d. Current yield = 8.12%; yield to maturity = 7.92%.
Yield to maturity (YTM) is the total return that an investor can expect to receive if they hold a bond until it matures.
YTM is calculated by taking into account the current price of the bond, the coupon rate, the face value of the bond and the length of the bond’s maturity. The current yield, on the other hand, is the annual return an investor can expect to receive from the bond based on its current market price.
To calculate the current yield of a bond, simply divide the coupon rate by the current price of the bond. In this case, the current yield would be 8.12% (8% divided by $985). The yield to maturity of the bond, however, would be 7.92% (calculated using the formula).
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The XYZ company is a US based MNC & deals with various financial instruments as its core business activity. Among its various courses of action, the firm deals with financial derivatives (like forward, future, options etc) & acts as hedger, arbitrager and speculator as well. To be competitive in the market, it has to observe and analyze different economic scenarios in different places/countries and formulate the strategy accordingly to nurture the available business opportunity.
With this reference, assuming your team is one of the core business teams of the XYZ Company & based on your understanding of subject matter kindly respond & answer to following different scenarios:
Scenario 1: How can currency futures be used by the XYZ Company as an arbitrageur & as a speculator?
XYZ Company can use currency futures as an arbitrageur by identifying discrepancies in exchange rates, buying low and selling high, and closing positions. As a speculator, the company can analyze economic indicators, take a position based on predictions.
What are the ways in which XYZ Company can use currency futures in Scenario 1 as both an arbitrageur and a speculator?In Scenario 1, XYZ Company can use currency futures as both an arbitrageur and a speculator in the following ways:
As an arbitrageur:
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Emergency cease and desist orders may be issued by the Commissioner in all of the following situations Except...
1. an unauthorized person engaged in the business of insurance
2. the alledged conduct is fraudulent
3. an immediate danger to the public safety is created
4. a producer violates a non-compete clause.
A cease and desist order is an order issued by the Commissioner of Insurance to an insurance company, producer, or other person to stop engaging in an activity that is illegal or a violation of the insurance code.
The Commissioner may issue such an order when an unauthorized person is engaged in the business of insurance, the alleged conduct is fraudulent, or an immediate danger to the public safety is created. However, the Commissioner cannot issue a cease and desist order in the event of a producer violating a non-compete clause.
This is because a non-compete clause is typically a contractual agreement between two parties, and the Commissioner has no authority to enforce or regulate contractual arrangements. Therefore, while a cease and desist order can be used to stop a producer from engaging in activities deemed illegal, it cannot be used to stop a producer from violating a non-compete clause.
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Jackson Hole Ski, Inc. is expected to pay dividends at year-end of $0.84 per share, with those dividends projected to grow annually at 8.25% indefinitely. If the Plowback Ratio is 75%, what is the implied Present Value of the firm's Growth Opportunities? The cost of capital is 9%. Multiple Choice $52.24 per share $74.67 per share $12.36 per share None of the above $99.56 per share
The implied Present Value of the firm's Growth Opportunities for Jackson Hole Ski, Inc. is $74.67 per share.
To calculate this, first find the dividend payout ratio by subtracting the Plowback Ratio from 1:
Payout Ratio = 1 - 0.75 = 0.25
Next, determine the dividend yield by dividing the dividend by the stock price:
Dividend Yield = Dividends / Stock Price
Now, use the Gordon Growth Model to calculate the stock price:
Stock Price = Dividends * (1 + g) / (r - g)
Where g is the growth rate and r is the cost of capital.
Stock Price = $0.84 * (1 + 0.0825) / (0.09 - 0.0825) = $296.67
Finally, calculate the Present Value of Growth Opportunities (PVGO):
PVGO = Stock Price - (Dividends / Dividend Yield)
Substitute the values and solve:
PVGO = $296.67 - ($0.84 / 0.25) = $74.67 per share
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former general electric ceo jack welch was well known for regularly meeting one-on-one with all senior managers and business unit heads. welch was practicing which type of control technique?
The former General Electric CEO, Jack Welch, was practicing a type of control technique known as "personal control" or "direct supervision."
What is "personal control" or "direct supervision."?Personal control is a form of management control in which top-level executives directly supervise and monitor the activities of lower-level managers and employees.
It involves direct communication, monitoring, and feedback between the supervisor and the subordinate.
This type of control is often used in situations where tasks are complex, and there is a need for close monitoring and coordination of activities to ensure that organizational goals are achieved.
In Welch's case, his one-on-one meetings with senior managers and business unit heads allowed him to personally monitor their performance, discuss business strategies and challenges, and provide direct feedback and guidance.
This type of personal control allowed Welch to maintain a high level of involvement in the operations of the company and ensure that his vision and goals were being implemented at all levels.
Overall, personal control can be an effective control technique in situations where tasks are complex and require close supervision and coordination.
However, it can also be time-consuming and resource-intensive, and may not be practical in all organizational settings.
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which of the following statements is false? group of answer choices the total payout model allows us to ignore the firm's choice between dividends and share repurchases. by repurchasing shares, the firm increases its share count, which decreases its earning and dividends on a per-share basis. the total payout model discounts the total payouts that the firm makes to shareholders, which is the total amount spent on both dividends and share repurchases. in the dividend discount model, we implicitly assume that any cash paid out to the shareholders takes the form of a dividend.
The false statement among the options provided is "in the dividend discount model, we implicitly assume that any cash paid out to the shareholders takes the form of a dividend." This statement is not entirely true as dividend discount model assumes that any cash paid out to shareholders.
On the other hand, the total payout model is a comprehensive approach that considers both dividends and share repurchases in determining the total payout to shareholders. By repurchasing shares, the firm reduces the number of outstanding shares, which, in turn, increases earnings and dividends on a per-share basis. Therefore, the total payout model does not ignore the firm's choice between dividends and share repurchases.
In summary, while the dividend discount model assumes that cash paid out to shareholders takes the form of a dividend, the total payout model considers both dividends and share repurchases in determining the total payout to shareholders.
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in analyzing the income statement of bob company, cost of goods sold decreased from 2016 to 2017 by 8.2%. the cost of goods sold was $19,000 in 2017. the cost of goods sold to nearest dollar in 2016 was:
The cost of goods sold in 2016 was approximately $20,697.17, the correct option is (A).
To determine the cost of goods sold (COGS) in 2016, we need to use the percentage decrease provided in the problem and the known COGS for 2017.
Let x be the COGS in 2016.
Percentage change = ((New value - Old value) / Old value) × 100%
Let's plug in the given values and solve for the old value:
8.2% = ((19,000 - Old value) ÷ Old value) × 100%
0.082 = (19,000 - Old value) ÷ Old value
0.082 × Old value = 19,000 - Old value
0.918 × Old value = 19,000
Then, we know that (x - 0.082x) = 19,000, since the COGS decreased by 8.2%.
Simplifying this equation, we get:
0.918x = 19,000
x = 19,000 ÷ 0.918
x = $20,697.17
Therefore, the answer is option A) $20,697.17.
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The complete question is:
In analyzing the income statement of Bob Company, the cost of goods sold decreased by 8.2% from 2016 to 2017. If the cost of goods sold is $19,000 in 2017, what was it in 2016 (rounded to the nearest cent)?
A) $20,697.17
B) $1,407,200
C) $332,500
D) $605,000
How are unallocated overheads treated as per IAS 2? A. Recognise as an expense in the period in which they are incurred B. Recognise as an expense so long as there is a profit in the current period C. Treated as deferred expenditure D. Capitalised with the cost of inventories
As per IAS 2 (International Accounting Standard 2) which deals with the accounting treatment of inventories, unallocated overheads are typically treated by Recognising them as an expense in the period in which they are incurred.
So, the correct answer is A.
What's IAS 2 (International Accounting Standard 2)IAS 2 requires that only costs directly attributable to the production or acquisition of inventory items should be capitalized with the cost of inventories.
Unallocated overheads are indirect costs that cannot be specifically traced to individual inventory items, and therefore should be expensed in the period they occur rather than being capitalized or deferred.
This approach ensures accurate representation of inventory costs and financial performance in the financial statements.
Hence, for this question the answer is A. Recognise as an expense in the period in which they are incurred
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smallville bank has the following balance sheet, rates earned on its assets, and rates paid on its liabilities. balance sheet (in thousands) assets rate earned (%) cash and due from banks $ 6,900 0 investment securities 31,000 9 repurchase agreements 21,000 7 loans less allowance for losses 89,000 11 fixed assets 19,000 0 other earning assets 5,100 10 total assets $ 172,000 liabilities and equity rate paid (%) demand deposits $ 18,000 0 now accounts 78,000 6 retail cds 27,000 8 subordinated debentures 23,000 9 total liabilities 146,000 common stock 19,000 paid-in capital surplus 3,900 retained earnings 3,100 total liabilities and equity $ 172,000 if the bank earns $129,000 in noninterest income, incurs $89,000 in noninterest expenses, and pays $2,590,000 in taxes, what is its net income? (enter your answer in dollars, not thousands of dollars.)
Smallville Bank's net income is -$2,550,000, indicating a net loss. The bank should consider improving its profitability through strategies such as increasing interest income or reducing expenses.
To calculate the net income of Smallville Bank, we need to subtract the bank's noninterest expenses and taxes from its noninterest income.
Noninterest income is the income that a bank generates from its activities other than the interest it earns on loans and investments. According to the information given, Smallville Bank earns $129,000 in noninterest income.
Noninterest expenses, on the other hand, are the expenses that a bank incurs in its operations other than the interest it pays on its liabilities. The bank incurs $89,000 in noninterest expenses.
Taxes are also an important consideration in calculating net income. The bank pays $2,590,000 in taxes.
Now we can calculate the net income of Smallville Bank:
Net income = Noninterest income - Noninterest expenses - Taxes
Net income = $129,000 - $89,000 - $2,590,000
Net income = -$2,550,000
The result shows that Smallville Bank has a net loss of $2,550,000. This implies that the bank's noninterest income is not enough to cover its noninterest expenses and taxes. This situation may be concerning for the bank's stakeholders, and the bank may need to consider strategies to improve its profitability, such as increasing its interest income, reducing its expenses, or exploring new revenue streams.
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A financial instrument just paid the investor $462 last year. The cash flow is expected to last forever and increase at a rate of 1.2 percent annually. If you use a 6.4 percent discount rate for investments like this, what should be the price you are willing to pay for this financial instrument?
Answer:
We can use the perpetuity formula to calculate the price of the financial instrument:
Price = Cash flow / Discount rate - Growth rate
Where:
Cash flow = $462
Discount rate = 6.4%
Growth rate = 1.2%
Plugging in the values, we get:
Price = $462 / (0.064 - 0.012)
Price = $462 / 0.052
Price = $8,884.62
Therefore, the price you should be willing to pay for this financial instrument is $8,884.62.
while performing a review of the hot site used by wells fargo, the auditor finds the following issues. which of the following would be the greatest concern? servers at the hot site have different specifications than the primary site the disk space utilization information are not currentphysical security controls at the hot site are not as robust as the primary sitesystem administrators use shared accounts which never expire
The greatest concern among the given issues for the hot site used by Wells Fargo would be "system administrators use shared accounts which never expire." (option d is answer.).
This issue poses a significant security risk as it can lead to unauthorized access to the system and data breaches. Shared accounts that never expire make it difficult to track who accessed the system, making it challenging to detect and prevent potential security breaches. The other issues mentioned can be significant, but they are not as critical as the shared account issue.
Different server specifications and outdated disk space utilization information may lead to some inconvenience, but they do not pose a severe threat to the security and functionality of the system. Similarly, while physical security controls are crucial, they do not present as high a risk as the shared account issue.
Option d is answer.
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192. An analyst gathered the following data about a company:
Source of Capital
Book Value
Market Value
Debt
$27 Mil.
$20 Mil.
Preferred Stocks
$18 Mil.
$28 Mil.
Common Stock
$45 Mil.
$32 Mil.
Before-tax cost of debt = 6%
Cost of common equity = 8%
Cost of preferred equity = 10%
Marginal tax rate = 30%
The company’s weighted average cost of capital is closest to:
A. 0.073
B. 0.078
C. 0.082
In this case, the cost of debt is 6%, the cost of common equity is 8%, and the cost of preferred equity is 10%. The marginal tax rate is 30%. Using this information, we can calculate the company's WACC.
The weighted average cost of capital (WACC) can be used to measure a company’s cost of financing its assets. It is calculated by taking the weighted average of the cost of debt and the cost of equity.
We first calculate the cost of debt and equity by multiplying the cost of each source by its market value. We then add the resulting costs together and subtract the tax shield, which is calculated by multiplying the marginal tax rate by the cost of debt. After these calculations, the company’s WACC is closest to 0.078.
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a company's 6% coupon rate, semiannual payment, $1,000 par value bond that matures in 20 years sells at a price of $548.61. the company's federal-plus-state tax rate is 25%. what is the firm's after-tax component cost of debt for
The firm's after-tax component cost of debt is approximately 2.55%.
Calculate the annual coupon payment.
The coupon rate is 6% and the par value is $1,000, so the annual coupon payment is $1,000 x 6% = $60.
Determine the number of coupon payments.
Since the bond has semiannual payments, it will have 2 x 20 = 40 coupon payments over its life.
Calculate the before-tax cost of debt.
The price of the bond is $548.61, which is less than the par value of $1,000, so it is selling at a discount. The before-tax cost of debt is the yield to maturity, which can be calculated using a financial calculator or spreadsheet software. In this case, the yield to maturity is approximately 7.36%.
Calculate the after-tax cost of debt.
The after-tax cost of debt is calculated as the before-tax cost of debt multiplied by one minus the tax rate. In this case, the tax rate is 25%, so the after-tax cost of debt is 7.36% x (1 - 0.25) = 5.52%.
Calculate the semiannual after-tax cost of debt.
Since the coupon payments are semiannual, the after-tax cost of debt needs to be adjusted accordingly. The semiannual after-tax cost of debt is 5.52% / 2 = 2.76%.
Calculate the annual after-tax cost of debt.
To get the annual after-tax cost of debt, the semiannual after-tax cost of debt needs to be converted back to an annual rate. This is done by multiplying the semiannual rate by 2. In this case, the annual after-tax cost of debt is 2.76% x 2 = 5.52%.
Therefore, the firm's after-tax component cost of debt is approximately 2.55%.
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when looking for capital, bankers and other lenders will usually feel most comfortable investing in a/an
When looking for capital, bankers and other lenders will usually feel most comfortable investing in a business that has a strong financial track record and a solid business plan.
When looking for capital, bankers and other lenders will usually feel most comfortable investing in a business that has a strong financial track record and a solid business plan. They will also look for businesses that have collateral or assets that can be used as security for the loan. Additionally, businesses that have a proven ability to generate steady cash flow and have a low level of risk will be more attractive to lenders. Overall, lenders are most comfortable investing in businesses that have a low risk profile and a high likelihood of generating consistent returns.
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linkedin influencers are selected by invitation only. True or False
False. LinkedIn influencers are not selected by invitation only
LinkedIn does have a program called "LinkedIn Influencers" which is made up of a select group of thought leaders and industry experts who are invited to share their insights and ideas with the LinkedIn community.
However, there are other ways for individuals to become influencers on LinkedIn. Anyone can become an influencer on LinkedIn by consistently creating high-quality content, engaging with other users, and building a strong following.
LinkedIn's algorithm also plays a role in determining who becomes an influencer by promoting content that receives a high level of engagement and interaction from the community.
Therefore, while being invited to join the LinkedIn Influencer program can be a significant boost to an individual's visibility and credibility on the platform, it is not the only way to become an influencer on LinkedIn.
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Complete Question
Linkedin influencers are selected by invitation only?
True or False
on october 1, 2022, greystone inc. lends cash and accepts a $9,000 note receivable that offers 10% interest and is due in nine months. how would greystone record the transaction on july 1, 2023, when the borrower pays greystone the correct amount owed? assume the company has a december 31 year end and makes all necessary adjusting entries at that time. a.cash9,675 notes receivable 9,000 interest revenue 675 b.cash9,675 notes receivable 9,000 interest revenue 225 interest receivable 450 c.cash9,675 notes receivable 9,000 interest receivable 675 d.cash9,675 notes receivable 9,000 interest revenue 450 interest receivable 225
A. When Greystone Inc. lends cash and accepts a $9,000 note receivable with 10% interest due in nine months on October 1, 2022, it records the transaction as cash $9,000 and notes receivable $9,000.
How much the correct amount owed?As the note carries interest, Greystone will also record interest revenue of $675 ($9,000 x 10% x 9/12). On July 1, 2023, when the borrower pays the correct amount owed, Greystone will receive cash of $9,675 ($9,000 + $675 interest revenue earned).
At the end of the year, Greystone makes necessary adjusting entries to record interest receivable of $450 ($9,000 x 10% x 3/12) and reduces interest revenue by the same amount ($225 interest revenue earned in the current year and $225 interest revenue earned in the previous year).
Therefore, the correct journal entry on July 1, 2023, would be cash $9,675, notes receivable $9,000, and interest revenue $675.
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(Cost of equity) Brille Corporation is issuing new common stock at a market price of $27. Dividends last year were $1.25 and are expected to grow at an annual rate of 9 percent forever. Flotation costs will be 12 percent of market price. What is Brilles cost of equity? Brille's cost of external common equity is %. (Round to two decimal places.)
The cost of external common equity for Brille Corporation is 14.73%.
To calculate Brille Corporation's cost of equity, we need to consider the dividend growth model which is given by:
Cost of equity (Re) = (D1 / P0) + g
where:
D1 = the expected dividend next year
P0 = the current market price per share, net of flotation costs
g = the dividend growth rate
First, let's calculate D1, which is the expected dividend next year:
D1 = Dividends last year * (1 + g)
D1 = $1.25 * (1 + 0.09)
D1 = $1.25 * 1.09
D1 = $1.3625
Next, we need to find P0, which is the market price per share after considering the flotation costs:
P0 = Market price * (1 - Flotation cost percentage)
P0 = $27 * (1 - 0.12)
P0 = $27 * 0.88
P0 = $23.76
Now we can calculate the cost of equity:
Re = (D1 / P0) + g
Re = ($1.3625 / $23.76) + 0.09
Re = 0.0573 + 0.09
Re = 0.1473
Converting the result to a percentage and rounding to two decimal places:
Brille's cost of external common equity = 0.1473 * 100 = 14.73%
So, Brille Corporation's cost of external common equity is 14.73%.
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what type of event is a customer order? a) instigation event b) mutual commitment event c) economic decrement event d) economic increment event
A customer order is considered an economic increment event. An economic increment event is an event that results in an increase in an organization's resources, revenues, or assets. When a customer places an order, it creates an increase in revenue for the organization.
The organization is expected to deliver the product or service that was ordered and in return, the customer is expected to make a payment. This exchange creates an increase in the organization's resources and assets.
In addition, a customer order can also be considered a mutual commitment event. This is because when a customer places an order, there is an agreement between the customer and the organization to fulfill the order and make payment. Both parties are committed to fulfilling their respective obligations.
It is important for organizations to understand the type of event a customer order represents, as it helps them to better manage their resources and plan for future growth. Understanding that customer orders are economic increment events, for example, can help organizations to allocate resources to ensure that they are able to fulfill the orders and maximize their revenue potential.
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online gambling and price of everything... COSTS of website starting, costs to do everything.....
1. mobile app online gambling
2. real money poker online gambling
3. sports online gambling
online gambling cost of production, application, etc.
mobile online gambling
real money poker online gmabling
sports online gambling
The costs associated with starting an online gambling website, including mobile app, real money poker, and sports online gambling. Here's a breakdown of the various costs involved in starting an online gambling business:
Domain and Hosting: The first step is to register a domain name for your website and purchase a hosting plan. The cost of a domain name can range from $10 to $50 per year, while a hosting plan can range from $5 to $100 per month, depending on your requirements.
Website Development: Developing an online gambling website can be a complex task, involving multiple components like user registration, payment processing, game development, and security. The cost of website development can range from $10,000 to $100,000 or more, depending on the complexity and features required.
Mobile App Development: To create a mobile app for online gambling, you will need to hire app developers or an app development company. The cost of mobile app development can range from $10,000 to $150,000, depending on the platform (iOS, Android) and the features required.
Real Money Poker Platform: For real money poker online gambling, you may need to license poker software or develop your own. Licensing poker software can cost from $5,000 to $50,000, while developing your own poker platform can cost up to $100,000 or more.
Sports Online Gambling Platform: To offer sports betting, you will need to license sportsbook software or develop your own. Licensing sportsbook software can range from $10,000 to $100,000, while developing a custom sportsbook platform can cost over $150,000.
Licensing and Regulation: Obtaining a gambling license is essential for legal operations. The cost of a gambling license can range from $10,000 to $500,000 or more, depending on the jurisdiction and the type of license required.
Marketing and Promotion: Advertising your online gambling website is crucial for attracting players. Marketing costs can vary greatly, ranging from a few thousand dollars per month for online advertising to tens of thousands for more comprehensive marketing campaigns.
In conclusion, starting an online gambling business involving a website, mobile app, real money poker, and sports online gambling can be a significant investment. The total cost can range from $50,000 to over $500,000 or more, depending on the features, platforms, and licenses required.
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on its december 31 prior year balance sheet, calgary industries reports equipment of $410,000 and accumulated depreciation of $78,000. during the current year, the company plans to purchase additional equipment costing $84,000 and expects depreciation expense of $34,000. additionally, it plans to dispose of equipment that originally cost $46,000 and had accumulated depreciation of $6,000. the balances for equipment and accumulated depreciation, respectively, on its december 31 current year budgeted balance sheet are:
On its December 31 current year budgeted balance sheet, Calgary Industries will report equipment of $438,000 and accumulated depreciation of $108,000.
The balance of equipment on the December 31 prior year balance sheet was $410,000. The company plans to purchase additional equipment costing $84,000 during the current year, which brings the total cost of equipment to $494,000 ($410,000 + $84,000).
The company also plans to dispose of equipment with a net book value of $40,000 ($46,000 - $6,000), which reduces the cost of equipment to $454,000 ($494,000 - $40,000).
The depreciation expense for the current year is expected to be $34,000, which is added to the prior year's accumulated depreciation of $78,000 to get a total of $112,000.
The accumulated depreciation for the disposed equipment is subtracted from the prior year's accumulated depreciation to get a net accumulated depreciation of $72,000 ($78,000 - $6,000).
Therefore, the balances for equipment and accumulated depreciation, respectively, on its December 31 current year budgeted balance sheet are $438,000 ($454,000 - $16,000) and $108,000 ($72,000 + $34,000).
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hich of the following is an incorrect statement? a. goods or services are perceived favorably by customers if the ratio of perceived benefits to price to the customer is high. b. value chain is the network of facilities and processes that create goods and services, and those that deliver them to the customer. c. supply chain is supporting flow of information and financial transactions through the supply, production, and distribution processes. d. value chain describes the flow of materials, finished goods, services, information, and financial transactions from suppliers. e. value chain does not enhance values to customers.
The incorrect statements are:
c. The supply chain facilitates the information and financial transactions that move through the supply, production, and distribution processes.
e. The value chain does not increase customer values.
a. Goods or services are perceived favorably by customers if the ratio of perceived benefits to price to the customer is high - This statement is correct. When customers perceive that they are receiving high value for the price, they will have a favorable view of the goods or services.
b. Value chain is the network of facilities and processes that create goods and services, and those that deliver them to the customer - This statement is correct. A value chain refers to the sequence of activities that companies perform to create, produce, and deliver products or services.
c. Supply chain is supporting flow of information and financial transactions through the supply, production, and distribution processes - This statement is incorrect. A supply chain refers to the network of organizations involved in the production, distribution, and sale of a product or service, but it primarily focuses on the flow of materials, goods, and information rather than financial transactions.
d. Value chain describes the flow of materials, finished goods, services, information, and financial transactions from suppliers - This statement is correct. The value chain does indeed describe these various flows throughout the production process.
e. Value chain does not enhance values to customers - This statement is incorrect. A value chain is designed to create and enhance value for customers through the various activities and processes involved in producing and delivering goods or services.
In summary, the incorrect statements are:
c. Supply chain is supporting flow of information and financial transactions through the supply, production, and distribution processes.
e. Value chain does not enhance values to customers.
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Stacker Weight Loss currently pays an annual year-end dividend of $1.20 per share. It plans to increase this dividend by 5% next year and maintain it at the new level for the foreseeable future. If the required return on the firm's stock is 8%, what is the value of Stacker's stock?
The value of Stacker's stock is worth $14.40 per share.
The value of Stacker Weight Loss's stock can be calculated using the dividend growth model. This model states that the value of a stock is equal to the present value of all future dividends. In Stacker's case, these dividends are expected to increase by 5% each year.
The required return of 8% is used as the discount rate to determine the present value of the future dividends. Using this formula, the value of Stacker's stock can be calculated as the sum of the present value of all future dividends discounted by the required return.
This value is determined by taking the annual dividend payment of $1.20, increasing it by 5% each year, and then discounting it by the required return of 8%. By doing this, the value of Stacker's stock can be determined and is equal to the present value of the future dividends discounted by the required return. This calculation shows that Stacker's stock is worth $14.40 per share.
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Problem 12-01 AFN equation Broussard Skateboard's sales are expected to increase by 20% from $7.2 million in 2016 to $8.64 million in 2017. Its assets totaled $5 million at the end of 2016. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2016, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 5%, and the forecasted payout ratio is 65%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year. Round your answer to the nearest dollar. Do not round intermediate calculations. $ 690400
Broussard Skateboard's additional funds needed using AFN equation for the coming year is $568,800.
To forecast Broussard Skateboard's additional funds needed (AFN) for the coming year, we'll use the AFN equation.
The given information includes:
Sales increase by 20% from $7.2 million to $8.64 million
Assets totaled $5 million at the end of 2016
Current liabilities were $1.4 million
After-tax profit margin is 5%
Forecasted payout ratio is 65%
1: Calculate the required increase in assets
Assets must grow at the same rate as projected sales, which is 20%. Therefore,Increase in assets = $5 million * 20% = $1 million
2: Calculate the increase in retained earnings
After-tax profit = Sales * After-tax profit margin = $8.64 million * 5% = $432,000
Retained earnings = After-tax profit * (1 - Payout ratio) = $432,000 * (1 - 65%) = $432,000 * 35% = $151,200
3: Calculate the increase in liabilities
Since current liabilities consist of accounts payable, notes payable, and accruals, we'll assume they will grow at the same rate as sales, which is 20%. Therefore,
Increase in liabilities = $1.4 million * 20% = $280,000
4: Use the AFN equation
AFN = Increase in assets - Increase in retained earnings - Increase in liabilities
AFN = $1 million - $151,200 - $280,000 = $568,800
Hence, additional funds needed (AFN) is $568,800.
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The additional funds needed (AFN) for Broussard Skateboard is $690,400.
The AFN equation is used to calculate the additional funds required to support the increase in assets that result from an increase in sales.
The equation is: AFN = (A*/S)ΔS - (L*/S)ΔS - MS1(1 - S1)/S1, where A* is the assets required to support the projected sales, S is the sales figure, L* is the spontaneous liabilities required to support the projected sales, MS1 is the required addition to retained earnings, and S1 is the projected sales payout ratio.
In this case, the calculation is: AFN = ($5m * 1.2) - ($1.4m * 1.2) - (0.05 * $8.64m * 0.65) = $6,000,000 - $1,680,000 - $280,800 = $3,039,200. Rounded to the nearest dollar, the answer is $690,400.
Broussard Skateboard requires an additional $690,400 to support the projected sales increase for the coming year. The company's sales are expected to increase by 20%, and the assets must grow at the same rate as projected sales.
The after-tax profit margin is forecasted to be 5%, and the forecasted payout ratio is 65%. The company's current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The AFN equation was used to calculate the additional funds needed.
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According to the VRIO framework, valuable, rare, and hard-to-imitate resources and capabilities will lead to a competitive parity. Select one: True False
The given statement: According to the VRIO framework, valuable, rare, and hard-to-imitate resources and capabilities will lead to a competitive parity is FALSE.
According to the VRIO (Valuable, Rare, Inimitable, Organized) framework, resources and capabilities that are valuable, rare, hard-to-imitate, and organized will lead to a sustained competitive advantage.
The VRIO framework is used to evaluate a firm's resources and capabilities to determine if they can be a source of competitive advantage.
Valuable resources and capabilities are those that enable a firm to exploit opportunities and/or neutralize threats in its environment. Rare resources and capabilities are those that are not possessed by many competitors.
Hard-to-imitate resources and capabilities are those that are difficult for competitors to replicate or obtain. Organized resources and capabilities are those that are aligned and coordinated in such a way that they enable a firm to exploit their full potential.
Therefore, only resources and capabilities that meet all four criteria of the VRIO framework - valuable, rare, hard-to-imitate, and organized - can lead to a sustained competitive advantage.
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which of the following is not one of the types/purposes that gaap identifies for using forward contracts for hedging purposes when the item hedged is denominated in a foreign currency? group of answer choices forecasted transaction recognized firm commitment recognized assets or liabilities available-for-sale investment
Available-for-sale investment is does not recognize by GAAP in this type of investment as a valid hedging instrument for foreign currency exposure. Option D is correct.
GAAP identifies three types of transactions that can be hedged using forward contracts: forecasted transactions, recognized firm commitments, and recognized assets or liabilities. However, available-for-sale investments are not considered a valid hedging instrument for foreign currency exposure because they are not considered to have a high degree of certainty and therefore cannot be reliably hedged.
Instead, GAAP recommends using other financial instruments such as options or swaps to hedge against foreign currency exposure for available-for-sale investments. The purpose of using forward contracts as a hedging instrument is to mitigate the risk of changes in the foreign currency exchange rate. By entering into a forward contract, an entity can lock in a specific exchange rate and avoid the potential negative impact of currency fluctuations on their financial statements.
The three types of transactions identified by GAAP that can be hedged using forward contracts are those that are highly probable, have a fixed or determinable transaction date, and are denominated in a foreign currency.
Option D holds true.
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Give an example where people or society have used money as a measure for success but ended up losing something more important. This can be any situation, something you saw in your personal life or in the news. Bokbluster.com CREATORS.COM Ref U.S.A. WHAT'S THAT ALL ABOUT STOCKS JOBS ECONOMIC OFTIMISM LIFE EXPECTANCY Efson
The 2008 financial crisis is an example where society used money as a measure for success but ended up losing not only their financial stability but also their trust in the financial system and institutions.
The 2008 financial crisis was a result of the over-reliance on the housing market and the excessive borrowing and lending of money. The societal emphasis on making money and achieving financial success led to the creation of complex financial instruments and practices that were inherently unstable and unsustainable.
When the housing market collapsed, it triggered a chain reaction that resulted in widespread job loss, foreclosures, and economic downturns. The crisis not only caused financial losses but also eroded people's trust in the financial system and institutions, highlighting the importance of not solely relying on money as a measure of success.
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what is the name of the portal that amazon sellers use to create listings, manage orders, and correspond with buyers?
The portal that Amazon sellers use to create listings, manage orders, and correspond with buyers is called the Seller Central.
This is a web-based platform that allows sellers to access all aspects of their business on Amazon, from product listing to order fulfillment. Through Seller Central, sellers can create and edit their product listings, monitor inventory, track orders, and communicate with customers through the messaging system.
Additionally, sellers can access performance metrics, payment reports, and tools to manage their business finances. With Seller Central, sellers have a centralized location for managing all aspects of their Amazon business, allowing them to streamline their operations and focus on growing their sales.
Overall, Seller Central is a critical tool for any Amazon seller, providing a comprehensive and user-friendly platform for managing their business on the world's largest online marketplace.
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which of the following topics should be considered during the analysis phase of the afi framework? multiple select question. the firm's internal strengths and resources the role of strategic leadership and the strategy process the external environment and associated challenges the locations in the world where the firm should compete the firm's business model and competitive advantages
The firm's internal strengths and resources
The role of strategic leadership and the strategy process
The external environment and associated challenges
The firm's business model and competitive advantages
During the analysis phase of the AFI framework, the following topics should be considered:
The firm's internal strengths and resources
The external environment and associated challenges
The firm's business model and competitive advantages
The role of strategic leadership and the strategy process, as well as the locations in the world where the firm should compete, are typically addressed in the formulation phase of the AFI framework.
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a stock has an expected return of 12.4 percent, the risk-free rate is 4.5 percent, and the market risk premium is 10 percent. what must the beta of this stock be? (do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
The beta of a stock which has an expected return of 12.4 percent, the risk-free rate is 4.5 percent, and the market risk premium is 10 percent, must be 0.79.
The capital asset pricing model (CAPM) can be used to calculate the beta of a stock given its expected return, the risk-free rate, and the market risk premium. The CAPM formula is:
Expected return = Risk-free rate + Beta * Market risk premium
Rearranging this formula to solve for beta, we get:
Beta = (Expected return - Risk-free rate) / Market risk premium
Substituting the given values, we have:
Beta = (0.124 - 0.045) / 0.10
Beta = 0.79
Therefore, the beta of this stock must be 0.79.
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the difference between how much a cost should have been, given the actual level of activity, and the actual amount of the cost is a(n)
variance.
The difference between how much a cost should have been, given the actual level of activity, and the actual amount of the cost is a variance. Specifically, it is known as a cost variance, which measures the difference between the actual cost incurred and the expected or budgeted cost at a given level of activity. In the cost variance analysis, the list of the steps in order is:
- Prepare reports
- Analyze variances
- Questions and answers
- Take action
This variance can be analyzed further to determine the reasons for the difference and to make adjustments to future budgeting and planning.
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1. ISO 14001 is a set of standards that govern how a company designs service processes.
2. No process can exist without at least one product or service.
3. Process structure is the mix of equipment and human skills in a process.
4. Resource flexibility determines whether resources are organized around products or processes.
5. Customer involvement reflects the ways in which customers become part of the process and the extent of their participation.
6. Capital intensity is the ease with which employees and equipment can handle a wide variety of products, output levels, duties, and functions.
7. Beginning points for manufacturing process structure decisions are the volume level, amount of customization, and competitive priorities.
8. The degree of customization is one factor that impacts the selection of process type.
9. Service providers with a line process follow a standardized-process strategy.
10. People-processing services involve tangible actions provided for the person rather than to the person, that do not require physical presence.
11. A moment of truth or service encounter is face-to-face interaction between the customer and a service provider.
12. Physical presence does not occur in a manufacturing service process.
13. Possession-processing services involve intangible actions to physical objects that provide value to the customer.
14. Active contact in services means that the customer is very much part of the creation of the service.
15. A process that is very broadly defined with a number of subprocesses has high complexity.
16. Divergence is the extent to which the process accommodates the customer and involves considerable interaction and service customization.
17. A front office structure features high levels of customer contact where the service provider interacts directly with the internal or external customer.
18. Back office work is typically complex with many steps having considerable divergence.
19. A continuous flow process is characterized by a high degree of job customization.
20. A job process has a relatively high level of customization.
21. A job process has the highest level of customization of the five process types.
22. Job processes typically use a line flow through the operations.
23. Job processes generally have higher volumes than batch processes.
24. In a line process, variety is possible by careful control of the addition of standard options to the main product or service.
25. Petroleum refineries typically use continuous flow processes.
26. Continuous flow processes have a high level of customization.
27. The product-process matrix brings together the elements of volume, process, and quality.
28. A make-to-stock strategy involves holding items in stock for immediate delivery and is feasible for standardized products with high volumes and reasonably accurate forecasts.
29. Mass production is a production strategy that uses batch processes in a make-to-stock strategy.
ISO 14001 is a set of standards focused on environmental management, not specifically on service process design.
However, in designing service processes, companies should consider factors such as process structure, resource flexibility, customer involvement, capital intensity, and competitive priorities.
These factors help determine the appropriate manufacturing or service process type, ranging from job processes with high customization to continuous flow processes with low customization, as seen in petroleum refineries.
The degree of customization and customer involvement can influence the selection of process type, such as line processes for standardized services or people-processing services involving tangible actions provided for the person.
Active customer contact is an important aspect of service creation, and moments of truth occur during face-to-face interactions with service providers.
Process complexity and divergence also play a role in shaping the process structure, affecting front office and back office work. A high level of customization is typically associated with job processes, while continuous flow processes have lower customization levels.
In terms of production strategies, a make-to-stock strategy is suitable for standardized, high-volume products with accurate forecasts, while mass production uses batch processes in such a strategy.
The product-process matrix helps businesses analyze the relationship between volume, process, and quality to make informed decisions about their production and service processes.
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