Melanie works in the marketing channel as an importer. Melanie's job as an importer is to discover and purchase authentic handmade rugs from all around the world and bring them to Canada.
She acts as a liaison between producers and retailers, adding value to the carpets by selecting high-quality materials and offering a varied selection of options to her customers.
Melanie's job as an importer entails navigating complex foreign trade procedures, managing logistics, and ensuring that products fulfill Canadian safety and quality standards. Once the carpets arrive in Canada, she sells them through her physical stores and website, making her a merchant as well.
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Coway Tours choosing between two bus One is more tive to purchase and maintain but much longer than the Gawrys su 11.1 The company into con with one the models for the forature. Based on the costs of each shown below, which should choose? (Note: dollar amounts are in thousands Model Year Year 1 Od Year 2 Year 3 - 5100 Yaar -30 Year Short and Sweet -2 -$38 Yew - $37 -510 - 138 -333 Years Based on the costs of each model which should choose?
Based solely on the costs provided, it appears that Short and Sweet (Model Year Year 1) is cheaper in the first year compared to Gawrys su 11.1 (Model Year Year 2). However, Gawrys su 11.1 has lower costs in Year 2 and Year 3 compared to Short and Sweet.
What are the costs associated with each bus?
Based on the costs provided, it seems like there are two bus models to choose from:
Model Year Year 1, referred to as "Short and Sweet," and Model Year Year 2, referred to as "Gawrys su 11.1."
The costs associated with each model are as follows:
Short and Sweet (Model Year Year 1):
Year 1: -$2,000 (thousands of dollars)
Year 2: -$38,000
Year 3: -$37,000
Gawrys su 11.1 (Model Year Year 2):
Year 1: -$5,100
Year 2: -$30,000
Year 3: -$10,000
Based solely on the costs provided, it appears that Short and Sweet (Model Year Year 1) is cheaper in the first year compared to Gawrys su 11.1 (Model Year Year 2). However, Gawrys su 11.1 has lower costs in Year 2 and Year 3 compared to Short and Sweet.
In order to make a decision, other factors such as the anticipated maintenance costs, fuel efficiency, seating capacity, and other operational considerations would need to be taken into account. Additionally, the company's specific requirements and budget constraints would also play a significant role in the decision-making process. It is important to consider all relevant factors and conduct a thorough analysis before making a final decision on which model to choose.
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a large automobile repair shop installs about 1,250 mufflers per year, 18 percent of which are for imported cars. (assume a very steady demand rate.) all of the imported-car mufflers are purchased from a single local supplier at a cost of $18.50 each. the shop uses a holding cost based on a 25 percent cost of capital (i.e., 25% of the purchase cost). the fixed cost for placing an order is estimated to be $28. the following questions are about imported-car mufflers only. a. determine the optimal number of imported-car mufflers the shop should purchase each time an order is placed, and the time between placement of orders. b. if the (replenishment) lead-time is six weeks, what are the reorder point and on-hand inventory at the time of placing an order? c. the current reorder policy is to buy imported-car mufflers only once a year. what is the additional annual inventory cost (which consists of annual holding cost and order (setup) cost) incurred by this policy? d. due to some administrative reason, the manager decides to order every quarter (3months). repeat (c) with this order interval. do you see anything about the robustness of the eoq model?
Here's the answer to each of the question:
a. The optimal number of imported-car mufflers the shop should purchase each time an order is placed can be calculated using the Economic Order Quantity (EOQ) model.
EOQ = √[(2DS)/H]
where D = annual demand, S = ordering cost per order, and H = holding cost per unit per year.
Given,
Annual demand (D) = 18% of 1,250 = 225 mufflers per year
Ordering cost (S) = $28 per order
Holding cost (H) = 25% of $18.50 = $4.625 per muffler per year
Substituting the values,
EOQ = √[(222528)/4.625] = 103 mufflers per order (rounded to nearest integer)
The time between placement of orders can be calculated as:
Time between orders = EOQ / D = 103/225 = 0.457 years or approximately 5.48 months.
b. The reorder point is the level of inventory at which an order should be placed to avoid stockouts during the lead time. The lead time is given as 6 weeks, which is approximately 0.115 years. The reorder point can be calculated as:
Reorder point = D * Lead time = 225 * 0.115 = 25.875 or approximately 26 mufflers
On-hand inventory at the time of placing an order should be equal to the EOQ minus the reorder point, which is:
On-hand inventory = EOQ - Reorder point = 103 - 26 = 77 mufflers
c. If the current reorder policy is to buy imported-car mufflers only once a year, the additional annual inventory cost can be calculated by comparing the annual cost of the current policy to the annual cost of the EOQ model.
Annual cost of current policy = (D * H) + (D/Q) * S
= (225 * $4.625) + (225/1250) * $28
= $1,309.38
Annual cost using EOQ model = √(2DSH)
= √[(222528*4.625)]
= $239.45
Therefore, the additional annual inventory cost of the current policy compared to the EOQ model is:
$1,309.38 - $239.45 = $1,069.93
d. If the manager decides to order every quarter, the new time between orders would be 3 months or 0.25 years. The EOQ would remain the same, but the annual demand would need to be adjusted:
Quarterly demand = (225/4) = 56.25 mufflers per quarter
Time between orders = EOQ / Quarterly demand = 103/56.25 = 1.836 quarters
The new annual cost using EOQ model can be calculated as:
Annual cost using EOQ model = (D/Q) * S + (Q/2) * H
= (225/103) * $28 + (103/2) * $4.625
= $132.99
Therefore, the additional annual inventory cost of the quarterly policy compared to the EOQ model is:
$132.99 - $239.45 = -$106.46
The negative value indicates that the quarterly policy is actually cheaper than the EOQ model. This shows that the EOQ model is not always robust to changes in the ordering interval, lead time, or other factors. In this case, ordering more frequently than the EOQ suggests leads to a lower inventory cost.
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the return on an investment is the gain (or loss) on the investment divided by its value. for example, if you buy a share of stock for $100 and the price of the stock increases to $110, your return on the stock is: return
The return on an investment is a key factor to consider when making investment decisions. It is calculated as the gain or loss on the investment divided by its value. In simple terms, it tells us how much money we have made or lost on an investment in relation to the initial amount invested.
if you purchase a share of stock for $100 and its price increases to $110, your return on investment is 10%. Similarly, if the price of the stock drops to $90, your return on investment is -10%. The higher the return on an investment, the better it is for the investor.
Return on investment is an important metric for evaluating the performance of an investment portfolio. It helps investors understand the profitability of their investments and make informed decisions about where to allocate their funds. In addition, it can be used to compare different investment opportunities and determine which ones are more profitable.
Overall, understanding the return on investment is crucial for anyone who wants to invest their money wisely and achieve their financial goals. It is a powerful tool that can help investors make informed decisions and maximize their returns.
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Cost of exhibition catalogues. A catalogue for each exhibitionwill cost £5,000 to produce. The catalogue for the first exhibitionwill have been paid for in December out of Caroline’s remaining£10,000. The catalogues for the second and third exhibitions will also be paid for one month in advance.Gallery premises costs. Business rates are to be paid monthly; the cost is £750 per month. Electricity costs will average out at £60 per month and Caroline expects to receive a bill for the first three months' electricity in March, and to pay it in April.Wages. Caroline will pay a part time assistant £550 per month.Other expenses. Caroline estimates that a total of £1,000 in other expenses will be paid each month.Drawings. She plans to draw £700 per month in cash.Private view expenses. In each of the three months Caroline will have to spend an estimated £450 on buying in wine and other refreshments for the private view. This figure also includes the cost of hourly-paid waiting staff to take drinks round to guests.Advertising. The initial round of press adverts will appear in December, and the £3,000 cost will be paid for out of Caroline’s remaining £10,000. Each month £400 will be paid for brochures and postage costs to send out to people on the gallery’s mailing list.The bank balance at 1 January 20X4 will be £2,000 after advertising and catalogue costs have been paid for. The advertising and catalogue costs form part of Caroline’s start-up capital.The gallery premises are to be depreciated over 25 years on the straight-line basis, with an assumption of nil residual value.Prepare for Caroline:a budget cash flow statement for the three months of January, February and March 20X4a budget statement of profit or loss for the three months ending 31 March 20X4a budget statement of financial position at 31 March 20X4 and:briefly discuss whether or not you think Caroline’s business is going to be successful, identifying any areas where cash flow might be a problem
Budget cash flow statement:
January:
Inflow: None
Outflow: Business rates (£750), Electricity (£60), Wages (£550), Other expenses (£1,000), Drawings (£700), Private view expenses (£450), Brochures and postage (£400), Catalogue for second exhibition (£5,000)
Total outflow: £8,910
Net cash flow: -£8,910
February:
Inflow: None
Outflow: Business rates (£750), Electricity (£60), Wages (£550), Other expenses (£1,000), Drawings (£700), Private view expenses (£450), Brochures and postage (£400), Catalogue for third exhibition (£5,000)
Total outflow: £8,910
Net cash flow: -£8,910
March:
Inflow: None
Outflow: Business rates (£750), Electricity (£60), Wages (£550), Other expenses (£1,000), Drawings (£700), Private view expenses (£450), Brochures and postage (£400)
Total outflow: £3,910
Net cash flow: -£3,910
Budget statement of profit or loss:
Total revenue: None
Total expenses: Catalogues (£15,000), Business rates (£2,250), Electricity (£180), Wages (£1,650), Other expenses (£3,000), Private view expenses (£1,350), Advertising (£3,000), Brochures and postage (£1,200)
Net loss: £27,630
Budget statement of financial position at 31 March 20X4:
Assets: None
Liabilities: None
Equity: Start-up capital (£20,000), Net loss (£27,630)
Total equity: -£7,630 (Negative)
Caroline’s business appears to be facing cash flow problems. Each month, the outflow is significantly greater than the inflow, which means that the business will need additional funding to continue operating.
In addition, the budget statement of financial position at 31 March 20X4 shows negative equity, which means that the business owes more than it owns. Caroline may need to consider alternative funding sources or adjust her expenses to make the business profitable.
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The application of sugar tariffs would cost all of the following individuals except:
A. an American sugar producer
B. an American consumer of foods made with sugar
C. No one would benefit from the application of sugar tariffs
D. a Brazilian sugar farmer
The application of sugar tariffs would cost all of the following individuals except a Brazilian sugar farmer. The reason for this is that sugar tariffs are essentially taxes placed on imported sugar, making it more expensive for foreign producers to sell their sugar in the domestic market. The correct option is d.
This has the effect of protecting local sugar farmers from foreign competition, as their domestically produced sugar becomes relatively cheaper than imported sugar.
Therefore, if you are a Brazilian sugar farmer, the application of sugar tariffs would have no impact on you, as you are not exporting your sugar to the country that has implemented the tariffs. Instead, it is the foreign sugar producers who would be negatively affected, as their sugar would become more expensive and therefore less competitive in the domestic market.
On the other hand, consumers who purchase sugar from foreign countries would likely face higher prices due to the tariffs, as they would be paying not only the cost of the sugar itself but also the added tariff. Domestic sugar farmers, meanwhile, would benefit from increased demand for their relatively cheaper sugar.
Overall, the application of sugar tariffs can have significant effects on both domestic and foreign sugar producers, as well as on consumers. However, Brazilian sugar farmers are not among those who would be affected by such tariffs.The correct option is d.
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the key proposition of new growth theory that makes growth persist is that ______ is not subject to diminishing returns.
The key proposition of new growth theory that makes growth persist is that Knowledge and innovation is not subject to diminishing returns.
The key proposition of new growth theory that makes growth persist is that knowledge and innovation are not subject to diminishing returns. Unlike traditional factors of production such as capital and labor, the more knowledge and innovation are applied, the greater the potential for growth and productivity. This is because knowledge and innovation can be shared and replicated infinitely without losing their value, leading to an endless cycle of growth and development.
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the key proposition of the new growth theory that makes growth persist is that technological innovation is not subject to diminishing returns.
The theory suggests that as more knowledge and innovation are created, there are increasing returns to scale, meaning that each additional unit of input leads to a larger increase in output.
This is in contrast to traditional neoclassical growth theory, which assumes that all factors of production are subject to diminishing returns, and therefore, growth will eventually slow down.
What are diminishing returns?The law of diminishing returns is an economic principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain constant.
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T/F In general, a tax raises the price the buyers pay, lowers the price the sellers receive, and reduces the quantity sold.
The given statement- "In general, a tax raises the price the buyers pay, lowers the price the sellers receive, and reduces the quantity sold" is True.
When a tax is imposed on a product, it raises the cost of production for the seller, who will then try to pass on the cost to the buyers in the form of a higher price.
This increase in price paid by the buyers results in a decline in the quantity demanded, as consumers may choose to reduce their consumption of the product or switch to a substitute with a lower price.
At the same time, the higher price may also deter some potential buyers from entering the market, further reducing the quantity sold.
On the seller side, the lower price they receive after paying the tax may cause them to reduce production or exit the market entirely if their profits fall too much.
Overall, a tax creates a wedge between the price paid by buyers and the price received by sellers, leading to a reduction in the quantity sold and potential market inefficiencies.
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. what is the present (year 0) value of the cash flow stream if the opportunity cost rate is 10 percent?
To calculate the present value of a cash flow stream, you need to discount each cash flow by the opportunity cost rate. The present value is the sum of all discounted cash flows.
For example, if the cash flow stream is $100 for each of the next five years, the calculation would be:
Year 1: $100 / (1 + 0.1)^1 = $90.91
Year 2: $100 / (1 + 0.1)^2 = $82.64
Year 3: $100 / (1 + 0.1)^3 = $75.13
Year 4: $100 / (1 + 0.1)^4 = $68.30
Year 5: $100 / (1 + 0.1)^5 = $62.09
Present value = $90.91 + $82.64 + $75.13 + $68.30 + $62.09 = $379.07
Therefore, the present (year 0) value of the cash flow stream is $379.07 if the opportunity cost rate is 10 percent. The opportunity cost rate represents the return that could be earned on an alternative investment with similar risk, so it is used as a benchmark to determine whether the cash flow stream is worth investing in.
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if the price of the product is $110, then who would be willing to purchase the product? a. calvin b. calvin, sam, and andrew c. calvin, sam, andrew, and lori d. calvin and sam
If the price of the product is $110, it is likely that not everyone would be willing to purchase the product. Generally, individuals who have a higher purchasing power and a greater need or desire for the product will be more willing to purchase it at a higher price.
In this case, if the product is of high quality and satisfies a specific need or desire, individuals with a higher income and greater need or desire for the product, such as Calvin, Sam, Andrew, and Lori, would be more likely to purchase it.
On the other hand, individuals with a lower income or those who do not need or desire the product as much may not be willing to purchase it at such a high price. In this case, Calvin and Sam may be less likely to purchase the product.
It is important to consider various factors such as income, need, and desire when determining who would be willing to purchase a product at a specific price point. Ultimately, the willingness to purchase a product is subjective and can vary depending on individual circumstances.
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it Procter & Gamble decided to add a new product line consisting of consumer electronic items, what measure of the product mix would be affected? a. Quality b. Width O Depth d. Reliability e. Consistency
If Procter & Gamble decided to add a new product line consisting of consumer electronic items, the measure of the product mix that would be affected is Width. The correct option is B.
Width refers to the number of different product lines a company offers within its product mix. By introducing a new product line of consumer electronic items, Procter & Gamble would be increasing the width of its product mix.
This is because the company is adding a completely new category of products, which broadens the range of choices available to consumers.
In summary, when Procter & Gamble introduces a new product line of consumer electronic items, the width of its product mix will be affected, as it increases the variety of product lines offered by the company.
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Complete question:
it Procter & Gamble decided to add a new product line consisting of consumer electronic items, what measure of the product mix would be affected?
a. Quality
b. Width
c. Depth
d. Reliability
e. Consistency
which of the following international corporate-level strategies does fifa use? group of answer choices a. multidomestic strategy b. global strategy c. transnational strategy d. environmental strategy
FIFA, the international governing body for soccer, uses a transnational strategy.
Option C is correct.
A transnational strategy involves a company operating in multiple countries while also working to maintain a unified global strategy. This strategy allows for customization of products or services to local markets while maintaining a consistent global brand identity and a high degree of coordination among its operations worldwide.
FIFA operates in multiple countries around the world, overseeing soccer tournaments, events, and competitions. It has a unified global strategy aimed at promoting and developing soccer worldwide while also adapting to local markets and cultures. For example, FIFA may adjust tournament schedules or rules to better suit the needs and interests of local soccer associations or audiences.
Option C is correct.
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Ernie is a director of Five-Star Properties, Inc. Ernie is a property appraiser. Five-Star makes several purchases in which it pays too much. Ernie approves all the transactions without evaluating them. He is most likely liable for breach of a. the duty of care. b. none of the choices. c. the duty of loyalty. d.the business judgment rule
Ernie is most likely liable for breach of the duty of care. As a director of Five-Star Properties, Inc., Ernie has a duty to exercise reasonable care, skill, and diligence in making business decisions that affect the company. The correct option is a.
This duty of care requires Ernie to act in good faith and with the level of care that a reasonably prudent person would exercise in similar circumstances. By approving transactions without evaluating them, Ernie failed to exercise reasonable care and diligence, and thus breached his duty of care to Five-Star Properties, Inc. The business judgment rule is a legal principle that protects directors from personal liability for decisions made in good faith and with the best interests of the company in mind.
However, this protection only applies when directors have fulfilled their duty of care and duty of loyalty. Since Ernie has breached his duty of care, the business judgment rule is not applicable in this case. The duty of loyalty requires directors to act in the best interests of the company and avoid conflicts of interest. While it is possible that Ernie also breached this duty if he had a personal interest in the transactions, the question does not provide enough information to determine this. Therefore, the most likely answer is a. the duty of care.
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Ernie is most likely liable for breach of the duty of care as a director of Five-Star Properties, Inc. By approving transactions without evaluating them, he fails to exercise the diligence and care that a reasonable person in his position would exercise.
As a director of Five-Star Properties, Inc., Ernie owes a duty of care to the company and its shareholders. By approving transactions without evaluating them, he fails to exercise the diligence and care that a reasonable person in his position would exercise. This breach of the duty of care can make Ernie liable for any damages or losses incurred by the company as a result of the transactions. The business judgment rule does not protect Ernie in this case as it only provides a defense if the director acted in good faith and with the reasonable belief that their actions were in the best interest of the company. Ernie's lack of evaluation shows that he did not act in good faith and may have violated his duty of care.
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Check my we Suppose that in 2023 one and two-year interest rates are 52% in the United States and 10% in Japan. The spot exchange rate is ¥120.22/$ suppose that one year later interest rates are 3% in both countries, while the value of the yen has appreciated to Y115.00/$ a. Benjamin Pinkerton from New York invested in a US, two year zero-coupon bond at the start of the period and sold it after one year What was his return?
Benjamin Pinkerton invested in a US, two year zero-coupon bond at the start of the period when the one and two-year interest rates in the United States were 52%. He sold the bond after one year when the interest rates in both countries had decreased to 3% and the value of the yen had appreciated to Y115.00/$.
To calculate his return, we need to first calculate the price of the bond at the beginning and at the end of the year. The price of a zero-coupon bond is calculated using the following formula:
Price = Face Value / (1 + Interest rate) ^ Time
Where face value is the value of the bond at maturity, interest rate is the annual interest rate and time is the number of years until maturity.
At the beginning of the period, the interest rate was 52% and the time to maturity was two years, so the price of the bond was:
Price = $1,000 / (1 + 0.52) ^ 2 = $396.31
After one year, the interest rate had decreased to 3% and the time to maturity was one year, so the price of the bond was:
Price = $1,000 / (1 + 0.03) ^ 1 = $970.87
Therefore, Benjamin Pinkerton's return on the bond was:
Return = (Selling Price - Purchase Price) / Purchase Price
Return = ($970.87 - $396.31) / $396.31
Return = 1.45 or 145%
Therefore, Benjamin Pinkerton earned a return of 145% on his investment in the US, two year zero-coupon bond. This is a significant return on investment due to the high interest rates in the United States at the start of the period. However, the appreciation of the yen reduced his return slightly. It is important to keep an eye on the currency exchange rates when investing in international bonds.
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1. Portfolio D has an annual return of 8.5% and an annual return standard deviation of 25%. Calculate the expected return over 9 years.2. Portfolio D has an annual return of 8.5% and an annual return standard deviation of 25%. Calculate the 9-year standard deviation.
1. The expected return over 9 years is 99.2%. 2. The standard deviation over 9 years is 75%.
We will calculate the expected return and the 9-year standard deviation for Portfolio D.
1. To calculate the expected return over 9 years for Portfolio D, follow these steps:i. Find the annual return for one year, which is given as 8.5%.
ii. Convert the annual return to a decimal:
8.5% / 100 = 0.085.
iii. We'll use the formula for compound interest:
(1 + r)^n - 1, where r is the annual return and n is the number of years.
iv, Plug in the values:
(1 + 0.085)^9 - 1
v. Calculate the result:
≈ 1.992 - 1 = 0.992
vi. Convert the result back to a percentage: 0.992 * 100 ≈ 99.2%
The expected return for Portfolio D over 9 years is approximately 99.2%.
2. To calculate the 9-year standard deviation for Portfolio D, follow these steps:i. Find the annual return standard deviation for one year, which is given as 25%.
ii. Convert the standard deviation to a decimal:
25% / 100 = 0.25.
iii. Since standard deviation scales with the square root of time, we'll use the formula:
SD = σ * √n, where σ is the annual return standard deviation and n is the number of years.
iv. Plug in the values:
0.25 * √9
v. Calculate the result:
0.25 * 3 = 0.75
vi. Convert the result back to a percentage:
0.75 * 100 = 75%
The 9-year standard deviation for Portfolio D is 75%.
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Eight years ago Zack& Co. had purchased an equipment fo: $1,200,000. This equipment was being depreciated on a straight line basis over a 12 year period to a 300,000 salvage value. The equipment has six more years of economic life. During this period the annual revenues and operating costs assocaited with this machine are expected to be $388,000 and $87,500, respectively. Zack is now considering replacing this machine with a more modern one. The old equipment can now be sold for $180,000. Investment in net working capital is expected to increase by $132,000 as a result of the investment. The new machine will cost $1,500,000 and another $120,000 will be needed to modify it. This machine falls into the ACRS 5-year class life. It. is also expected to have an economic life of SiX years. The annual revenue and operating costs from the new machine are expected to be $750,000 and $58,000, respectively. At the sixth year Zack expects to sell the nes machine for $180,000. Zack's marginal tax rate is 34%. The equipment will be equity financed. (14 pts.) 1 Please calculate Zack's Net Investment and the Net Cash flows for the next six years if the replacement decision is made.
The net investment for the replacement decision is $1,512,000 and the net cash flows for the next six years are -$186,600, $322,800, $436,000, $386,000, $347,800, and $293,400 respectively.
To calculate the net cash flows for the next six years, we need to calculate the annual depreciation expense for the new machine using the ACRS depreciation method, which is $240,000 for the first year and $360,000 for the second year.
We also need to calculate the tax savings from the depreciation expense, which is $81,600 for the first year and $122,400 for the second year. Then, we can calculate the net operating cash flows for each year by subtracting the operating costs and taxes from the revenues.
Finally, we can calculate the net cash flows for each year by subtracting the net operating cash flows, the investment in net working capital, and the annual loan payments from the tax savings. At the end of the sixth year, we add the salvage value of the new machine and the salvage value of the old machine to get the total net cash flow.
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You are looking at an appraisal and the subject property has numerous features that are more desirable than one of the comparable properties. How would you expect this to be handled by the appraiser? A. Adjust the price of the comparable property down. B. Adjust the price of the comparable property upward. C. Make no adjustments to the price of the comparable property.
If the subject property has numerous features that are more desirable than one of the comparable properties, then it is likely that the appraiser would adjust the price of the comparable property upward.
This is because the comparable property would not be a true reflection of the value of the subject property, as it does not have the same desirable features.
Adjusting the price of the comparable property upward would mean that the appraiser is taking into account the differences between the two properties and making an adjustment that reflects the added value of the desirable features.
This adjustment would ensure that the appraisal accurately reflects the value of the subject property, and would provide a fair and accurate assessment of its worth.
However, it is important to note that there may be other factors at play that could influence the appraiser's decision. For example, if the comparable property has other features that are not present in the subject property, then the appraiser may need to make adjustments in the other direction.
Overall, the key point to remember is that the appraiser's goal is to provide an accurate and fair assessment of the value of the subject property, and any adjustments made to comparable properties should reflect this aim.
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Marko, Inc., is considering the purchase of ABC Co. Marko believes that ABC Co. can generate cash flows of $4,700, $9,700, and $15,900 over the next three years, respectively. After that time, they feel the business will be worthless. Marko has determined that a rate of return of 12 percent is applicable to this potential purchase. What is Marko willing to pay today to buy ABC Co.? Multiple Choice $23,246.52 $32,875.50 $21,686.52 $30,300.00 $24,632.59
Marko, Inc. is willing to pay $24,632.59 to purchase ABC Co. This amount is calculated by taking the present value of the cash flows generated by ABC Co. over a three-year period.
The present value of the cash flows is calculated by discounting the cash flows at a rate of return of 12 percent. The discount rate of 12 percent is the rate of return that Marko, Inc. requires in order to make the purchase.
The calculation is as follows: Present Value = $4,700 / (1 + 0.12) + $9,700 / (1 + 0.12)^2 + $15,900 / (1 + 0.12)^3 = $24,632.59. Therefore, Marko, Inc. is willing to pay $24,632.59 to purchase ABC Co.
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When is it advisable to disregard the "ride your winners, dump your losers" strategy?
When you've got a really good feeling
When the stock is in a hot sector
When you feel the stock market is at a top (sell!) or the stock is a value investment (buy!)
When selling or buying a particular stock unbalances your portfolio
While the "ride your winners, dump your losers" strategy can be a useful guideline for investors, it's important to consider each investment decision in context and avoid making decisions based solely on emotion or industry trends.
The "ride your winners, dump your losers" strategy is a commonly cited investment principle, but it may not always be advisable to follow it blindly. Here are some situations where disregarding this strategy may be appropriate:
When you've got a really good feeling: Investing based on intuition or a "gut feeling" is generally not recommended, as it can lead to emotional decision-making and irrational behavior. Instead, it's important to base investment decisions on solid research and analysis.
When the stock is in a hot sector: Just because a stock is in a popular sector doesn't necessarily mean it will continue to perform well. It's important to evaluate each stock on its own merits, rather than relying solely on industry trends.
When you feel the stock market is at a top (sell!) or the stock is a value investment (buy!): While market timing can be tempting, it's notoriously difficult to execute successfully. Trying to predict market highs and lows can lead to missed opportunities or costly mistakes. Similarly, simply identifying a stock as undervalued or overvalued based on metrics like P/E ratios or earnings reports may not paint the full picture of a company's health.
When selling or buying a particular stock unbalances your portfolio: Diversification is a key principle of investing, as it helps to mitigate risk. If buying or selling a particular stock would significantly alter the makeup of your portfolio, it may be worth considering the potential impact on your overall risk and return profile.
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A football coach has just signed a five-year contract, 2.5-million dollar contract with a college. He will get a $300,000 signing bonus. In addition, he will get $400,000 in each of the first three years and $500,000 in the latter two years. Assuming the current interest rate is 5%, what is the present value of the coach's contract? a. $2,500,000 b. $2,392,414 c. $2,192,414 d. $1,917,760
The present value of the coach's contract is b. $2,392,414.
What is the present value of the coach's contract with the given payment structure and interest rate?The correct answer is b. $2,392,414.
To find the present value of the coach's contract, we need to discount each payment back to its present value using the given interest rate of 5%. We can use the formula:
Present Value = Payment / (1 + interest rate)^n
where n is the number of years until the payment is received.
The signing bonus of $300,000 is received immediately, so its present value is simply $300,000.
For the annual payments, we can calculate the present value of each payment as follows:
Year 1: $400,000 / (1 + 0.05) ¹ = $380,952.38
Year 2: $400,000 / (1 + 0.05)² = $363,636.36
Year 3: $400,000 / (1 + 0.05)³ = $347,858.67
Year 4: $500,000 / (1 + 0.05) ⁴ = $413,162.45
Year 5: $500,000 / (1 + 0.05)⁵= $393,263.29
To find the present value of the entire contract, we simply add up the present values of each payment:
$300,000 + $380,952.38 + $363,636.36 + $347,858.67 + $413,162.45 + $393,263.29 = $2,392,414.15
Therefore, the answer is b. $2,392,414.
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what exclusive organization's membership is invited to become members based on excellence in craftsmanship and other requirements such as number of ateliers (workrooms)?
The exclusive organization's membership that is invited to become members based on excellence in craftsmanship and other requirements such as the number of ateliers (workrooms) is the Meilleurs Ouvriers de France (Best Craftsmen of France).
This organization was founded in 1924 and recognizes exceptional skills and expertise in various crafts, such as cooking, pastry-making, carpentry, jewelry-making, and more. The membership is limited to those who have won the prestigious competition "Un des Meilleurs Ouvriers de France" (One of the Best Craftsmen of France), which is held every four years and requires the contestants to undergo a rigorous selection process and demonstrate their mastery of their craft.
The organization aims to promote and preserve the French tradition of excellence in craftsmanship and to support the development of young craftsmen.
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A stock recently paid a $5/share dividend and they currently have a constant growth policy with g=10%/year. They will maintain this policy for the next 3 years. The growth rate will fall down to 3%/year after year 3 into perpetuity (i.e., from year 3 to year 4, the growth rate is 3%). R = 15%. Calculate the stock price. A stock will pay the following dividends over the next 5 years: $4 in year 1, $4.5 in year 2, $5 in year 3, $5.5 in year 4, and $6 in year 5. Afterwards, they will maintain a zero growth dividend policy. R=15%. Calculate the stock price.
For the first scenario, the stock price is $93.86.
For the second scenario, the stock price is $50.37.
For the first scenario,
To calculate the stock price in the first scenario, we use the formula:
[tex]P0 = (D1 / (r - g)) + (D2 / (1+r)^2) + (D3 / (1+r)^3) + (P3 / (r - g))[/tex]
where D1, D2, and D3 are the dividends in years 1, 2, and 3 respectively, r is the required rate of return, g is the growth rate, and P3 is the expected stock price in year 3.
Plugging in the given values, we get:
[tex]P0 = ($5.50 / (0.15 - 0.10)) + ($6.05 / (1.15)^2) + ($6.66 / (1.15)^3) + ($182.78 / (0.15 - 0.03)) = $93.86.[/tex]
For the second scenario,
To calculate the stock price in the second scenario, we use the formula:
[tex]P0 = (D1 / (1+r)) + (D2 / (1+r)^2) + (D3 / (1+r)^3) + (D4 / (r - g)) + (D5 / (r - g)) / (1+r)^5[/tex]
where D1 to D5 are the dividends in years 1 to 5 respectively, r is the required rate of return, and g is the growth rate.
Plugging in the given values, we get:
[tex]P0 = ($4 / 1.15) + ($4.5 / (1.15)^2) + ($5 / (1.15)^3) + ($5.5 / (0.15 - 0.03)) + ($6 / (0.15 - 0.03)) / (1.15)^5 = $50.37[/tex]
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Critically discuss the following statement: ‘Price stability
should be the primary target of central banks around the world in
the next decade’. 2500 word essay.
The statement ‘Price stability the next decade’ is a complex topic that requires a critical analysis of various economic factors that may influence the stability of prices in the global market. Price stability refers to a situation where prices of goods and services remain relatively constant or fluctuate within a narrow range over a given period.
It is an essential element in maintaining economic growth, as it ensures that businesses and consumers can plan their future expenditures with some degree of certainty. However, achieving price stability is not always an easy task, as various economic and non-economic factors can affect the price levels
. Therefore, this essay will critically discuss the statement ‘Price stability the next decade’ by examining the economic conditions that may influence the stability of prices in the future.
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mccorp spent $240,000 to acquire a building (appraised at $180,000) on a parcel of land (appraised at $120,000). additional, mccorp spent another $50,000 renovating the building to get it ready for use. after the revovation and the building was occuppied the assets will be valued at?
The total value of the assets after the renovation and occupation would be $300,000 + $50,000 = $350,000.
Based on the information provided, McCorp spent a total of $290,000 ($240,000 for acquisition and $50,000 for renovation) on the building and the land.
The initial appraised value of the building and the land was $300,000 ($180,000 for the building and $120,000 for the land).
Therefore, the total value of the assets after the renovation and occupation would be $300,000 + $50,000 = $350,000.
This is because the renovation improved the value of the building, and the occupation of the building would make it a productive asset.
It is important to note that the actual value of the assets could be different depending on various factors such as market demand, depreciation, and maintenance costs. However, based on the information given, the assets would be valued at $350,000.
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Nancy has a strong tendency to morally disengage. As a result, when Nancy sells some company supplies on eBay for her own profit she is likely to ________
.
A) turn herself into a company official
B) feel no distress from being unethical
C) suffer from extreme role conflict
D) share her profits with the company
Nancy is likely to feel no distress from being unethical.(B)
When someone has a strong tendency to morally disengage, they can easily detach themselves from the ethical consequences of their actions. In Nancy's case, she sells company supplies on eBay for her own profit.
Due to her moral disengagement, she does not experience any distress or guilt from acting unethically. Instead, she is able to justify her actions and rationalize them in her mind.
This differs from options A, C, and D, where she would either face consequences, experience role conflict, or share profits with the company, which are not typical of someone who morally disengages.(B)
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At the beginning of the year, the Calgary Region expanded its product line to include a business suitcase on wheels with a laptop compartment. This product line may be expanded into other regions if the profitability supports such expansion. Your analysis will assist in decision making not just for the existing Calgary region operations but also for potential expansion into other regions. Based on research conducted, regional managers established the following standards for each suitcase. Standard Quantity or Standard Price of Rate Standard Cost Hours Direct materials 1.20 kilograms $5.00 per kilogram $6.00 Direct labour .80 hours $4.00 per hour 3.20 Variable manufacturing overhead 0.30 machine-hours $3.00 per machine hour .90 Total standard cost $10.10 Management made the commitment to prepare a flexible budget and conduct variance analysis to support decision making for future production and product line decisions. The December income statement presented represent the flexible budget at 14,800 suitcases.
The standard cost for each suitcase is $10.10, and the provided flexible budget and variance analysis can inform management decisions regarding future production and product line expansion.
What is the standard cost for each business suitcase on wheels with a laptop compartment?I understand you need help analyzing the Calgary Region's decision to expand its product line to include a business suitcase on wheels with a laptop compartment.
This analysis will assist in decision making for both existing operations and potential expansion into other regions. Based on the provided standards, the standard cost for each suitcase is as follows:
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since 2014, abercrombie & fitch (nyse: anf) has been paying annual dividends of $0.80 per share. assume anf has a cost of equity capital of 8.07%. the stock has recently traded around $15.35 per share. assuming the dividend will continue to stay at $0.80 per share on a continuing basis, what is the estimated value per share for anf?
ANF's estimated intrinsic value per share is $9.92, which is significantly lower than the current market price of $15.35. This suggests that the stock may be overvalued based on the DDM model.
We can use the dividend discount model (DDM) which takes into account the future expected dividends and the cost of equity capital.
Using the DDM formula, we can estimate the intrinsic value per share as follows:
Value per share = Dividend per share / (Cost of equity capital - Dividend growth rate)
Given that ANF has been paying an annual dividend of $0.80 per share since 2014, we can assume that this dividend will continue on a continuing basis. Therefore, the dividend growth rate can be assumed to be zero.
Using a cost of equity capital of 8.07%, we can calculate the estimated value per share as follows:
Value per share = $0.80 / (8.07% - 0%) = $9.92
However, it's important to note that this model has limitations and other factors such as market trends and company performance can affect the actual stock price. Therefore, investors should consider multiple valuation methods and conduct thorough research before making investment decisions.
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as long as the mp is positive, the tp will be increasing. true false
The statement "as long as the mp is positive, the tp will be increasing" is false because marginal product and total product are not directly related.
The given statement "as long as the mp is positive, the tp will be increasing" is false because the relationship between mp and tp is not necessarily a direct one. MP (marginal product) refers to the change in output resulting from a change in the input. TP (total product), on the other hand, is the total output resulting from a specific amount of input. While a positive MP may contribute to an increase in TP, there are other factors that can affect TP as well, such as diminishing returns.
Therefore, a positive MP does not necessarily guarantee an increase in TP. The given statement is false.
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u.s. bond prices are normally inversely related to u.s. inflation. if the fed planned to use intervention to weaken the dollar, how might bond prices be affected?expectations of a weak dollar placespressure on u.s. prices and therefore cause expectations of inflation, which tends to place pressure on interest rates. because there is an inverse relationship between interest rates and bond prices, bond prices would be e
The Fed planned to use intervention to weaken the dollar, it could lead to an increase in interest rates and a subsequent decrease in bond prices.
If the Fed planned to use intervention to weaken the dollar, it might do so by decreasing interest rates, which would increase the supply of dollars in circulation and reduce demand for the currency. This, in turn, could lead to an increase in inflation expectations, which tends to place upward pressure on interest rates. As there is an inverse relationship between interest rates and bond prices, when interest rates rise, bond prices fall.
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P15–3 Multiple changes in cash conversion cycle Garrett Industries turns over its inventory
six times each year; it has an average collection period of 45 days and an average
payment period of 30 days. The firm’s annual sales are $3 million. Assume that
there is no difference in the investment per dollar of sales in inventory, receivables,
and payables, and assume a 365-day year.
a. Calculate the firm’s cash conversion cycle, its daily cash operating expenditure,
and the amount of resources needed to support its cash conversion cycle.
b. Find the firm’s cash conversion cycle and resource investment requirement if it
makes the following changes simultaneously.
(1) Shortens the average age of inventory by 5 days.
(2) Speeds the collection of accounts receivable by an average of 10 days.
(3) Extends the average payment period by 10 days.
c. If the firm pays 13% for its resource investment, by how much, if anything,
could it increase its annual profit as a result of the changes in part b?
d. If the annual cost of achieving the profit in part c is $35,000, what action would
you recommend to the firm? Why?
a. The firm’s cash conversion cycle is 60 days, its daily cash operating expenditure is $41,096. and the amount of resources needed to support its cash conversion cycle is $2,465,753.
b. After the changes, the firm’s cash conversion cycle will be 50 days, and the amount of resources needed to support its cash conversion cycle will be $2,054,795.
c. The firm could increase its annual profit by $20,960.
d. I would recommend the firm to implement the changes because the potential increase in profit ($20,960) is greater than the cost of achieving it ($35,000). By implementing the changes, the firm can improve its cash conversion cycle and reduce its resource investment requirement, leading to increased profitability.
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an initial amount of $2500 is invested in an account at an interest rate of 8% per year, compounded continuously. assuming that no withdrawals are made, find the amount in the account after four years.
After four years, the account balance will be about $3,442.75, assuming no withdrawals are made.
How to calculate the account balanceGiven an initial amount of $2,500 invested at an interest rate of 8% per year compounded continuously, we can calculate the account balance after four years using the formula
A = P * e^(rt)
where A is the final amount, P is the principal, r is the interest rate (as a decimal), t is time in years, and e is Euler's number (approximately 2.718).
In this case, P = $2,500, r = 0.08, and t = 4 years.
Plugging these values into the formula, we get:
A = $2,500 * e^(0.08 * 4)
A = $2,500 * e^(0.32) A ≈ $2,500 * 1.3771
After calculating, the final amount (A) is approximately $3,442.75.
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