More companies are replacing traditional performance feedback with 360-degree feedback, a multi-rater appraisal process that includes input from coworkers, subordinates, and supervisors.
Companies are increasingly using 360-degree feedback, a multi-rater evaluation procedure that incorporates input from coworkers, subordinates, and supervisors, as opposed to the conventional superior-subordinate performance feedback process. This method, which takes into account many viewpoints and offers a more balanced review, offers a more thorough appraisal of an employee's performance.
The 360-degree feedback also promotes open communication and teamwork, which results in more helpful criticism and better performance. This strategy also fits with a more contemporary, collaborative work environment where workers are recognised for their variety of talents and contributions.
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advertising is relevant for both business-to-business as well as for business-to-consumer approaches. select one: true false
True. advertising is relevant for both business-to-business (B2B) and business-to-consumer (B2C) tactics.
In a B2B context, advertising is often used to sell products or services to other corporations, inclusive of workplace materials or production equipment.
B2B advertising and marketing normally specializes in constructing relationships and generating leads rather than direct sales. In a B2C context, advertising is used to promote products or services without delay to purchasers, which include apparel, food, or entertainment.
B2C advertising and marketing frequently focuses on constructing brand focus and developing emotional connections with customers to inspire them to make purchases.
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True. advertising is relevant for both business-to-business (B2B) and business-to-consumer (B2C) tactics. In a B2B context, advertising is often used to sell products or services to other corporations,
inclusive of workplace materials or production equipment. B2B advertising and marketing normally specializes in constructing relationships and generating leads rather than direct sales. In a B2C context, advertising is used to promote products or services without delay to purchasers, which include apparel, food, or entertainment. B2C advertising and marketing frequently focuses on constructing brand focus and developing emotional connections with customers to inspire them to make purchases.
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Supoore you buy a call options on a $100.000 Tranny bondscoact wanxorciso peke of 105 (Note: The price of an option is quoted in ports that mimic the fines contract, 10 oach point corresponds o 1.000 Based on the information on given above the price of the treasure bond is 135 expiration the call option is __
Based on the information given above a fumatongen overige $15.000. the premium for the option is___
The price of the treasury bond is 135. This means that if you were to buy the bond itself, you would be paying $135,000.
However, instead of buying the bond, you are buying a call option on it. This means that you are paying a premium for the right to buy the bond at a specific price (the strike price) at a specific time (the expiration date).
In this case, the strike price is 105, which means that you have the right to buy the bond for $105,000. If the price of the bond goes up above $105,000, you can exercise your option and buy the bond at the lower price. This allows you to make a profit.
The premium for the option is not given, so we cannot calculate the exact cost. However, we do know that the option is "in the money" by $15,000. This means that the current price of the bond is $15,000 higher than the strike price. Since each point corresponds to $1,000, this means that the option is in the money by 15 points. If we assume a premium of $1,000 per point, then the premium for the option would be $15,000.
Overall, buying a call option on a treasury bond can be a way to potentially profit from changes in the bond market without actually buying the bond itself. However, it is important to remember that options trading involves risks and should be approached with caution.
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scheduling major change-overs sequentially helps to shorten overall setup times for the factory. group startstrue or false
The statement "scheduling major change-overs sequentially helps to shorten overall setup times for the factory group starts." is False.
The statement suggests that scheduling major change-overs sequentially helps to shorten overall setup times for the factory, but it does not mention anything about group starts. Therefore, it is impossible to determine the accuracy of the statement regarding group starts from the information provided.
The statement mentions scheduling major change-overs sequentially as a means of shortening overall setup times for the factory. It does not provide any information about the effectiveness or ineffectiveness of group starts in reducing setup times.
The effectiveness of group starts in reducing setup times may depend on several factors, such as the complexity of the setup, the number and types of machines involved, the level of coordination and communication required among workers, the availability and allocation of resources, and the overall culture and organization of the factory.
Additionally, the success of group starts may also depend on the skill level and experience of the workers involved, as well as the training and support provided by management.
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False. The statement "scheduling major change-overs sequentially helps to shorten overall setup times for the factory group starts." . The statement suggests that scheduling .
major change-overs sequentially helps to shorten overall setup times for the factory, but it does not mention anything about group starts. Therefore, it is impossible to determine the accuracy of the statement regarding group starts from the information provided. The statement mentions scheduling major change-overs sequentially as a means of shortening overall setup times for the factory. It does not provide any information about the effectiveness or ineffectiveness of group starts in reducing setup times. The effectiveness of group starts in reducing setup times may depend on several factors, such as the complexity of the setup, the number and types of machines involved, the level of coordination and communication required among workers, the availability and allocation of resources, and the overall culture and organization of the factory.
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Your examination of the records of a company that follows the cash basis of accounting tells you that the company’s reported cash-basis earnings in 2017 are $33,900. If this firm had followed accrual-basis accounting practices, it would have reported the following year-end balances.2017 2016Accounts receivable $3,300 $2,200Supplies on hand 1,360 1,530Unpaid wages owed 2,500 2,450Other unpaid expenses 1,720 1,070Determine the company’s net earnings on an accrual basis for 2017.Net earnings on an accrual basis for 2017 $
Net earnings as per accrual basis are $37,360. The calculations are shown in the below section.
The income retained by the company after meeting its operating cost, interest, taxes, and dividends is known as net earnings. It is the measure of the profitability of a company in a particular accounting period.
Calculation of net earnings:
Particulars Amount($)
Net earnings as per cash basis 36,810
Increase in accounts receivables (3,220-2,160) 1,060
Decrease in supplies (1,700-1,3200 (380)
Decrease in unpaid wages (2,330-2,320) (10)
Decrease in unpaid expenses (1,440-1,320) (120)
Net earnings as per accrual basis 37,360
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The company’s net earnings on an accrual basis for 2017 would be $32,980, which is calculated by adding the accounts receivable balance to the reported cash-basis earnings and subtracting the total expenses incurred but not yet paid.
To determine the company’s net earnings on an accrual basis for 2017, we need to consider the adjustments that would be required if the company had followed accrual-basis accounting practices. Accrual accounting recognizes revenue when it is earned and expenses when they are incurred, regardless of when cash is received or paid.
Looking at the provided information, the company had accounts receivable of $3,300 at the end of 2017, indicating that there was revenue earned but not yet received. We also see that the company had unpaid wages owed and other unpaid expenses totaling $4,220, indicating that there were expenses incurred but not yet paid.
To calculate the company’s net earnings on an accrual basis for 2017, we would add the accounts receivable balance of $3,300 to the reported cash-basis earnings of $33,900, giving us a total revenue of $37,200. We would then subtract the total expenses incurred but not yet paid, which is $4,220, giving us a net earnings on an accrual basis for 2017 of $32,980.
In summary, the company’s net earnings on an accrual basis for 2017 would be $32,980, which is calculated by adding the accounts receivable balance to the reported cash-basis earnings and subtracting the total expenses incurred but not yet paid.
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A supply management organization partners with another department to determine the feasibility of marketing a new product. To aid in decision-making, the supply management organization should employ which of the following?
(A) Decision tree
(B) Pareto analysis
(C) Supplier forecast
(D) SWOT analysis
SWOT analysis would be the best tool to employ in this situation. The correct answer is option d.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. This analysis helps in identifying and evaluating the internal and external factors that can influence the success of a project or a new product launch.
By using SWOT analysis, the supply management organization can assess the feasibility of marketing a new product by identifying the strengths and weaknesses of the new product as well as the opportunities and threats in the market.
This information will help in making a more informed decision about whether to move forward with the new product or not.
The correct answer is option d.
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Salim started a new hobby of collecting classic cars. He instructed Suroor, a well-known specialist in classic cars and motorcycles, to locate and purchase a 1971 Ford Mustang Sportsroof. On 01/03/2022, with the help of his contacts, Suroor managed to locate Sultan, who owned two 1971 Ford Mustang Sportroofs. After lengthy negotiations, Sultan agreed to sell one of his classic cars for 150,000 AED and to deliver the car to Salim on 03/03/2022. Suroor drew a post-dated cheque for 150,000 AED to be deposited by Sultan on 04/03/2022.
Salim, who has recently taken up the hobby of collecting classic cars, has enlisted the help of a specialist in classic cars and motorcycles, Sudor.
Salim has instructed Sudor to locate and purchase a 1971 Ford Mustang Sports roof for his collection. Using his contacts, Sudor was able to locate a seller, Sultan, who owned two 1971 Ford Mustang Sport roofs. After negotiations, Sultan agreed to sell one of his classic cars for 150,000 AED and to deliver it to Salim on 03/03/2022.
To secure the purchase, Sudor drew a post-dated chequeen for 150,000 AED to be deposited by Sultan on 04/03/2022. Thanks to Sudor's expertise, Salim has successfully added a new classic car to his collection.
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a company has accounts named purchases, purchases discounts, purchases returns and allowances, and freight-in as part of its chart of accounts. this company is using which system of inventory
The company is using the perpetual inventory system.
Based on the accounts named in the chart of accounts, the company is using the perpetual inventory system. In a perpetual inventory system, inventory balances are updated continuously as transactions occur. The purchases account is used to record the cost of inventory purchases, while the purchases discounts account is used to record discounts received from suppliers for prompt payment. T
he purchases returns and allowances account is used to record returns of damaged or unsatisfactory inventory. Finally, the freight-in account is used to record the cost of shipping inventory from suppliers to the company's warehouse. By tracking inventory in real-time, the perpetual inventory system provides businesses with accurate inventory information to help with decision-making and financial reporting.
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ana buys an iphone for $150 and gets a consumer surplus of $200. her willingness to pay for an iphone is. if she had bought the iphone on sale for $100, her consumer surplus would have been. if the price of the iphone had been $450, her consumer surplus would have been
If Ana purchases a mobile phone for $100 and gets a consumer surplus of $250. her willingness to pay is $350. and if the price of the iPhone had been $450 the consumer surplus is - 100.
a. Maximum price willing to pay by the buyer
consumer surplus = $200
The actual price paid or market price=$150
Willingness to pay = Price + Consumer surplus
Maximum price willing to pay by the buyer = $150 + $200 = $350
b. Consumer surplus
Actual price paid = $100
Consumer surplus= Maximum price– Actual price paid
Consumer surplus= $350 - $100 = $250
c. Consumer surplus
The actual price paid = $450
Consumer surplus = Maximum price– Actual price
Consumer surplus= $350 -$450 = - 100
Therefore her maximum willing price is $350 and her consumer surplus is $250 and - 100.
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A stock recently paid a $2/share dividend. They will grow this dividend by 10%/year in each of the next 3 years. Afterward, they will maintain a zero growth dividend policy, forever. R=15%. Calculate the stock price.
QUESTION 3 A stock recently paid a $2/share dividend. They will grow this dividend by 10%/year in each of the next 3 years. Afterward, they will maintain a zero growth dividend policy, forever. R=15%. Calculate the stock price.
The stock price is $18.32.
To calculate this, we must first find the present value of the growing dividends and the present value of the constant dividends.
Step 1: Calculate the dividends for the next 3 years with 10% growth.
Year 1: $2 * 1.10 = $2.20
Year 2: $2.20 * 1.10 = $2.42
Year 3: $2.42 * 1.10 = $2.66
Step 2: Find the present value of these growing dividends.
PV_Year1 = $2.20 / (1+0.15)¹ = $1.91
PV_Year2 = $2.42 / (1+0.15)² = $1.82
PV_Year3 = $2.66 / (1+0.15)³= $1.69
Step 3: Calculate the present value of constant dividends from Year 4 onwards.
Constant dividend (D) = $2.66 (Year 3 dividend)
Discount rate (R) = 15%
PV_constant_dividends = D / R = $2.66 / 0.15 = $17.73
Step 4: Calculate the present value of the constant dividends in Year 3.
PV_Year3_constant_dividends = $17.73 / (1+0.15)³ = $11.27
Step 5: Add the present values to find the stock price.
Stock price = PV_Year1 + PV_Year2 + PV_Year3 + PV_Year3_constant_dividends = $1.91 + $1.82 + $1.69 + $11.27 = $18.32
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One way to establish credibility is to become more dependent of
government when designing policy
Select one:
True
False
The statement "One way to establish credibility is to become more dependent of government when designing policy" is false because One way to establish credibility is not to become more dependent on the government when designing policy.
Credibility can be established by creating well-researched, evidence-based policies that are transparent and include input from various stakeholders.
Becoming more dependent on the government can limit the scope of perspectives and potentially reduce objectivity. To create credible policies, it's important to remain independent, gather data from multiple sources, engage in consultation with experts and the public, and have clear and accountable decision-making processes.
This approach ensures that policies are well-rounded, evidence-driven, and have the trust and support of the people they aim to serve.
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average cost function AC(q) = 5 + 2000/q the marginal cost function and its value at q=250 are: MC(q) = 5; MC(250) = 5 = = 2 2 MC(q) -2000 ; MC(250) q2 25 None of these
The given average cost function is AC(q) = 5 + 2000/q.
To find the marginal cost function, we need to take the derivative of the average cost function with respect to q:
AC(q) = 5 + 2000/q
AC'(q) = -2000/q^2
Therefore, the marginal cost function is MC(q) = AC'(q) = -2000/q^2.
To find MC(250), we substitute q = 250 in the marginal cost function:
MC(250) = -2000/250^2
MC(250) = -0.32
Therefore, the value of the marginal cost function at q = 250 is -0.32.
None of the given options (5, 22, -2000, 25) match this value.
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What are Amazons trends in stock price, dividend payout, andtotal stockholders’ equity? How have recent events or marketconditions affected those trends for Amazon?
The COVID-19 pandemic, increased competition in the e-commerce space, and Amazon's focus on reinvesting profits for growth have all affected Amazon's trends in stock price and financial performance. Despite these challenges, Amazon has shown strong financial performance and a commitment to investing in growth.
What are some recent events and market conditions that have affected Amazon's trends in stock price and financial performance?Amazon's trends in stock price have been generally positive over the past few years, with occasional fluctuations due to market conditions and company news.
The company's dividend payout has been relatively low, with a focus on reinvesting profits back into the business for growth. In terms of total stockholders' equity, Amazon has seen steady growth over the years.
Recent events and market conditions, such as the COVID-19 pandemic and increased competition in the e-commerce space, have affected Amazon's trends in various ways.
While the pandemic has led to increased demand for online shopping and boosted Amazon's revenue, it has also resulted in higher costs for things like employee safety measures and supply chain disruptions.
Additionally, increased competition from companies like Walmart and Target has put pressure on Amazon to innovate and adapt to stay ahead in the market.
Despite these challenges, Amazon has continued to demonstrate strong financial performance and a commitment to investing in growth for the future.
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in kelly evans' presentation on using business research tools, she referred to a standard classification code system for business and industries. these codes are known as what type of code?
The standard classification code system for business and industries referred to by Kelly Evans is known as the North American Industry Classification System (NAICS).
This code system is a standardized numerical system used to classify businesses and industries in the United States, Mexico, and Canada. It is used to compile, analyze, and compare statistical data related to economic activities, such as the number of businesses and employees in an industry, total sales, and total wages.
NAICS was developed by the United States Office of Management and Budget in 1997, and is updated every five years. It is based on a six-digit code system, with each digit representing a distinct level of detail. The first two digits denote the most general level, while the last four digits provide finer detail.
For example, the code for “general automotive repair shops” is 811111, with 8 indicating the industry sector “Repair and Maintenance”, 11 indicating the subsector of “Automotive Repair and Maintenance”, and 1111 indicating the industry “General Automotive Repair”.
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You have the following debts:
Student loan balance of $17,000 at 5.25% interest, with payments of $225 per month
Visa balance of $800.00 at 18% interest, with a minimum monthly payment of $32.00
Car loan balance of $5,500, with monthly payments of $175
Department store credit card balance of $300 at 24% interest, minimum monthly payments of $25
By paying all of your expenses and living on a very tight budget, you stopped all the little leaks and now have an extra $300 each month and $1,000 in your emergency fund. You now are at war with your debts. Structure a repayment plan, listing the order in which you will pay off debts and when they will be paid off.
To create a repayment plan, we need to follow the debt avalanche method, where we focus on paying off the debt with the highest interest rate first and then moving down the line.
1. Department store credit card: The balance is small, but the interest rate is high at 24%. Since you have an extra $300 per month, pay the entire balance of $300 immediately.
2. Visa balance: With a balance of $800 at 18% interest, the minimum payment of $32.00 barely covers the interest, and it will take years to pay off the balance.
Allocate your $300 extra payment towards this balance, making your total monthly payment $332 ($300 + $32). This will pay off the balance in 3 months.
3. Student loan: This is a substantial balance at 5.25% interest. Since the minimum payment is $225 per month, use the $332 payment you were making towards the Visa balance and add it to your student loan payment.
You will now pay $557 ($225 + $332) per month. At this rate, you will pay off the balance in approximately 34 months.
4. Car loan: The car loan has a low-interest rate, so it is better to focus on paying off the higher interest debt first. Once you have paid off the other debts, you can continue making the regular $175 monthly payments until it is paid off.
By following this repayment plan, you can become debt-free in approximately 3 years and 4 months. After you have paid off all your debts, you can allocate the $557 payment towards your emergency fund or invest it in your retirement account.
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uppose peru decides to increase its production of emeralds by 2. what is the opportunity cost of this decision? a. 40 rubies b. 60 rubies c. 30 rubies d. 120 rubies
The opportunity cost of increasing emerald production by 2 units is the value of the best alternative foregone. Without additional information, we cannot determine the opportunity cost accurately.
However, if we assume that the production of emeralds and rubies requires similar resources and that Peru was previously producing emeralds and rubies in equal proportions, then the opportunity cost of increasing emerald production by 2 units would be 60 rubies (since the production of each emerald costs 30 rubies). Therefore, the answer is (b) 60 rubies.
It's important to note that opportunity cost varies depending on the specific circumstances, and without additional information, it's impossible to determine the opportunity cost accurately.
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Had to split question #16 into two photos for words to remain clear and visible.
What is the earnings credit rate? Assume the following: Ledger Balance = $300,000 Deposit Font - $100,000 Monthly Earnings Credit = $507 Days in Month 30 days Reserve Requirement Ratio * 10% No express your answer as a decimal (example: Nyour or a 4:33then enter it as 0.043) Thank you.
The monthly earnings credit is the amount of money a bank credits to a customer's account as compensation for the customer's deposits. The earnings credit rate for this scenario is 3.70%.
It is calculated based on the average daily balance in the account and the earnings credit rate (ECR) set by the bank.
To calculate the earnings credit rate (ECR) for this scenario, we need to use the following formula:
ECR = (Monthly earnings credit / Average daily balance) x (365 / Days in month)
We can calculate the average daily balance as follows:
Average daily balance = (Ledger balance + Deposit float) / Days in month
Average daily balance = ($300,000 + $100,000) / 30
= $13,333.33
We are given that the monthly earnings credit is $507, and the days in the month are 30. The reserve requirement ratio is also given as 10%.
Using the formula for ECR, we get:
ECR = ($507 / $13,333.33) x (365 / 30)
ECR = 0.036975 or 3.70% (rounded to two decimal places)
Therefore, the earnings credit rate for this scenario is 3.70%.
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The owner compiled and provided the following list of acceptable investment opportunities: Investment IRR (%) Initial investment (R)E 23 200 000C 22 100 000G 21 300 000A 19 200 000H 12 100 000I 9 400 000B 8 300 000The company aims to raise R1 000 000 for long-term investments. Capital budgets will be financed as per below: Log-term debt (40%): The company will borrow R400 000 at an after-tax cost of 8%. Ordinary shares (40%): The company will issue ordinary shares at the cost of 10%. Preferred shares: The company will finance the rest of the money by issuing preference shares at the cost of 13%. Calculate the company's weighted average cost of capital. (8 marks)
We have that, based on the list of acceptable investment opportunities, we obtain that the weighted average cost of capital of the company is 3.4%.
To calculate the weighted average cost of capital (WACC) of the company, we must take into account the cost of each type of financing and their respective weights in the capital structure.
Long-term debt financing has a weight of 40% (0.4) and a cost of 8% after tax. Therefore, the after-tax cost of debt is 0.4 x 0.08 = 0.032 or 3.2%.
Financing with ordinary shares also has a weight of 40% (0.4) and a cost of 10%. Therefore, the cost of capital is 0.4 x 0.1 = 0.04 or 4%.
The financing of preference shares has a weight of 20% (0.2) and a cost of 13%. Therefore, the cost of preferred stock is 0.2 x 0.13 = 0.026 or 2.6%.
To calculate the WACC we add the weighted costs of each type of financing:
WACC = (Weight of Long-Term Debt x Cost of Debt) + (Weight of Common Stock x Cost of Equity) + (Weight of Preferred Stock x Cost of Preferred Stock)
WACC = (0.4 x 0.032) + (0.4 x 0.04) + (0.2 x 0.026)
WACC = 0.0128 + 0.016 + 0.0052
WACC = 0.034 or 3.4%
Therefore, the company's weighted average cost of capital is 3.4%.
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1.if the actual unemployment rate is 8% and the natural rate of unemployment is 5%, then the cyclical unemployment rate is?
The natural rate of unemployment is subtracted from the actual unemployment rate to arrive at the cyclical unemployment rate.
(8% - 5% = 3%) The cyclical unemployment rate would be 3%.
The cyclical unemployment rate is calculated by subtracting the natural rate of unemployment from the actual unemployment rate. So, in this case, the cyclical unemployment rate would be 3% (8% - 5% = 3%). This represents the portion of unemployment that is due to the current economic cycle or downturn, rather than due to structural or frictional factors.
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a homeowner has been paying her mortgage for several years and has built up equity. she decides to take out a home equity line of credit because she needs some cash. this credit will create
Homeowner who has been paying her mortgage for several years has built up equity in her home. She decides to take out a home equity line of credit (HELOC) because: a flexible borrowing option secured by their home equity.
A home equity line of credit (HELOC) is a type of loan that allows a homeowner to borrow money against the value of their home, specifically the portion they have paid off, which is known as equity. This equity serves as collateral for the loan, and the homeowner can borrow money up to a specified limit, as determined by the lender.
Taking out a HELOC can provide a homeowner with a flexible source of funds for various purposes, such as home improvements, debt consolidation, or emergency expenses. The homeowner can draw from the line of credit as needed and only pays interest on the amount borrowed.
However, it's important to note that taking out a HELOC also comes with risks. Since the loan is secured by the home, failure to repay the borrowed funds can result in the loss of the home through foreclosure. Additionally, the interest rates on HELOCs can be variable, which means they can increase over time and potentially make the loan more expensive.
In summary, a homeowner with built-up equity who takes out a home equity line of credit will create a flexible borrowing option secured by their home equity. This can provide much-needed funds for various purposes, but it's crucial to understand the associated risks and responsibly manage the borrowed money.
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year 2010 ending retained earnings were 2,000,000. year 2011 forecasted sales are $100,000 with 25% net margin and 20% dividend payout ratio. what are the forecasted retained earnings for year 2011?
In the year 2011, the forecasted retained earnings are calculated based on the year 2010 ending retained earnings, the forecasted sales, net margin, and dividend payout ratio.The year 2010 ending retained earnings were $2,000,000, and the year 2011 forecasted sales are $100,000 with a 25% net margin and a 20% dividend payout ratio. First, calculate the net income for 2011: $100,000 (sales) * 25% (net margin) = $25,000.
Next, calculate the dividends paid in 2011: $25,000 (net income) * 20% (dividend payout ratio) = $5,000.
Finally, calculate the forecasted retained earnings for year 2011: $2,000,000 (year 2010 retained earnings) + $25,000 (net income) - $5,000 (dividends) = $2,020,000.
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a good definition of lean is ""creating more value for customers with fewer resources.""
The given statement is true because the concept of "lean" refers to a systematic approach to eliminating waste and increasing efficiency in order to create more value for customers with fewer resources.
The focus is on identifying and eliminating any processes, activities, or resources that do not add value for the customer, while maximizing the use of those that do. By doing so, businesses can improve their competitiveness, reduce costs, and enhance customer satisfaction. Ultimately, the goal of lean is to create a more streamlined, efficient, and customer-centric organization that is better able to meet the needs and expectations of its customers.
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True or False, development is riskier than investing in existing
assets, all else equal.
The statement is true because developing new assets, whether it's a new product, technology, or infrastructure, typically involves more uncertainties and risks than investing in existing assets that have a proven track record.
When developing new assets, there may be unknown market demand, technological feasibility, regulatory hurdles, and other factors that can affect the success of the investment. Additionally, development projects usually require higher initial investments and longer time horizons, which can increase the risk of failure and result in higher opportunity costs.
Investing in existing assets, on the other hand, can provide more predictable cash flows and a lower risk profile, assuming the assets are well-established and have a stable market demand.
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A company is expected to pay a dividend of $1.35 per share next year. The dividends are expected to grow at 3% per year indefinitely. If the required return on similar investments is 6%, what is the current price of the stock?
The current price of the stock is $45. This means that if an investor buys the stock at $45, they can expect to receive a dividend of $1.35 next year and this dividend will grow at a rate of 3% per year. The required return on this investment is 6%.
To calculate the current price of the stock, we can use the dividend discount model.
In this case, the company is expected to pay a dividend of $1.35 next year, and this dividend is expected to grow at a rate of 3% per year indefinitely. The required return on similar investments is 6%.
Using the dividend discount model, the current price of the stock can be calculated as:
Price = Dividend next year / (Required return - Dividend growth rate)
Price = $1.35 / (0.06 - 0.03)
Price = $45.Therefore, the current price of the stock is $45.
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Determine the equilibrium quantity and price: Price of Good X Quantity Supplied Quantity Demanded $2 10 25$5 11 20$10 12 17$12 13 13$15 14 11Select one: a. equilibrium price is $15 and equilibrium quantity is 25 units. b. equilibrium price is $15 and equilibrium quantity is 3 units. c. equilibrium price is $12 and equilibrium quantity is 13 units. d. equilibrium price is $12 and equilibrium quantity is 26 units.
Equilibrium price is $12 and equilibrium quantity is 13 units.This is the point where the market is in balance and there is no shortage or surplus of the good. Option C is the correct answer.
Looking at the table, we can see that as the price of Good X increases, the quantity supplied increases and the quantity demanded decreases. The only price point where the quantity supplied and quantity demanded are equal is at $12. At a price of $12, the quantity supplied is 13 and the quantity demanded is also 13. Therefore, the equilibrium price is $12 and the equilibrium quantity is 13 units. Option C is the correct answer.
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a firm has 75,000 shares of common stock outstanding at a price of $42 a share, 10,000 shares of preferred stock at $50 a share, and 3,000 bonds with a price quote of 101.2. how is the weight of preferred stock computed for the firm's wacc?
The weight of preferred stock , based on the mentioned values in the company's WACC is found to be 7.48%.
To calculate the weighted average cost of capital (WACC), we need to determine the proportion of each type of financing (common stock, preferred stock, and debt) in the company's overall capital structure. The weight of each component is determined by dividing the market value of that component by the total market value of the company's capital structure.
To calculate the weight of the preferred stock, we need to determine the market value of the preferred stock.
Market value of preferred stock = Number of preferred shares x Market price per share = 10,000 x $50 = $500,000
Next, we need to determine the total market value of the company's capital structure:
Total market value = Market value of common stock + Market value of preferred stock + Market value of debt
Total market value = (75,000 shares x $42 per share) + $500,000 + (3,000 bonds x 101.2% x $1,000 par value per bond)
Total market value = $3,150,000 + $500,000 + $3,036,000
Total market value = $6,686,000
Now we can calculate the weight of the preferred stock:
Weight of preferred stock = Market value of preferred stock / Total market value
Weight of preferred stock = $500,000 / $6,686,000
Weight of preferred stock = 0.0748 or 7.48%
Therefore, the weight of preferred stock in the company's WACC calculation is 7.48%.
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g 8. in 2022 the u.s. trade deficit was about 12% larger than the year before (2021). the increase in the trade deficit in 2022 means that u.s. consumption: group of answer choices is larger and there is more borrowing from and/or selling assets to the rest of the world. is larger and there is a a lower household savings rate. is smaller and there is a smaller federal government budget deficit is smaller and there is less borrowing from and/or selling assets to the rest of the world.g
Based on the given information, the increase in the U.S. trade deficit in 2022 indicates that the country imported more goods and services than it exported.
This means that U.S. consumption is larger, as more goods and services were consumed domestically than were produced domestically. To finance this consumption, the U.S. would need to borrow from and/or sell assets to the rest of the world, which is reflected in the larger trade deficit. Therefore, the correct answer is: U.S. consumption is larger and there is more borrowing from and/or selling assets to the rest of the world.
In 2022, the U.S. trade deficit was about 12% larger than the year before (2021). The increase in the trade deficit in 2022 means that U.S. consumption is larger and there is more borrowing from and/or selling assets to the rest of the world. This occurs because a trade deficit indicates that a country is importing more goods and services than it is exporting, thus requiring additional borrowing or selling of assets to finance the excess consumption.
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Canada Telecom, a telephone company, is contemplating investing in a project in multimedia applications. The company is currently 30% debt financed. The company’s analysts have estimated the project’s cash flows but need to determine the project cost of capital. Canada Telecom analysts assess that their new multimedia division has a target debt-equity ratio of 0.6, and a cost of debt of 6.5%. In addition, the risk-free rate is 3%, and market risk premium is 5%.
XYZ Co. is a pure play in the multimedia business and is 35% debt financed. Its current equity beta is 1.05. Assume that both Canada Telecom and XYZ have a tax rate of 35%, and a debt beta of 0.
Is Canada Telecom’s WACC the right discount rate for its new project? Why or why not? (5 marks)
Explain why you cannot use XYZ’s equity beta (1.05) as a proxy for the equity beta of Canada Telecom’s new project. Estimate the new project’s equity beta. (10 marks)
What is the new project’s cost of capital? (5 marks)
Canada Telecom’s WACC is not the right discount rate for its new project because the new project is expected to have a different capital structure than the existing business.
The new division has a target debt-equity ratio of 0.6, while the overall company is currently 30% debt financed. Therefore, the new project’s WACC will be different from the company's WACC.
We cannot use XYZ’s equity beta (1.05) as a proxy for the equity beta of Canada Telecom’s new project because the two companies have different business risks, financial risks, and operating environments.
While XYZ is a pure-play multimedia company, Canada Telecom has a diversified business portfolio. Moreover, the debt-to-equity ratios of the two companies are different. Therefore, we need to estimate the new project’s equity beta.
To estimate the new project’s equity beta, we can use the Hamada equation:
Equity Beta = Unlevered Beta * [1 + (1 - Tax Rate) * (Debt/Equity)]
Here,
Unlevered Beta = XYZ's Equity Beta / [1 + (1 - Tax Rate) * (Debt/Equity)]
= 1.05 / [1 + (1 - 0.35) * (0.35/0.65)] = 0.86
Debt-to-Equity Ratio of the new project = 0.6
Tax Rate = 35%
Plugging the values in the Hamada equation, we get:
Equity Beta = 0.86 * [1 + (1 - 0.35) * (0.6/0.4)]
= 0.86 * 1.63
= 1.40
Therefore, the estimated equity beta of Canada Telecom’s new project is 1.40.
The new project’s cost of capital can be calculated as follows:
Cost of Equity = Risk-Free Rate + Equity Risk Premium * Beta
= 3% + 5% * 1.40
= 10%
Cost of Debt = 6.5%
Tax Rate = 35%
Weight of Debt = 0.6
Weight of Equity = 0.4
WACC = (Weight of Debt * Cost of Debt * (1 - Tax Rate)) + (Weight of Equity * Cost of Equity)
= (0.6 * 6.5% * (1 - 0.35)) + (0.4 * 10%)
= 2.34% + 4%
= 6.34%
Therefore, the new project’s cost of capital is 6.34%.
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Cajamadrid, S.A. issued preferred stocks in 2009. A preferred stock is simply a constant and perpetual annuity. Assuming that you got EUR 37 each year in terms of dividend, compute the price of the preferred stock in the market. The rate of discount of the preferred stocks is 22% annual. a. EUR 12. b. EUR 280. C. EUR 75. d. None of the above.
The present value of the anticipated future dividends, discounted by 22%, is used to determine the preferred stock's price, which is set at EUR 168.18. The correct option is d.
To compute the price of the preferred stock, we need to use the formula for the present value of a perpetual annuity:
Price = Dividend / Rate of Discount
Given that the dividend is EUR 37 per year and the rate of discount is 22% annually, we can calculate the price of the preferred stock as:
Price = 37 / 0.22 = EUR 168.18
Therefore, none of the options provided (a, b, c) match the calculated price. The correct answer is d. None of the above.
To explain further, the price of the preferred stock is determined by the present value of its expected future dividends. Since the dividends are constant and perpetual, we can use the formula for the present value of a perpetuity.
In this case, the rate of discount is 22%, which reflects the opportunity cost of investing in this preferred stock instead of other investment opportunities that may yield a higher return. The higher the discount rate, the lower the present value of the preferred stock, and vice versa.
Using the formula, we can see that the price of the preferred stock is EUR 168.18, which is the present value of the expected future dividends discounted at 22%.
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A deposit of $1,000,000 in an
account with an annual rate with monthly compounding. The account
will have the amount of $1,629,994.054 after seven (7)
years.
Calculate the annual rate with monthly compounding
associated with this account.
The annual rate with monthly compounding associated with this account is approximately 4.69%.
The formula for calculating the future value of a lump sum investment with monthly compounding is:
FV = PV × (1 + r/n)^(n×t)
Where FV is the future value, PV is the present value, r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the time period.
In this case, PV = $1,000,000, FV = $1,629,994.054, n = 12 (since interest is compounded monthly), and t = 7 years.
We can rearrange the formula to solve for r:
r = n × [(FV/PV)^(1/(n×t)) - 1]
Plugging in the values, we get:
r = 12 × [(1,629,994.054/1,000,000)^(1/(12×7)) - 1] ≈ 0.0469 or 4.69%
Therefore, the annual rate with monthly compounding associated with this account is approximately 4.69%.
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If the bank restructures the loan, the terms of the restructuring terms are as follows:
Loan payments will be stretched to 5 years.
Interest rate will be reduced to 5% for the next 5 years.
Principal payment of $1,000,000 in year 3 and principal payments of $1,500,000 in years 4 to 5.
No upfront fee.
The cost of funds for the bank increases to 10% since the risk of the loan increases after restructuring
What would be the present value of the restricted loan? (
The present value of the restructured loan is $4,013,934.
To calculate the present value of the restructured loan, follow these steps:
1. Determine the cash flows: The loan will have annual payments for five years, with a principal payment of $1,000,000 in year 3 and principal payments of $1,500,000 in years 4 and 5.
2. Calculate the annual interest payment: The interest rate is 5%, so the annual interest payment is 5% of the outstanding balance.
3. Calculate the total payment for each year: Add the interest payment and principal payment for each year.
4. Discount the cash flows: Use the bank's cost of funds, which is 10%, as the discount rate to find the present value of each cash flow.
5. Sum the present values: Add the present values of all cash flows to find the present value of the restructured loan.
By following these steps, the present value of the restructured loan can be calculated as $4,013,934.
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