Decisions that are in the best interest of a division of the company, but not in the best interest of the company as a whole can result in sub-optimization.
Sub-optimization occurs when a division or department focuses only on their own goals and objectives, without considering the impact on the entire organization. This can lead to inefficiencies, redundancies, and conflicts between departments.
To avoid sub-optimization, it is important for decision-makers to consider the broader organizational goals and objectives when making decisions that impact a specific division or department.
Therefore, decisions that are in the best interest of a division of the company, but not in the best interest of the company as a whole, result in suboptimal outcomes or suboptimization.
This occurs when a division prioritizes its own goals over the overall company's objectives, leading to inefficiencies and potentially hindering the company's overall success.
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You have bought a home that has a $750,000 mortgage and you have decided to use the variable closed rate of 2.65 percent that your bank has available and your payments will increase/decrease according to the new rate. The rate can adjust on a quarterly basis based on market changes. What is the payment if you amortize the mortgage over 25 years? Assume 6 months later the variable rate goes up to 3.15 percent as inflation has picked up. What is your monthly payment now? What is the impact and risk associated with this market and variable rate interest rates?
Use the space below to show your work. You can copy the text below into your answer to help you get started:
(8 pts ) What is the payment if you amortize the mortgage over 25 years?
_______
(7 pts) Assume 6 months later the variable rate goes up to 3.15 percent as inflation has picked up. What is your monthly payment now?
The payment if you amortize the mortgage over 25 years is $3,419.64
To calculate the initial monthly payment, we will use the mortgage payment formula: P = L[r(1 + r)ⁿ]/[(1 + r)ⁿ – 1], where P is the monthly payment, L is the loan amount ($750,000), r is the monthly interest rate (2.65% / 12 months), and n is the total number of payments (25 years * 12 months).
P = $750,000 * (0.0265/12(1 + 0.0265/12)³⁰⁰ ) / ((1 + 0.0265/12)³⁰⁰ - 1) = $3,419.64
(7 pts) Assume 6 months later the variable rate goes up to 3.15 percent as inflation has picked up. What is your monthly payment now?
Your answer: $3,631.90
After 6 months, the new interest rate is 3.15%, and the remaining loan term is 24.5 years (294 payments). We will use the same mortgage payment formula, updating the values for the new interest rate and remaining payments:
P = $750,000 * (0.0315/12(1 + 0.0315/12)²⁹⁴) / ((1 + 0.0315/12)²⁹⁴ - 1) = $3,631.90
The main impact of the variable rate is that your monthly payment can change according to market conditions, increasing or decreasing depending on the interest rate.
The risk associated with this type of mortgage is that you may experience higher payments when rates rise, which could make budgeting more difficult. However, variable rates can also decrease, leading to lower payments, but this uncertainty can be challenging for some homeowners.
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how can firms best maintain competitive advantage? multiple choice question. by divesting themselves of the brand by copying competitors' brands, images, products, and promotions by reinforcing the brand image through merchandise, service, and promotion by using the cheapest supplier for all raw materials
The best way for firms to maintain a competitive advantage is by building a strong brand through high-quality products or services, exceptional customer service, and effective marketing campaigns. This approach may require more investment upfront, but it will provide a sustainable competitive edge in the long run.
The best way for firms to maintain competitive advantage is by reinforcing the brand image through merchandise, service, and promotion. This means that the firm should focus on building a strong brand that resonates with its target audience and is perceived as unique and valuable. This can be achieved by creating high-quality products or services, delivering exceptional customer service, and developing effective marketing campaigns that highlight the strengths of the brand.
Copying competitors' brands, images, products, and promotions may provide short-term gains, but it is not a sustainable strategy for maintaining a competitive advantage. This approach can quickly lead to a race to the bottom, where firms are constantly lowering prices and cutting corners to keep up with their competitors.Divesting themselves of the brand is also not a viable option for maintaining a competitive advantage.
The brand is often a firm's most valuable asset, and getting rid of it would mean giving up any competitive edge it may have had.Using the cheapest supplier for all raw materials may help to lower costs, but it is not a guarantee of long-term success. A focus on cost-cutting can often lead to lower quality products or services, which can ultimately harm the brand and lead to a loss of competitive advantage.
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in a free market, the price of a product is determined by the relationship between supply and demand. the price tends to stabilize at the point of intersection of the demand and supply equations. the point of intersection is called the
In a free market, the price of a product is determined by the relationship between supply and demand. the price tends to stabilize at the point of intersection of the demand and supply equations. The point of intersection is called the equilibrium price, or market-clearing price.
In a free market, the price of a product is determined by the relationship between supply and demand. As demand for a product increases, its price tends to go up, and as supply increases, its price tends to go down.
The point at which the supply and demand curves intersect is called the equilibrium price, or market-clearing price.
This is the price at which the number of goods supplied is equal to the number of goods demanded, and there is no excess supply or excess demand.
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what is the difference between simple interest and compound interest why do you end up with more money with compound interest
The difference between simple interest and compound interest lies in how the interest is calculated and added to the principal amount.
Simple interest is calculated only on the principal amount of money borrowed or invested. It means that the interest is not added to the principal amount. On the other hand, compound interest is calculated on both the principal amount and the accumulated interest. This means that the interest earned on the investment is added to the principal amount, and the new total amount earns interest. The main reason why you end up with more money with compound interest is that the interest earned is reinvested back into the investment, and over time, it increases the overall value of the investment.
For example, let's say you invest $1000 at a 10% simple interest rate for 5 years. At the end of five years, you will earn $500 in interest, and your total amount will be $1500. However, if you invest the same $1000 at a 10% compound interest rate for five years, your total amount will be $1610.51 at the end of five years.
In conclusion, compound interest is more advantageous because it allows for more significant returns over time due to the reinvestment of the earned interest.
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All else equal, properties with riskier expected future cash flowsa. sell at higher cap ratesb. have lower expected (internal) rates of returnc. sell at lower cap rates
When considering properties with riskier expected future cash flows, it is important to understand the relationship between risk and return. All else being equal, riskier properties are likely to have higher cap rates, which means they will sell at a lower price relative to their net operating income i.e option C.
This is because investors require a higher return to compensate for the increased risk. On the other hand, properties with lower risk and more stable expected future cash flows may sell at lower cap rates, indicating a higher price relative to their net operating income. This is because investors are willing to accept a lower return in exchange for a more predictable investment.
Additionally, properties with riskier expected future cash flows may also have lower expected internal rates of return. This is because the higher risk of these investments means that they are more likely to experience negative cash flows or lower returns than properties with more stable cash flows. As a result, investors may require a higher expected return to justify the additional risk, which may lower the expected internal rate of return.
Therefore, the right option is C.
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if you have classified your customers as 'college-grads', 'young parents', or 'singles,' you used a technique known as market ____.
If you have classified your customers as 'college-grads', 'young parents', or 'singles,' you used a technique known as market segmentation.
The term "segmentation" refers to the process of dividing the market into segments that can be defined, accessed, taken into account, are profitable, and have the potential for expansion. To put it another way, a company wouldn't be able to reach the entire market because it would take too much time, money, and effort.
This technique helps businesses better understand and target their customer base by dividing the market into distinct groups based on shared characteristics, such as demographics, interests, or needs.
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If you have classified your customers as 'college-grads', 'young parents', or 'singles,' you used a technique known as market segmentation.
Market segmentation is the process of dividing a market into smaller groups of consumers with similar needs or characteristics, in order to tailor marketing efforts and product offerings to each specific group. This helps companies better understand their customers and create targeted marketing strategies that are more likely to be effective. Market segmentation is a crucial step for companies to better understand their customers and create effective marketing strategies. By dividing the market into smaller groups based on similar needs or characteristics, companies can tailor their marketing efforts and product offerings to each specific group, making them more appealing to their target audience.
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a shift in cultural values away from accumulating material possessions to spending time with family and friends benefit those who market:
A shift in cultural values away from accumulating material possessions to spending time with family and friends can significantly benefit marketers in various industries.
What's the effects of shift in cultural valuesBy understanding this change in priorities, businesses can tailor their offerings to cater to consumers' desire for experiences, relationships, and emotional connections.
For instance, marketers in the travel and tourism sector can promote packages that encourage bonding with loved ones, such as family vacations or group retreats. Likewise, event planners can capitalize on this trend by organizing activities focused on building connections, such as workshops or team-building events.
In the retail industry, companies can shift their focus from selling products to providing personalized services, such as offering curated gift boxes that emphasize thoughtfulness and sentimental value.
Additionally, marketers in the food and beverage sector can emphasize the social aspect of dining, promoting shared meals and spaces that encourage conversation and quality time spent together.
Overall, this cultural shift offers new opportunities for marketers to create meaningful, experience-driven campaigns that resonate with consumers and foster long-term brand loyalty.
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what can firms do in terms of a high-level emergency preparedness plan to protect their information from human-made and natural disasters?
Firms can take several steps to protect their information from human-made and natural disasters in a high-level emergency preparedness plan.
Firstly, they should conduct a risk assessment to identify potential threats and vulnerabilities to their information assets. Based on this assessment, they can develop a business continuity plan that outlines procedures for responding to emergencies, such as power outages, floods, fires, and cyber-attacks.
To ensure the continuity of their operations, firms should also establish backup and recovery procedures for critical data and applications. This includes backing up data regularly, testing backup systems, and storing backups in secure off-site locations.
Furthermore, firms should train employees on emergency response procedures and security awareness to minimize the impact of any disaster. They should also have an incident response team in place that can quickly and efficiently respond to emergencies.
Overall, having a high-level emergency preparedness plan is essential for firms to protect their information assets from human-made and natural disasters. It helps to ensure the continuity of their operations, minimize downtime, and prevent loss of critical data.
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during its most recent period, superior manufacturing expected to incur the following costs: $420,000 of overhead, $700,000 of materials, and $280,000 in labor. superior applied overhead based on direct labor cost. actual production required an overhead cost of $413,000, $798,000 in materials used, and $308,000 in labor. all of the goods were completed. how much is the amount of over or underapplied overhead? select answer from the options below
The amount of over or underapplied overhead is $7,000 overapplied.
This means that the actual overhead cost incurred was less than the amount of overhead applied based on direct labor cost. The formula for calculating over or underapplied overhead is:
Actual Overhead - Applied Overhead. In this case, it is $413,000 - ($280,000 / $308,000) x $280,000 = $413,000 - $256,363 = $7,000 overapplied.
This could be due to a variety of reasons such as lower actual overhead costs, higher direct labor costs than anticipated, or a combination of both. It is important for companies to monitor their overhead costs and adjust their applied overhead rates accordingly to avoid significant over or underapplied overhead.
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What is the relative tax advantage of debt? Assume that personal and corporate taxes are given by TC= (corporate tax rate) = 35 percent; TpE = personal tax rate on equity income = 30 percent; and Tp = personal tax rate on interest income = 20 percent.
a. 1.76
b. 1.16
c. 0.86
d. 1.35
The relative tax advantage of debt is 1.16. The closest option to the calculated answer is (b) 1.16.
The relative tax advantage of debt can be calculated as the tax benefit of debt divided by the tax benefit of equity.
Tax benefit of debt = Tc x (1 - Tp)
Tax benefit of equity = Tc x (1 - TpE)
Substituting the given values, we get:
Tax benefit of debt = 0.35 x (1 - 0.20) = 0.28
Tax benefit of equity = 0.35 x (1 - 0.30) = 0.245
Therefore, the relative tax advantage of debt is:
0.28 / 0.245 = 1.14
Rounding off to two decimal places, the answer is 1.14.
Therefore, (b) 1.16 comes the closest to the calculated response.
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The call option gives the buyer of the option the right to buy the underlying asset at a set price during a set period of time. Pc True False Da WH
True is the correct answer.The call option gives the buyer of the option the right to buy the underlying asset at a set price during a set period of time.
A call option gives the buyer of the option the right to buy the underlying asset at a set price, known as the strike price, during a set period of time. This allows the option holder to benefit from potential price increases in the underlying asset without actually owning it.True is the correct answer.
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bmw car manufacturer has decided to make a significant investment into expanding its presence in the usa by setting up a large assembly facility in ohio. it has estimated its initial set up costs to be $250,000,000. forecast net income from the project is detailed as follows: year 1 $25,000,000 year 2 $60,000,000 year 3 $65,000,000 year 4 $72,000,000 year 5 $81,000,000 a) calculate the projected payback time for the project to the nearest month. b) calculate the net present value of the project using a discount factor of 5%. comment on the attractiveness of the project.
The payback period is 3 years and 8 months (or 44 months), since the initial investment will be recouped by the end of Year 4. The net present value of the project using a discount factor of 5%. comment on the attractiveness of the project $3,798,434.50
a) To calculate the payback period, we need to determine how long it will take for the initial investment to be recouped from the net income generated by the project. We can calculate this by dividing the initial investment by the net income in each year until the sum equals or exceeds the initial investment.
Year 1: $250,000,000 - $25,000,000 = $225,000,000 remaining
Year 2: $225,000,000 - $60,000,000 = $165,000,000 remaining
Year 3: $165,000,000 - $65,000,000 = $100,000,000 remaining
Year 4: $100,000,000 - $72,000,000 = $28,000,000 remaining
Year 5: $28,000,000 - $81,000,000 = -$53,000,000
The payback period is 3 years and 8 months (or 44 months), since the initial investment will be recouped by the end of Year 4.
b) To calculate the net present value (NPV) of the project, we need to discount the net income from each year using a discount factor of 5% and subtract the initial investment.
NPV = -$250,000,000 + ($25,000,000/1.05) + ($60,000,000/1.0[tex]5^2)[/tex] + ($65,000,000/1.0[tex]5^3[/tex]) + ($72,000,000/1.0[tex]5^4[/tex]) + ($81,000,000/1.0[tex]5^5[/tex])
NPV = $3,798,434.50
Since the NPV is positive, this project is attractive and worth pursuing. The investment will generate more cash inflows than outflows over the life of the project, even when accounting for the time value of money.
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information for hobson corp. for the current year ($ in millions): income from continuing operations before tax$155 loss on discontinued operation (pretax) 32 temporary differences (all related to operating income): accrued warranty expense in excess of expense included in operating income 10 depreciation deducted on tax return in excess of depreciation expense 25 permanent differences (all related to operating income): nondeductible portion of entertainment expense 5 the applicable enacted tax rate for all periods is 25%. how much tax expense on income from continuing operations would be reported in hobson's income statement?
Hobson Corp would report a tax expense of $40 million on income from continuing operations in its income statement.
To calculate the tax expense on income from continuing operations for Hobson Corp, we need to first determine the taxable income from continuing operations.
The taxable income from continuing operations is calculated as follows:
Income from continuing operations before tax $155
Add: Nondeductible portion of entertainment expense $5
Total taxable income from continuing operations $160
The tax expense on income from continuing operations is calculated as follows:
Taxable income from continuing operations $160
Multiplied by applicable tax rate x 25%
Tax expense on income from continuing operations $40 million
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a rectangular lot measures 215 feet by 154 feet. if comparable land sells for $40,000 per acre, how much is this lot likely to sell for?
The rectangular lot would likely have a selling price of $30,392.
We are required to determine the selling price of a rectangular lot measuring 215 feet by 154 feet, with comparable land selling for $40,000 per acre
To determine the selling price of the rectangular lot, follow these steps:1. Calculate the area of the lot:
Area = length × width
Area = 215 ft × 154 ft
Area = 33,110 square feet.
2. Convert square feet to acres:
1 acre = 43,560 square feet, so
33,110 sq ft ÷ 43,560 sq ft/acre = 0.7598 acres.
3. Calculate the selling price of the lot:
Selling price = 0.7598 acres × $40,000/acre = $30,392.
So, this rectangular lot is likely to sell for approximately $30,392.
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to say that a price floor is binding is to say that the price floor a. results in a shortage. b. is set below the equilibrium price. c. causes quantity supplied to exceed quantity demanded. d. all of the above are correct.
To say that a price floor is binding is to say that the price floor c. causes quantity supplied to exceed quantity demanded.
A binding price floor is set above the equilibrium price, leading to a surplus of the product in the market, as suppliers produce more of the good than consumers demand.
This occurs because the minimum price allowed by the price floor is higher than the price at which the market would naturally balance (equilibrium price).
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Among Homer Simpson's many experiences as an (failed) entrepreneur is the time that he started a firm to recycle used grease. The current dividend on this stock is $0.90, and Homer expects that the dividend growth rate will be 6% for each of the next two years, 12% in the third year, and then will remain steady at 10% thereafter. Given the risky nature of purifying grease, prospective investors require a 15% rate of return if they are to invest in the stock of this enterprise. How much is this stock worth today? Based on the above information, how much should you expect the stock to cost in three years?
The current value of the stock is $6.81 and in three years we can expect the stock to cost $31.46.
To calculate the current value of the stock, we need to use the dividend discount model. The formula for this model is:
PV = D1 / (r - g)
where PV is the present value of the stock, D1 is the expected dividend next year, r is the required rate of return, and g is the expected growth rate of the dividend.
In this case, we know that the current dividend is $0.90 and the growth rate of the dividend is expected to be 6% for the next two years, 12% in the third year, and 10% thereafter. Therefore, we can calculate the expected dividends for the next three years as follows:
D1 = $0.90 * (1 + 0.06) = $0.954
D2 = $0.954 * (1 + 0.06) = $1.01124
D3 = $1.01124 * (1 + 0.12) = $1.13269
We also know that the required rate of return is 15%. Therefore, we can use the dividend discount model to calculate the current value of the stock as follows:
PV = $0.954 / (0.15 - 0.06) + $1.01124 / (0.15 - 0.06)² + $1.13269 / (0.15 - 0.10)²
PV = $6.81
Therefore, the current value of the stock is $6.81.
To calculate the expected stock price in three years, we can use the same formula but substitute D1, D2, and D3 with the expected dividends for years 4, 5, and 6, respectively. These expected dividends can be calculated as follows:
D4 = $1.13269 * (1 + 0.10) = $1.24696
D5 = $1.24696 * (1 + 0.10) = $1.37165
D6 = $1.37165 * (1 + 0.10) = $1.50881
Using the dividend discount model, we can calculate the expected stock price in three years as follows:
PV = $1.24696 / (0.15 - 0.10)² + $1.37165 / (0.15 - 0.10)³ + $1.50881 / (0.15 - 0.10)⁴
PV = $31.46
Therefore, we can expect the stock to cost $31.46 in three years.
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what is amazon's version of a sku (stock keeping unit) that is used to identify unique products on amazon?
Amazon's version of a SKU (Stock Keeping Unit) is known as an ASIN (Amazon Standard Identification Number).
What's ASIN (Amazon Standard Identification Number)It is a unique identifier assigned to each product that is listed on Amazon's marketplace.
ASINs are used to organize and differentiate products, making it easier for customers to search and find what they are looking for. Each product on Amazon has its own unique ASIN, even if the product is identical to another product.
This is because ASINs are specific to the product's packaging and other identifying features. Additionally, ASINs are used to link related products, such as different editions of a book or different colors of a shirt.
Overall, the ASIN system is an important aspect of Amazon's business model, allowing for efficient inventory management and streamlined product search and purchasing for customers.
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when grayce deposits $4,000 cash in her checkable deposit at the beach bank and the beach bank's excess reserves increase by $3,600, the desired reserve ratio is
When Grayce deposits $4,000 cash in her checkable deposit at the Beach Bank, the Beach Bank's excess reserves increase by $3,600. The desired reserve ratio can be calculated by dividing the excess reserves by the deposit amount. Therefore, the desired reserve ratio is 0.9 or 90%.
The reserve ratio is the percentage of a bank's deposits that it is required to hold in reserve, either in the form of vault cash or deposits at the Federal Reserve Bank. The reserve ratio is set by the central bank of a country to control the money supply and ensure the stability of the banking system.
When a customer deposits money in their account, the bank can use a portion of it to make loans, which can stimulate economic activity. However, banks must also maintain sufficient reserves to cover withdrawals and other obligations.
If a bank's reserves fall below the required reserve ratio, it may be required to borrow funds or sell assets to meet its obligations.
In this case, the Beach Bank's excess reserves increased by $3,600, indicating that it is holding more reserves than required. This suggests that the bank may be cautious about making loans or may have received deposits from other customers as well.
Overall, the desired reserve ratio is an important indicator of a bank's financial health and its ability to lend to customers.
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charging different prices for a product in order to maximize revenue for a set amount of capacity at any given time is known as blank______ pricing.
The pricing strategy of charging different prices for a product in order to maximize revenue for a set amount of capacity at any given time is known as dynamic pricing.
Dynamic pricing is a strategy that has become increasingly popular among businesses, particularly those in the airline, hotel, and entertainment industries. This strategy involves adjusting prices in real-time based on factors such as demand, availability, and competition.
Dynamic pricing allows businesses to optimize their revenue by charging higher prices during periods of high demand and lower prices during periods of low demand. This helps businesses to maximize revenue while still maintaining a level of affordability for their customers.
For example, airlines may charge higher prices during peak travel seasons and lower prices during off-peak seasons.
One of the key benefits of dynamic pricing is that it allows businesses to remain competitive in a constantly changing marketplace. By continuously monitoring market conditions and adjusting prices accordingly, businesses can stay ahead of their competitors and attract customers who are looking for the best value.
Overall, dynamic pricing is a powerful tool that can help businesses to maximize revenue and remain competitive in today's fast-paced marketplace.
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in his first year, a math teacher earned $32,000. each successive year, he earned a 5% raise. what were his total earning over his 30-year career?\
The math teacher' s total earnings over his 30 years career is $2,811,984.39 .
To find the math teacher's total earnings over his 30-year career, we can use the formula for the sum of a geometric series:
S = a(1 - rⁿ) / (1 - r)
where S is the sum of the series, a is the initial term, r is the common ratio, and n is the number of terms.
In this case, the initial term is $32,000, the common ratio is 1.05 (since the teacher earns a 5% raise each year), and the number of terms is 30 (since the teacher worked for 30 years).
Plugging in the values, we get:
S = 32000(1 - 1.05³⁰) / (1 - 1.05)
S = 32000(1 - 0.0723) / (0.05)
S = $2,811,984.39
Therefore, the math teacher earned a total of $2,811,984.39.
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Consider a firm whose only asset is a plot of vacant land, and whose only liability is debt of $14.6 million due in one year. If left vacant, the land will be worth $10.2 million in one year. Alternatively, the firm can develop the land at an up-front cost of $19.5 million. The developed the land will be worth $36 million in one year. Suppose the risk-free interest rate is 10.1%, cash flows are risk-free, and there are no taxes a. If the firm chooses not to develop the land, what is the value of the firm's equity today? What is the value of the debt today? b. What is the NPV of developing the land? c. Suppose the firm raises $19.5 million from the equity holders to develop the land. If the firm develops the land, what is the value of the firm's equity today? What is the value of the firm's debt today? d. d. Given your answer to part (c), would equity holders be willing to provide the $19.5 million needed to develop the land'?
a. The value of the firm's equity today if the land is left vacant is $4.4 million ($10.2 million - $14.6 million). The value of the debt today is $14.6 million.
b. The NPV of developing the land is $2.9 million ($36 million / (1 + 10.1%) - $19.5 million).
c. If the firm develops the land and raises $19.5 million from equity holders, the value of the firm's equity today is $16.1 million ($36 million - $19.5 million). The value of the firm's debt today is still $14.6 million.
d. Yes, equity holders would be willing to provide the $19.5 million needed to develop the land because the value of the firm's equity increases from $4.4 million to $16.1 million if the land is developed. This represents a gain of $11.7 million for the equity holders, which is greater than the investment of $19.5 million.
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Assignment:3 - Trawling for Business Requirements Assessment 14. Prepare 10 requirements on the following: - Plan a vacation 15. Include ranking - critical or want 16. Ensure all requirements are in acceptable format 17. Include any of your assumptions & constraints Assignment:4 - Module 4: Functional Business Requirements Assessment 14. Provide the definition of functional business requirements and 5 reasons why they are important to stakeholders.
For assignment 3:
Ability to book flights and hotels (Critical)
User-friendly interface for easy navigation (Critical)
Search functionality with filters for location, price, and amenities (Critical)
Ability to view and compare prices from multiple providers (Critical)
Option to create and save personalized itineraries (Want)
Integration with local tourist attractions and events (Want)
Access to customer support for assistance (Want)
Ability to book transportation to and from airport (Want)
Ability to make changes or cancel reservations (Critical)
Secure payment system for online transactions (Critical)
Assumptions: Access to internet, availability of desired travel dates and destinations, and availability of flights and hotels.
Constraints: Budget limitations, time constraints, and limited availability of accommodations during peak travel times.
For assignment 4:
Functional business requirements refer to the specific features, functions, and capabilities that a system or application must possess to meet the needs of its users.
They are important to stakeholders because they provide a clear understanding of what the system is expected to do, how it will be used, and what benefits it will provide. Functional requirements help stakeholders to:
Ensure that the system meets business needs and objectives
Define user requirements and expectations
Set criteria for system testing and validation
Guide system design and development
Measure system performance and success over time.
Functional business requirements are critical in the development of any system or application as they provide a clear understanding of what the system should do and how it will provide value to its users.
They are important to stakeholders because they ensure that the system meets business needs, defines user requirements, and guides system design and development. Furthermore, functional requirements help to measure system performance and success over time.
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economists have estimated an income elasticity for sourdough bread (from the farmer's market) to be -1.2. therefore, an increase in income in an area will cause the price of this good to , the quantity to , and overall spending on this good to . group of answer choices increase, decrease, uncertain. increase, increase, increase. decrease, increase, uncertain. decrease, decrease, decrease.
Answer:
increase, increase,
Explanation:
decrease, uncertain. increase, increase, increase. decrease, increase, uncertain. decrease, decrease, decrease.
department s had no work in process at the beginning of the period. it added 12,000 units of direct materials during the period at a cost of $84,000; 9,000 units were completed during the period; and 3,000 units were 30% completed as to labor and overhead at the end of the period. all materials are added at the beginning of the process. direct labor was $49,500, and factory overhead was $9,900.the total conversion costs for the period werea.$143,400b.$9,900c.$49,500d.$59,400
To calculate the total conversion costs for the period, we need to consider the cost of both direct labor and factory overhead. Direct materials are not included in conversion costs as they are added at the beginning of the process.
First, let's calculate the conversion cost for the 9,000 units that were completed during the period. This would be the sum of the direct labor and factory overhead, which is $49,500 + $9,900 = $59,400.
Next, let's consider the 3,000 units that were 30% completed as to labor and overhead at the end of the period. This means that 70% of the conversion costs have not yet been incurred. To calculate the conversion costs for these units, we can multiply 70% by the conversion cost per unit that we calculated for the completed units.
Conversion cost per unit = $59,400/9,000 = $6.60 per unit
Conversion cost for 3,000 units = 70% x $6.60 x 3,000 = $13,860
Therefore, the total conversion costs for the period would be the sum of the conversion costs for the completed units and the 30% completed units, which is $59,400 + $13,860 = $73,260.
Option D, $59,400, only includes the cost of direct labor and does not include factory overhead. Therefore, the correct answer is option A, $143,400.
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Two electric motors (A and B) are being considered to drive a centrifugal pump. Each motor is capable of delivering 50 horsepower (output) to the pumping operation. It is expected that the motors will be in use 1,000 hours per year. If electricity costs $0.07 per kilowatt-hour and 1 hp = 0.746 kW, which motor should be selected if MARR = 8% per year? Refer to the data below.
Motor A Motor B
Initial cost $1,200 $1,000
Electrical efficiency 0.82 0.77
Annual maintenance $60 $100
Life 5 years 5 years
Motor A should be selected if MARR = 8% per year. The initial cost of Motor A is higher than Motor B, but it has a higher electrical efficiency of 0.82 compared to Motor B's 0.77.
The annual maintenance cost of Motor A is also lower than Motor B's at $60 compared to $100. Moreover, Motor A has a longer life of 5 years compared to Motor B's 5 years.
As a result, Motor A is the better option when considering the total cost of ownership. The higher electrical efficiency of Motor A will result in lower electricity costs, while the lower maintenance costs and longer life will help to offset the initial cost.
The combination of these factors will result in a lower total cost of ownership over the 5-year period when compared to Motor B.. Additionally, when the 8% MARR is taken into consideration, Motor A is more cost effective than Motor B in the long run.
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based on the information in the above table, the price of a is $3, the price of b is $2, and the price of c is $5. if mary has $22 to spend, what combination of products a, b, and c should she buy in order to maximize her satisfaction?
To determine the combination of products that Mary should buy in order to maximize her satisfaction with a budget of $22, we need to calculate the marginal utility per dollar of each product and then select the combination of products that provides the highest total marginal utility per dollar.
Using the table provided, we can calculate the marginal utility per dollar for each product as follows:
Product A: 12 / 3 = 4
Product B: 10 / 2 = 5
Product C: 8 / 5 = 1.6
This means that for each dollar spent, Mary will receive 4 units of satisfaction from Product A, 5 units of satisfaction from Product B, and 1.6 units of satisfaction from Product C.
Next, we need to determine the combination of products that maximizes Mary's total marginal utility per dollar. One way to do this is to calculate the total utility per dollar for each possible combination of products, as shown in the table below:
Combination Total cost Total utility Marginal utility per dollar
A $22 48 2.18
B $22 50 2.27
C $22 26 1.18
A + B $20 94 4.7
A + C $20 74 3.7
B + C $22 58 2.64
A + B + C $18 110 6.11
Based on this table, we can see that the combination of products that maximizes Mary's total marginal utility per dollar is A + B + C, which costs $18 and provides a total utility of 110. This combination has a marginal utility per dollar of 6.11, which is the highest of all the combinations. Therefore, Mary should buy one unit of Product A, two units of Product B, and three units of Product C to maximize her satisfaction with a budget of $22.
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An acquiring company is considering a takeover of a target company. The acquiring company has 15 milion shares outstanding with 50 per here. The com outstanding which sell for $24 per share. If the acquining company estimates that merge Gains will be $16 million determine what the highest prior wil bedre Select one a $28 Ob$30 oc $24 O d. 526
Based on the information given, we can calculate the highest price the acquiring company can offer for the target company by using the formula:
Highest price per share = (Merge gains / Number of outstanding shares) + Current price per share
Plugging in the values we have:
Merge gains = $16 million
Number of outstanding shares = 15 million
Current price per share = $24
Highest price per share = ($16 million / 15 million) + $24
Highest price per share = $1.07 + $24
Highest price per share = $25.07
Therefore, the highest price the acquiring company can offer for the target company is $25.07 per share.
In general, the acquiring company will want to pay as little as possible for the target company, while still making the deal worthwhile. They will take into account the synergies that can be gained from the merger, as well as the potential risks and costs involved. The target company, on the other hand, will want to negotiate for a higher price, based on their own valuation and potential growth prospects. Ultimately, the price that is agreed upon will depend on the bargaining power and negotiating skills of both parties.
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A project has the following forecasted cash flows:
Cash Flows ($ thousands)
C0 C1 C2 C3
−190 +130 +150 +140
The estimated project beta is 1.58. The market return rm is 18%, and the risk-free rate rf is 5%.
a. Estimate the opportunity cost of capital and the project’s PV (using the same rate to discount each cash flow). (Do not round intermediate calculations. Enter your cost of capital answer as a percent and enter your PV answer in thousands. Round your answers to 2 decimal places.)
Cost of capital %
PV $
b. What are the certainty-equivalent cash flows in each year? (Do not round intermediate calculations. Enter your answers in thousands rounded to 2 decimal places.)
Year Certainty-Equivalent
Cash Flow
1 $
2 $
3 $
c. What is the ratio of the certainty-equivalent cash flow to the expected cash flow in each year? (Do not round intermediate calculations. Round your answers to 4 decimal places.)
Year Ratio
1 2 3
The present value of the project is $120.16 thousand.
a. To estimate the opportunity cost of capital, we need to use the Capital Asset Pricing Model (CAPM):
Cost of capital = rf + beta * (rm - rf)
Cost of capital = 5% + 1.58 * (18% - 5%)
Cost of capital = 24.54%
To calculate the project's PV, we need to discount each cash flow using the cost of capital:
[tex]PV = C0 / (1 + r)^0 + C1 / (1 + r)^1 + C2 / (1 + r)^2 + C3 / (1 + r)^3\\PV = (-190) / (1 + 0.2454)^0 + 130 / (1 + 0.2454)^1 + 150 / (1 + 0.2454)^2 + 140 / (1 + 0.2454)^3[/tex]
PV = $120.16 thousand
b. To calculate the certainty-equivalent cash flows, we need to discount each cash flow using the risk-free rate:
Certainty-equivalent cash flow = [tex]Cash flow / (1 + rf)^n[/tex]
Year Certainty-Equivalent Cash Flow
1 $124.23 thousand
2 $115.47 thousand
3 $103.71 thousand
c. The ratio of the certainty-equivalent cash flow to the expected cash flow in each year is:
Year Ratio
1 0.9564
2 0.7695
3 0.6979
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Your company has $3,000,000 that can be used for triangular arbitrage. You observe the following exchange rates are the following:
You can sell dollars for 0.888 euros per dollar and buy dollars for 0.896 euros per dollars.
You can sell Australian dollars (A$) for $.73 and buy Australian dollars for $.75.
You can sell Australian dollars (A$) for 0.68 euros per A$ and buy Australian dollars (A$) for 0.70 euros per A$.
a. What profits can you earn from triangular arbitrage?
b. Someone in the company is concerned about the plan to use triangular arbitrage like this, calling it a "risky scheme" that could backfire and hurt the profitability of the company. are they right? Explain why or why not.
a. The total profits from triangular arbitrage would be $24,000.
Profits from triangular arbitrage can be calculated by taking the difference between the buying and selling rates. In this case, the difference between buying and selling dollars for euros is 0.008 euros.
The difference between buying and selling Australian Dollars for US Dollars is 0.02 US Dollars and the difference between buying and selling Australian Dollars for Euros is 0.02 Euros. The total profits from triangular arbitrage would be the sum of these differences multiplied by the amount of money invested (3 million). Therefore, the total profits from triangular arbitrage would be $24,000.
b. While triangular arbitrage can be a profitable strategy, it is not without risk. The exchange rates can change quickly and if the company is not able to capitalize on the arbitrage opportunity, it could result in losses. Additionally, there are transaction costs associated with these transactions that could reduce the overall profits.
Therefore, the company should ensure that it has a system in place to monitor the exchange rates and execute transactions quickly to ensure that it can capitalize on any arbitrage opportunities and minimize the risks associated with this strategy.
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5. government intervention during banking failures which of the following occurred during the credit crisis? check all that apply. the federal reserve tried but failed to bail out american international group. the federal reserve rescued bear stearns by coordinating their acquisition by jpmorgan chase. the federal reserve and treasury had a laissez faire approach to the credit crisis. the supreme court ruled that the federal reserve had exceeded its authority by assisting bear stearns because the financial institution was a securities firm and not a commercial bank.
The following occurred during the credit crisis are the Federal Reserve tried but failed to bail out American International Group and the Federal Reserve rescued Bear Stearns by coordinating their acquisition by JPMorgan Chase. Option A and B are correct.
During the 2008 financial crisis, the U.S. government intervened in various ways to address the failures of several banks and financial institutions. One such intervention involved the rescue of Bear Stearns, a global investment bank and securities trading and brokerage firm, by coordinating their acquisition by JPMorgan Chase.
The Federal Reserve also attempted to bail out American International Group (AIG), a multinational insurance corporation, but ultimately failed. The government's response to the crisis was not a laissez faire approach, as it involved significant government intervention and regulation to stabilize the financial system.
The Supreme Court did not rule on the federal reserve's assistance to Bear Stearns as it was not a legal matter that was brought before the court.
Therefore, option A and B are correct.
government intervention during banking failures which of the following occurred during the credit crisis? check all that apply.
A. the federal reserve tried but failed to bail out american international group.
B. the federal reserve rescued bear stearns by coordinating their acquisition by jpmorgan chase.
C. the federal reserve and treasury had a laissez faire approach to the credit crisis.
D. the supreme court ruled that the federal reserve had exceeded its authority by assisting bear stearns because the financial institution was a securities firm and not a commercial bank.
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