Answer:
Because it gives the exporter greater flexibility to choose the goods that he wishes to purchase.
Explanation:
Counter purchase agreement is when a firm decided to buy back certain quantities of materials from the country that the materials were initially sold to. Under this agreement, the exporter agrees to purchase specific value of goods, service or technology previously sold to an importer within a stipulated time period. It is mostly useful for companies that wants to enter new market and also have an edge over their competitors in terms of market share.
Offset is more or less like counter purchase agreement, in as much one of the parties agrees to buy back the goods and services with a portion of the gain from the previous sale. What differentiate offset from Counter purchase agreement is that the party in offset can fulfil his duties with any firm in the country where the goods were previously sold to, hence more attractive from an exporter's perspective because it gives him greater flexibilit to choose the goods that he wishes to purchase.
The cost of raising capital through retained earnings is__________ the cost of raising capital through issuing new common stock.
Answer:
less
Explanation:
flotation costs are the cost incurred when issuing new common stock.
there are no flotation cost when using retained earnings to raise new capital.
Evaluate the following statement. True or False: Adaptive expectations incorporate data from the recent past, whereas rational expectations incorporate all available information about the probable effects of current and future economic events. True
Answer:
true
Explanation:
This is true because adaptive expectation relies upon the latest beyond and rational expectation consequences for modern-day and future monetary activities.
What is the rational expectation idea?The rational expectancy idea is a theory and a modeling method that is used broadly in macroeconomics.
People make decisions based on three factors, according to the theory: their human rationality, the statistics available to them, and their beyond-experienced experiences.
So, from the above observation this is clear that the given statement is true.
Learn more about rational expectation, refer to:
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On January 2, 20X5, Park Co. purchased 10 percent of Sky, Inc.'s outstanding common shares for $400,000. Park is the largest single shareholder in Sky, and Park's officers are a majority on Sky's board of directors. As a result, Park is able to exercise significant influence over Sky. Sky reported net income of $500,000 for 20X5, and paid dividends of $150,000. In its December 31, 20X5, balance sheet, what amount should Park report as investment in Sky?
Answer:
The answer is $435,000
Explanation:
Initial Investment-----------------$400,000
Park Co's share of Sky's net income(10% x $500,000) --- $50,000
Park Co's share of Sky's dividend (10% x $150,000) ---------------------- ($15,000)
Reported Investment--------- $435,000
Therefore, Park's balance sheet
will report $435,000 as the investment in Sky's in the year ended December 31, 20X5.
In 1985, a given Japanese imported automobile sold for 1,476,000 yen, or $8,200. If the car still sold for the same amount of yen today but the current exchange rate is 144 yen per dollar, what would the car be selling for today in U.S. dollars?
Answer:
The car will be selling for $10250 today
Explanation:
To calculate the selling price of the car in dollars today, we have to convert the value of 1476000 yen into dollars based on the exchange rate between dollars and yen today. It is known that the car will be sold for the same amount of yen today for which it was sold in 1985 and this amount is 1476000 yen.
We know that 1 dollar equals 144 yen.
Thus, let x be the number of dollars that equal 1476000 yen today.
x = 1476000 / 144
x = $10250
The car will be sold for $10250 today
Suppose that the economy is in a recessionary gap. The appropriate countercyclical monetary policy is
Answer: expansionary monetary policy
Explanation:
Recession occurs when economic activities slowdown. In a recessionary gap, the actual gross domestic product of the economy will be less than the potential gross domestic product of the said economy.
In such scenario, the expansionary monetary policy will be used because it will bring about economic growth. Expansionary monetary policy is when there is a rise in the supply of money in the economy. Also, the interest rates are reduced and there is an increase in demand.
Categorization of a market area for a center is relatively simple because the size of the market area served is refleced in the centers size.
a. True
b. False
Answer: True
Explanation:
The Market Area that a Centre will serve is directly related to its size. This is because the larger the size of a Centre, the more services it offers that will bring people from further to it.
Services range from low level to high level. High level services bring people from further away while low level services are mostly for people in the area.
A large centre will have more High level services offered and so will serve people from further as opposed to a small centre that will have more low level services which will serve people in it's vicinity.
Think about Neighbourhood stores vs large Shopping Complexes.
. On April 31, 2021, Elkhorn Associates borrowed $10 million cash from Colonial Bank and issued a 5-month, noninterest-bearing note, priced to yield an effective interest rate of 10%. The stated discount rate on this loan is:
Answer:
C : Less than the effective interest rate
Explanation:
The complete question is as follows;
On April 31, 2016, Elkhorn Associates borrowed $10 million cash from Colonial Bank and issued a 5-month, noninterest-bearing note, priced to yield an effective interest rate of 10%. The stated discount rate on this loan is:
A. More than the effective interest rate.
B. Less than the effective interest rate.
C. Equal to the effective interest rate.
D. Unrelated to the effective interest rate
Explanation;
Here, the correct answer is that the stated discount rate on the loan is less than the effective interest rate.
Identify and describe two financial management practices that firms use to manage each of the following: (a) liquidity risk; (b) interest rate risk; and (c) credit risk.
Answer:
a. Liquidity Risk
- Reduce Cash Conversion Cycle
Management tries to reduce the Cash Conversion cycle which is the time taken for proceeds to be received from inventory. By reducing this period, the company can have more cash.
- Maintain Cash Reserve
Maintaining a cash reserve that the business can fall back for contingency helps the company maintain liquidity. This amount should not be too small that it cannot help neither should it be too big that it hinder investment opportunities.
b. Interest Rate Risk
- Derivatives
Buying a a Derivative aimed at reducing interest rate risk can reduce it. Derivatives such as Interest Rate Futures will allow the company is make sure that they get a particular rate in future.
- Use more complex and accurate models to predict Interest rates and take measures against the fluctuations.
c. Credit Risk
- Use of Bond Ratings
Ratings will tell how risky the bond that is to be acquired is. If the Rating is quite low then the Credit Risk is high.
- Credit Default Swaps
This is a method of reducing Credit risk by insuring the Security in question against losses. This is usually done by the Issuer as an added requirement of the transaction.
Assuming semiannual compounding, what is the price of a zero coupon bond with 12 years to maturity paying $1,000 at maturity if the YTM is (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.):
Answer:
Price of the Bond
a. 3 percent = $701.38
b. 7 percent = $444.01
c. 11 percent = $285.84
Explanation:
since the bonds do not pay any coupon, in order to determine its price all you need to do is to determine the present value of the bonds' face value using the present value formula:
3% ⇒ PV = $1,000 / (1 + 3%)¹² = $701.38
7% ⇒ PV = $1,000 / (1 + 7%)¹² = $444.01
11% ⇒ PV = $1,000 / (1 + 11%)¹² = $285.84
If economic globalisation is inevitable, it should primarily serve humanity rather than the interests of transnational corporations.
A. Strongly disagree
B. Disagree
C. Agree
D. Strongly Agree
Answer:
C. Agree
Explanation:
I agree with the statement that economic globalization must primarily serve the interests of humanity over the interests of transnational corporations.
Because, the reason for the existence of the economy is to use material resources to promote social welfare.
Therefore, a globalized economy must exist so that there is primarily the promotion of people's well-being, above corporate profitability, this ensures that transnational companies must provide protection to human values and their dignity, not using labor exploitation. and the environment, providing conditions of security and respect for the values of each multicultural society.
Globalization is a phenomenon that has strengthened trade relations between countries, so it must be a source of job creation, social development and promote human dignity.
Rose Company had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017.
Apr. 16 Purchased 6,000 shares of Gem Co. stock at $21.50 per share plus a $340 brokerage fee.
May 1 Paid $210,000 to buy 3-month U.S. Treasury bills (debt securities): $210,000 principal amount, 4% interest, securities mature on July 31.
July 7 Purchased 3,000 shares of PepsiCo stock at $52.00 per share plus a $310 brokerage fee. 20 Purchased 1,500 shares of Xerox stock at $16.00 per share plus a $390 brokerage fee.
Aug. 1 Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 31.
Aug 15 Received an $.95 per share cash dividend on the Gem Co. stock. 28 Sold 3,000 shares of Gem Co. stock at $28.25 per share less a $430 brokerage fee.
Oct. 1 Received a $1.80 per share cash dividend on the PepsiCo shares.
Dec. 15 Received a $1.10 per share cash dividend on the remaining Gem Co. shares.
Dec. 31 Received a $1.10 per share cash dividend on the PepsiCo shares.
Required:
a. Prepare journal entries to record the preceding transactionsand events.
b. Prepare a table to compare the year-end cost and fair valuesof Perryâs short-term investments in available-for-sale securities.The year-end fair values per share are: Gem Co., $28.00; PepsiCo,$46.25; and Xerox, $12.00.
c. Prepare an adjusting entry, if necessary, to record theyear-end fair value adjustment for the portfolio of short-terminvestments in available-for-sale securities.
Answer:
Rose Company
1. Journal Entries:
April 16:
Debit Investments in available for sale securities $129,340
Credit Cash Account $129,340
To record the purchase of 6,000 shares of Gem Co. stock at $21.50 per share plus a $340 brokerage fee.
May 1:
Debit U.S. Treasury Bills $210,000
Credit Cash Account $210,000
To record the purchase of 3-month U.S. Treasury bills, 4% interest.
July 7:
Debit Investment in PepsiCo Stock $156,310
Credit Cash Account $156,310
To record the purchase of 3,000 shares of PepsiCo stock at $52.00 per share plus a $310 brokerage fee.
July 20:
Debit Investment in Xerox Stock $24,390
Credit Cash Account $24,390
To record the purchase of 1,500 shares of Xerox stock at $16.00 per share plus a $390 brokerage fee.
July 31:
Debit Interest Receivable from U.S. Treasury Bills $2,100
Credit Interest Revenue $2,100
To record the accrued interest on the bills.
Aug. 1:
Debit Cash Account $212,100
Credit Interest Receivable $2,100
Credit U.S. Treasury Bills $210,000
To record the receipt of check for principal and accrued interest on July 31 maturity.
Aug. 15:
Debit Cash Account $5,700
Credit Dividend $5,700
To record receipt of $.95 per share cash dividend on the Gem Co. stock.
Aug. 28:
Debit Cash Account $84,320
Credit Investment in available for sale securities $84,320
To record the sale of 3,000 shares of Gem Co. stock at $28.25 per share less a $430 brokerage fee.
Oct. 1:
Debit Cash Account $5,400
Credit Dividends $5,400
To record the receipt of cash dividends on PepsiCo shares.
Dec. 15:
Debit Cash Account $3,300
Credit Dividends $3,300
To record the receipt of cash dividends on 3,000 GemCo shares.
Dec. 31:
Debit Cash Account $3,300
Credit Dividends $3,300
To record the receipt of $1.10 per share cash dividend on the PepsiCo shares.
b. Comparison of year-end cost and fair values of short-term investments:
Year-end units Fair Fair Value
cost Values Difference
Gem Co., $28.00 $45,020 3,000 $84,000 $38,980
PepsiCo,$46.25 $156,310 3,000 $138,750 -$17,560
Xerox, $12.00 $24,390 1,500 $18,000 -$6,390
c. Adjusting Entries
Dec. 31:
Debit Investment in available for sale securities $38,980
Credit Unrealized Gain on Investment $38,980
To record the unrealized gain based on fair value.
Dec. 31:
Debit Unrealized Loss $17,560
Credit Investment in PepsiCo Stock $17,560
To record the unrealized loss based on fair value.
Dec. 31:
Debit Unrealized Loss $6,390
Credit Investment in Xerox $6,390
To record the unrealized loss based on fair value.
Explanation:
a) Year-end Balances:
GemCo.
Initial investment = $129,340
Sale of 3,000 share (84,320)
Ending balance = $45,020
PepsiCo.
Initial investment = $156,310
Xerox
Initial investment = $24,390
b) Unrealized Gains and Losses on Investments: These are not tax deductible. As a rule, you do not pay taxes on such gains and losses. They are recorded in the Statement of Changes in Equity.
HK Goods Inc. is a large conglomerate that operates only in its home country. The company competes in industries like the consumer electronics, health care, hotel, airlines, education, and steel industries. Which of the following diversification strategies does this best illustrate?
A. Process diversification
B. Product diversification
C. Geographic diversification
D. Market diversification
Answer:
B. Product diversification
Explanation:
Based on this information it seems that HK Goods Inc. is following the diversification strategy known as product diversification. This strategy revolves around selling the same or different variations of a product but in various different markets. Which is what HK Goods Inc. is doing by competing in a large variety of markets such as consumer electronics, health care, hotel, airlines, education, and steel industries, but still selling the same base product in only one geographical location.
Dove Corporation, a calendar-year C corporation, had the following information for 2019:
Net income per books (after-tax) $386,250
Taxable income 120,000
Federal income tax per books 25,200
Cash dividend distributions 150,000
Un-appropriated retained earnings, as of January 1, 2019 796,010
Based on the above, Dove's unappropriated retained earnings balance as of December 31, 2016, is:______.
Answer:
$1,032,260
Explanation:
Dove's unappropriated retained earnings balance as of December 31, 2016 = Unappropriated retained earnings balance on January 1, 2016 + Net income - Dividends distributions.
= 796,010 + 386,250 - 150,000.
= $1,032,260
Unappropriated retained earnings balance of Dove corporation as on December 31, 2016 is $1,032,260
Hildreth Company uses a job order cost system. The following data summarize the operations related to production for April, the first month of operations.
a. Materials purchased on account, $147,000.
b. Materials requisitioned and factory labor used:
Job No. Materials Factory Labor
101 $19,320 $19,500
102 23,100 28,140
103 13,440 14,000
104 38,200 36,500
105 18,050 15,540
106 18,000 18,700
For general factory use 9,000 20,160
c. Factory overhead costs incurred on account, $6,000.
d. Depreciation of machinery and equipment, $4,100.
e. The factory overhead rate is $40 per machine hour.
Job No. Machine Hours
101 23
102 43
103 37
104 65
105 32
106 35
Total 235
f. Jobs completed: 101, 102, 103, and 105.
g. Jobs were shipped and customers were billed as follows: Job 101, $7,640; Job 102, $10,810; Job 105, $16,490.
Required:
1. Journalize the entries to record the summarized operations.
2. Post the appropriate entries to T-accounts for Work in Process and Finished Goods.
3. Prepare a schedule of unfinished jobs to support the balance in the Work in Process account.
4. Prepare a schedule of finished jobs to support the balance in the Finished Goods account.
Answer:
raw materials 147,000 debit
account payable 147,000 credit
WIP-inventory 130,110 debit
Factory Overhead 9,000 debit
raw materials 139,110 credit
WIP-inventory 132,380 debit
Factory Overhead 20,160 debit
Wages Payable 152,540 credit
Factory overhead 6,000 debit
Account Payable 6,000 credit
Factory Overhead 4,100 debit
Acc Dep machinery 4,100 credit
WIP-inventory 9,400 debit
Factory Overehad 9,400 credit
Finished Goods 233,790 debit
WIP-Inventory 233,790 credit
Cost of Good Sold 127,570 debit
Finished Good Invnetory 127,570 credit
account receivables 34,940 debit
sales revenue 34,940 credit
Cost of GoodSold 29,860 debit
Factory Overhead 29,860 credit
Explanation:
Materials Labor Overhead Total
101 19320 19500 920 39740
102 23100 28140 1720 52960
103 13440 14000 1480 28920
104 38200 36500 2600 77300
105 18050 15540 1280 34870
106 18000 18700 1400 38100
Total 130110 132380 9400 271890
Completed 101 + 102 + 103 + 105
Total finished good: 233,790
Applied overhead calculations:
235 hours x $40 = 9,400
COst of Good Sold
101 + 102 + 105
Total cost: 127,570
Sales Revenues
7,640 + 10,810 + 16,490 = 34,940
Overhead T account
DEBIT CREDIT
9,000
20,160
6,000
4,100
9,400
29860 UNDERAPPLIED
we must increase it against Cost of Good Sold
Mahre, Incorporated, a New York corporation, runs ski tours in a several states. Mahre also has a New York retail store and an Internet store, which ships to out-of-state customers. Assume sales transactions in all states, except New York, are under 200 and that all states have adopted Wayfair legislation. The ski tours operate in Maine, New Hampshire, and Vermont, where Mahre has employees and owns and uses tangible personal property. Mahre has real property only in New York. Mahre has the following sales: Mahre Sales State Goods Services Total Alaska $ 23,214 $ 0 $ 23,214 Colorado 10,632 0 10,632 Maine 35,983 156,154 192,137 New Hampshire 26,801 325,557 352,358 New York 65,521 0 65,521 Vermont 42,062 277,631 319,693 Totals $ 204,213 $ 759,342 $ 963,555 Assume the following sales tax rates: Alaska (0 percent), Colorado (7.75 percent), Maine (8.5 percent), New Hampshire (0 percent), New York (8 percent), and Vermont (5 percent). How much sales and use tax must Mahre collect and remit
Answer: $11,228.31
Explanation:
Given the following data :
Sales data:
State - - - - - Goods - - - - - Service - - - - - Total
Alaska - - - $23,214 - - - - - - 0 - - - - - - - $23,214
Colorado - $10,632 - - - - - - 0 - - - - - - - $10,632
Maine - - - $35,983 - - - $156,154 - - - - $192,137
N/Hampshire $26,801 - - 325,557 - - - 352,358
New York - - - $65,521 - - - - 0 - - - - - - - 65,521
Vermont - - - - $42,062 - - $277,631 - - -$319,693
Totals - - - - - $204,213 - -$759,342 - -$963,555
The amount of sales tax Mahre should collect and remit :
Sum of (goods sold * sales and use tax) in each state
ALASKA:
Sales tax rate = 0%
Sales and use tax = 0
COLORADO:
Sales tax rate = 7.75%
Sales and use tax = (0.0775×$10632) = $823.98
MAINE:
Sales tax rate = 8.5%
Sales and use tax = (0.085×$35983) = $3059.55
New Hampshire:
Sales tax rate = 0%
Sales and use tax = (0×$26801) = $0
New york:
Sales tax rate = 8%
Sales and use tax = (0.08×$65521) =$5,241.68
Vermont :
Sales tax rate = 5%
Sales and use tax = (0.05×$42062) =$2103. 1
Total sum:
(0+$823.98+$3059.55+0+$5241.68+$2103.1)
= $11,228.31
Abbe Co. is a small merchandising company with a manual accounting system. An investigation revealed that in spite of a sufficient bank balance, a significant amount of available cash discounts had been lost because of failure to make timely payments. In addition, it was discovered that the invoices for several purchases had been paid twice. Indicate whether the procedures listed below for the payment of vendors' invoices would reduce the possibility of losing available cash discounts and of paying an invoice a second time. 1. Each voucher should be approved for payment by a designated official before verifying price, quantities, and terms.
Answer:
1. FALSE
2.TRUE
3. TRUE
4.TRUE
Explanation:
1. It is FALSE which means each voucher should NOT be approved for payment by a designated official before verifying price, quantities, and terms because it would not reduce the chances of losing cash discount .
2. It is TRUE which means each voucher should tend to be filed by the day which will be the last day of the discount period or the due date if the invoice is not subject to a cash discount because if the voucher is filed at last day, there will be chance of losing it.
3. It is TRUE which means each day, the vouchers should be removed from the appropriate section of the file and checks issued by the disbursing official because yhis will also tend to lead to losing the cash discount for payment to the vendor.
4. It is TRUE which means at the time of payment, all vouchers and supporting documents should be stamped or perforated "Pald" because there will presentation of invoice for the second time.
Suppose that you go to a bank at which you have no account, give the bank cash, and in return obtain a check drawn against that bank which you will use to pay someone else. This is called a
Answer:
Cashier's check.
Explanation:
These checks are said to be quaranteed and issued in the bank by the banking institute. It contains the name of the receiver receipiant which has been inscribed in the check by the banking institute or credit union attached to the receiver also with the amount of money written on it. This amount written on it is known to be the withdrawable amount.
The cashier's check can be sent out in form of a letter, fax or even a mail to the intended persons or organisation making the withdrawal.
Here, monies which are been orders are easily secured by use of a cashier’s checks.
An elderly relative offers to sell you their used 1958 Cadillac Eldorado for $54,000 You note that very similar cars are selling on the open market for $87,000. You don't care for classic cars and would rather buy a new Ford Explorer for $31,000. What is the net value of buying the Cadillac?
Answer:
$33,000
Explanation:
Calculation for net value of buying the Cadillac
Using this formula
Net value =Purchase-Resale price of the Cadillac
Let plug in the formula
Net value =$87,000-$54,000
Net value =$33,000
Therefore the net value of buying the Cadillac will be $33,000
Handel Company uses the allowance method for estimating uncollectible accounts.
January 5 Sold merchandise to Terry Richman for $2,000, terms n/15.
April 15 Received $600 from Terry Richman on account.
August 21 Wrote off as uncollectible the balance of the Terry Richman account when she declared bankruptcy.
October 5 Unexpectedly received a check for $300 from Terry Richman. It is not felt any more will be received from Richman.
Prepare journal entries to record the above transactions: (Credit account titles are automatically indente
Answer:
Entries are given below
Explanation:
January 5 - Sold Merchandise
DEBIT CREDIT
Receivable - Terry $2,000
Sales Revenue $2,000
April 15 - Received $600 from terry
DEBIT CREDIT
Cash $600
Receivable - Terry $600
August 21 wrote off uncollectable debt
DEBIT CREDIT
Allowance for debt (2000-400) $1,400
Receivable - Terry $1,400
October 5 Received a check
DEBIT CREDIT
Receivable - Terry $300
Allowance for doubtful debt $300
A local furniture store is advertising a deal in which you buy a $3,500 living room set with three years before you need to make payments (no interest is incurred). How much would you have to deposit each month in a savings account earning 3.5 percent APR, compounded monthly, to be able to pay the $3,500 bill in three years
Answer:
$92.35
Explanation:
using the future value formula for an ordinary annuity:
Future value = payment [((1 + r)ⁿ - 1) / r]
so, PMT = FV / [((1 + r)ⁿ - 1) / r]
r = 3.5% / 12 = 0.002917n = 3 x 12 = 36FV = $3,500PMT = 3,500 / [((1 + 0.002917)³⁶ - 1) / 0.002917] = $92.35
The number of jobs available in the U.S. economy is largely determined by the number of workers private firms choose to hire. In 2016, firms employed 124 million people. The Federal Reserve is part of the federal government and hires relatively few people, about 22,000 in 2016. Even if the Fed doubled or tripled its work force, it would have little impact on employment levels, yet economists strongly link actions of the Fed to the level of total employment in the economy. Carefully explain how the Fed is able to affect the level of total employment in the economy. Be sure to include all relevant actions the Fed can take in affecting total employment.
Answer:
The Federal Reserve is in charge of the monetary policy in the United States. It expands or reduces the money supply (the total amount of money in the economy) by raising or lowering the interest rate.
There is a relationship, in the short run, between unemployment and money supply. The higher the money supply, the lower the unemployment rate, and viceversa: the lower the money supply, the higher the unemployment rate.
This relationship exists because when the money supply increases, the interest rate falls, if the interest rate falls, investing becomes cheaper, and as a result, firms invest more and hire more workers.
The opposite happens when the money supply is contracted: interest rates rise, investing becomes more expensive, and firms hire less people.
This is why the Fed has a great deal of power when it comes to employment in the economy.
Explain the measures of customer service that are influenced by the structure of the distribution network.
Answer:
1. Response time or Time Response
2. Product variety or variety of the products
3. Availability
4. The Customer experience
5.The Order visibility
6. Returnability
Explanation:
Below is the Explanation of the measures of customer service that are influenced by the structure of the distribution network.
We have 6 measures of customer service that are influenced by the structure of the distribution network and they are:
1.Response time can be defined as the time between when a customer places an order and when the customer receives the delivery.
2. Product variety can be seen as the number of different products that a customer wish and desires from the distribution network.
3. Availability can be defined as the probability or likelihood of a company or an organisation to have a product in stock when a customer order arrives or when a customer places an order.
4.Customer experience can be seen as the the ease that occur when a customer place and receive their order.
5. Order visibility can be defined as the ability of the customer to track their own order from the time of placement to delivery.
6.Returnability can be defined as the ease with which a customer return merchandise or product that they are unsatisfied with and the strength or the ability of the network to handle such returns.
The measures of customer service which are influenced by the structure of the distribution network are:
Response timeProduct varietyProduct availabilityCustomer satisfaction, etcAccording to the given question, we are asked to state and explain the measures of customer service which are influenced by the structure of the distribution network.
As a result of this, we can see that theses are the various ways through which the customer satisfaction can be monitored and assessed so that better services can be provided for them. This has to do with how efficient the service delivery is, the difference in products, response time, etc.
Read more here:
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You put up $50 at the beginning of the year for an investment. The value of the investment grows 4% and you earn a dividend of $3.50. Your HPR was ____. A. 4% B. 3.5% C. 7% D. 11%
Answer: 11%
Explanation:
From the question, we are informed that an individual put up $50 at the beginning of the year for an investment and that the value of the investment grows 4% and the person earn a dividend of $3.50.
The HPR will be calculated as :
= 4% + (3.50/50)
= 4% + 0.07
= 0.04 + 0.07
= 0.11
= 11%
Suppose that a flower nursery benefits from having a butterfly farm located only a few miles away, because the presence of the insects greatly improves flower pollination. Lawyers for the two companies meet to draft a legal document specifying the number of butterflies the farm promises to maintain in exchange for payments by the nursery.
The need for highly paid lawyers to work out a legal agreement between the flower nursery and the butterfly farm contradicts an important requirement of _________ namely, that the parties experiencing an externality must be able to _________ .
Private solutions to externalities do not always work. One of the primary occurrences of this is when parties must spend an excessive amount of time or money to reach an agreement. This describes the problem of ________ .
Answer:
The need for highly paid lawyers to work out a legal agreement between the flower nursery and the butterfly farm contradicts an important requirement of the case theorem namely, that the parties experiencing an externality must be able to bargain at low cost.
Private solutions to externalities do not always work. One of the primary occurrences of this is when parties must spend an excessive amount of time or money to reach an agreement. This describes the problem of transaction costs.
Explanation:
In case theorem,in the presence of externality, irrespective of which company own the right to the property, the two companies can negotiate for the optimal solution, provided the negotiation costs are negligible.
Transaction cost is said to be the cost which is involved in the form of time or money during the finalisation of a decision or reaching to an agreement.
In this case, excessive amount of money is spent in following the bargains between both parties to get the final aggrement, since they need highly paid lawyers. This is the problem of transaction cost.
Evaluating finance packages. Assume that you’ve been shopping for a new car and intend to finance part of it through an installment loan. The car you’re looking for has a sticker price of $18,000. The local dealership has offered to sell it to you for $3,000 down and finance the balance with a loan that will require 48 monthly payments of $333.67; Adventure Vehicles will sell you the exact same vehicle for $3,500 down, plus a 60-month loan for the balance, with monthly payments of $265.02. Which of these two finance packages is the better deal? Explain.
Answer:
Personally I would go for the local dealership's plan because the total interests paid are less, and the monthly payment is not much higher compared to the other plan, but it is also shorter.
There is no such thing as the best financial plan for everyone. Some people may not be able to pay more than $300 per month for a car, so they might have to choose the second alternative even though they will pay more interests. Both financial options have good things and bad things.
The local dealership requires a lower down payment, you pay less total interests but since the plan is shorter, the monthly payments are higher. On the other hand, adventure vehicles requires a higher down payment, charges more interests, but offers a longer financing plan which results in lower monthly payments.
It really depends on the specific client and how much money they have to make the down payment and how much money they will have to pay their monthly payments.
Explanation:
total sticker price $18,000
alternative A alternative B
local dealer adventure vehicles
down payment $3,000 $3,500
financed amount $15,000 $14,500
payment per month $333.67 $265.02
total monthly payments 48 60
total amount $16,016.16 $15,901.20
interests paid $1,016.16 $1,401.20
This is a promotion for a brand of ketchup. Investigate the positioning strategy that best explains the cognitive values. Select the correct option. Select one: a. The positioning of the bite mark enhances the message 'No sin'. b. The positioning of the red image in the center helps it stay longer in memory. c. The positioning of the logo in white space attracts atten
Answer:
a. The positioning of the bite mark enhances the message 'No sin'.
Explanation:
Based on the popular story of Adam and Eve in the garden of Eden, where the two was said to have sinned against God, by eating or biting from the forbbiden fruit.
Thus, in this case, with the promotion for a brand of ketchup showing a part of the fruit that was bitten, is trying to link the popular Adam and Eve story to the picture, such that people or audience can easily remember the promotion and that biting or eating from the ketchup is not a sin.
Hence, positioning strategy that best explains the cognitive values is that, the positioning of the bite mark enhances the message 'No sin'.
Daves Inc. recently hired you as a consultant to estimate the company’s Weighted Average Cost of Capital. You have obtained the following information: 1. There is no preferred equity in the company’s capital structure. 2. The company’s debt is financed through issuing corporate bond and now the yield to maturity of this bond is 8%. 3. The company’s common stock has an estimated return of 10%. 4. The tax rate is 40%. 5. The bond price is $900 per unit and there are 1 million units of bond issued. 6. The common stock is priced at $10 per share and there are 10 million stock shares outstanding. What is the firm’s WACC based on market value?
Answer:
WACC = 5.32%
Explanation:
bond's YTM = 8%
cost of equity = 10%
tax rate = 40%
total bonds = $900,000,000
total common stocks = $100,000,000
total firm's value = $1,000,000,000
to simplify the process I will use hundreds of millions
WACC = (1/10 x 10%) + [9/10 x 8% x (1 - 40%)] = 1% + 4.32% = 5.32%
The triple-bottom-line philosophy says that: companies should treat their local, national, and global customers fairly. business success increases by having three times more contingent workers than permanent employees. companies should try to support the economic, social, and environmental spheres of sustainability. companies should pay three times as much attention to profits as they do to employee wellbeing. the main goal of all companies is to satisfy the needs of three groups: employees, shareholders, and suppliers.
Answer: companies should try to support the economic, social, and environmental spheres of sustainability.
Explanation:
The triple bottom line is simply an accounting framework that consist of three parts which are the social, financial and the environment.
The triple bottom line philosophy says that organizations should not only focus on the financial aspect(profit) alone but should also focus on the environment and the social aspect of the society.
Therefore, the triple-bottom-line philosophy says that companies should try to support the economic, social, and environmental spheres of sustainability.
Consumerism is described as activities undertaken by independent individuals, groups, and organizations to protect their rights as consumers.
a. True
b. False
Answer:
a. True
Explanation:
This alternative is true, as consumerism can be defined as a phenomenon that is positive for economic growth to occur, because through the increase in the consumption of goods and services, companies benefit from increased sales, revenues and profits while consumers benefit from the utilities and benefits of the consumer goods they purchase.
Therefore, consumerism is seen as a phenomenon that strengthens the capitalist economy, as consumer spending accounts for most of the GDP and aggregate demand, factors essential to economic growth.
Windham Corporation has current assets of $520,000 and current liabilities of $650,000. Windham Corporation's current ratio would be increased by:
Answer:
The current ratio would increased by the purchase of $130,000 of inventory on account
Explanation:
Calculation for Windham Corporation's current ratio
Current assets- Current liabilities
$520,000 - $650,000=$130,000
Formula for Current ratio
Current ratio = Current assets ÷ Current liabilities
= $520,000 ÷ $650,000 = 0.80
Current ratio = Current assets ÷ Current liabilities
= ($520,000 + $130,000) ÷ ($650,000 + $130,000)
=$650,000÷$780,000
=0.833
Therefore the current ratio would increased by the purchase of $130,000 of inventory on account.