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The XYZ company is a US based MNC & deals with various financial instruments as its core business activity. Among its various courses of action, the firm deals with financial derivatives (like forward, future, options etc) & acts as hedger, arbitrager and speculator as well. To be competitive in the market, it has to observe and analyze different economic scenarios in different places/countries and formulate the strategy accordingly to nurture the available business opportunity.
With this reference, assuming your team is one of the core business teams of the XYZ Company & based on your understanding of subject matter kindly respond & answer to following different scenarios:
Scenario 1: How can currency futures be used by the XYZ Company as an arbitrageur & as a speculator?
XYZ Company can use currency futures as an arbitrageur by identifying discrepancies in exchange rates, buying low and selling high, and closing positions. As a speculator, the company can analyze economic indicators, take a position based on predictions.
What are the ways in which XYZ Company can use currency futures in Scenario 1 as both an arbitrageur and a speculator?In Scenario 1, XYZ Company can use currency futures as both an arbitrageur and a speculator in the following ways:
As an arbitrageur:
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university researchers create a positive externality because what they discover in their research labs can easily be learned by others who haven't contributed to the research costs. suppose that the federal government gives grants to these researchers equal to the their per-unit production externality. what is the relationship between the equilibrium quantity of university research and the socially optimal quantity of university research produced?
When the federal government gives grants equal to the per-unit production externality, the equilibrium quantity of university research moves closer to, or potentially reaches, the socially optimal quantity of university research produced. University researchers create a positive externality because what they discover in their research labs can easily be learned by others who haven't contributed to the research costs.
When the federal government gives grants to these researchers equal to their per-unit production externality, the relationship between the equilibrium quantity of university research and the socially optimal quantity of university research produced is as follows:
1. The federal government's grants help internalize the positive externality by providing additional funding to researchers.
2. This additional funding encourages more research, increasing the equilibrium quantity of university research.
3. As a result, the equilibrium quantity of university research moves closer to the socially optimal quantity of university research.
4. Ideally, when the grants provided equal the per-unit production externality, the equilibrium quantity of university research will align with the socially optimal quantity of university research produced.
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A particular forecasting model was used to forecast a six-month period. Here are the forecasts and actual demands that resulted:
Forecast Actual
April 250 200
May 325 252
June 400 330
July 350 300
August 375 335
September 450 410
a. Find the tracking signal for each month.
Month Tracking Signal
April May June July August September b. Is the model being used giving acceptable answers?
a. No, the model's performance is poor.
b. Yes, the model's performance is good.
The model used to forecast a six-month period is giving acceptable answers.
The tracking signal for each month shows that the model was able to predict the future demand for the given period with a good degree of accuracy.
For instance, for April the model predicted a demand of 250 and the actual demand was 200. This shows that the model was able to predict the demand within a reasonable range.
Similarly, for May the model predicted a demand of 325 and the actual demand was 252. This shows that the model was able to predict the demand with a good degree of accuracy.
Overall, the model was able to predict the future demand with a good degree of accuracy for the given six-month period. Therefore, the model is giving acceptable answers.
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in analyzing the income statement of bob company, cost of goods sold decreased from 2016 to 2017 by 8.2%. the cost of goods sold was $19,000 in 2017. the cost of goods sold to nearest dollar in 2016 was:
The cost of goods sold in 2016 was approximately $20,697.17, the correct option is (A).
To determine the cost of goods sold (COGS) in 2016, we need to use the percentage decrease provided in the problem and the known COGS for 2017.
Let x be the COGS in 2016.
Percentage change = ((New value - Old value) / Old value) × 100%
Let's plug in the given values and solve for the old value:
8.2% = ((19,000 - Old value) ÷ Old value) × 100%
0.082 = (19,000 - Old value) ÷ Old value
0.082 × Old value = 19,000 - Old value
0.918 × Old value = 19,000
Then, we know that (x - 0.082x) = 19,000, since the COGS decreased by 8.2%.
Simplifying this equation, we get:
0.918x = 19,000
x = 19,000 ÷ 0.918
x = $20,697.17
Therefore, the answer is option A) $20,697.17.
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The complete question is:
In analyzing the income statement of Bob Company, the cost of goods sold decreased by 8.2% from 2016 to 2017. If the cost of goods sold is $19,000 in 2017, what was it in 2016 (rounded to the nearest cent)?
A) $20,697.17
B) $1,407,200
C) $332,500
D) $605,000
which of the following topics should be considered during the analysis phase of the afi framework? multiple select question. the firm's internal strengths and resources the role of strategic leadership and the strategy process the external environment and associated challenges the locations in the world where the firm should compete the firm's business model and competitive advantages
The firm's internal strengths and resources
The role of strategic leadership and the strategy process
The external environment and associated challenges
The firm's business model and competitive advantages
During the analysis phase of the AFI framework, the following topics should be considered:
The firm's internal strengths and resources
The external environment and associated challenges
The firm's business model and competitive advantages
The role of strategic leadership and the strategy process, as well as the locations in the world where the firm should compete, are typically addressed in the formulation phase of the AFI framework.
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Stacker Weight Loss currently pays an annual year-end dividend of $1.20 per share. It plans to increase this dividend by 5% next year and maintain it at the new level for the foreseeable future. If the required return on the firm's stock is 8%, what is the value of Stacker's stock?
The value of Stacker's stock is worth $14.40 per share.
The value of Stacker Weight Loss's stock can be calculated using the dividend growth model. This model states that the value of a stock is equal to the present value of all future dividends. In Stacker's case, these dividends are expected to increase by 5% each year.
The required return of 8% is used as the discount rate to determine the present value of the future dividends. Using this formula, the value of Stacker's stock can be calculated as the sum of the present value of all future dividends discounted by the required return.
This value is determined by taking the annual dividend payment of $1.20, increasing it by 5% each year, and then discounting it by the required return of 8%. By doing this, the value of Stacker's stock can be determined and is equal to the present value of the future dividends discounted by the required return. This calculation shows that Stacker's stock is worth $14.40 per share.
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the new equilibrium will be where a. the new money supply curve intersects a new money demand curve. b. the new money supply curve intersects the original money demand curve. c. the original money supply curve intersects the original money demand curve. d. anywhere along the new money supply curve.
The new equilibrium will be where the new money supply curve intersects the original money demand curve. The correct answer is option (b).
When there is a change in the money supply, it will shift the money supply curve. However, the money demand curve remains the same since it represents the willingness of people to hold money at various interest rates, which is not affected by changes in the money supply.
Therefore, the new equilibrium will occur where the new money supply curve intersects the original money demand curve. This is because the interest rate will adjust until the quantity of money demanded equals the quantity of money supplied at that interest rate.
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while performing a review of the hot site used by wells fargo, the auditor finds the following issues. which of the following would be the greatest concern? servers at the hot site have different specifications than the primary site the disk space utilization information are not currentphysical security controls at the hot site are not as robust as the primary sitesystem administrators use shared accounts which never expire
The greatest concern among the given issues for the hot site used by Wells Fargo would be "system administrators use shared accounts which never expire." (option d is answer.).
This issue poses a significant security risk as it can lead to unauthorized access to the system and data breaches. Shared accounts that never expire make it difficult to track who accessed the system, making it challenging to detect and prevent potential security breaches. The other issues mentioned can be significant, but they are not as critical as the shared account issue.
Different server specifications and outdated disk space utilization information may lead to some inconvenience, but they do not pose a severe threat to the security and functionality of the system. Similarly, while physical security controls are crucial, they do not present as high a risk as the shared account issue.
Option d is answer.
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Steel cable barriers in highway medians are a lowcost way to improve traffic safety without
busting state department of transportation budgets. Cable barriers cost $44,000 per mile,
compared with $72,000 per mile for guardrail and $419,000 per mile for concrete barriers.
Furthermore, cable barriers tend to snag tractor-trailer rigs, keeping them from ricocheting back
into same-direction traffic. The state of Ohio spent $4.97 million installing 113 miles of cable
barriers. If the cables prevent accidents totalling $1.3 million per year, (a) what rate of return
does this represent if a 10-year study period is considered? (b) What is the rate of return for
113 miles of guardrail if accident prevention is $1.1 million per year over a 10-year study
period?
(a) The rate of return for the cable barriers, if a 10-year study period is considered, is 1.6149.
(b) The rate of return for guardrails is 35.17 %
(a) To calculate the rate of return for the cable barriers, first find the total cost of the installation and then the total accident prevention savings over the 10-year study period.
[tex]Total cost of cable barriers: $4.97 millionTotal accident prevention savings (10 years): $1.3 million/year * 10 years = $13 million[/tex]
[tex]Rate of return for cable barriers = (Total savings - Total cost) / Total cost\\Rate of return = ($13 million - $4.97 million) / $4.97 million\\Rate of return ≈ 1.6149, or 161.49%[/tex]
(b) To calculate the rate of return for guardrails, find the total cost of installing guardrails for 113 miles and the total accident prevention savings over the 10-year study period.
[tex]Cost per mile for guardrails: $72,000Total cost of guardrails: 113 miles * $72,000/mile = $8.136 millionTotal accident prevention savings (10 years): $1.1 million/year * 10 years = $11 million[/tex]
[tex]Rate of return for guardrails = (Total savings - Total cost) / Total cost\\Rate of return = ($11 million - $8.136 million) / $8.136 million\\Rate of return ≈ 0.3517, or 35.17%[/tex]
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1. ISO 14001 is a set of standards that govern how a company designs service processes.
2. No process can exist without at least one product or service.
3. Process structure is the mix of equipment and human skills in a process.
4. Resource flexibility determines whether resources are organized around products or processes.
5. Customer involvement reflects the ways in which customers become part of the process and the extent of their participation.
6. Capital intensity is the ease with which employees and equipment can handle a wide variety of products, output levels, duties, and functions.
7. Beginning points for manufacturing process structure decisions are the volume level, amount of customization, and competitive priorities.
8. The degree of customization is one factor that impacts the selection of process type.
9. Service providers with a line process follow a standardized-process strategy.
10. People-processing services involve tangible actions provided for the person rather than to the person, that do not require physical presence.
11. A moment of truth or service encounter is face-to-face interaction between the customer and a service provider.
12. Physical presence does not occur in a manufacturing service process.
13. Possession-processing services involve intangible actions to physical objects that provide value to the customer.
14. Active contact in services means that the customer is very much part of the creation of the service.
15. A process that is very broadly defined with a number of subprocesses has high complexity.
16. Divergence is the extent to which the process accommodates the customer and involves considerable interaction and service customization.
17. A front office structure features high levels of customer contact where the service provider interacts directly with the internal or external customer.
18. Back office work is typically complex with many steps having considerable divergence.
19. A continuous flow process is characterized by a high degree of job customization.
20. A job process has a relatively high level of customization.
21. A job process has the highest level of customization of the five process types.
22. Job processes typically use a line flow through the operations.
23. Job processes generally have higher volumes than batch processes.
24. In a line process, variety is possible by careful control of the addition of standard options to the main product or service.
25. Petroleum refineries typically use continuous flow processes.
26. Continuous flow processes have a high level of customization.
27. The product-process matrix brings together the elements of volume, process, and quality.
28. A make-to-stock strategy involves holding items in stock for immediate delivery and is feasible for standardized products with high volumes and reasonably accurate forecasts.
29. Mass production is a production strategy that uses batch processes in a make-to-stock strategy.
ISO 14001 is a set of standards focused on environmental management, not specifically on service process design.
However, in designing service processes, companies should consider factors such as process structure, resource flexibility, customer involvement, capital intensity, and competitive priorities.
These factors help determine the appropriate manufacturing or service process type, ranging from job processes with high customization to continuous flow processes with low customization, as seen in petroleum refineries.
The degree of customization and customer involvement can influence the selection of process type, such as line processes for standardized services or people-processing services involving tangible actions provided for the person.
Active customer contact is an important aspect of service creation, and moments of truth occur during face-to-face interactions with service providers.
Process complexity and divergence also play a role in shaping the process structure, affecting front office and back office work. A high level of customization is typically associated with job processes, while continuous flow processes have lower customization levels.
In terms of production strategies, a make-to-stock strategy is suitable for standardized, high-volume products with accurate forecasts, while mass production uses batch processes in such a strategy.
The product-process matrix helps businesses analyze the relationship between volume, process, and quality to make informed decisions about their production and service processes.
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on its december 31 prior year balance sheet, calgary industries reports equipment of $410,000 and accumulated depreciation of $78,000. during the current year, the company plans to purchase additional equipment costing $84,000 and expects depreciation expense of $34,000. additionally, it plans to dispose of equipment that originally cost $46,000 and had accumulated depreciation of $6,000. the balances for equipment and accumulated depreciation, respectively, on its december 31 current year budgeted balance sheet are:
On its December 31 current year budgeted balance sheet, Calgary Industries will report equipment of $438,000 and accumulated depreciation of $108,000.
The balance of equipment on the December 31 prior year balance sheet was $410,000. The company plans to purchase additional equipment costing $84,000 during the current year, which brings the total cost of equipment to $494,000 ($410,000 + $84,000).
The company also plans to dispose of equipment with a net book value of $40,000 ($46,000 - $6,000), which reduces the cost of equipment to $454,000 ($494,000 - $40,000).
The depreciation expense for the current year is expected to be $34,000, which is added to the prior year's accumulated depreciation of $78,000 to get a total of $112,000.
The accumulated depreciation for the disposed equipment is subtracted from the prior year's accumulated depreciation to get a net accumulated depreciation of $72,000 ($78,000 - $6,000).
Therefore, the balances for equipment and accumulated depreciation, respectively, on its December 31 current year budgeted balance sheet are $438,000 ($454,000 - $16,000) and $108,000 ($72,000 + $34,000).
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A 30-year old is planning to retire in 40 years at age 70. The person wants to have $2 million in current purchasing power at retirement. If the person trusts the Federal Reserve will meet its inflation target of 2% annually, how much will the person need to have in 40 years to have the same purchasing power as $2 million at today’s price level? Round to the last dollar. Answer:
The person will need to have $4,416,000 in 40 years to have the same purchasing power as $2 million at today's price level, assuming that inflation averages 2% annually and the Federal Reserve meets its inflation target.
To calculate the future value of $2 million in 40 years, we need to take into account the effects of inflation. The inflation rate is assumed to be 2% annually, which means that prices are expected to increase by 2% per year on average over the next 40 years.Using the inflation-adjusted formula, we can calculate the future value of $2 million in today's dollars as:
FV = PV x (1 + r)^nWhere:PV = present value = $2,000,000r = annual inflation rate = 2%n = number of years = 40
Plugging in the values, we get:
FV = $2,000,000 x (1 + 0.02)^40FV = $2,000,000 x 2.208FV = $4,416,000
Therefore, the person will need to have $4,416,000 in 40 years to have the same purchasing power as $2 million at today's price level, assuming that inflation averages 2% annually and the Federal Reserve meets its inflation target.
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Consider the following projects: Cash Flows ($) Project C0 C1 D –11,500 23,000 E –21,500 37,625 Assume that the projects are mutually exclusive and that the opportunity cost of capital is 10%. a. Calculate the profitability index for each project. Project Profitability Index D E b-1. Calculate the profitability-index using the incremental cash flows. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Profitability-index b-2. Which project should you choose? Project D Project E
To calculate the profitability index for each project, we need to divide the present value of the cash flows by the initial investment (C0).
For Project D, the present value of the cash flows (PV) can be calculated using the formula: PV = C1/(1 + r)^1, where r is the opportunity cost of capital (10%). Thus, PV = 23,000/(1 + 0.10)^1 = 20,909.09. The profitability index for Project D is then calculated as follows:
Profitability Index (D) = PV/C0 = 20,909.09/11,500 = 1.82
For Project E, the present value of the cash flows (PV) can be calculated using the same formula: PV = 37,625/(1 + 0.10)^1 = 34,204.55. The profitability index for Project E is then calculated as follows:
Profitability Index (E) = PV/C0 = 34,204.55/21,500 = 1.59
To calculate the profitability-index using the incremental cash flows, we need to calculate the difference in cash flows between the two projects (D-E). These incremental cash flows can then be discounted back to the present using the same formula as above, and the profitability index can be calculated as follows:
Incremental Cash Flows:
Year 0: C0 (E-C) = 21,500 - 11,500 = 10,000
Year 1: C1 (E-C) = 37,625 - 23,000 = 14,625
PV of Incremental Cash Flows:
PV (E-C) = 10,000/(1 + 0.10)^0 + 14,625/(1 + 0.10)^1 = 22,840.91
Profitability Index (E-C) = PV (E-C)/C0 (C) = 22,840.91/11,500 = 1.99
Based on the profitability index calculations, both projects are acceptable as they both have a value greater than 1. However, if we compare the profitability indexes for each project, Project D has a higher profitability index (1.82) than Project E (1.59), indicating that it is more profitable. Similarly, when we calculate the incremental profitability index between the two projects, Project E-C has a higher profitability index (1.99) than Project D-C, indicating that it is the better choice. Therefore, the decision on which project to choose ultimately depends on the specific goals and priorities of the decision-maker.
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applied research has the objective of achieving commercial applications for new ideas, true or false?
True. Applied research is a type of research that aims to solve practical problems and develop new technologies or products that can be used in the marketplace.
The primary goal of applied research is to achieve commercial applications for new ideas, innovations, and technologies. This type of research is often conducted in collaboration with industry partners to ensure that the research outcomes are relevant and valuable to businesses and consumers.
Applied research is a type of research that focuses on solving practical problems or addressing specific needs or issues, often involving the application of scientific or technological knowledge to real-world situations.
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Sophia estimates the rate of growth of dividends for XYC will be 15% for the next 3 years. The market capitalization rate for XYC is 11%. After this initial period of 3 years, the dividend is expected to grow at a rate of 4% forever after. You forecast that the dividend next year (this includes 1 year of growth at a rate of 15%) will be $0.84. Calculate Sophia's intrinsic value for XYC
Using dividend discount model, Sophia intrinsic value is $13.28
What is Sophia Intrinsic value?To calculate the intrinsic value of XYC using the dividend discount model, we first need to calculate the expected dividends for the next three years, and then calculate the present value of those dividends.
The dividend next year is given as $0.84, which includes one year of growth at 15%. To calculate the dividend in the second year, we need to multiply the dividend in the first year by (1 + 15%), which gives:
Dividend in year 2 = $0.84 x (1 + 15%) = $0.966
Similarly, the dividend in year 3 can be calculated as:
Dividend in year 3 = $0.966 x (1 + 15%) = $1.11
After year 3, the dividend is expected to grow at a rate of 4% forever. Therefore, the dividend in year 4 can be calculated as:
Dividend in year 4 = $1.11 x (1 + 4%) = $1.154
Using the dividend discount model, the intrinsic value of XYC can be calculated as:
Intrinsic value = (Dividend in year 1 / (1 + Market capitalization rate)^1) + (Dividend in year 2 / (1 + Market capitalization rate)^2) + (Dividend in year 3 / (1 + Market capitalization rate)^3) + (Dividend in year 4 / (Market capitalization rate - Growth rate))
Substituting the values, we get:
Intrinsic value = ($0.84 / (1 + 11%)^1) + ($0.966 / (1 + 11%)^2) + ($1.11 / (1 + 11%)^3) + ($1.154 / (11% - 4%))
Intrinsic value = $13.28
Therefore, Sophia's intrinsic value for XYC is $13.28
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linkedin influencers are selected by invitation only. True or False
False. LinkedIn influencers are not selected by invitation only
LinkedIn does have a program called "LinkedIn Influencers" which is made up of a select group of thought leaders and industry experts who are invited to share their insights and ideas with the LinkedIn community.
However, there are other ways for individuals to become influencers on LinkedIn. Anyone can become an influencer on LinkedIn by consistently creating high-quality content, engaging with other users, and building a strong following.
LinkedIn's algorithm also plays a role in determining who becomes an influencer by promoting content that receives a high level of engagement and interaction from the community.
Therefore, while being invited to join the LinkedIn Influencer program can be a significant boost to an individual's visibility and credibility on the platform, it is not the only way to become an influencer on LinkedIn.
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Complete Question
Linkedin influencers are selected by invitation only?
True or False
(Cost of equity) Brille Corporation is issuing new common stock at a market price of $27. Dividends last year were $1.25 and are expected to grow at an annual rate of 9 percent forever. Flotation costs will be 12 percent of market price. What is Brilles cost of equity? Brille's cost of external common equity is %. (Round to two decimal places.)
The cost of external common equity for Brille Corporation is 14.73%.
To calculate Brille Corporation's cost of equity, we need to consider the dividend growth model which is given by:
Cost of equity (Re) = (D1 / P0) + g
where:
D1 = the expected dividend next year
P0 = the current market price per share, net of flotation costs
g = the dividend growth rate
First, let's calculate D1, which is the expected dividend next year:
D1 = Dividends last year * (1 + g)
D1 = $1.25 * (1 + 0.09)
D1 = $1.25 * 1.09
D1 = $1.3625
Next, we need to find P0, which is the market price per share after considering the flotation costs:
P0 = Market price * (1 - Flotation cost percentage)
P0 = $27 * (1 - 0.12)
P0 = $27 * 0.88
P0 = $23.76
Now we can calculate the cost of equity:
Re = (D1 / P0) + g
Re = ($1.3625 / $23.76) + 0.09
Re = 0.0573 + 0.09
Re = 0.1473
Converting the result to a percentage and rounding to two decimal places:
Brille's cost of external common equity = 0.1473 * 100 = 14.73%
So, Brille Corporation's cost of external common equity is 14.73%.
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a stock has an expected return of 12.4 percent, the risk-free rate is 4.5 percent, and the market risk premium is 10 percent. what must the beta of this stock be? (do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
The beta of a stock which has an expected return of 12.4 percent, the risk-free rate is 4.5 percent, and the market risk premium is 10 percent, must be 0.79.
The capital asset pricing model (CAPM) can be used to calculate the beta of a stock given its expected return, the risk-free rate, and the market risk premium. The CAPM formula is:
Expected return = Risk-free rate + Beta * Market risk premium
Rearranging this formula to solve for beta, we get:
Beta = (Expected return - Risk-free rate) / Market risk premium
Substituting the given values, we have:
Beta = (0.124 - 0.045) / 0.10
Beta = 0.79
Therefore, the beta of this stock must be 0.79.
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smallville bank has the following balance sheet, rates earned on its assets, and rates paid on its liabilities. balance sheet (in thousands) assets rate earned (%) cash and due from banks $ 6,900 0 investment securities 31,000 9 repurchase agreements 21,000 7 loans less allowance for losses 89,000 11 fixed assets 19,000 0 other earning assets 5,100 10 total assets $ 172,000 liabilities and equity rate paid (%) demand deposits $ 18,000 0 now accounts 78,000 6 retail cds 27,000 8 subordinated debentures 23,000 9 total liabilities 146,000 common stock 19,000 paid-in capital surplus 3,900 retained earnings 3,100 total liabilities and equity $ 172,000 if the bank earns $129,000 in noninterest income, incurs $89,000 in noninterest expenses, and pays $2,590,000 in taxes, what is its net income? (enter your answer in dollars, not thousands of dollars.)
Smallville Bank's net income is -$2,550,000, indicating a net loss. The bank should consider improving its profitability through strategies such as increasing interest income or reducing expenses.
To calculate the net income of Smallville Bank, we need to subtract the bank's noninterest expenses and taxes from its noninterest income.
Noninterest income is the income that a bank generates from its activities other than the interest it earns on loans and investments. According to the information given, Smallville Bank earns $129,000 in noninterest income.
Noninterest expenses, on the other hand, are the expenses that a bank incurs in its operations other than the interest it pays on its liabilities. The bank incurs $89,000 in noninterest expenses.
Taxes are also an important consideration in calculating net income. The bank pays $2,590,000 in taxes.
Now we can calculate the net income of Smallville Bank:
Net income = Noninterest income - Noninterest expenses - Taxes
Net income = $129,000 - $89,000 - $2,590,000
Net income = -$2,550,000
The result shows that Smallville Bank has a net loss of $2,550,000. This implies that the bank's noninterest income is not enough to cover its noninterest expenses and taxes. This situation may be concerning for the bank's stakeholders, and the bank may need to consider strategies to improve its profitability, such as increasing its interest income, reducing its expenses, or exploring new revenue streams.
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