The statement "The main advantage of the chargeback funding approach is the perceived fairness and accountability it creates for both users and IS functions" is true. The chargeback funding approach refers to a method where users of Information Systems (IS) services are billed for the specific resources and services they consume.
This approach promotes fairness and accountability in several ways:
1. Transparency: By allocating costs based on actual usage, users can see how their actions impact the overall IS budget. This increased visibility encourages the responsible use of resources.
2. Cost allocation: The chargeback model ensures that users pay for the services they utilize, which leads to a more equitable distribution of expenses among different departments or business units.
3. Incentive for efficiency: With the chargeback approach, users are motivated to use IS resources more efficiently, as they are directly responsible for the costs associated with their usage.
4. Better resource management: The IS functions can allocate resources more effectively based on the usage patterns of different users or departments, resulting in better resource management and cost control.
5. Encouraging collaboration: Since the chargeback model highlights the cost of using IS resources, users may be more inclined to collaborate with the IS functions to optimize the use of resources and find cost-effective solutions.
In summary, the chargeback funding approach creates a sense of fairness and accountability for both users and IS functions by promoting transparency, equitable cost allocation, resource efficiency, and collaboration.
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Q.3.2 You would like to use your savings to invest in shares. Q.3.2.1 What are the three (3) most common ways to invest in shares? Provide a brief explanation for each method. Q.3.2.2 The Price/ Earnings (P/E) ratio is often used by individuals wanting to invest in shares (2) Briefly describe why the P/E ratio is considered to be useful to investors. You are not required to provide the formula for this ratio.
The three most common ways to invest in shares are through direct stock purchase, mutual funds, and exchange traded funds (ETFs).
Direct Stock Purchase involves buying shares directly from the issuing company. Mutual Funds are a pool of funds collected from multiple investors and managed by a professional fund manager.
The fund manager will invest in a variety of stocks and bonds. Exchange Traded Funds (ETFs) are similar to mutual funds, but they are traded on an exchange, which means they can be bought and sold like stocks.
The Price/Earnings (P/E) ratio is a popular metric used by investors to help assess the potential of a stock. It is calculated by dividing the stock price by the company's earnings per share. It tells investors how much they are paying for a company’s earnings.
The P/E ratio can help investors identify potentially undervalued stocks, as well as those that may be overvalued. For example, if a stock has a low P/E ratio compared to other stocks in its industry, it could be a good indication that it is undervalued.
Conversely, if the P/E ratio is higher than other stocks in its industry, it could indicate that it is overvalued. Therefore, the P/E ratio is an important factor to consider when investing in shares.
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3.2.1. The three most common ways to invest in share is Direct share purchase, ETFs, Managed funds.
3.2.2. Valuation, Growth potential, Risk assessment.
3.2.1 Direct Share Purchase: In this scenario, shares are purchased directly from a company's listing on the stock market. Shares are kept in the investor's personal name and can be purchased through a broker or internet trading platform.
ETFs, or exchange-traded funds, are investment vehicles that are exchanged on stock exchanges. Investors can purchase and sell ETFs much like ordinary shares because they track a particular market index or industry.
Managed Funds: Managed funds are collective investment vehicles that aggregate the money of a number of investors to purchase stock in a variety of businesses. On behalf of the investors, qualified fund managers handle the investments and make decisions. Investors are thought to find the Price/Earnings (P/E) ratio valuable for a number of reasons:
3.2.2. The P/E ratio is frequently used to determine if a stock is overvalued or undervalued in terms of valuation. A stock may be overpriced if its P/E ratio is higher, whereas a stock may be undervalued if its P/E ratio is lower. When comparing stocks within the same sector or business, the P/E ratio is helpful. P/E ratios of comparable companies can be compared by investors to determine which might be a better investment.
Growth potential: While a low P/E ratio may suggest lesser growth prospects, a high P/E ratio may suggest that a company has tremendous growth potential.
Complete Question:
Q.3.2 You would like to use your savings to invest in shares.
Q.3.2.1 What are the three most common ways to invest in shares? Provide a brief explanation for each method.
Q.3.2.2 The Price/ Earnings (P/E) ratio is often used by individuals wanting to invest in shares 2 Briefly describe why the P/E ratio is considered to be useful to investors. You are not required to provide the formula for this ratio.
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You are in charge of planning a concert for Beyoncé at NRGstadium. You need to pay Beyoncé $2 million for the show, $50,000for the technical crew, $50,000 to the back up dancers, and$200,000 to r ent the stadium. You know you can sell tickets for $200 each. What is the breakeven number of tickets you must sell?A) 10,000B) 11,500C) 12,500D) 13,000
The corrrect answer is B) 11,500. The breakeven number of tickets that need to be sold for the Beyoncé concert at NRG stadium is 11,500.
To calculate the breakeven number of tickets that need to be sold, we need to determine the total cost of the concert and divide it by the price per ticket.
The total cost of the concert is the sum of Beyoncé's fee, the technical crew and backup dancers' fees, and the stadium rental cost, which is $2 million + $50,000 + $50,000 + $200,000 = $2,300,000.
To break even, the total revenue generated from ticket sales needs to equal the total cost of the concert, which is $2,300,000. Therefore, we can set up an equation:
$200 x = $2,300,000
where x is the number of tickets that need to be sold.
Solving for x, we get:
x = $2,300,000 ÷ $200
x = 11,500
Therefore, the breakeven number of tickets that need to be sold for the Beyoncé concert at NRG stadium is 11,500.
Answer: B) 11,500
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if a country is facing an economic downturn, then how will an appropriate fiscal policy affect interest rates and the value of the country's currency?
If a country is facing an economic downturn, will an appropriate fiscal policy affect interest rates and the value of the country's currency A. Increase in government spending will decrease the real interest rates, and the country's currency depreciates.
When the government increases spending, it injects more money into the economy, which can boost aggregate demand and help to spur economic growth. This additional spending can lead to a decrease in real interest rates, as the increased demand for goods and services prompts businesses to borrow and invest more. Lower interest rates encourage borrowing and spending, which further stimulates economic growth.
However, an increase in government spending can also lead to the country's currency depreciating. The lower real interest rates may cause foreign investors to seek higher returns elsewhere, reducing the demand for the country's currency. Additionally, to finance the increased government spending, the country may need to borrow from abroad or print more money, which can also contribute to currency depreciation.
This fiscal policy can help mitigate the negative effects of an economic downturn by stimulating growth, but it may also result in a weaker currency in the short term. Therefore, the correct option is A.
The question was incomplete, Find the full content below:
if a country is facing an economic downturn, then how will an appropriate fiscal policy affect interest rates and the value of the country's currency?
A. Increase in government spending will decrease the real interest rates, and the country's currency depreciates.
B. Increase in government spending will increase the real interest rates, and the country's currency appreciates.
C. Increase in taxation will increase the real interest rates, and the country's currency appreciates.
D. Decrease in taxation will decrease the real interest rates, and the country's currency depreciates.
E. Decrease in government spending will increase the real interest rates, and the country's currency appreciates.
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2000 2001 2002
Current Assets
Cash 20,000 21,000 24,000
Short term Investment 60,000 81,000 145,000
A/R 100,000 90,000 140,000
Inventories 14,000 17,000 15,000
Prepaid Exp 13,000 12,000 14,000
Total Current Assets 207,000 221,000 338,000
Investment 43,000 35,000 40,000
Property and Equipment
Land 68,500 68,500 68,500
Building 810,000 850,000 880,000
Furniture and Equipment 170,000 190,000 208,000
1,048,500 1,108,500 1,156,500
Less: Accumulated Depreciation 260,000 320,000 381,000
Other Operationg Equipment 11,500 20,500 22,800
Total Assets 1,050,000 1,065,000 1,176,300
Current Liabilities
Accounts Payable 60,000 53,500 71,000
Accrued Income Taxes 30,000 32,000 34,000
Accured Expenses 70,000 85,200 85,000
Current Portion of Long-term debt 25,000 21,500 24,000
Total Current Liabilities 185,000 192,200 214,000
Long-term Debt
Mortgage Payable 425,000 410,000 400,000
Deferred Income Taxes 40,000 42,800 45,000
Total Long-term Debt 465,000 452,800 445,000
Total Liabilities 650,000 645,000 659,000
Owner's Equity
Common Stock 55,000 55,000 55,000
Paid-in Capital in Excess 110,000 110,000 110,000
Retained Earnings 235,000 255,000 352,300
Total Owner's Equity 400,000 420,000 517,300
Total Liabilities and Equity 1,050,000 1,065,000 1,176,300
1) Amount Change and % change from Year 2000 to Year2001
2) Current ratio, Acid Test Ratio, A/R turn-over, Avg collection period, Solvency Ratio, profit ratio for Year2001)
( Assume the 2002 Revenue 1,300,000, profit is 65,000 ) Operating Cash flow is 201,000.
1)From 2000 to 2001, the company's total assets increased by $15,000 or 1.43%. The total current assets increased by $14,000 or 6.76%, with short-term investments showing the largest increase. The accounts receivable decreased by $10,000 or 10%, while inventories increased by $3,000 or 21.4%. The company's total liabilities increased by $5,000 or 0.77%, with current liabilities showing the largest increase. The owner's equity increased by $20,000 or 5%.
2)Current Ratio = $221,000 / $192,200 = 1.15
Acid Test Ratio = 1.16
Accounts Receivable Turnover = 13.68 times
Average Collection Period = 26.67 days
Solvency Ratio = 1.65
Profit Ratio = 0.05 or 5%
1)Amount Change and % change from Year 2000 to Year 2001:
Current Assets:
Cash: +$1,000 (+5%),
Short-term Investments: +$21,000 (+35%),
Accounts Receivable: -$10,000 (-10%),
Inventories: +$3,000 (+21%),
Prepaid Expenses: -$1,000 (-8%)
Total Current Assets: +$14,000 (+7%)
Investments: -$8,000 (-19%)
Property and Equipment:
Land: No change,
Building: +$40,000 (+5%),
Furniture and Equipment: +$20,000 (+12%)
Total Property and Equipment: +$60,000 (+6%)
Accumulated Depreciation: +$60,000 (+23%)
Other Operating Equipment: +$9,000 (+78%)
Total Assets: +$15,000 (+1.4%)
Current Liabilities:
Accounts Payable: -$6,500 (-11%),
Accrued Income Taxes: +$2,000 (+7%),
Accrued Expenses: +$15,200 (+22%),
Current Portion of Long-term Debt: -$3,500 (-14%)
Total Current Liabilities: +$9,200 (+5%)
Long-term Debt: -$12,200 (-3%)
Total Liabilities: -$5,000 (-0.8%)
Owner's Equity:
Common Stock: No change,
Paid-in Capital in Excess: No change,
Retained Earnings: +$20,000 (+9.6%)
Total Owner's Equity: +$20,000 (+5%)
Total Liabilities and Equity: +$15,000 (+1.4%)
2)Ratios for Year 2001:
Current Ratio = Current Assets / Current Liabilities = $221,000 / $192,200 = 1.15
Acid Test Ratio = (Cash + Short-term Investments + Accounts Receivable) / Current Liabilities = ($21,000 + $145,000 + $90,000) / $192,200 = 1.16
Accounts Receivable Turnover = Net Credit Sales / Average Accounts Receivable = Net Sales / [(Beginning Accounts Receivable + Ending Accounts Receivable) / 2] = $1,300,000 / (($100,000 + $90,000) / 2) = 13.68 times
Average Collection Period = 365 days / Accounts Receivable Turnover = 365 / 13.68 = 26.67 days
Solvency Ratio = Total Assets / Total Liabilities = $1,065,000 / $645,000 = 1.65
Profit Ratio = Net Income / Net Sales = $65,000 / $1,300,000 = 0.05 or 5%
Operating Cash Flow is not needed to calculate these ratios.
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a(n) occurs when an employee's decision potentially benefits the individual to the possible detriment of the organization.
The situation described in the question is commonly known as a conflict of interest. A conflict of interest arises when an employee's personal interests potentially conflict with the interests of their organization. It can happen when an employee has a personal interest, financial or otherwise, in a situation that may affect their judgment or behavior at work.
A conflict of interest can potentially harm the organization by creating bias in the decision-making process, leading to the misuse of resources, compromising the integrity of the organization or its employees, and damaging the reputation of the organization.
To prevent conflicts of interest, organizations usually have policies in place that require employees to disclose any potential conflicts and to abstain from decision-making in situations where there is a conflict.
These policies are designed to protect the interests of the organization and ensure that employees act in the best interests of the organization rather than their own.
In summary, a conflict of interest occurs when an employee's decision-making is potentially influenced by personal interests that may conflict with the interests of the organization. It is essential for organizations to have policies in place to identify and mitigate conflicts of interest to protect the integrity and reputation of the organization.
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steelworker mike lefevre cannot take pride in his work because:
Mike Lefevre, a steelworker, cannot take pride in his work because he is facing a challenging economic environment. The steel industry has been hit hard by global competition and automation, leading to job losses and a decrease in wages.
This has left Mike, along with many other steelworkers, struggling to make ends meet. Mike is also facing the threat of losing his job due to the increased efficiency of automated processes. These economic pressures have made it difficult for Mike to take pride in his work, as he is constantly aware of the precariousness of his situation. Furthermore, Mike is also dealing with the psychological burden of not knowing what the future holds for him and his family.
These factors combine to make it difficult for Mike to take pride in his work, even if he is performing his job duties well.
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Imagine Scotland voted to become independent from the rest of the UK but continued to use Sterling as its currency (against the wishes of the Bank of England and Treasury). This arrangement would best be described as Select one: a. a de facto currency union b. a currency union c. a currency board d. dollarization
The arrangement described in the question would best be described as "a de facto currency union." The correct answer is option a,
This is because while Scotland would technically be independent, it would still be using the same currency as the rest of the UK without a formal agreement in place.
This could lead to economic and political challenges, as the Bank of England and Treasury may not have control over Scotland's monetary policy.
Thus, the arrangement would best be described as a de facto currency union, which is an informal agreement between two or more countries to use the same currency without a formal treaty or agreement in place.
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when mcdonald's sells cheeseburgers in india, there is absolutely no beef or pork used. the mcdonald's menu in india features indian burgers that are 100 percent vegetarian. india is predominantly a hindu country, and hindus are strict in terms of not eating beef because they consider the cow as a holy manifestation of the divinity. this scenario is an example of . group of answer choices product correctness product adaptation product innovation product variation
The scenario described is an example of product adaptation, which is the process of modifying a product or service to better meet the needs and preferences of a specific market or culture.
In this case, McDonald's adapted its menu to the Indian market by offering 100 percent vegetarian burgers that do not include beef or pork, which are not consumed by Hindus due to religious beliefs.Product adaptation is a common strategy used by companies when entering new markets, especially when cultural or religious factors need to be taken into consideration.
By adapting its products to local tastes and preferences, companies can increase their chances of success in new markets and better connect with their target customers.In the case of McDonald's in India, product adaptation has allowed the company to successfully operate in the country and cater to the needs and preferences of its predominantly Hindu customer base.
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The records of Blue Spruce Company at the end of the current year show Accounts Receivable $63,900, Credit Sales $664,200; and Sales Returns and Allowances $32,800. (a) If Blue Spruce uses the direct write-off method to account for uncollectible accounts and Blue Spruce determines that Matisse's $738 balance is uncollectible, what will Blue Spruce record as bad debt expense? (b) If Allowance for Doubtful Accounts has a balance of $902 and Blue Spruce concludes bad debts are expected to be 10% of accounts receivable, what will Blue Spruce record as bad debt expense? eTextbookand Media
(a) If Blue Spruce uses the direct write-off method to account for uncollectible accounts and determines that Matisse's $738 balance is uncollectible, Blue Spruce will record $738 as bad debt expense.
(b) If Allowance for Doubtful Accounts has a balance of $902 and Blue Spruce concludes bad debts are expected to be 10% of accounts receivable, Blue Spruce will record $5,898 ($63,900 x 10% - $902) as bad debt expense.
(a) If Blue Spruce Company uses the direct write-off method and determines that Matisse's $738 balance is uncollectible, Blue Spruce will record a bad debt expense of $738. If the Allowance for Doubtful Accounts has a balance of $902 and Blue Spruce expects bad debts to be 10% of accounts receivable ($63,900), the expected bad debts will be $6,390. To adjust the allowance account to the expected amount, Blue Spruce will record a bad debt expense of $6,390 - $902 = $5,488.
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(a) If Blue Spruce uses the direct write-off method to account for uncollectible accounts and determines that Matisse's $738 balance is uncollectible, Blue Spruce will record the full amount of the uncollectible account as bad debt expense. Therefore, the bad debt expense recorded will be $738.
(b) If Allowance for Doubtful Accounts has a balance of $902 and Blue Spruce concludes that bad debts are expected to be 10% of accounts receivable, Blue Spruce will need to calculate the required balance in the Allowance for Doubtful Accounts. The required balance in the allowance can be calculated as follows:
Required balance = (Accounts Receivable * % Estimated Uncollectible) - Existing Balance in Allowance for Doubtful Accounts
= ($63,900 * 10%) - $902
= $6,390 - $902
= $5,488
Since the existing balance in the Allowance for Doubtful Accounts is $902 and the required balance is $5,488, Blue Spruce will need to adjust the Allowance for Doubtful Accounts by debiting bad debt expense and crediting the Allowance for Doubtful Accounts for $4,586 ($5,488 - $902). This adjustment will bring the Allowance for Doubtful Accounts to the required balance of $5,488. Therefore, the bad debt expense recorded will be $4,586.
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if msu decides to expand the undergraduate student population from 40,000 to 50,000 the expected effect on the child-care market in east lansing is a. an increase in the price of child care and a corresponding increase in the number of students supplying the service. b. a reduction in the price of child care because of an increase in supply c. a surplus of workers resulting from decreased demand for the service d. no effect
If MSU decides to expand the undergraduate student population from 40,000 to 50,000, the expected effect on the n market in East Lansing is b. a reduction in the price of child care because of an increase in supply.
As the number of undergraduate students increases, there will likely be an increased demand for child care services in the area. This, in turn, may encourage more individuals to supply child care services to meet the increased demand. The increased supply of child care services will lead to greater competition among providers, which is likely to drive down prices. Thus, an increase in the undergraduate student population is likely to result in a reduction in the price of child care.
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XYZ Comp will pay no dividends for the next 9 years in year 10, they will pay Stishare and continue paying that amount every year, forever. Ru 10% Calculate the stock price
The stock price of XYZ Comp can be calculated using the perpetuity formula.
Since the company will not pay any dividends for the next 9 years, the present value of the stock will be the present value of the future perpetuity payments starting from year 10.
Assuming a required rate of return of 10%, the stock price can be calculated as Stishare divided by the discount rate (0.1), which gives a present value of Stishare divided by 0.1.
In simpler terms, the stock price of XYZ Comp can be determined by calculating the present value of the future payments starting in year 10. This is done using the formula for a perpetuity, which assumes a constant payment every year, forever.
The required rate of return, or discount rate, is used to determine the present value of these future payments. Therefore, assuming no dividends for the next 9 years and a required rate of return of 10%, the stock price would be equal to the Stishare divided by 0.1.
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A stock has expected return of 0.05. If its expected dividend growth increases from 0.01 to 0.02, its price changes by a. -25% b. 33% c. 100% d. it depends on the current dividend of the stock
Changes in the price of a stock depend upon the current dividend of the stock. The correct answer is option D " it depends on the current dividend of the stock"
The price of a stock is determined by its expected future cash flows, which include both the expected dividends and the expected price appreciation. If the expected dividend growth rate increases, it means that the company is expected to pay out more dividends in the future.
However, if the current dividend of the stock is already high, the impact of the increased dividend growth rate on the stock price may be smaller than if the current dividend is low. Therefore, depending on the stock's current dividend prices vary.
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Herman Rithmetic, CFO of Fluffy Teddie Bear Company is concerned whether their company may have an accounts receivable problem. He noted that days in accounts receivable is currently at just over 33 days. The credit terms extended by Fluffy Teddie Bear Company to their top customers is 30 days same as cash. Last year their days in accounts payable was 29.2 days. Herman is unsure what this means and turns to you for advice. Don’t let him down.A. Herman can safely ignore the problem, since their receivables balance is just 3 days higher than their policy for paying receivables.B. Herman should not send any correspondence to their customers sothey won’t get mad.C. none of the above.D. The days in accounts receivable should always be more than the current terms offered by the company..E. Herman’s company should stay on top of the receivables and provide any necessary follow-up to customers to ensure they pay on time.
Based on the provided case, the advice to Herman is that Herman’s company should stay on top of the receivables and provide any necessary follow-up to customers to ensure they pay on time. Therefore, the correct option is E.
The fact that Fluffy Teddie Bear Company's days in accounts receivable is just over 33 days, while their credit terms are 30 days, indicates that the company may have an accounts receivable problem. It means that customers are taking longer than the agreed-upon time to pay their bills, which could negatively impact the company's cash flow and profitability.
Therefore, Herman should not ignore the problem and should take necessary steps to ensure that customers pay on time. This may involve sending reminders or follow-up messages to customers who have not paid on time, or even implementing more stringent credit policies for customers who consistently pay late. Ultimately, it is important for the company to stay on top of its accounts receivable to maintain a healthy cash flow and financial position.
Hence, the correct advice is option E: Herman’s company should stay on top of the receivables and provide any necessary follow-up to customers to ensure they pay on time.
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the four key areas of world systems include all but which of the following? a. expansion in economic domains b. formation of an ideology supporting free trade c. demise of the hegemonic power and restructuring of the system d. growth of the military e. a ban on free trade
The four key areas of world systems exclude option (e) a ban on free trade.
The four key areas include: a. expansion in economic domains, b. formation of an ideology supporting free trade, c. demise of the hegemonic power and restructuring of the system, and d. growth of the military. These key areas represent important aspects of global systems. Expansion in economic domains (a) refers to the growth of international trade and commerce. Formation of an ideology supporting free trade (b) indicates the development of intellectual and philosophical beliefs that promote economic liberalization, where nations are encouraged to reduce trade barriers and enhance international cooperation. The demise of the hegemonic power and restructuring of the system (c) is a critical process in which the dominant power loses its ability to maintain control and influence over other countries, leading to a shift in the global order.
Lastly, growth of the military (d) represents the increase in military capabilities and defense spending among countries to protect their interests and assert their power in the world system. Overall, these four areas provide a comprehensive understanding of the dynamics of world systems, emphasizing the interdependence of economic, ideological, political, and military factors in shaping global relations. A ban on free trade (e) is not included as it contradicts the ideology supporting free trade (b) and would not be considered a key area of world systems.
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AllCity Inc. is financed 40% with debt, 15% with preferred stock, and 45% with common stock. Its pre-tax cost of debt is 6%; its preferred stock pays an annual dividend of $3.25 and is priced at $28. It has an equity beta of 1.3. Assume the risk-free rate is 2%, the market risk premium is 6%, and AllCity's tax rate is 35%. What is its after-tax WACC? What is its after-tax WACC? 'wacc (Round to five decimal places.)
The after tac WACC for the AllCity Inc. financed 40% with debt, 15% with preferred stock, and 45% with common stock is 7.71%.
The weighted average cost of capital (WACC), which includes ordinary stock, preferred stock, bonds, and other types of debt, is the average after-tax cost of capital for a company. The WACC is the typical interest rate that a business anticipates paying to finance its assets.
Because WACC reflects the return that both bondholders and shareholders require in order to provide the firm with capital in a single value, it is frequently used to calculate necessary rate of return (RRR). Because investors will want larger returns, a company's WACC is likely to be higher if its stock is very volatile or if its debt is seen as hazardous.
Debt = 40%
Preferred Stock = 15%
Common Stock = 45%
Pre Tax Cost of Debt = 6%
Annual Dividend of Preferred Stock = $3.25
Price of Preferred Stock = $28
Using the Formula of Preferred Stock,
Cost of Preferred stock = [tex]\frac{Annual\ dividend}{Market\ Price}[/tex]
= 3.25 / 28
= 0.1160714285714
= 11.61%.
Using the Formula of Capital Asset Pricing Model
Equity Beta = 1.3
Risk-free rate = 2%
Market Risk Premium = 6%
[tex]ER_i=R_f+\beta(ER_m-R_f)[/tex]
= 2% + 1.3(6%)
= 2% + 7.8%
[tex]ER_i[/tex] = 9.8%.
Tax rate = 35%
Using the Formula of After-Tax WACC
[tex]WACC=W_D K_P(1-T)+W_EK_E+W_PK_P[/tex]
= 040 x 6%(1-0.35) + 0.45 x 9.8% + 0.15 x 11.61%
= 1.56 + 4.41 + 1.7415
WACC = 7.71%.
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Consider a project with a life of 4 years with the following information: initial fixed asset investment = $360,000; straight-line depreciation to zero over the 4-year life; zero salvage value; price = $40; variable costs = $18; fixed costs = $172,800; quantity sold = 100,224 units; tax rate = 23 percent. How sensitive is OCF to changes in quantity sold? Multiple Choice a. $19.31 b. $16.94 c. $0.06
The sensitivity of OCF to changes in quantity sold is $19.31.(A)
To calculate the sensitivity of OCF (Operating Cash Flow) to changes in quantity sold, follow these steps:
1. Calculate the contribution margin per unit: price - variable costs = $40 - $18 = $22.
2. Calculate the operating income before tax: (contribution margin * quantity sold) - fixed costs = ($22 * 100,224) - $172,800.
3. Calculate the income tax: operating income before tax * tax rate = operating income before tax * 23%.
4. Calculate the OCF: operating income before tax - income tax.
5. Calculate the sensitivity of OCF to changes in quantity sold: contribution margin per unit * (1 - tax rate) = $22 * (1 - 23%) = $19.31.(A)
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if nominal gdp in 2010 is greater than real gdp in 2011 (using 2010 prices), then
The given scenario is possible when there's a combination of inflation and/or economic contraction between 2010 and 2011. Real GDP, adjusted for inflation using 2010 prices, provides a more accurate picture of the economy's performance, as it allows for a fair comparison between different time periods.
Nominal GDP refers to the monetary value of all goods and services produced in an economy within a specific time period, without considering inflation or changes in the price level. It is measured using the current market prices during that time period. Real GDP, on the other hand, measures the value of all goods and services produced within an economy during a specific time period, but adjusts for inflation or changes in the price level. This situation can occur due to the following reasons:
1. Inflation: If the prices of goods and services increased significantly between 2010 and 2011, nominal GDP in 2010 could be greater than real GDP in 2011, as the latter adjusts for changes in the price level. This means that the economy's growth rate may be overstated when comparing nominal GDP values without accounting for inflation
. 2. Economic Contraction: If the economy experienced a contraction between 2010 and 2011, the production of goods and services could have decreased, leading to a lower real GDP in 2011.
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A project has the following cash flows :
Year Cash Flows
0 −$12,000 1 5,410 2 7,810 3 5,200 4 −1,540 Assuming the appropriate interest rate is 10 percent, what is the MIRR for this project using the discounting approach?
19.21%
15.23%
13.96%
11.63%
17.77%
The MIRR for this project using the discounting approach is 15.23%.
1. Calculate the present value of cash inflows for years 1-4 using the discount rate (10%):
- Year 1: 5,410 / (1 + 0.10)¹ = 4,918.18
- Year 2: 7,810 / (1 + 0.10)² = 6,440.91
- Year 3: 5,200 / (1 + 0.10)³ = 3,871.20
- Year 4: -1,540 / (1 + 0.10)⁴ = -1,048.76
2. Calculate the total present value of cash inflows: 4,918.18 + 6,440.91 + 3,871.20 - 1,048.76 = 14,181.53
3. Calculate the future value of the total present value of cash inflows, assuming the interest rate remains 10% for four years: 14,181.53 * (1 + 0.10)⁴ = 20,929.10
4. Calculate the MIRR using the formula: [(Future Value / Initial Investment)^(1 / N) - 1]
- MIRR = [(20,929.10 / 12,000)¹/⁴ - 1] = 0.1523 or 15.23%
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A specific type of Observed misconduct in 2011 such as Lying to employees as a percentage was 19% Select one: O True O False
However, if we assume that the statement is true, it would suggest that 19% of employees observed lying by their colleagues or superiors in the workplace in 2011.
Lying to employees is a serious form of misconduct that can harm workplace culture, reduce trust, and decrease employee morale. It can also result in legal consequences for the organization if the lies lead to losses for employees or customers.
Therefore, it is important for organizations to establish a culture of integrity, honesty, and transparency. Organizations should develop and enforce ethical standards that emphasize ethical behavior, provide training to employees on ethical conduct, and hold employees accountable for violating ethical standards. Additionally, it is crucial for organizations to establish channels for employees to report observed misconduct without fear of retaliation.
In conclusion," if the statement is accurate, it highlights the need for organizations to take proactive measures to prevent and address observed misconduct such as lying to employees to ensure a healthy, ethical, and productive workplace culture."
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Sales promotion aimed at intermediaries, often emphasizing price reduction, is called ______ promotion. a. Private b. Trade c. Supplier d. Channel
Trade promotion refers to sales promotion intended at intermediates, which frequently emphasises price reduction. The second option is entirely right.
What exactly is trade promotion?Promotion of trade is a component of revenue management that relates to marketing initiatives aimed towards retailers and wholesalers rather than end customers. It is a marketing approach used to increase product demand in retail establishments. The primary goal of trade promotions is to enhance product sales by making it more appealing to potential customers. In the case of innovations, promotions try to raise product awareness by emphasising its benefits and value proposition. it is one of the important promotion.
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The sales promotion aimed at intermediaries, often emphasizing price reduction, is called Trade promotion.
Trade promotion refers to promotional activities aimed at distributors, wholesalers, or retailers, rather than end consumers. The main objective of trade promotions is to motivate these intermediaries to stock, promote, and sell more of a particular product or brand.
Trade promotions can take various forms, including discounts, allowances, free goods, merchandising support, co-operative advertising, point-of-sale displays, and training programs. These promotions can help increase the visibility and availability of a product, encourage intermediaries to buy in larger quantities, and ultimately boost sales and market share.
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dollar amounts stated are in thousands. a. compute trend percentages for the above items taken from the financial statements of lopez plumbing over a five-year period. treat 2017 as the base year. b. state whether the trends are favorable or unfavorable.
This is a two part question and the answer is given in two separate headings.
Trend Percentages
Year 2021 2020 2019 2018
Sales* 58% 30% 22% 14%
Cost of Goods Sold** 153% 67% 66% 34%
The difference between the current year's sales and the base year's sales is divided by 100 to compute sales. The proportion, for instance, is 14% for 2018 [(57,000 - 50,000) / 50,000 * 100]. in the same manner as previous years' calculations. The difference between the current cost of goods sold and the base year cost of goods sold has been divided by the base year cost of goods sold 2017 * 100 to get the cost of goods sold.
The proportion, for instance, is 14% for 2018 [(40,200 - 30,000) / 30,000 * 100]. in the same manner as previous years' calculations. However, the cost of goods sold has been rising quickly; by the most recent trending year, it had climbed by 153% when compared to the base year of 2017.
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ryan neal bought 2,400 shares of ford (f) at $16.02 per share. assume a commission of 1% of the purchase price. ryan sells the stock for $20.33 with the same 1% commission rate.what is the gain or loss for ryan?
Ryan gained $9,471.60 from selling 2400 Ford shares, including commissions.
How much did Ryan gain or lose from selling the Ford shares?The gain or loss for Ryan can be calculated as follows:
First, let's calculate the total cost of purchasing the shares of Ford:
Purchase price per share = $16.02
Number of shares purchased = 2,400
Total purchase price = $16.02 x 2,400 = $38,448
Now, let's calculate the commission Ryan paid for the purchase:
Commission rate = 1%
Commission paid = 1% x $38,448 = $384.48
So, the total cost of purchasing the shares, including the commission, was:
Total cost = $38,448 + $384.48 = $38,832.48
Next, let's calculate the total proceeds from selling the shares of Ford:
Selling price per share = $20.33
Number of shares sold = 2,400
Total selling price = $20.33 x 2,400 = $48,792
Now, let's calculate the commission Ryan paid for the sale:
Commission rate = 1%
Commission paid = 1% x $48,792 = $487.92
So, the total proceeds from selling the shares, after deducting the commission, were:
Total proceeds = $48,792 - $487.92 = $48,304.08
Finally, let's calculate the gain or loss for Ryan:
Gain/Loss = Total proceeds - Total cost
Gain/Loss = $48,304.08 - $38,832.48
Gain/Loss = $9,471.60
Therefore, Ryan's gain from selling the shares of Ford was $9,471.60
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Consider a 30-year, fixed-rate mortgage for $125,000 at a nominal rate of 6% with monthly payments. If the borrower pays an additional $120 with each monthly payment, what will be the amount of the last monthly payment?
A. $872.00
B. $357.03
C. $869.44
D. $420.90
E. $873.79
F. $357.77
G. $418.81
H. $355.99
We can calculate the last monthly payment by subtracting the balance from the monthly payment, which gives us $869.16 - $79,572.42 * 0.005 = $420.90. Therefore, the answer is option D, $420.90.
To solve this problem, we need to first calculate the monthly payment for the mortgage. We can use the formula PMT = PV*r/(1-(1+r)^(-n)), where PV is the present value (the mortgage amount), r is the monthly interest rate (6%/12 = 0.005), and n is the total number of payments (30*12 = 360). Plugging in the values, we get a monthly payment of $749.16.
Next, we need to add an additional $120 to each monthly payment. Therefore, the new monthly payment will be $749.16 + $120 = $869.16.
Now, we can use the formula for the remaining balance of a mortgage to calculate the amount of the last monthly payment.
The formula is Balance = PV*(1+r)^n - PMT*[(1+r)^n-1]/r, where n is the number of remaining payments. Since this is a 30-year mortgage with monthly payments, the number of remaining payments will be 360 - 1 = 359. Plugging in the values, we get a balance of $79,572.42.
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What layout strategy deals with low-volume, high-variety production? A) fixed-position layout. B) retail layout. C) warehouse layout. D) office layout
The layout strategy that deals with low-volume, high-variety production is the fixed-position layout. This type of layout is commonly used in construction projects, shipbuilding, and aerospace manufacturing, where large and complex products are produced in one location.
In fixed-position layout, the product stays in one place while the materials, equipment, and workers are brought to it. This allows for maximum flexibility and customization in production. The other layout strategies mentioned, such as retail layout, warehouse layout, and office layout, are more suitable for high-volume, low-variety production or service operations. Retail layout focuses on customer experience and product placement, warehouse layout is designed for efficient storage and movement of goods, and office layout is optimized for communication and collaboration among employees.
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The layout strategy that deals with low-volume, high-variety production is A) fixed-position layout.
In a fixed-position layout, the product or project remains stationary, and the workers, materials, and equipment are brought to the site. This layout is commonly used in construction projects, shipbuilding, and aircraft manufacturing, where large, complex products are built in a single location.
Since the products are typically large and customized, and the production volume is low, a fixed-position layout is often the most practical option.
In contrast, retail layout, warehouse layout, and office layout are typically used for high-volume, low-variety production, where products are standardized and produced in large quantities.
Therefore correct option is A) fixed-position layout.
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On April 1st last year, Company S had assets of £79.0 million and liabilities of £27.1 million. In the year ended March 31st this year, Company S made a profit of £12.3 million before tax, of which £2.3 million is payable in tax and £3.3 million has been distributed as a dividend. No further dividends have been announced. Company S has 300 million ordinary shares in issue, each with a nominal value of 10p of which 200 million are listed on the London Stock Exchange. On April 1st last year, the market price of each of these shares was 165.56p. On March 31st this year it was 140.25p. None of Company S's assets were revalued during the year. Company S did not acquire or sell any other companies, did not issue any further shares or bonds and did not redeem any shares or bonds. There were no changes in reserves other than those stated above. How much was the book value of the shareholders' equity in Company S at March 31st this year, in millions of £? Give your answer to 1 decimal place in £ million, without commas. For example, for £33.762 million enter 33.76 Answer:
The book value of the shareholders' equity in Company S at March 31st this year was £60.4 million.
To find the book value of the shareholders' equity, we need to calculate the total equity of the company by subtracting its liabilities from its assets.
As no revaluations were done during the year and there were no changes in reserves other than those stated in the problem, we can assume that the equity at the beginning of the year was equal to the book value of the equity at the end of the year.
Therefore, the total equity of the company at March 31st this year can be calculated as:
Total Equity = Assets - Liabilities
Total Equity = £79.0 million - £27.1 million
Total Equity = £51.9 million
We can then calculate the book value of the shareholders' equity by multiplying the number of outstanding ordinary shares by the nominal value of each share:
Book Value of Shareholders' Equity = Number of Ordinary Shares x Nominal Value of each Share
Book Value of Shareholders' Equity = 300 million x £0.10
Book Value of Shareholders' Equity = £30 million
Finally, we can calculate the book value of the listed shareholders' equity by multiplying the book value of the total shareholders' equity by the ratio of listed ordinary shares to total ordinary shares:
Book Value of Listed Shareholders' Equity = Book Value of Shareholders' Equity x (Listed Ordinary Shares / Total Ordinary Shares)
Book Value of Listed Shareholders' Equity = £30 million x (200 million / 300 million)
Book Value of Listed Shareholders' Equity = £20 million
To convert this to the book value of the listed shareholders' equity in millions of £, we divide by 1 million:
Book Value of Listed Shareholders' Equity in millions of £ = £20 million / £1 million
Book Value of Listed Shareholders' Equity in millions of £ = £20.0 million
As the question asks for the book value of the shareholders' equity, not just the listed shareholders' equity, we add the book value of the unlisted shareholders' equity:
Book Value of Shareholders' Equity = Book Value of Listed Shareholders' Equity + Book Value of Unlisted Shareholders' Equity
Book Value of Shareholders' Equity = £20.0 million + (£51.9 million - £30.0 million)
Book Value of Shareholders' Equity = £60.4 million
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what is the primary difference between singular channel distribution and multichannel distribution in ebook self-publishing?
The primary difference between singular channel distribution and multichannel distribution in ebook self-publishing is the number of platforms used to distribute your ebook.
In singular channel distribution, you choose to self-publish your ebook on only one platform (e.g., Amazon Kindle Direct Publishing). This limits your audience reach, but it can be easier to manage.
In multichannel distribution, you self-publish your ebook on multiple platforms (e.g., Amazon Kindle Direct Publishing, Apple iBooks, Barnes & Noble Nook, etc.). This increases your audience reach and potential sales, but it may require more management and coordination among the different platforms.
To summarize:
1. Singular channel distribution: Publishing on one platform, easier to manage, limited audience reach.
2. Multichannel distribution: Publishing on multiple platforms, increased audience reach, more management and coordination required.
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QUESTION 5 Rocket corp has 100 bonds outstanding. The bonds are annual coupon bonds with a face value of $1000, a coupon rate of 6.4%, and 11 years until the bond matures. If the YTM of the bonds is 7.5%, what is the total market value of the bonds for Rocket corp?
The total market value of the bonds for Rocket Corp is $94,480.
To find the total market value of the bonds for Rocket Corp, you need to calculate the present value of the bond's cash flows, which consists of the annual coupon payments and the face value at maturity. Here's a step-by-step explanation:
1. Calculate the annual coupon payment: Face value ($1000) x coupon rate (6.4%) = $64
2. Determine the number of periods (years) until maturity: 11 years
3. Find the yield to maturity (YTM) as a decimal: 7.5% = 0.075
4. Calculate the present value of the coupon payments using the formula:
(Coupon payment x (1 - (1 + YTM)^(-number of periods))) / YTM = ($64 x (1 - (1 + 0.075)^(-11))) / 0.075 ≈ $525.42
5. Calculate the present value of the face value at maturity:
Face value / (1 + YTM)^(number of periods) = $1000 / (1 + 0.075)^11 ≈ $419.38
6. Add the present values of the coupon payments and the face value to find the market value of a single bond:
$525.42 + $419.38 ≈ $944.80
7. Multiply the market value of a single bond by the number of bonds outstanding (100) to find the total market value of the bonds for Rocket Corp:
$944.80 x 100 = $94,480
So, the total market value of the bonds for Rocket Corp is $94,480.
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2. a)
Dungeoness Corporation has excess cash of $3,000 that it would like to distribute to shareholders as an extra dividend. Current earnings are $0.80 per share, and the stock currently sells for $31 per share. There are 260 shares outstanding. Ignore taxes and other imperfections.
If Dungeoness Corp. pays a cash dividend, what will be the dividend per share? After the dividend is paid, what will the price per share be? What are earnings per share (EPS) and the price earnings (P/E) ratio? Enter your answers rounded to 2 DECIMAL PLACES.
Dividend per share=
Price per share =
Earnings per share (EPS) =
Price earnings (P/E) ratio=
The dividend per share is calculated by dividing the excess cash by the number of outstanding shares:
Dividend per share = $3,000 / 260 = $11.54
After the dividend is paid, the price per share will be adjusted downward by the amount of the dividend, which is $11.54:
Price per share = $31 - $11.54 = $19.46
The earnings per share can be calculated by dividing the current earnings by the number of outstanding shares:
EPS = $0.80 / 260 = $0.0031
The price earnings ratio is calculated by dividing the price per share by the earnings per share:
P/E ratio = $19.46 / $0.0031 = 6,277.42 (rounded to 2 decimal places)
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bookmark question for later the hr department at clearwater electronics has received several complaints from new employees who say their job descriptions do not match what they are doing. they say they feel misled, and some of them have indicated they are thinking of quitting. the hr department is currently conducting a review of the job descriptions, in conjunction with the line managers. how can hr professionals best help to avoid a situation like this?
The best way for HR professionals to avoid a situation where new employees feel misled by their job descriptions is to conduct a thorough job analysis before writing job descriptions.
This will involve obtaining information about the tasks, duties, and responsibilities involved in a job, as well as the knowledge, skills, and abilities required to perform the job successfully. This information can be gathered through interviews with current employees and supervisors, observations of the job being performed, and surveys.
By conducting a job analysis, HR professionals can ensure that the job descriptions accurately reflect the job requirements and are not misleading. The job analysis can also help to identify any gaps in knowledge or skills that need to be addressed through training or other development programs.
HR professionals can also help to ensure that line managers are properly trained in how to write effective job descriptions, and that they are updated regularly to reflect changes in the job requirements.
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3. Given the following information, calculate the value of a call option and a put option using the 2 period binomial option pricing model. 50 So = K = T = n = 53 1 Year 2 period per year 0.05 0.07 r= = 4 What is the value of an american put option for the option in #3. Why is it more or less valuable than a European option?
We must first build a binomial tree before we can use the 2-period binomial option pricing model to determine the call and put options' values.
The stock price at each node has a factor u or d potential increases or decreases. The formulae shown below can be used to compute these variables:
u = (rT/n + σ√(T/n))
d = (rT/n - σ√(T/n))
In this case, u = (0.05/2 + 0.4√(1/2)) = 1.2361 and d = (0.05/2 - 0.4√(1/2)) = 0.8253.
We can now use these factors to construct the binomial tree:
50
/ \
61.81 41.32
/ \ / \
76.55 51.23 51.23 34.24
To calculate the value of the call and put options at each node, we work backwards from expiration. At expiration, the value of the call option is max(S - K, 0) and the value of the put option is max(K - S, 0).
Expiration:
50
/ \
61.81 41.32
/ \ / \
76.55 51.23 51.23 34.24
Call option:
11.81
/ \
21.74 0.00
/ \ / \
31.55 0.00 0.00 0.00
Put option:
3.68
/ \
0.00 8.68
/ \ / \
0.00 2.77 13.77 16.76
To calculate the value of the options at each node, we use the following formulas:
Call option value = max(S - K, 0)
Put option value = max(K - S, 0)
At each node, we discount the expected value of the option at the next period by the risk-free interest rate. For example, at node (1,1), the expected value of the call option is (0.5 * 31.55 + 0.5 * 0) = 15.77. We discount this value by the risk-free interest rate to get the value of the call option at node (0,0):
Call option value at node (1,1) = [tex]e^{(-0.04/2)}[/tex] x 15.77 = 15.22
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