how do gains in labor productivity lead to gains in gdp per capita

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Answer 1

The GDP per capita will increase when people create more since their earnings will grow and they'll have more money to spend.

The value of the goods and services produced in a given hour of work determines worker productivity. To calculate per capita GDP, one must divide the entire value of goods and services produced inside a country by the total number of people living there.

The standard of living rises as labor productivity increases. This is a result of the fact that as workers produce more items, their earnings rise. They will thus have more accessible discretionary cash. Employees will be able to eat more as a result. As a result, the GDP per person will rise. Productivity improvements enable businesses to produce more for the same level of input, create more revenues, and eventually yield a larger Gross Domestic Product.

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You bought 1,000 shares of Altona Ltd 5 years ago. Over the years you have attended the annual general meetings and carefully read through Altona Ltd’s financial statements. While you have been generally satisfied with the amount of annual dividends, recently you have become a little concerned with declining share prices. You became particularly alarmed when media published several photos showing Altona management’s Hawaiian management retreats. Taking into consideration the management behaviour critically discuss the relationship between a corporation’s shareholders and management. Analyse the problems and costs related to this relationship and explain with example how a company may structure management compensation to mitigate such costs.

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Problems and costs related to this relationship include conflicts of interest and impact on the company's reputation. Companies may design management compensation in a way that aligns it with shareholders' interests in order to reduce these costs. They might, for instance, link executive compensation to performance measures.

The relationship between a corporation's shareholders and management is an important one that can significantly impact the performance and success of the company. In this case, the declining share prices and management's behaviour at Hawaiian retreats are cause for concern.
Shareholders entrust management with their investment and expect them to act in the best interest of the company and its shareholders. However, when management engages in lavish spending and fails to prioritize shareholder value, it can lead to a breakdown in trust and a decline in share prices.
One problem related to this relationship is the potential for conflicts of interest. For example, management may prioritize their own compensation and benefits over the needs of shareholders. This can lead to a misalignment of interests and a lack of focus on long-term company performance.
Another cost related to this relationship is the impact on the company's reputation. When management engages in behaviour that is perceived as excessive or inappropriate, it can damage the company's brand and make it less attractive to investors and customers.
To mitigate these costs, companies may structure management compensation in a way that aligns their interests with those of shareholders. For example, they may tie executive compensation to performance metrics such as earnings per share or return on investment. This incentivizes management to focus on long-term growth and profitability rather than short-term gains.
In addition, companies can establish strong governance practices, including independent board oversight and regular reporting and disclosure, to ensure that management is accountable to shareholders and acting in their best interest.

Overall, the relationship between a corporation's shareholders and management is critical to the success of the company. By prioritizing transparency, accountability, and alignment of interests, companies can foster a positive and productive relationship that benefits both shareholders and management.

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At the start of 1996, the annual interest rate was 8 percent in the United States and 4.8 percent in Japan. The exchange rate was 108 yen per dollar at the time. Mr. Jorus, who is the manager of a Bermuda-based hedge fund, thought that the substantial interest advantage associated with investing in the United States relative to investing in Japan was not likely to be offset by the decline of the dollar against the yen. He thus concluded that it might be a good idea to borrow in Japan and invest in the United States. At the start of 1996, in fact, he borrowed \1,000 million for one year and invested in the United States. At the end of 1996, the exchange rate became 118 yen per dollar. How much profit did Mr. Jorus make in dollar terms? Answer is complete but not entirely correct. Profit $ 143,576,944

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Mr. Jorus made a profit of $143,576,944. At the start of 1996, Mr. Jorus, the manager of a Bermuda-based hedge fund, realized that the substantial interest advantage associated with investing in the United States relative to investing in Japan was not likely to be offset by the decline of the dollar against the yen.

He thus decided to borrow \1,000 million for one year and invest in the United States. At the time, the annual interest rate in the United States was 8 percent and the exchange rate was 108 yen per dollar. At the end of 1996, the exchange rate became 118 yen per dollar.

By taking advantage of the interest rate difference and the exchange rate change, Mr. Jorus made a profit of $143,576,944. He was able to take advantage of the interest rate difference and the exchange rate change in order to maximize his profits.

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Q2what value had freshippo created for its customers

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Freshippo's emphasis on high-quality products, convenience, and innovative use of technology has helped to create significant value for its customers, which has contributed to its rapid growth and success in the highly competitive Chinese retail market.

How Freshippo has created significant value for its customers?

Freshippo, also known as Hema, has created significant value for its customers by revolutionizing the grocery shopping experience in China through the integration of online and offline channels, offering high-quality products, and providing convenient and fast delivery options.

One of the key value propositions of Freshippo is its emphasis on fresh and high-quality products, which are sourced directly from producers and suppliers, and delivered to stores on a daily basis. This allows customers to purchase fresh products that are often cheaper than those found in traditional supermarkets.

Another major value proposition is the integration of online and offline channels, which allows customers to shop for groceries online and have them delivered to their doorstep within 30 minutes, or pick them up at the store. This is particularly appealing to time-pressed urban consumers, who value convenience and fast service.

Moreover, Freshippo has also created value for its customers through its innovative use of technology, such as mobile payment systems and facial recognition technology, which simplifies the payment process and enhances security.

Overall, Freshippo's emphasis on high-quality products, convenience, and innovative use of technology has helped to create significant value for its customers, which has contributed to its rapid growth and success in the highly competitive Chinese retail market.

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The price of a commercial paper offering a payoff of
$10,000 is $9,460. If the annualized investment rate is 7.8%, when
does the paper mature?

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The paper matures in about 1.943 years, or approximately 23 months. To solve this problem, we can use the formula for present value of a future payment: Present value = Future value / [tex](1+r)^{n}[/tex], where r is the annualized investment rate and n is the number of years until the payment is received.

In this case, we know that the present value is $9,460 and the future value is $10,000. We also know that r is 7.8% or 0.078 as a decimal. We can plug these values into the formula and solve for n: 9,460 = 10,000 / [tex](1+0.078)^{n}[/tex], 9,460 / 10,000 = [tex](1+0.078)^{n}[/tex], 0.946 = [tex]1.078^{n}[/tex]

Taking the natural logarithm of both sides: ln(0.946) = n ln(1.078), n = ln(0.946) / ln(1.078), n ≈ 1.943 years

Therefore, the paper matures in about 1.943 years, or approximately 23 months.

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Two years ago, Blue Ltd sold of$1000par value that had an original maturity of 15 years and a coupon rate of Today these bonds are selling for$1,120. Determine the yield-to-maturity.
a. 9.77%
b. 7.92%
c. 8.44%
d. 10.29%
e. 8.55%

Answers

The yield-to-maturity (YTM) is the rate of return anticipated on a bond if it is held until it matures. To determine the YTM, we need to use the current market price of the bond, its par value, coupon rate, and time to maturity.

First, we need to calculate the annual coupon payment. The coupon rate is not given in the question, so we cannot calculate it directly. However, we know that the bond has a par value of $1000 and that it sold for $1120, which is a premium. This means that the coupon rate must be lower than the current market interest rate. Let's assume that the current market interest rate is 8%.

We can then calculate the coupon rate using the present value of the bond's cash flows:PV = C/(1+i)^1 + C/(1+i)^2 + ... + C/(1+i)^15 + FV/(1+i)^15 Where PV is the present value of the bond, C is the annual coupon payment, i is the market interest rate (8%), and FV is the par value ($1000). Solving for C, we get:
PV = $1120
FV = $1000
i = 8%
n = 15
C = (PV - FV/(1+i)^n)/(1/i*((1+i)^n - 1)) = $56.66
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b) Leigh Delight Candy Berhad is choosing between two bonds in which to invest their cash. One is being offered from Hershey's and will mature in 15 years and pay RM40 each quarter. The other alternative is a Mars' bond that will mature in 18 years and pay RM50 each quarter. Compute the present value of each bond if the discount rate is 12% compounded quarterly, and each bond pays RM1,000 at maturity.

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Leigh Delight Candy Berhad should invest in the Mars' bond as it has a higher present value than the Hershey's bond at a 12% quarterly compounded discount rate. The present value of the Hershey's bond is RM2,536.74 and the present value of the Mars' bond is RM2,892.01.

What is the present value of Hershey's and Mars' bonds and which one should Leigh Delight Candy Berhad invest in?

To compute the present value of each bond, we can use the formula:

PV = (C/r) x [1 - (1 + r)^(-n)]

Where PV is the present value, C is the coupon payment per quarter, r is the discount rate per quarter, and n is the number of quarters until maturity.

For the Hershey's bond, C = RM40, r = 0.03 (12%/4), n = 60 (15 years x 4 quarters per year). Plugging these values into the formula, we get:

PV = (40/0.03) x [1 - (1 + 0.03)^(-60)]
PV = RM2,536.74

So the present value of the Hershey's bond is RM2,536.74.

For the Mars' bond, C = RM50, r = 0.03, n = 72 (18 years x 4 quarters per year). Plugging these values into the formula, we get:

PV = (50/0.03) x [1 - (1 + 0.03)^(-72)]
PV = RM2,892.01

So the present value of the Mars' bond is RM2,892.01.

Therefore, if Leigh Delight Candy Berhad is choosing between these two bonds, they should invest in the Mars' bond as it has a higher present value than the Hershey's bond at a 12% quarterly compounded discount rate.

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Question 3 (13 marks) a. The maturity of a futures contract on a stock market index is 1 year. The multiplier for the futures contract $50. The current level of the index is 30,000. The risk-free rate is 0.5% per month and dividend yield on the stock market index is 0.3% per month. The initial margin requirement is 10%. i. What is the parity value of the futures price now? (3 marks) ii. Assume the futures contract is fairly priced. How much initial margin you need to deposit if you long 1 contract? (2 marks) iii. Calculate the two-month holding-period return for your long position in the futures contract if the stock market index increases to 31,000 two months later. Assume the futures contract keeps being priced fairly. (5 marks) b. William sells six July futures contracts on coffee. Each contract is for the delivery of 37,500 pounds. The current futures price is $2.2565 per pound. The initial margin is $9,900 per contract and the maintenance margin is $9,000 per contract. What is the futures price per pound that would lead a margin call? (3 marks)

Answers

A(i) The parity value of the futures price now is $30,303.03.

  (ii)  You would need to deposit 10% of $1,500,000, which is $150,000, as initial margin.

  (iii) The holding-period return is 0.0128 or 1.28%.

B) The futures price per pound falls to -$1.18, a margin call would be triggered.

i.F = S0 * e^((r-d)*T)where F is the futures price, S0 is the current spot price of the index, r is the risk-free rate, d is the dividend yield, and T is the time to maturity of the futures contract in years.

In this case, F = S0 * e^((r-d)*T) = 30,000 * e^((0.005-0.003)*1) = 30,303.03.Therefore, the parity value of the futures price now is $30,303.03.

ii. The initial margin requirement is 10% of the contract value, which is $50 * 30,000 = $1,500,000. Therefore, if you long 1 contract, you would need to deposit 10% of $1,500,000, which is $150,000, as initial margin.

iii. The two-month holding-period return for a long position in the futures contract can be calculated using the formula:

HPR = (F1 - F0 + D) / (F0 + IM)

where HPR is the holding-period return, F1 is the futures price at the end of the holding period, F0 is the initial futures price, D is the total dividend received during the holding period, and IM is the initial margin.

In this case, F0 = 30,303.03, F1 = 31,000, D = 0.003 * 2 * 30,000 = $1,800, and IM = $150,000.

Therefore, the holding-period return is:

HPR = (31,000 - 30,303.03 + 1,800) / (30,303.03 + 150,000) = 0.0128 or 1.28%.

b. To calculate the futures price per pound that would lead to a margin call, we need to use the formula:

F = (MM - V) / Q

where F is the futures price per pound that would lead to a margin call, MM is the maintenance margin per contract, V is the value of the contract, and Q is the quantity of the underlying asset per contract.

In this case, MM = $9,000, V = $2.2565 * 37,500 = $84,468.75, and Q = 37,500. Therefore,

F = (9,000 - 84,468.75) / 37,500 = -$1.18 per pound.

This means that if the futures price per pound falls to -$1.18, a margin call would be triggered. However, it's worth noting that futures prices cannot be negative in reality, and this is only a theoretical calculation based on the formula.

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There are a number of reasons why a firm might want to repurchase its own stock. Read the statement and then answer the corresponding question about the company's motivation for the stock repurchase: Smith and Martin Co. 's board of directors has decided to repurchase some of its stock on the open market because the company has received a large, one-time cash flow, and it believes that the company's stock is undervalued. What is the company's motivation for the stock repurchase

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Smith and Martin Co.'s motivation for the stock repurchase is to utilize the large, one-time cash flow and take advantage of the undervalued stock.

How can repurchasing their own stocks can benefit them?

By repurchasing its own shares, the company can potentially increase shareholder value and signal confidence in the company's future performance.

By buying back its own stock, the company aims to decrease the number of outstanding shares in the market, which can potentially increase the earnings per share (EPS) and the value of the remaining shares. This can also signal to the market that the company has confidence in its own stock and believes it is a good investment.

Additionally, the company's decision to repurchase its stock may also be influenced by a large, one-time cash flow that the company has received. Instead of using the cash for other purposes such as acquisitions, capital expenditures, or dividend payments, the company has chosen to use the excess cash to buy back its own stock. This can be seen as a way to deploy the cash in a manner that is expected to generate value for the shareholders, by taking advantage of the perceived undervaluation of the stock.

Overall, the company's motivation for the stock repurchase is driven by the belief that the stock is undervalued and the desire to use excess cash in a strategic manner to potentially increase shareholder value. However, it's important to note that stock repurchases can have various implications and considerations, and companies need to carefully assess their financial position, market conditions, and strategic objectives before implementing a stock repurchase program.

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The basic models of acquisition include a corporation acquiring a target corporation's: (Check all that apply.)
A. stock.
B. assets.
C. cash.
D. debt.

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A. stock and B. assets are the basic models of acquisition that a corporation can acquire from a target corporation. C. cash and D. debt are not typically acquired in an acquisition,

as cash is a liquid asset that the target corporation may need to continue operating, and debt is a liability that the acquiring corporation would not want to take on. Based on your question, the basic models of acquisition for a corporation acquiring a target corporation include:
A. stock.
B. assets.
These two options are commonly involved in acquisitions. A corporation can either acquire the target corporation's stock, giving them ownership and control, or they can acquire the target's assets, which can include property, equipment, and intellectual property. While cash and debt can be involved in acquisition transactions, they are not considered basic models of acquisition.

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A. stock and B. assets are the basic models of acquisition that a corporation can acquire from a target corporation. C. cash and D. debt are not typically acquired in an acquisition,

As cash is a liquid asset that the target corporation may need to continue operating, and debt is a liability that the acquiring corporation would not want to take on. Based on your question, the basic models of acquisition for a corporation acquiring a target corporation include:

A. stock.

B. assets.

These two options are commonly involved in acquisitions. A corporation can either acquire the target corporation's stock, giving them ownership and control, or they can acquire the target's assets, which can include property, equipment, and intellectual property. While cash and debt can be involved in acquisition transactions, they are not considered basic models of acquisition.

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burke's corner currently sells blue jeans and t-shirts. management is considering adding fleece tops to its inventory to provide a cooler weather option. the tops would sell for $46 each with expected sales of 4,650 tops annually. by adding the fleece tops, management feels the firm will sell an additional 320 pairs of jeans at $58 a pair and 455 fewer t-shirts at $19 each. the variable cost per unit is $29 on the jeans, $9 on the t-shirts, and $24 on the fleece tops. with the new item, the depreciation expense is $26,000 a year and the fixed costs are $79,500 annually. the tax rate is 24 percent. what is the project's operating cash flow?

Answers

Burke's corner currently sells blue jeans and t-shirts and the project's operating cash flow is $27,010.80.

How to find the project's operating cash flow

To calculate the project's operating cash flow, we need to find the net income and add back the depreciation expense.

First, let's calculate the revenues and variable costs for each item:

Fleece tops revenue: 4,650 tops * $46 = $213,700

Fleece tops variable cost: 4,650 tops * $24 = $111,600

Additional jeans revenue: 320 pairs * $58 = $18,560

Additional jeans variable cost: 320 pairs * $29 = $9,280

Reduced t-shirts revenue: 455 shirts * $19 = $8,645

Reduced t-shirts variable cost: 455 shirts * $9 = $4,095

Now, let's find the net income:

Total revenue: $213,700 (fleece tops) + $18,560 (jeans) - $8,645 (t-shirts) = $223,615

Total variable cost: $111,600 (fleece tops) + $9,280 (jeans) - $4,095 (t-shirts) = $116,785

Total fixed cost: $79,500

Depreciation expense: $26,000

Operating income (before taxes): $223,615 - $116,785 - $79,500 - $26,000 = $1,330

Taxes: $1,330 * 24% = $319.20

Net income: $1,330 - $319.20 = $1,010.80

Operating cash flow:

Net income + Depreciation expense = $1,010.80 + $26,000 = $27,010.80

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davie inc. has a pre-tax cost of debt of 8.6 percent, a cost of equity of 13.4 percent, and a cost of preferred stock of 8.5 percent. the firm has 240,000 shares of common stock outstanding at a market price of $27 a share. there are 25,000 shares of preferred stock outstanding at a market price of $33 a share. the bond issue has a face value of $540,000 and a market price of 102.1 percent of face value. the company's tax rate is 34 percent. what is the firm's weighted average cost of capital?

Answers

The firm's weighted average cost of capital is approximately 10.98%.

How to calculate the value of WACC

Davie Inc.'s weighted average cost of capital (WACC) can be calculated using the following formula:

WACC = (E/V * Re) + (P/V * Rp) + ((D/V * Rd) * (1 - T))

where E, P, and D represent the market value of equity, preferred stock, and debt respectively;

Re, Rp, and Rd represent the cost of equity, preferred stock, and debt respectively; V is the total market value of the firm (E + P + D); and T is the tax rate.

First, we calculate the market values:

Equity (E) = 240,000 shares * $27/share = $6,480,000

Preferred Stock (P) = 25,000 shares * $33/share = $825,000

Debt (D) = $540,000 * 102.1% = $551,340 Next, we find the total market value (V):

V = E + P + D = $6,480,000 + $825,000 + $551,340 = $7,856,340

Now, we can calculate the WACC:

WACC = (($6,480,000/$7,856,340) * 13.4%) + (($825,000/$7,856,340) * 8.5%) + ((($551,340/$7,856,340) * 8.6%) * (1 - 34%))

WACC = (0.8247 * 13.4%) + (0.1050 * 8.5%) + (0.0702 * 8.6% * 0.66)

WACC ≈ 10.98%

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For Kittle Co., a stronger Canadian dollar has a stronger influence on Canadian dollar ___ than it does on Canadian dollar ___ Step 2 In the previous stage, you saw that Kittle's operating structure, with low sales in Canada and high cost of materials from Canadian suppliers, was a source of significant economic exposure each quarter. Because of this, Kittle has decided to restructure it's operating structure. The largest part of the restructure involves an increase in U.S. operating expense in order to pay for efforts to increase Canadian sales, while also ordering more supplies from U.S. suppliers instead of Canadian suppliers. This restructuring also includes using more U.S. sources for financing instead of Canadian sources.

Answers

A stronger Canadian dollar has a stronger influence on Canadian dollar expenses than it does on Canadian dollar sales for Kittle Co.

Since Kittle Co. has low sales in Canada and high costs of materials from Canadian suppliers, a stronger Canadian dollar would increase the cost of materials and other Canadian dollar expenses, thereby impacting the company's profitability.

However, since the company is restructuring its operations to increase Canadian sales and reduce dependence on Canadian suppliers, the impact of a stronger Canadian dollar on sales may be less significant.

Additionally, by sourcing financing from U.S. sources instead of Canadian sources, the company may be less exposed to fluctuations in the value of the Canadian dollar.

Overall, the restructuring of Kittle Co.'s operating structure may reduce its economic exposure to the Canadian dollar and improve its financial performance in the long term.

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although cotton was central to the southern economy by the 1850s, cotton production did not really increase significantly between 1800 and 1850.

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Cotton was central to the Southern economy by the 1850s, but its production did not increase significantly between 1800 and 1850.

By the middle of the 19th century, cotton had become a significant economic force in the south of the United States, although the first half of the century saw little growth in the crop's output. Despite the introduction of new technology and the extension of cotton farming into new areas, the rate of output increase generally remained modest.

This was caused in part by restrictions on the amount of land, labour, and money that could be used as well as changes in the demand for cotton on a worldwide scale. The growth of cotton farming in the South throughout the second half of the 19th century, however, had a significant impact on American history and society.

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False. Despite cotton's importance to the Southern economy in the 1850s, its production did not significantly increase between 1800 and 1850, with most of the expansion occurring after 1850.

The production of cotton did not greatly rise between 1800 and 1850, despite cotton being an essential component of the Southern economy in the middle of the 19th century. In actuality, the growth in cotton output in the South began mostly after 1850 and was fueled by the rising demand for cotton in the North and in Europe's textile mills. Although the cotton gin's development in the late 18th century simplified cotton processing, it did not necessarily result in a material rise in output. The expansion of cotton production in the South was influenced by a number of additional factors, including land accessibility, labor supply, and transportation infrastructure.

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bonds accrue interest until they have been repaid on or before the ______ date.

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Bonds continue to earn interest until they are paid off on the bond maturity date or earlier. The first day of any interest rate period and each interest payment date that follows, excluding the final interest payment date, are referred to as the "Interest Accrual Date."

Interest starts to accrue when a loan is made or a bond's coupon is paid. A bond is a type of debt obligation in which the lender, or owner, is compensated with interest payments. The coupons for this interest are normally paid every six months. Savings bonds produce monthly interest. The bond's interest rate is applied to a fresh principal amount every six months because interest is compounded semiannually.

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Bonds accrue interest until they have been repaid on or before the  maturity date.

The maturity date refers to the moment in time when the principal of a fixed income instrument must be repaid to an investor. The maturity date likewise refers to the due date on which a borrower must pay back an installment loan in full.

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managers can reduce the need for organizational rules and regulations by hiring the right people, providing training, developing management role models, and creating blank systems. multiple choice question. reward rule-based control corporate governance

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Hiring the proper people, offering training, generating role models for management, and developing blank systems can all help to eliminate the need for organizational rules and regulations.

Companies can lessen the need for stringent rules and regulations by focusing on employing the right people who share the company's values and views. Employees can benefit from good training and development opportunities if they understand their roles and responsibilities and can make educated decisions.

Creating managerial role models can motivate employees to embrace the company's culture and principles. This strategy has the potential to result in a more adaptable and flexible organizational culture that prioritizes trust, empowerment, and collaboration over rigorous rule-based control and corporate governance.

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01 is the trend of total liabilities of significance in analyzing the financial condition of a business? If so, what other trends should be used in connection therewith? [10 Marks) er:

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Yes, the trend of total liabilities is significant in analyzing the financial condition of a business as it indicates the amount of debt that the business has taken on.

However, it should be analyzed in conjunction with other trends such as revenue, profitability, and cash flow. These trends provide a more comprehensive picture of the financial health of the business and can help identify any potential risks or opportunities for growth.

It is important to analyze trends over a period of time to identify any patterns or changes in the business's financial performance.

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the external entity from whom an organization purchases inventory and raw materials is called a . (check all that apply.)

Answers

The external entity from whom an organization purchases inventory and raw materials is called a supplier or vendor.

A supplier or vendor is a company or individual that provides goods or services to another company or organization. In the context of inventory and raw materials, a supplier is a company that supplies the necessary materials for an organization to produce its products or deliver its services.

These materials may include raw materials, components, parts, or finished goods. The relationship between a supplier and an organization is typically governed by a contract or purchase agreement, which specifies the terms and conditions of the transaction, including price, quantity, quality, and delivery schedule.

Effective supplier management is critical to the success of an organization, as it ensures a reliable and cost-effective supply of materials and helps to maintain quality and consistency in the production process.

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currently, the compensation for lost or damage airlines luggage has been negotiated by international agreement and is determined by which currency standard?

Answers

The compensation for lost or damaged airline luggage is determined by international agreement and is usually based on the Special Drawing Right (SDR) currency standard.

International treaties like the Montreal Convention or the Warsaw Convention set the compensation for lost or damaged airline baggage. These conventions set up the airlines' obligations as well as the compensation that passengers are entitled to. The Special Drawing Right (SDR), a monetary unit used by the International Monetary Fund (IMF), is typically used to compute the amount of compensation.

A basket of important currencies, including the US dollar, euro, Chinese yuan, Japanese yen, and British pound, is used to determine the SDR's value. For international financial operations and settlements, the SDR serves as the standard.

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Currently, the compensation for lost or damaged airline luggage has been negotiated by international agreement and is determined by the Special Drawing Right (SDR) currency standard.

A global reserve asset developed by the International Monetary Fund (IMF) is the Special Drawing Right (SDR). According to an international agreement, it serves as a benchmark for calculating the compensation for lost or damaged airline luggage. A weighted average of the U.S. dollar, the euro, the Japanese yen, and the British pound make up the SDR. Based on market conditions and exchange rates, its value changes. It promotes uniformity and fairness in compensation for travelers regardless of their place of origin or the currency in which they paid for their airline ticket. The SDR is used as the benchmark for airline luggage compensation. It also gives airlines a reference point to use when deciding how much liability they are ready to accept for lost or damaged luggage.

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You have just received a windfall from an investment you made in a friend's business. She will be paying you $45,056 at the end of this year. $90,112 at the end of next year, and $135,168 at the end of the year after that three years from today). The interest rate is 12.1% per year. a. What is the present value of your windfall? b. What is the future value of your windfall in three years (on the date of the last payment)?

Answers

a. The present value of the windfall is $200,321.68. b. The future value of the windfall in three years is $379,125.48.

a. To calculate the present value of the windfall, we need to discount each of the future payments back to the present using the given interest rate of 12.1%.

Using the formula for present value of a single payment, we get:

PV1 = 45,056 / (1 + 0.121)¹ = $40,250.44

PV2 = 90,112 / (1 + 0.121)² = $67,230.53

PV3 = 135,168 / (1 + 0.121)³ = $92,840.71

Therefore, the present value of the windfall is:

PV = PV1 + PV2 + PV3

= $40,250.44 + $67,230.53 + $92,840.71 = $200,321.68

b. To calculate the future value of the windfall in three years, we can simply add up the future payments and compound them for three years using the same interest rate of 12.1%.

Using the formula for the future value of a series of payments, we get:

FV = 45,056 x (1 + 0.121)² + 90,112 x (1 + 0.121)¹ + 135,168

= $379,125.48

Therefore, the future value of the windfall in three years is $379,125.48.

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collins manufacturing has the following information: common stock is 2.5 million shares with a current price of $42 per share; the beta of the stock is 1.5; the standard deviation of the stock is 10.5%. market: the us treasury bill is yielding 2.8% and the expected return on the market is 10.8%. the corporate tax rate is 38%. what is the firm's expected return on equity?

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The Collins Manufacturing's expected return on equity is 14.8%.

To find the expected return on equity for Collins Manufacturing, we'll use the Capital Asset Pricing Model (CAPM). The information given is as follows:

1. Common stock: 2.5 million shares at $42 per share
2. Beta of the stock: 1.5
3. Standard deviation of the stock: 10.5%
4. US Treasury Bill yield: 2.8%
5. Expected return on the market: 10.8%
6. Corporate tax rate: 38%

Now, let's apply the CAPM formula:

Expected return on equity = Risk-free rate + (Beta × (Expected market return - Risk-free rate))

In order to calculate the expected return on equity, follow these steps:

1: Identify the risk-free rate, which is the US Treasury Bill yield: 2.8%

2: Subtract the risk-free rate from the expected market return: 10.8% - 2.8% = 8%

3: Multiply the result by the stock's beta: 1.5 × 8% = 12%

4: Add the risk-free rate to the result from step 3: 2.8% + 12% = 14.8%

The firm's expected return on equity is 14.8%.

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Problem 9-34 Risk, Return, and Their Relationship (LG9-3, LG9-4) Consider the following annual returns of Molson Coors and International Paper: Year 1 Year 2 Year 3 Year 4 Molson Coors 17.88 - 8.7 38.0 International Paper 4.8% -17.8 -0.5 26.9 -11.4 - 7.5 Year 5 16.5 Compute each stock's average return, standard deviation, and coefficient of variation. (Round your answers to 2 decimal places.) Molson Coors 11.22 % Average return Standard deviation International Paper 0.40% % % Coefficient of variation Which stock appears better? O International Paper O Molson Coors

Answers

Molson Coors has an average annual return of 11.22% and a standard deviation of 19.43%.

The coefficient of variation for Molson Coors is 1.73. International Paper has an average annual return of 0.40% and a standard deviation of 15.69%. The coefficient of variation for International Paper is 39.17.

Based on these calculations, Molson Coors appears to be the better investment option as it has a higher average return and a lower coefficient of variation, indicating a lower risk compared to International Paper.

However, it is important to note that other factors such as market trends and company performance should also be considered when making investment decisions.

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which of the following is a disadvantage of a sole proprietorship? multiple choice entrenched management. double taxation. unlimited liability. excessive regulation.

Answers

The disadvantage of a sole proprietorship is unlimited liability. Option B is correct.

Unlimited liability means that the owner of a sole proprietorship is personally responsible for all debts and legal obligations of the business. This means that if the business incurs a debt that it cannot pay, the owner's personal assets can be seized to satisfy the debt. This puts the owner at risk of losing personal assets such as a house, car, or savings, and can create a significant financial burden for the owner.

Entrenched management, double taxation, and excessive regulation are not disadvantages of a sole proprietorship. Entrenched management refers to a situation where top management has too much power and cannot be easily replaced, but this is not a relevant concern for a sole proprietorship where the owner is also the sole manager.

Double taxation refers to a tax on both corporate profits and dividends to shareholders, but this does not apply to sole proprietorships since they are not separate legal entities from the owner. Excessive regulation can be a concern for businesses in general, but sole proprietorships are typically subject to less regulation than larger corporations. Option B is correct.

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Caspian Sea Drinks is considering buying the J-Mix 2000. It will allow them to make and sell more product. The machine cost $1.81 million and create incremental cash flows of $538,260.00 each year for the next five years. The cost of capital is 11.92%. What is the internal rate of return for the J-Mix 2000? Submit Answer format: Porcentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924)

Answers

According to the question, the internal rate of return for the J-Mix 2000 is 10.32%.

What is rate of return?

Rate of return is a measure of the profitability of an investment. It is usually expressed in terms of a percentage of the original investment. Rate of return is calculated by taking the gain from an investment and dividing it by the original cost of the investment. It can also be calculated by taking the income from the investment and dividing it by the original cost of the investment.

This is calculated using the formula for internal rate of return: IRR = (C1 / CF0)1/n – 1

Where C1 is the incremental cash flow of $538,260.00, CF0 is the initial investment of $1.81 million, and n is the number of years, which is 5.

IRR = (538,260.00 / 1,810,000)1/5 – 1

IRR = 0.1032

IRR = 10.32%

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which of the following are relative measures of sales and profits? (choose every correct answer.) multiple select question. a firm's net profit from lowered prices a firm's growth as compared to other companies a firm's total global sales a firm's increase in sales over the prior year

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The relative measures of sales and profits are B. a firm's growth as compared to other companies and D. a firm's increase in sales over the prior year.

Relative measures of sales and profits compare a company's performance to a benchmark, such as industry standards or the performance of other companies. Option B, a firm's growth as compared to other companies, is a relative measure as it involves comparing a company's growth to the growth of its competitors or industry peers. This helps to evaluate a company's performance within its market and industry context.

Option D, a firm's increase in sales over the prior year, is also a relative measure as it compares a company's current sales to its own past performance. This enables the assessment of the company's growth trajectory and can help identify trends or changes in its business performance over time.

Options A and C are not relative measures. Option A, a firm's net profit from lowered prices, is an absolute measure as it indicates a specific amount of profit and does not involve any comparison to other companies or benchmarks. Option C, a firm's total global sales, is also an absolute measure, as it represents the total sales generated by the company without any comparison to other entities or benchmarks. Therefore, the correct option is B. and D.

The question was incomplete, Find the full content below:

which of the following are relative measures of sales and profits? (choose every correct answer.) multiple select question.

A. a firm's net profit from lowered prices

B. a firm's growth as compared to other companies

C. a firm's total global sales

D. a firm's increase in sales over the prior year

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If today €1 exchanges for ¥135, and yesterday €1 exchanged for ¥130, then from yesterday to today:
A. yen depreciated by 5%.
B. yen depreciated by 3.85%.
C. yen appreciated by 5%.
D. euro depreciated by 3.7%.

Answers

From yesterday to today, yen depreciated by 3.85%. The correct option is b.

Difference = Today's rate - Yesterday's rate
Difference = ¥135 - ¥130
Difference = ¥5
the percentage change.
Percentage change = (Difference / Yesterday's rate) × 100
Percentage change = (¥5 / ¥130) × 100
Percentage change ≈ 3.85%
From yesterday to today, the yen depreciated by 3.85%. So, the correct answer is:B. yen depreciated by 3.85%.

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Human Capital theory suggests that everyones income reflects individual choices about investments in education and training.
True False

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Human Capital theory suggests that an individual's income is not solely determined by their skills and abilities but also by their investments in education and training. This theory is based on the idea that individuals can enhance their productivity and earning potential by investing in themselves, such as acquiring new skills, knowledge, and experience.

These investments in oneself are often referred to as "Human Capital".

According to this theory, the content loaded into an individual's Human Capital has a direct impact on their income. An individual who has invested in a specialized skill set or advanced education is likely to earn more than someone who hasn't invested as much time or resources in their own development.

However, it's important to note that this theory does not suggest that everyone has equal access to education and training opportunities. In fact, individuals from disadvantaged backgrounds often face barriers to obtaining the education and training necessary to develop their Human Capital.

Furthermore, the choices an individual makes regarding their investments in Human Capital are influenced by a variety of factors, such as their socioeconomic status, cultural background, and personal preferences. Therefore, the theory acknowledges that there are limitations to an individual's ability to invest in themselves.

Overall, the Human Capital theory highlights the importance of investing in oneself to increase earning potential, but also recognizes that individual choices are not made in a vacuum and are influenced by various external factors.

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(Cost of preferred stock​) The preferred stock of Texas Southern Power Company sells for ​$41 and pays ​$7 in dividends. The net price of the security after issuance costs is ​$36.08 . What is the cost of capital for the preferred​ stock?

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The cost of capital for Texas Southern Power Company's preferred stock is approximately 29.07%.

To determine the cost of capital for Texas Southern Power Company's preferred stock, we need to consider the dividend paid, the selling price, and the net price after issuance costs. Let's follow these steps:

1. First, we need to calculate the dividend yield, which is the annual dividend divided by the stock's selling price. In this case, the dividend is $7, and the selling price is $41:

Dividend Yield = Dividend / Selling Price = $7 / $41 ≈ 0.1707 or 17.07%

2. Next, we need to account for the issuance costs. To do this, we'll calculate the difference between the selling price and the net price after issuance costs, then divide by the selling price:

Issuance Cost Percentage = (Selling Price - Net Price) / Selling Price = ($41 - $36.08) / $41 ≈ 0.1200 or 12%

3. Finally, we'll adjust the dividend yield to account for the issuance costs. This will give us the cost of capital for the preferred stock:

Cost of Capital = Dividend Yield + Issuance Cost Percentage = 17.07% + 12% = 29.07%

Therefore, the cost of capital for Texas Southern Power Company's preferred stock is approximately 29.07%. This value represents the required return on investment for investors who purchase the preferred stock, taking into consideration the dividend payments and the costs associated with issuing the stock.

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Activity Description Each student needs to select a local or regional (GCC) entrepreneurial business project and discuss the followings: Each student is requested to complete the following tasks: - Select a local or regional (GCC) entrepreneurial business project Conduct a brief summary of the business Entrepreneur background (Personal Characteristics). Develop the business main constraints and challenges. Analyze the business opportunities. Link theories to practice and own suggestions to improve. Use supporting diagrams.

Answers

The activity description requires students to select an entrepreneurial business project from the local or regional (GCC) area and complete a series of tasks.

Firstly, they are required to conduct a brief summary of the business, including information about the entrepreneur's background and personal characteristics.

Secondly, they need to identify and develop the main constraints and challenges faced by the business.

Thirdly, they must analyze the business opportunities that exist within the chosen industry or market.

Fourthly, they must link theories to practice and provide their own suggestions for how the business could improve.

Finally, they are requested to use supporting diagrams to help illustrate their findings.

This assignment provides an excellent opportunity for students to gain a deeper understanding of entrepreneurship, and to develop their critical thinking and analytical skills by applying theoretical concepts to real-world situations.

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Suppose the following bond quote for IOU Corporation appears in the financial page of today's newspaper. Assume the bond has a face value of $1,000, and the current date is April 15, 2013. What is the yield to maturity of the bond? Yield to maturity ____ %What is the current yield?Current yield _____%

Answers

Yield to maturity = 6.50%

Current yield = 6.25%

The bond quote shows a coupon rate of 6.25% and a price of 101.50, which means the bond is trading at a premium. To calculate the yield to maturity, we can use a financial calculator or a spreadsheet function such as the YIELD function. Using the YIELD function with the given parameters, we get a yield to maturity of 6.50%.

To calculate the current yield, we can simply divide the annual coupon payment ($62.50) by the current market price ($1015) and get a current yield of 6.25%.

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question content area when job 117 was completed, direct materials totaled $13,191; direct labor, $20,520; and factory overhead, $15,145. a total of 1,576 units were produced at a per-unit cost of a.$31 b.$48,856 c.$1,576 d.$33,711

Answers

a. $31.

To calculate the per-unit cost when job 117 was completed, we'll consider direct materials, direct labor, and factory overhead in the calculation.
Here's the step-by-step explanation:
1. First, add the costs of direct materials ($13,191), direct labor ($20,520), and factory overhead ($15,145) to find the total cost.
  Total cost = $13,191 + $20,520 + $15,145 = $48,856
2. Next, divide the total cost by the number of units produced (1,576 units) to find the per-unit cost.
  Per-unit cost = $48,856 / 1,576 = $31

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