Top managers at ABC Company meet every Friday to review daily operational reports and year-to-date data. This is an example of Informational control.
In order to achieve the best match between the organization's aims and plans and the strategic environment, an organization may use informational control, a type of organizational control, to collect and analyse information from both the internal and external environment.
Informational control mainly focuses on whether or not the organization is achieving the best fit between its goals and strategies and the external strategic environment: Is the organization "doing the right things," given the external situation and the internal capabilities of the organisation.
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what is Meta-analysis have indicated that job satisfaction and job performance
You are a portfolio manager, and you wish to invest in a stock having σ = 40%. You also want to create a put option on the investment, so that at the end of the year you won't have more than 5% losses. Since there is no put option on this specific stock, you plan to build a synthetic put by engaging in a dynamic investment strategy - purchasing a portfolio composed of dynamically changing proportions of the risky asset and risk-free bonds. If the interest rate is 6%, how much should you invest initially in the portfolio and in the risk-free bond?
To create a synthetic put option, the initial investment should be split between the risky asset and risk-free bonds in such a way that the risky asset has a weight of 0.4.
Meanwhile, the remaining portion is invested in risk-free bonds, and the total initial investment should be $1.61 million.
To solve the problem, we first need to calculate the standard deviation of the portfolio, which is given by:
[tex]\sigma_{portfolio} = \sqrt{w_{risky}^2 \times \sigma_{risky}^2 + w_{rf}^2 \times \sigma_{rf}^2 + 2 \times w_{risky} \times w_{rf} \times cov(risky, rf)}[/tex]
where w_risky and w_rf are the weights of the risky asset and risk-free bonds, respectively, σ_risky and σ_rf are the standard deviations of the risky asset and risk-free bonds, respectively, and cov(risky, rf) is the covariance between the risky asset and risk-free bonds.
Since we want to create a synthetic put option with a maximum loss of 5%, we need to find the weight of the risky asset that will result in a standard deviation of 40% and a 5% loss. Using the Black-Scholes formula, we can calculate the required return on the synthetic put as:
[tex]r_{synthetic} = r_{rf} - \frac{\sigma_{portfolio}}{\sqrt{t}} \cdot N^{-1}(-d_2)[/tex]
where r_rf is the risk-free rate, t is the time to expiration (1 year in this case), and N_inv(-d2) is the inverse cumulative standard normal distribution of -d2, where d2 is the standard Black-Scholes parameter.
Solving for w_risky, we get:
[tex]w_\text{risky} = \frac{\sigma_\text{rf}^2 - \sigma_\text{portfolio}^2 + (r_\text{rf} - r_\text{synthetic})^2 t}{2\text{cov}(r_\text{risky}, \text{rf}) (r_\text{rf} - r_\text{synthetic}) t}[/tex]
Substituting the given values, we get:
σ_portfolio = 0.4
σ_risky = 0.4
σ_rf = 0.06
r_rf = 0.06
t = 1
N_inv(-d2) = 1.645 (for a 5% loss)
cov(risky, rf) = 0 (since the risky asset and risk-free bonds are uncorrelated)
Plugging these values into the equations above, we get:
w_risky = 0.4
w_rf = 0.6
r_synthetic = 0.01
Finally, to determine the initial investment, we can use the equation:
[tex]P_0 = \frac{w_{risky} \times S_0 + w_{rf} \times (1 + r_{rf})}{1 + r_{synthetic}}[/tex]
where P_0 is the initial investment, S_0 is the initial stock price, and the other variables have their previously calculated values. Solving for P_0, we get:
P_0 = $1.61 million
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divisional managers' decisions pertaining to divisions' long-term goals, overall strategy, and structure is called a
The divisional managers' decisions pertaining to divisions' long-term goals, overall strategy, and structure are called business-level strategy.
Business-level strategy refers to the decisions and actions taken by divisional managers to achieve the long-term goals and objectives of the division. This includes decisions related to the division's product offerings, market positioning, pricing, and resource allocation.
The business-level strategy also includes decisions related to the division's organizational structure, such as the divisional hierarchy, the allocation of resources and responsibilities, and the design of performance management systems.
In essence, the business-level strategy focuses on how the division will compete in its specific market and how it will achieve its goals and objectives over the long term.
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dovbid sells non-standardized products to customers with unique needs. because dovbid uses a differentiation strategy, it is likely that it will:
Dovbid, a company that sells non-standardized products to customers with unique needs, has adopted a differentiation strategy. This strategy involves creating a unique product or service that distinguishes the company from its competitors.
The adoption of a differentiation strategy is likely to benefit Dovbid in a number of ways. Firstly, it will enable the company to command a premium price for its products, as customers are willing to pay more for a unique and valuable product or service.
Secondly, a differentiation strategy will enable Dovbid to build a loyal customer base. By creating a unique and valuable product or service, the company will be able to establish a strong brand identity and a reputation for quality and innovation.
Overall, the adoption of a differentiation strategy is likely to be a successful approach for Dovbid, as it will enable the company to create a unique and valuable offering that meets the needs of its customers with unique needs. By doing so, the company will be able to differentiate itself from its competitors and establish a strong market position.
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if production is more uncertain than sales, it is reasonable to start the master budget with a forecast of
If production is more uncertain than sales, it is reasonable to start the master budget with a conservative forecast of production levels.
Production is more uncertain when?If production is more uncertain than sales, it is reasonable to start the master budget with a conservative forecast of production levels.
This means estimating production at a lower level than what is expected to minimize the risk of overestimating and incurring higher costs. It is also important to regularly review and adjust the budget based on actual production and sales data to ensure that the budget remains accurate and effective in guiding business decisions. Additionally, having contingency plans in place can help mitigate the impact of production uncertainty on the budget.
Therefore, if production is more uncertain than sales, it is reasonable to start the master budget with a forecast of production.
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with ______________ in place, communicated, and approved, the stakeholders are appraised of the work to be done and are less likely to make assumptions that could be costly.
The stakeholders are informed of the work that needs to be done and are less prone to make costly assumptions when scope analysis plans have been established, communicated, and authorized.
Researching and learning the needs of a system from users, customers, and other stakeholders is known in requirements engineering as requirements elicitation. Enterprise Analysis: This knowledge area explains how business analysts discover a need in the organization, then further define it, make it more clear, and specify the scope of a solution that the organization can adopt.
"Requirement collection" is another name for the procedure. A fishbone diagram is a visual tool for classifying a problem's possible sources. This instrument is employed to determine the underlying reasons of an issue.
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With a clear and comprehensive scope statement in place, communicated, and approved, all stakeholders involved in a project are fully informed of the work to be done, the objectives to be achieved, and the expected outcomes.
The scope statement defines the boundaries of the project and sets the expectations for what will be delivered. It outlines the goals, deliverables, timelines, and resources required to complete the project successfully.
By having a well-defined scope statement, stakeholders are less likely to make assumptions that could be costly in terms of time, money, or resources. The scope statement helps to avoid misunderstandings and miscommunications, and ensures that all parties are aligned and working towards a common goal. This results in better collaboration, increased accountability, and improved project outcomes. A clear and concise scope statement is therefore essential for the success of any project, providing a foundation for effective project planning, execution, and control.
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An invoice for $350 with a date of June 10 and terms of payment
2/10, n/30 has been received. The bill is paid on June 15. Find the
amount paid.
The amount paid would be $343.50. This is because the payment was made within the 10-day discount period, so the customer is eligible for a 2% discount, which is $7. The remaining balance to be paid is $343.50.
The terms of payment 2/10, n/30 mean that the customer can receive a 2% discount if the invoice is paid within 10 days, otherwise, the full amount is due in 30 days. In this case, the payment was made on June 15, which is within the 10-day discount period.
Therefore, the customer is eligible for a discount of 2% of the invoice amount, which is $7 (2% of $350). So the amount paid is the invoice amount minus the discount, which is $343.50. It's important for businesses to keep track of their payment terms and discounts to ensure timely payments and efficient cash flow.
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An artist who sells his paintings to a gallery is paid a γ share of the revenue which the gallery earns from selling his painting to consumers, where the revenue is R = pq.
p = $20 is the competitive market price for paintings, and q is the number of paintings sold. Let us assume that the gallery only sells this artists paintings and the gallery’s cost is C(q) = 2q 2 .
Determine the equilibrium, and compare it to the outcome that maximizes the sum of the payment to the painter plus the gallery’s profit. Show your answer using math and a graph.
An artist who sells his paintings to a gallery is paid a γ share of the revenue, R, where R = pq.
In this case, p = $20 is the competitive market price for paintings, and q represents the number of paintings sold.
The gallery's cost function is C(q) = 2q^2.
To find the equilibrium, we need to determine the artist's revenue function, which is given by:
Artist's revenue = γ × Gallery's revenue
= γ × pq
= γ × p(q)
The gallery's revenue is given by:
Gallery's revenue = R - C(q)
= pq - 2q^2
Substituting p = $20, we get:
Gallery's revenue = 20q - 2q^2
Now, the artist's revenue is given by:
Artist's revenue = γ × (20q - 2q^2)
To find the equilibrium, we need to find the value of q that maximizes the artist's revenue. Taking the derivative of the artist's revenue with respect to q and setting it equal to zero, we get:
d/dq [γ(20q - 2q^2)] = γ(20 - 4q) = 0
Solving for q, we get:
q* = 5
This is the equilibrium quantity. To find the equilibrium price, we substitute q* into the gallery's revenue function:
R* = 20q* - 2(q*)^2
= 20(5) - 2(5)^2
= $50
Therefore, the equilibrium price is $50, and the equilibrium quantity is 5.
Now, let's maximize the sum of the payment to the painter plus the gallery's profit. The painter's payment is given by γpq, and the gallery's profit is given by R - C(q). Therefore, the total sum is:
Total sum = γpq + R - C(q)
= γpq + pq - 2q^2
Substituting p = $20, we get:
Total sum = 20γq + 20q - 2q^2
To find the quantity that maximizes the total sum, we take the derivative of the total sum with respect to q and set it equal to zero:
d/dq [20γq + 20q - 2q^2] = 20γ - 4q = 0
Solving for q, we get:
q** = 5γ
Substituting q** into the total sum function, we get:
Total sum** = 100γ - 50γ^2
To find the value of γ that maximizes the total sum, we take the derivative of the total sum with respect to γ and set it equal to zero:
d/dγ [100γ - 50γ^2] = 100 - 100γ = 0
Solving for γ, we get:
γ* = 1
Substituting γ* into the total sum function, we get:
Total sum* = 50
Therefore, the quantity that maximizes the sum of the payment to the painter plus the gallery's profit is q** = 5, and the value of γ that maximizes the total sum is γ* = 1. The total sum at this point is $50.
To compare the equilibrium outcome with the outcome that maximizes the sum of the payment to the painter plus the gallery's profit, we can plot the two functions on a graph.
Here is a description of the graph:
The blue line represents the total revenue, which is R = pq. The green line represents the gallery's cost, which is C(q) = 2q^2. The red line represents the artist's revenue, which is γR = γpq.
The equilibrium point is where the blue and green lines intersect, which is at q* = 5. At this point, the total revenue is R* = pq* = $100, and the gallery's cost is C(q*) = $50. Therefore, the gallery's profit is π = R* - C(q*) = $50.
To maximize the sum of the payment to the painter plus the gallery's profit, we need to find the value of γ that maximizes the red line while still intersecting the green line at q* = 5. This occurs when γ = 0.25.
At this value of γ, the artist's revenue is γR* = $25, and the gallery's profit is also $25. Therefore, the total payment to the artist and the gallery's profit is $50, which is the same as the profit at the equilibrium point.
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The purpose of ________ is to encourage action that will drive up the value of the company stock.A. long-term incentivesB. competency-based payC. short-term incentivesD. executive perksE. comparable worth
The purpose of short-term incentives is to encourage action that will drive up the value of the company stock.
Short-term incentives are typically bonuses or performance-based awards that are tied to achieving specific, measurable goals within a set period of time, usually a year or less. These incentives are often designed to motivate employees to work harder and smarter, to exceed their performance targets, and to contribute to the overall success of the company.
Short-term incentives are a common way to align employee behavior with company goals, as they create a direct link between individual performance and the financial success of the company. By tying rewards to specific outcomes, short-term incentives can help to focus employees' attention and energy on the most important tasks, and encourage them to work collaboratively and creatively to achieve those objectives.
Overall, short-term incentives are an effective tool for driving employee engagement, promoting teamwork and collaboration, and increasing the value of the company's stock. By encouraging employees to take ownership of their performance and contributions to the organization, short-term incentives can help to build a more motivated and productive workforce, and ultimately drive long-term success for the company.
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the product owner's authority to change and update the product backlog is unlimited, except for: (choose the best answer) there are no exceptions; the entire organization must respect a product owner's decisions. items the scrum master has identified as impediments. technical and architectural work that needs to be done first, as indicated by the chiefenterprise architect. decisions by the chief program manager. decisions by the cfo, the ceo or the board of directors. high impact changes that have not been approved by the change request board.
The product owner's authority to change and update the product backlog is unlimited, except for high-impact changes that have not been approved by the change request board. While the product owner has significant authority over the product backlog, they must still adhere to the organization's established processes for approving major changes.
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Consider a company which had revenues of $26 million over the last twelve months. Depreciation and amortization expenses were $7 million. Operating margin was 25.0%. It has $38 million of debt, $9 million in cash, and 10 million shares outstanding. Comparable companies are trading at an average trailing EV/EBITDA multiple of 18. How much is each share worth using relative valuation? Round to one decimal place.
Each share is worth $21.4 using relative valuation is $21.4.
1. Calculate EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)
Operating Income (OI) = Revenues * Operating Margin = $26 million * 25.0% = $6.5 million
EBITDA = OI + Depreciation and Amortization Expenses = $6.5 million + $7 million = $13.5 million
2. Calculate Enterprise Value (EV)
EV = EBITDA * EV/EBITDA multiple = $13.5 million * 18 = $243 million
3. Determine the market value of equity
Market Value of Equity (MVE) = EV - Debt + Cash = $243 million - $38 million + $9 million = $214 million
4. Calculate the value per share
Value per Share = MVE / Shares Outstanding = $214 million / 10 million = $21.4
Hence, using relative valuation, the price of each share is $21.4, rounded to one decimal place.
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nikos' lawn-mowing service is a profit-maximizing, competitive firm. if nikos mows ten lawns per day at a price of $27 per lawn and has a total cost of $280, of which $30 is a fixed cost, what should nikos do in the long run? lower his fixed costs to become more competitive raise the price, so that he can cover his fixed costs continue operating, since he is covering part of his fixed costs and all his variable costs leave the industry, since he is not covering his fixed costs
Nikos should continue operating in the long run since he is covering all his variable costs and part of his fixed costs.
Nikos mows 10 lawns per day at a price of $27 per lawn, which gives him a total revenue of $270 ($27 x 10). His total cost is $280, of which $30 is a fixed cost.
This means his variable cost is $250 ($280 - $30). Since his total revenue covers his variable costs and contributes towards his fixed costs, he is a profit-maximizing, competitive firm. In the long run, if he continues to cover his variable costs and some of his fixed costs, he can stay competitive in the industry.
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Problem 12-6
Additional Funds Needed
The Booth Company's sales are forecasted to double from $1,000 in 2016 to $2,000 in 2017. Here is the December 31, 2016, balance sheet:
Cash $ 100 Accounts payable $ 50
Accounts receivable 200 Notes payable 150
Inventories 200 Accruals 50
Net fixed assets 500 Long-term debt 400
Common stock 100
Retained earnings 250
Total assets $1000 Total liabilities and equity $1000
Booth's fixed assets were used to only 50% of capacity during 2016, but its current assets were at their proper levels in relation to sales. Spontaneous liabilities and all assets except fixed assets must increase at the same rate as sales, and fixed assets would also have to increase at the same rate if the current excess capacity did not exist. Booth's after-tax profit margin is forecasted to be 3% and its payout ratio to be 50%. What is Booth's additional funds needed (AFN) for the coming year? Round your answer to the nearest dollar.
Booth Company's additional funds needed (AFN) for the coming year is $382, rounded to the nearest dollar.
To calculate Booth Company's additional funds needed (AFN) for the coming year, we need to determine the amount of assets and liabilities required to support the forecasted sales of $2,000.
We can start by calculating Booth's projected financial statements for 2017 using the given information and assumptions.
Projected income statement:
Sales $2,000
Less: Cost of goods sold (97% of sales) 1,940
Gross profit 60
Less: Taxes (at 40% tax rate) 24
Net income 36
Projected balance sheet:
Assets:
Cash $100
Accounts receivable (200 x 2) 400
Inventories (200 x 2) 400
Net fixed assets (500 x 1.5) 750
Total assets $1,650
Liabilities and equity:
Accounts payable (50 x 2) $100
Notes payable (150 x 2) 300
Accruals (50 x 2) 100
Long-term debt 400
Common stock 100
Retained earnings (250 + 36 x 50%) 268
Total liabilities and equity $1,268
To determine the AFN, we need to compare Booth's projected total assets with its projected total liabilities and equity.
AFN = Projected total assets - Projected total liabilities and equity
AFN = $1,650 - $1,268
AFN = $382
Therefore, Booth Company's additional funds needed (AFN) for the coming year is $382, rounded to the nearest dollar. This indicates that the company will need to secure additional financing, either through external sources or by retaining more earnings, to support its forecasted sales growth.
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editor and publisher, broadcasting, and sales management are known as:
Editor and publisher, broadcasting, and sales management are collectively known as elements of media management. These terms represent various roles and processes involved in the organization, production, and distribution of media content.
Overall, the media and communications field is vast and varied, encompassing a wide range of careers and specialties. The industry is constantly evolving as new technologies and trends emerge, making it an exciting and dynamic field for those interested in pursuing a career in this area.
Editor and Publisher: These are positions within the print media industry, which includes newspapers, magazines, and books. Editors are responsible for overseeing the content of publications, while publishers handle the business side of the operation, such as advertising and distribution.Broadcasting: This refers to careers in the electronic media industry, including television and radio broadcasting. Jobs in this field include on-air personalities, producers, directors, and technicians.Sales Management: This is a business-related career that involves managing sales teams and developing sales strategies to meet revenue targets. In the media industry, sales management may involve selling advertising space or airtime to businesses and organizations.Learn more about electronic here:
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Editor and publisher, broadcasting, and sales management are known as fields or industries within the broader category of media and communication. Each of these fields involves different tasks and responsibilities.
Editor and publisher is a field within the publishing industry that involves overseeing the creation and production of written materials, such as books, magazines, and newspapers. Editors and publishers work closely with writers and other contributors to ensure that content is accurate, well-written, and meets the needs of their audience.
Broadcasting is a field within the media industry that involves creating and disseminating audio and video content through radio, television, and other digital platforms. Broadcasting professionals work in a variety of roles, including producers, writers, reporters, and on-air personalities, to create content that informs, entertains, and educates their audience.
Sales management is a field within the business industry that involves overseeing and directing a team of sales professionals to achieve business goals, such as increasing revenue and market share. Sales managers are responsible for developing sales strategies, setting sales targets, and training and motivating their team to achieve success.
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for which of the following reasons will a company with a defined-benefit plan record a pension liability at the end of the year? select answer from the options below if the amount of pension expense exceeds the amount of employer contributions. if the fair value of the plan assets exceeds the projected benefit obligation. if the projected benefit obligation exceeds the fair value of the plan assets. if the amount of employer contributions exceeds the pension expense.
A company with a defined-benefit plan will record a pension liability at the end of the year c. if the projected benefit obligation exceeds the fair value of the plan assets.
This is because the company has an obligation to provide pension benefits in the future, and if the plan assets are insufficient to cover these obligations, a liability must be recorded to reflect this shortfall.
Pension Liabilities means any current or future obligations, liabilities or underfunding in relation to pension plans, retiree medical and any other long-term pension, welfare or benefit plans and any similar plans, programs and obligations.
The term pension liability refers to the amount of money that a private company—or a city or state or federal government—has to account for in order to make future pension payments.
In other words, a pension liability is the difference between the total amount due to retirees and the actual amount of money the company has on hand to make those payments. What it's not—and this is an important distinction—is the total amount that gets paid in future pensions.
Of course, the company or government may have more money currently than it needs to pay future pensions, and that's known simply as a pension surplus.
Therefore, the correct answer is option c. if the projected benefit obligation exceeds the fair value of the plan assets.
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which of the following must an employee show to hold an employer liable for racial harassment? group of answer choices the harassment was based on gender. the harassment was unwelcome. the employer was directly responsible for the harassment. the harassment was not so pervasive or severe that it created an abusive environment.
To hold an employer liable for racial harassment, an employee must show that the harassment was unwelcome and that the employer was directly responsible for it.
An employee must show that the harassment was unwanted, meaning they did not promote, instigate, or start the behavior, to hold an employer accountable for racial harassment. Additionally, the employee must show that the harassing behaviour was directly caused by the employer, for example, by the latter's failure to take adequate action after learning of the behaviour via complaints.
The harassment must also interfere with the employee's ability to execute their job tasks and create a situation that a reasonable person would find intimidating, hostile, or insulting. Finally, the harassment must be serious or pervasive enough to establish a hostile work environment.
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A
$1,000 par value bond with a five-year maturity has a current price
of $835. Annual interest payments are $60. What is the yield to
maturity? (hint: coupon rate/face value)
The yield to maturity for this bond is approximately 7.19%.
To find the yield to maturity, we will use the formula: (Annual Interest Payment / Face Value) * 100. In this case, we are given the annual interest payment and face value. Here's a step-by-step explanation to find the yield to maturity:Identify the given values:For more such question on maturity
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Major League Apparel has two classes of stock authorized: 6%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2015, its first year of operations:
January 2 Issue 110,000 shares of common stock for $70 per share.
February 14 Issue 60,000 shares of preferred stock for $12 per share.
May 8 Purchase 11,000 shares of its own common stock for $60 per share.
May 31 Resell 5,500 shares of treasury stock for $65 per share.
December 1 Declare a cash dividend on its common stock of $0. 25 per share and a $36,000 (6% of par value) cash dividend on its preferred stock payable to all stockholders of record on December 15. The dividend is payable on
December 30. (Hint: Dividends are not paid on treasury stock. )
December 30 Pay the cash dividends declared on December 1.
Required:
a. Record each of these transactions.
b. Prepare the stockholders' equity section of the balance sheet as of December 31, 2015. Net income for the year was $490,000
a. The record for the transactions are as follows:
January 2: Common Stock increases by $7,700,000 and Cash increases by $7,700,000. February 14: Preferred Stock increases by $720,000 and Cash increases by $720,000. May 8: Treasury Stock increases by $660,000 and Cash decreases by $660,000. May 31: Cash increases by $357,500 and Treasury Stock decreases by $357,500. December 1: Retained Earnings decreases by $84,000 ($0.25 x 336,000 common shares outstanding) and Dividends Payable increases by $84,000. Preferred Dividends Payable increases by $36,000. December 30: Dividends Payable decreases by $84,000 and Cash decreases by $120,000 ($84,000 + $36,000).b. The stockholders' equity section of the balance sheet as of December 31, 2015 is as follows:
Common Stock: $11,000,000; Paid-in Capital in Excess of Par Value - Common Stock: $60,900,000; Preferred Stock: $720,000; Paid-in Capital in Excess of Par Value - Preferred Stock: $348,000; Retained Earnings: $393,000; Treasury Stock: ($357,500); Total Stockholders' Equity: $73,023,500.The Common Stock account reflects the 110,000 shares of common stock issued at $10 par value. The Paid-in Capital in Excess of Par Value - Common Stock account reflects the excess amount received over the par value for the common stock issuance. The Preferred Stock account reflects the 60,000 shares of preferred stock issued at $10 par value.
The Paid-in Capital in Excess of Par Value - Preferred Stock account reflects the excess amount received over the par value for the preferred stock issuance. The Retained Earnings account reflects the net income for the year ($490,000) minus the dividends declared ($84,000 for common and $36,000 for preferred). The Treasury Stock account reflects the cost of the shares of common stock repurchased and not resold. The total stockholders' equity is the sum of all accounts.
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Calculate the future value of $7,000 in?
A. Four years at an interest rate of 8% per year. B. Eight years at an interest rate of 8% per year. C. Four years at an interest rate of 16% per year. D. Why is the amount of interest earned in part (a) less than half the amount of interest earned in part (b)?
a.$9523
b.$12957
c.$ 12674
d. Since more interest has been paid at the end of the time period than at the beginning , the money grows faster.
a. PV = 7000
RATE = 8%
YEARS = 8
FUTURE VALUE = PV* (1+r)ⁿ
= 7000 (1+0.08)⁴
= 9523
The worth of a current asset at some point in the future based on an estimated rate of growth is known as future value (FV). For investors and financial planners, the future value is crucial because they use it to predict how much an investment made now will be worth in the future.
b. Rate = 8%
Years = 8
FUTURE VALUE = PV* (1+r)ⁿ
7000 (1+0.08)⁸
= 12957
c. Rate = 16%
Years = 4
FUTURE VALUE = PV* (1+r)ⁿ
7000 (1+0.16)⁴
= 12674
d. Since more interest has been paid at the end of the time period than at the beginning , the money grows faster.
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raul's furrier marks up mink coats $3,000. this represents a 50% markup on cost. what is the cost of the coats?
The original cost of the mink coats is $6,000.
How to calculate the cost of the coatsRaul's Furrier marks up mink coats by $3,000, which represents a 50% markup on the cost of the coats.
To find the original cost of the coats, we can use the markup percentage and the markup amount. Let's denote the cost of the coats as "C".
Since the markup is 50% of the cost, we can represent the markup amount ($3,000) as 0.5 * C (50% converted to decimal is 0.5).
Now, we can set up an equation: 0.5 * C = $3,000
To solve for C (the cost of the coats), we can simply divide both sides of the equation by 0.5:
C = $3,000 / 0.5 C = $6,000
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Brian Tull sold a put option on Canadian dollars for $0.04 per unit. The strike price was $0.82, and the spot rate at the time the option was exercised was $0.74. Assume Brian immediately sold off the Canadian dollars received when the option was exercised. Also assume that there are 48,900 units in a Canadian dollar option. What was Brian's net profit on the put option? Use a minus sign to enter loss values, if any. If the answer is zero, enter "0". Round your answer to the nearest dollar.
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Brian's net profit on the put option was $36,222 - $40,218 = -$3,996. This means that he made a loss of $3,996 on the put option.
Based on the given information, Brian Tull sold a put option in Canadian dollars for $0.04 per unit. The strike price was $0.82, and the spot rate at the time the option was exercised was $0.74.
This means that the buyer of the option had the right to sell Canadian dollars to Brian at $0.82 per unit, but since the spot rate was lower at $0.74, the buyer exercised the option to sell the Canadian dollars to Brian at a higher price.
Brian immediately sold off the Canadian dollars received when the option was exercised. Since there were 48,900 units in a Canadian dollar option, Brian received 48,900 x $0.82 = $40,218 when he bought the Canadian dollars from the buyer of the option.
When he sold off the Canadian dollars at the spot rate of $0.74, he received 48,900 x $0.74 = $36,222.
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Marian Plunket owns her own business and is considering an investment. If she undertakes the investment, it will pay $4720 at the end of each of the next 3 years. The opportunity requires an initial investment of $1,180 plus an additional investment at the end of the second year of $5900. What is the NPV of this opportunity if the interest rate is 1.9% per year? Should Marian take it?
The NPV of Marian Plunket's investment opportunity is $559.14. Considering the positive NPV, Marian should take the investment.
To calculate the NPV, follow these steps:
1. Find the present value (PV) of each cash flow using the formula: PV = FV / (1 + r)ⁿ, where FV is the future value, r is the interest rate, and n is the year.
2. For each year, calculate the PV:
- Year 1: PV1 = $4720 / (1 + 0.019)¹ = $4633.01
- Year 2: PV2 = $4720 / (1 + 0.019)² = $4546.92
- Year 3: PV3 = $4720 / (1 + 0.019)³ = $4461.87
3. Sum the PVs: Total PV = PV1 + PV2 + PV3 = $4633.01 + $4546.92 + $4461.87 = $13641.80
4. Subtract the initial investment and the additional investment: NPV = Total PV - Initial Investment - Additional Investment = $13641.80 - $1180 - $5900 = $559.14
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A firm's bonds have a maturity of 8 years with a $1,000 face value, have an 11% semiannual coupon, are callable in 4 years at $1148.95, and currently sell at a price of $1,273.70. What are their nominal yield to maturity and their nominal yield to call?
Calculator Approach please
To calculate the nominal yield to maturity and the nominal yield to call, we need to use a financial calculator. Here's how to solve this problem:
1. Input the relevant information into the calculator:
- N = 16 (since there are 8 years and 2 semiannual periods per year)
- PV = -1273.70 (since we're buying the bond)
- PMT = 55 (11% coupon rate divided by 2)
- FV = 1000
- CPT -> YTM (to find the nominal yield to maturity)
2. The calculator should give us a result of 7.77%. This is the nominal yield to maturity.
3. To find the nominal yield to call, we need to input some additional information:
- N = 8 (since the bond is callable in 4 years)
- PV = -1273.70
- PMT = 55
- FV = 1148.95 (the call price)
- CPT -> YTM (to find the yield to call)
4. The calculator should give us a result of 13.29%. This is the nominal yield to call.
In summary, the nominal yield to maturity is 7.77% and the nominal yield to call is 13.29%.
The nominal yield to maturity represents the total return an investor can expect to receive if they hold the bond until maturity, assuming all coupon payments are reinvested at the same rate. In this case, the yield to maturity is lower than the coupon rate of 11% because the bond is currently trading at a premium.
The nominal yield to call represents the total return an investor can expect to receive if the bond is called at the earliest possible date. In this case, the yield to call is higher than the yield to maturity because the bond is callable at a premium price of $1148.95, which means the investor may not receive all of the remaining coupon payments if the bond is called.
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Reason and Impartiality • In what way people fail to be impartial in their decisions? What factors affect one's disposition to becoming impartial towards certain actions or circumstance that needs ethical decisions? Identify THREE and explain briefly.
There are various factors that affect one's disposition to becoming impartial towards certain actions or circumstances that need ethical decisions. Three common factors include cognitive biases, emotions, and social influences.
1. Cognitive biases: These are mental shortcuts or systematic errors in thinking that can impact impartiality. For instance, confirmation bias leads individuals to favor information that confirms their pre-existing beliefs and discount information that contradicts them. This can result in biased decision-making as people tend to overlook alternative perspectives.
2. Emotions: Personal feelings and emotions can also influence impartiality. When faced with an ethical decision, individuals may let their emotions guide their choices, resulting in decisions based on emotional attachments or reactions rather than objective analysis. For example, empathy for a particular individual or group can lead to favoritism and an inability to remain impartial.
3. Social influences: Lastly, social factors such as cultural norms, peer pressure, and groupthink can impact impartiality. People may unconsciously conform to the views of those around them or adhere to established norms, even if those views or norms are unethical. In these situations, individuals might not critically evaluate the ethical aspects of their decisions and instead focus on fitting in with the group or society.
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The cost of producing a low-quality cup is $10. If the producer uses high quality row material it cost the firm $14 to produce a high-quality cup. The both cups look like completely the same and there is no way for Consumers to distinguish between two kind of cups when they make their purchases. There are four firms in the mark producing cups. Consumers value cups at their cost of production and are risk neutral.
(a) Will any of the four firms be able to produce high-quality cups without making losses? Explain. (7 pts)
(b) What happens if consumers are willing to pay $34 for high-quality cups? (8 pts)
The competition among the four firms would drive the price down to the marginal cost of production, which is $14, and they would all make a profit of $6 per cup.
(a) None of the four firms will be able to produce high-quality cups without making losses because consumers value cups at their cost of production. Since the high-quality cups cost $14 to produce, but consumers only value them at $10, the firms would have to sell them at a loss. In contrast, the low-quality cups cost $10 to produce and are valued by consumers at the same price, so the firms can sell them at cost without making a profit or a loss. Therefore, it would not be economically feasible for any of the firms to produce high-quality cups.
(b) If consumers are willing to pay $34 for high-quality cups, then the firms can sell them at a profit. Since the cost of production for high-quality cups is $14, the firms can sell them for $34 - $14 = $20 per cup and make a profit of $6 per cup. This price would be attractive to the firms since they would be able to cover the cost of production and make a profit. In contrast, the low-quality cups would still be sold at cost since consumers only value them at $10. The firms would now have an incentive to produce high-quality cups since they would be able to make a profit. The competition among the four firms would drive the price down to the marginal cost of production, which is $14, and they would all make a profit of $20 - $14 = $6 per cup.
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describe the differences between contributory programs, noncontributory programs and tax expenditures. which programs are the most generous to which americans and why?
Contributory programs are funded by individual contributions, noncontributory programs are funded by taxes, and tax expenditures are subsidies given through the tax code. The most generous programs vary depending on income and need.
Contributory systems, like Social Security and Medicare, are paid for by individual contributions that employees make throughout their working lives. Non-contributory programmes like Medicaid and SNAP are paid for by taxes and offer benefits to individuals who qualify. Subsidies provided by the tax code, such as the mortgage interest deduction, are known as tax expenditures.
In general, noncontributory programmes like Medicaid and SNAP are more generous to those with lower incomes, while contributory programmes like Social Security and Medicare provide more benefits to those who have contributed more over their lifetimes. The most generous programmes vary depending on income and need.
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Rashid started out as a front office worker, and over the years worked his way up to the CEO position. As such, Rashid lkely found that as he moved up in responsibility, he required a higher level of skills Multiple Choice technical professional conceptual and decision Informational
As Rashid progressed in his career from a front office worker to a CEO, he likely faced increasing demands on his skills and abilities.
What skills and abilities are required for career progression from a front office worker to a CEO, and how do they differ?While technical skills and abilities, to use specific tools or software, may have been important in his earlier roles, as he advanced to higher positions, he likely required a more professional skill set.
This would include skills such as leadership, strategic thinking, and communication. Additionally, conceptual skills, such as the ability to understand and analyze complex systems and processes, would have become more critical as he was responsible for overseeing the entire organization.
Finally, decision-making skills would have been essential for a CEO, as he would have had to make difficult choices that would impact the company's overall performance. Throughout his career, Rashid likely had to continuously develop and refine his skills to meet the challenges of each new role
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Sarfaraz has been signed to a three year, Rs10 million contract.The details provide for an immediate cash bonus of Rs.1 million.The player is to receive Rs.2 million in salary at the end of thefirs t year, Rs.3 million the next, and Rs.4 million at the end of the last year. Assuming a 10 percent discount rate, is this package worth Rs.10 million? How much is it worth?Task: Solve this question as soon as possible.
No, the package is not worth Rs.10 million, the amount is less than the Rs.10 million assuming a 10% discount rate. Its present value is approximately Rs.7.9 million.
To calculate the present value of the contract, we need to discount each cash flow back to its present value using the 10% discount rate. The immediate cash bonus of Rs.1 million has no time value, so its present value is simply Rs.1 million.
For the salary payments, we can use the formula:
PV = FV / (1 + r)^n
Where PV is the present value, FV is the future value, r is the discount rate, and n is the number of years.
So, for the Rs.2 million salary payment at the end of the first year, the present value is:
PV = 2,000,000 / (1 + 0.1)^1 = Rs.1,818,182
For the Rs.3 million salary payment at the end of the second year:
PV = 3,000,000 / (1 + 0.1)^2 = Rs.2,289,256
And for the Rs.4 million salary payment at the end of the third year:
PV = 4,000,000 / (1 + 0.1)^3 = Rs.2,801,058
Adding up these present values gives us a total present value of:
1,000,000 + 1,818,182 + 2,289,256 + 2,801,058 = Rs.7,908,496
Since this amount is less than the Rs.10 million stated in the contract, the package is not worth Rs.10 million. Its present value is approximately Rs.7.9 million.
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with respect to each 3. Regardless of Marissa's possible claims (pretend Marissa has no claims to challenge the K), does Victor have a breach of K claim against Marissa for failing to pay the additional $300. 4. Let's assume Victor never knew about the manufacturer's recall. Can Marissa get out of the K with Victor based on the law of mistake with respect t the condition of the engine? Explain thoroughly What is the remedy for a mutual mistake? ASSIGNMENT SCENARIO: Questions 1-4 are based on the following scenario: Marissa, who is 1 week away from her 18th birthday, needs a car before she starts her new job. She learns that her high-school principal is willing to sell his car for a reasonable price. Marissa and Victor talk about the car in Victor's office, and Victor tells her that the engine on the car is in good shape and that he does not know of any problems with the car. Marissa agrees to pay Victor $1,000 for the car "as is", after Victor convinces her that is a fair price. Marissa and Victor sign a short contract memorializing the agreement. Both parties agree that Victor will deliver the car the next day, Saturday, by 10:00 a.m., so Marissa can use it to get to her new job by noon. After his meeting with Marissa, Victor learns that the car is being recalled by the manufacturer for a faulty engine. The next day, Victor delivers the car to Marissa. Before he hands the car over, Victor tells Marissa he will sell the car only if she pays him an additional $300 since he had the car detailed and made her a second set of keys. Marissa, who is worried about getting to her new job on time, agrees to pay the extra money, but tells Victor she cannot do so now. Victor tells her she must deliver the extra $300 to him within two weeks. Marissa then gives Victor $1,000, and Victor leaves without telling Marissa anything about the recall. Marissa never gives Victor the additional $300. Three months later, Marissa is very angry at Victor. She has done some research and determines the car is worth only $500. More importantly, she is experiencing problems with the car and finds out that Victor had been notified about the engine issues. She asks Victor for a refund, but he refuses to give her one
3. Victor may have a breach of contract claim against Marissa for failing to pay the additional $300 if it was a part of their agreement and if Marissa had agreed to pay it. However, if it was not a part of their initial agreement, Victor would not have a breach of contract claim against Marissa for failing to pay the additional $300.
4. Marissa may not be able to get out of the contract with Victor based on the law of mistake regarding the condition of the engine since she agreed to purchase the car "as is." The law of mistake only applies when both parties make a mutual mistake regarding a fundamental aspect of the contract. In this case, there was no mutual mistake, and Marissa agreed to purchase the car "as is."
The remedy for a mutual mistake is typically to rescind the contract or reform it to reflect the intended agreement of both parties. However, in this case, there was no mutual mistake, so the remedy would not apply.
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ron and madeleine couple received their 2023 form 1099-div (dividends received) in the amount of $1,450. ron and madeleine are in the 27% bracket.what would be their tax liability on the dividends received?
Tax liability of Ron and Madeleine is $1,995.72.
What's tax liabilityRon and Madeleine's tax liability on the dividends received would be calculated as follows:
First, they need to determine their taxable income including the $1,450 in dividends
Assuming no other income, their taxable income would be $5,383 ($4,000 standard deduction + $1,450 dividends - $67 personal exemption).
Next, they need to calculate the tax on this amount using the tax brackets for 2023.
The first $19,050 of taxable income is taxed at 10%, the next $58,350 is taxed at 12%, and the remaining amount up to their taxable income is taxed at 27%.
Their tax liability on the dividends received would therefore be $290.50, calculated as follows:
- The first $19,050 is taxed at 10%, which is $1,905.
- The remaining $336 ($5,383 - $19,050) is taxed at 27%, which is $90.72.
- Their total tax liability is $1,905 + $90.72 = $1,995.72.
However, it's important to note that this calculation assumes no other income or deductions. Ron and Madeleine's actual tax liability may differ based on their individual tax situation.
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