When a company records a loss on a purchase commitment, it means that the market price of the inventory has decreased below the agreed-upon purchase price.
What will happen when a company records a loss on purchase commitmentThis situation creates an unfavorable difference that is reported as a loss in the company's financial statements. However, if the inventory market price later recovers, the loss on the purchase commitment becomes less significant or may even reverse.
The company may experience a gain or reduced loss as the difference between the purchase price and the market price decreases. This change is usually reflected in the company's financial statements, improving its overall financial performance.
In summary, when a company records a loss on a purchase commitment and the inventory market price later recovers, the company's financial performance improves due to reduced loss or potential gain from the favorable price change.
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1. which item(s) in the income statement shown above will not affect cash flows? (you may select more than one answer. single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. any boxes left with a question mark will be automatically graded as incorrect.)
The correct response is that cash flows will not be affected by the depreciation charge. Deterioration costs are recorded utilizing the income explanation's aberrant methodology, not its immediate strategy.
How is income influenced?Since operating cash flow begins with net income, any changes in net income would affect cash flow from operating activities. If costs rise or sales decrease, operational operations will experience a decrease in cash flow, resulting in a decrease in net income.
There is a cash flow problem when the amount of money going out of the company exceeds the amount coming in. As a result, you won't have enough money to pay your bills, pay back loans, pay your suppliers, or run your business profitably.
A company can improve cash flow by using high-interest savings accounts, increasing inventory, checking consumer credit, offering incentives for early payments, leasing rather than purchasing, and so on.
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A firm is contemplating shortening its credit period from 45 to 35 days and believes that, as a result of this change, its average collection period will decline from 50 to 43 days. Bad-debt expenses are expected to decrease from 1.4% to 1.1% of sales. The firm is currently selling 11,500 units but believes that as a result of the proposed change, sales will decline to 9,500 units. The sale price per unit is $56, and the variable cost per unit is $43. The firm has a required return on equal-risk investments of 11.2%. Evaluate this decision, and make a recommendation to the firm.
Based on the given information, the firm's decision to shorten its credit period is not advisable as it will lead to a decrease in profit.
The firm's decision to shorten its credit period from 45 to 35 days will result in a decrease in sales from 11,500 to 9,500 units.
Current sales revenue = 11,500 × $56 = $644,000
New sales revenue = 9,500 × $56 = $532,000
The total variable cost of producing 11,500 units is $43 × 11,500 = $494,500.
Current profit = $644,000 - $494,500 = $149,500
New profit = $532,000 - $494,500 = $37,500
The firm's average collection period is expected to decrease from 50 to 43 days, which means that the firm will be able to collect payments faster, resulting in a decrease in bad debt expenses from 1.4% to 1.1% of sales.
Current bad debt expenses = 1.4% × $644,000 = $9,016
New bad debt expenses = 1.1% × $532,000 = $5,852
However, the decrease in profit is greater than the decrease in bad debt expenses.
The net loss in profit due to the proposed change is $112,000, which represents a loss of $9.74 per unit.
The firm's required return on equal-risk investments is 11.2%. The loss of $9.74 per unit represents a return of -17.4%, which is lower than the required return. Therefore, the firm's decision to shorten its credit period is not advisable.
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The common stock of NCP paid 1.32 in dividends last year. Dividends are expected to grow at an 8% annual rate for an indefinite number of years.
a. If NCP's current market price is $23.50 per share, what is the stock's expected rate of return?
b. If your required rate of return is 10.5 %, what is the value of the stock for that investor?
c. Should you make the investment?
Given that your required rate of return is 10.5% and the stock value ($57.024) is higher than the current market price ($23.50), it is clear that the stock is undervalued and would be a wise investment.
We'll be using the Dividend Discount Model (DDM) to solve the problem.
a. To calculate the stock's expected rate of return, we'll use the following formula:
Expected Rate of Return = (Dividend1 / Current Market Price) + Dividend growth rate
First, we need to find Dividend1, which is the dividend for the next year. We have:
Dividend0 = $1.32 (last year's dividend)
Dividend Growth Rate = 8%
Dividend1 = Dividend0 * (1 + Dividend Growth Rate)
Dividend1 = $1.32 * (1 + 0.08)
Dividend1 = $1.4256
Now, we can calculate the expected rate of return:
Expected Rate of Return = ($1.4256 / $23.50) + 0.08
Expected Rate of Return = 0.06066 + 0.08
Expected Rate of Return = 0.14066 or 14.066%
b. To find the value of the stock for an investor with a required rate of return of 10.5%, we'll use the DDM formula:
Stock Value = Dividend1 / (Required Rate of Return - Dividend Growth Rate)
Stock Value = $1.4256 / (0.105 - 0.08)
Stock Value = $1.4256 / 0.025
Stock Value = $57.024
c. To determine if you should make the investment, compare the stock value with the current market price. In this case:
Stock Value = $57.024
Current Market Price = $23.50
Since the stock value ($57.024) is greater than the current market price ($23.50), it indicates that the stock is undervalued, and it would be a good investment based on your required rate of return of 10.5%.
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Stock A has a standard deviation of 5% and expected return of 10%. Stock B has a standard deviation of 10% and expected return of 15%. Suppose, we create a portfolio with 50% weight in stock A and 50% weight in Stock B. The portfolio has a standard deviation of 7.5%. What is the correlation between stock A and stock B? 0.5 - 1 1 0
The correlation between stock A and stock B is 0.5 and can be calculated using the formula:
Correlation = [(Portfolio Standard Deviation)²- (Weight A)²x (Standard Deviation A)² - (Weight B)²x (Standard Deviation B)²] / [2 x (Weight A) x (Weight B) x (Standard Deviation A) x (Standard Deviation B)]
Plugging in the given values, we get:
Correlation = [(7.5%)² - (50%)^² x (5%)^2 - (50%)² x (10%)²] / [2 x (50%) x (50%) x (5%) x (10%)]
Correlation = 0.5
Therefore, the correlation between stock A and stock B is 0.5.
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As a fresh graduate from the Master of Finance and Accounting, you have just been employed in a very reputable organization. The company is contemplating whether to rent a house or buy an outright house for people of your calibre to be used as an official resident for your position as a finance director. If the company should rent a house, they would have to pay a monthly rent of US$2,500.00 to a real estate company. However, the same real estate company is selling a house of similar features to be paid for over 25 years. The cost of the house is US$350,000. The company require a down payment of 25% of the total sum require before it would seal the deal for the company to own the house forever. The company has also realized that if it buys a piece of land in Ghana, it could build such as a house which may cost at least 20% less the sum requires for this mortgage facility. However, the company is concerned about some issues surrounding the acquisition of properties in Ghana. Also, since the company is operating in Ghana, it is pricing its products in Ghana cedis but had to pay in dollars. A host of other considerations surrounding this deal has been discussed at the management level. As a finance director you are expected to provide expert advice to your company based on the following:
Requirements
a. Determine the monthly payment of the mortgage facility assuming that the interest rate on the loan is 8%.
b. Show a four monthly amortization schedule for this mortgage facility.
c. Based on your computation of the monthly mortgage repayment, advise whether the company should purchase the mortgage facility or pay rent forever?
d. What are the three challenges of mortgage acquisition in Ghana? e. Provide three ways government should do to make mortgage acquisition attractive in Ghana?
a. The monthly payment of the mortgage facility would be US$1,862.30 assuming an interest rate of 8% and a loan term of 25 years.
b. Month | Beginning Balance | Payment | Interest | Principal | Ending Balance
1 | $262,500.00 | $1,862.30 | $1,750.00 | $112.30 | $262,387.70
2 | $262,387.70 | $1,862.30 | $1,747.90 | $114.40 | $262,273.30
3 | $262,273.30 | $1,862.30 | $1,745.80 | $116.50 | $262,156.80
4 | $262,156.80 | $1,862.30 | $1,743.60 | $118.70 | $262,038.10
c. Based on the computation of the monthly mortgage repayment, it may be financially beneficial for the company to purchase the house instead of paying rent forever. However, other factors such as the availability of funds for the down payment and the company's long-term plans should also be considered.
d. Three challenges of mortgage acquisition in Ghana include high-interest rates, difficulty in obtaining financing, and lack of transparency in the real estate sector.
e. To make mortgage acquisition more attractive in Ghana, the government should consider implementing policies such as reducing interest rates, providing incentives for mortgage lenders, and improving transparency in the real estate sector.
Additionally, the government could also consider introducing affordable housing schemes to help low and middle-income earners own homes.
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1. all of the following statements concerning the income beneficiary of a trust are correct, except: a. an income beneficiary in a trust can be given to the beneficiary, while also naming the same individual as the remainder beneficiary of the trust. b. a decedent will commonly create a testamentary trust that names his wife as the income beneficiary of his property for the rest of his life and his children as the remainder beneficiaries. c. a dynasty trust only has income beneficiaries. the trust property will never vest with a remainder beneficiary. d. when the property is paid to the remainder beneficiary at the termination of a trust, if the income beneficiary is a different individual than the remainder beneficiary, the income beneficiary is treated as having made a taxable gift to the remainder beneficiary.
Trusts are legal arrangements where a trustee holds property for the benefit of one or more beneficiaries. There are different types of trusts with different features and purposes. One type of trust is an income trust, where the income generated from the property held by the trustee is distributed to the income beneficiary. The remainder beneficiary is the person who ultimately receives the trust property at the termination of the trust. In this context, let's explore the statements given and identify the incorrect statement.
Statement a is correct as it is possible to name the same individual as the income beneficiary and remainder beneficiary of a trust. Statement b is also correct as it is common for a decedent to create a trust with his wife as the income beneficiary and his children as remainder beneficiaries. Statement d is also correct as the income beneficiary may be treated as making a taxable gift to the remainder beneficiary when the property is paid to the remainder beneficiary at the end of the trust.
However, statement c is incorrect. A dynasty trust is a type of trust that lasts for multiple generations and is designed to minimize taxes and maximize wealth preservation for the beneficiaries. Unlike what statement c says, a dynasty trust can have both income beneficiaries and remainder beneficiaries. Therefore, statement c is incorrect.
In summary, all the statements are true except for statement c, which is incorrect.
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be 9 yes Financial results may a misleading indicator of strategic health of a company do you agree with this statement? Explain start with with this statement or agree I do not agree Strictly one page: Strateg-effectiveness effia oncy - financial is operations : *Machoki - Readings FOC FIDEL MWAKI 4 COMPANY ADVOCATES$
I agree with the statement that financial results may be a misleading indicator of the strategic health of a company. While financial performance is undoubtedly important, it cannot be the only metric for evaluating a company's overall success.
A company may have strong financial results but still struggle with operational efficiency, or its strategic goals may not align with its financial performance.
For example, a company may have achieved high profitability through cost-cutting measures, but at the expense of investing in long-term growth opportunities.
Alternatively, a company may have incurred short-term losses in pursuit of a strategic shift that will position it for long-term success.
Therefore, it is essential to evaluate a company's overall strategy, effectiveness, efficiency, and operations alongside financial performance to gain a comprehensive understanding of its strategic health. Focusing solely on financial results can lead to a short-sighted view of a company's long-term prospects.
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Stock R has a beta of 1.2, Stock S has a beta of 0.55, the expected rate of return on an average stock is 9%, and the risk-free rate is 4%. By how much does the required return on the riskier stock exceed that on the less risky stock? Do not round intermediate calculations. Round your answer to two decimal places
The required return on the riskier stock exceed that on the less risky stock by 3.25%.
To calculate the required return on each stock using the Capital Asset Pricing Model (CAPM), we'll use the formula:
Required Return = Risk-free Rate + Beta × (Expected Market Return - Risk-free Rate).
For Stock R (riskier stock):
Required Return R = 4% + 1.2 × (9% - 4%)
For Stock S (less risky stock):
Required Return S = 4% + 0.55 × (9% - 4%)
Follow these steps to determine the required return on each stock:1: Calculate the difference in market return and risk-free rate:
(9% - 4%) = 5%
2: Calculate the required return for Stock R:
Required Return R = 4% + 1.2 × 5% = 4% + 6% = 10%
3: Calculate the required return for Stock S:
Required Return S = 4% + 0.55 × 5% = 4% + 2.75% = 6.75%
4: Find the difference in required return between Stock R and Stock S:
Difference = Required Return R - Required Return S = 10% - 6.75% = 3.25%
By using the CAPM, we find that the required return on the riskier stock (Stock R) exceeds that on the less risky stock (Stock S) by 3.25%.
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select all that apply marketers strive for efficient operations to provide their customers with which of the following? (choose every correct answer.) multiple select question. the products they want low-quality merchandise the correct quantity of merchandise products with lower costs than those of competitors'
Marketers strive for efficient operations to provide their customers with a: "the products they want" and c: "the correct quantity of merchandise", while also offering d: "products with lower costs than those of competitors'".
Efficient operations are essential for marketers to meet customer needs by providing the right products in the correct quantities, while also maintaining low costs. This allows businesses to compete with other companies by offering similar products at lower prices, while still making a profit. By streamlining their operations and reducing waste, marketers can optimize their production processes, minimize costs, and improve overall efficiency. Ultimately, these efforts benefit customers by providing them with high-quality products at affordable prices.
Options a, c and d are answers.
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Suppose that 5 years ago the Cisco Company sold a 15-year bond issue, which had a par value of $5,000 and a coupon rate of 7%. interest is paid semiannually. If the required return is 12%, what is the price of the bond today? Under what condition is it sold?
The price of the Cisco bond today is $3,783.43 and it is sold at a discount.
To calculate the price of the bond today, we need to discount the bond's future cash flows to their present value. The bond has a 15-year maturity with semi-annual coupon payments, so there are 30 periods.
The coupon payment is $175 (0.07 x $5,000 / 2), and the par value is $5,000. The required return is 12%, which we need to convert to a semi-annual rate of 6%.
Using the formula for the present value of an annuity, we can calculate the present value of the bond's coupon payments:
PV of annuity = $175 x [(1 - 1 / (1 + 0.06)³⁰) / 0.06] = $2,249.23
Using the formula for the present value of a future sum, we can calculate the present value of the bond's par value:
PV of par value = $5,000 / (1 + 0.06)³⁰ = $1,534.20
Adding the present values of the coupon payments and the par value, we get the bond's price today:
Bond price = $2,249.23 + $1,534.20 = $3,783.43
The bond is sold at a discount because its coupon rate is lower than the required return of 12%. Investors would only be willing to buy the bond at a price lower than its par value to compensate for the lower coupon payments.
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1. An indenture is:
A. another name for a bond's coupon.
B. the legal agreement between the bond issuer and the bondholders.
C. a bond that is secured by the inventory held by the bond's issuer.
D. a bond that is past its maturity date but has yet to be repaid.
E. the written record of all the holders of a bond issue.
2. Kaiser Industries has bonds on the market making annual coupon payments, with 14 years to maturity, and selling for $1,382.01. At this price, the bonds have a yield to maturity of 5.9 percent. What is the dollar amount of annual coupon?
A. $99.47
B. $59.00
C. $100.39
D. $40.69
E. $99.84
1. An indenture is the legal agreement between the bond issuer and the bondholders. The correct answer is B. 2. The dollar amount of the annual coupon is $99.84. The correct answer is E.
1. An indenture is the legal agreement between the bond issuer and the bondholders, which specifies the terms and conditions of the bond.
2. To calculate the annual coupon payment, we use the present value formula and solve for the coupon payment (C). The formula is:
[tex]PV = C / (1+r)^1+ C / (1+r)^2 + ... + C / (1+r)^n + FV / (1+r)^n[/tex]
where PV is the present value, r is the yield to maturity, n is the number of years to maturity, and FV is the face value of the bond. Rearranging the formula to solve for C, we get:
[tex]C = (PV - FV / (1+r)^n) / ((1+r)^1 + (1+r)^2 + ... + (1+r)^n)[/tex]
Substituting the given values, we get:
C = ($1,382.01 - $1,000 / (1+0.059)¹⁴) / ((1+0.059)¹ + (1+0.059)² + ... + (1+0.059)¹⁴) = $99.84
Therefore, the annual coupon payment is $99.84.
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in spock, this year's nominal gdp is $5 million and the real gdp is $4 million. what is spock's gdp deflator?
The Spock's GDP (Gross domestic product) deflator for this year is 125.
How to calculate the spock's GDP deflatorThe GDP deflator is a measure of the overall price level of goods and services produced in an economy. It is calculated by dividing the nominal GDP by the real GDP and multiplying by 100.
In this case, Spock's nominal GDP is $5 million and the real GDP is $4 million, so we can calculate the GDP deflator as follows:
GDP deflator = (nominal GDP / real GDP) x 100
GDP deflator = ($5 million / $4 million) x 100
GDP deflator = 1.25 x 100 GDP deflator = 125
Therefore, Spock's GDP deflator for this year is 125.
This indicates that the overall price level of goods and services in the economy has increased by 25% compared to the base year used to calculate the real GDP.
This information can be useful for policymakers to assess the inflationary pressures in the economy and make necessary adjustments to monetary and fiscal policies.
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which of the following are steps that organizations can take to evolve the organization from boundaries to rewards and culture? (check all that apply.) multiple select question. make sure that managers micromanage employees so that mistakes are caught early. make training an important part of the organization. develop a reward system that is clearly aligned with organizational goals. hire the right people.
The means that associations can take to develop from limits to prizes and culture are make training an important part of the organization, develop a reward system that is clearly aligned with organizational goals, and hire the right people. Hence, options (B), (C) and (D) are correct.
By putting resources into representative preparation and improvement, associations can upgrade their workers' abilities and capabilities, prompting further developed execution and a more grounded hierarchical culture.
Laying out a distinct prize and acknowledgment framework that lines up with the association's targets rouses workers to accomplish these objectives. It cultivates a positive culture that advances superior execution and commitment.
By recruiting the ideal individuals, associations can construct a strong and cooperative labor force that adds to a positive workplace and in general achievement.
Therefore, options (B), (C) and (D) are correct.
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a physical inventory taken on december 31, 2020, resulted in an ending inventory of $1,050,000. jep's markup on cost has remained constant at 32% in recent years. jep suspects that an unusual amount of inventory may have been damaged and disposed of without appropriate tracking. at december 31, 2020, what is the estimated cost of missing inventory?
The estimated cost of missing inventory is $538,235.30. However, it's important to note that this is just an estimate and further investigation would be necessary to determine the actual cost of missing inventory.
To calculate the estimated cost of missing inventory, we need to use the retail inventory method. The retail inventory method is a way to estimate the cost of inventory by using the ratio of the cost of goods available for sale to the retail price of goods available for sale.
First, we need to determine the cost of goods available for sale. We know the ending inventory at cost is $1,050,000, but we don't have information on the cost of goods sold. However, we can use the retail inventory method to estimate the cost of goods sold.
Let's assume that the total cost of goods available for sale is $3,000,000 (this includes the ending inventory at cost plus the cost of goods sold). We also know that Jep's markup on cost is 32%, which means that the cost of goods is 68% of the selling price.
Using this information, we can calculate the total selling price of goods available for sale as follows:
Selling price = Cost / (1 - Markup on cost)
Selling price = $3,000,000 / (1 - 0.32)
Selling price = $4,411,765.96
Next, we need to calculate the cost of goods sold:
Cost of goods sold = Selling price x (1 - Gross margin ratio)
Cost of goods sold = $4,411,765.96 x (1 - 0.68)
Cost of goods sold = $1,411,764.70
Now we can calculate the estimated cost of missing inventory:
Estimated cost of missing inventory = Cost of goods available for sale - Ending inventory at cost - Cost of goods sold
Estimated cost of missing inventory = $3,000,000 - $1,050,000 - $1,411,764.70
Estimated cost of missing inventory = $538,235.30
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Watters Umbrella Corp. issued 15-year bonds 2 years ago at a coupon rate of 8 percent. The bonds make semiannual payments. If these bonds currently sell for 115 percent of par value, what is the YTM?
The yield to maturity (YTM) on the 15-year bonds issued by Watters Umbrella Corp. can be calculated by using the current market price of the bonds and the coupon rate. Since the bonds make semiannual payments, the coupon rate can be divided by two to get the semiannual coupon payment.
First, we need to calculate the semiannual coupon payment which is 8% / 2 = 4%. Next, we need to find the present value of the semiannual coupon payments and the principal payment using the YTM.
Since the bonds are currently selling at 115% of par value, the price of each bond would be 1.15 x $1,000 = $1,150. We can use this price to calculate the YTM using a financial calculator or Excel's RATE function.
Assuming a face value of $1,000, a coupon rate of 4%, 30 payments (15 years x 2 payments per year), and a present value of -$1,150 (since it's the cash outflow), we get a YTM of approximately 3.5%. Therefore, the YTM for Watters Umbrella Corp.'s 15-year bonds is approximately 3.5%.
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if a firm permanently borrows $100 million at an interest rate of 8 percent, what is the present value of the interest tax shield? (assume that the marginal corporate tax rate is 21 percent.)
The present value of the interest tax shield for the firm is $21 million.
How to calculate the present valueWhen a firm borrows money, it receives an interest tax shield, which is a tax deduction on the interest paid.
In this case, the firm has borrowed $100 million at an interest rate of 8 percent, which leads to an annual interest expense of $8 million ($100 million * 0.08).
The marginal corporate tax rate is 21 percent, so the interest tax shield can be calculated as the annual interest expense multiplied by the tax rate.
Interest Tax Shield = Annual Interest Expense * Tax Rate
Interest Tax Shield = $8 million * 0.21
Interest Tax Shield = $1.68 million
The present value of the interest tax shield depends on the time frame and discount rate.
Since it's a permanent loan, the tax shield is a perpetuity, which can be calculated by dividing the annual tax shield by the discount rate.
Assuming the discount rate is equal to the interest rate (8 percent), the present value of the interest tax shield can be calculated as follows:
PV of Interest Tax Shield = Interest Tax Shield / Discount Rate
PV of Interest Tax Shield = $1.68 million / 0.08
PV of Interest Tax Shield = $21 million
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Hewitt Packing Company plans to issue bonds with a 10-year maturity, a $1,000 par value, a 10 percent coupon rate, and semiannual interest payments. Bonds of the same risk are currently having a yield to maturity of 12 percent. What is the value of these Hewitt Packing Company bonds? a. $885.30 b. $987.40 c. $1050.65
d. $1114.70
The value of Hewitt Packing Company bonds is $885.30 (option a).
To calculate the value of these bonds, we can follow these steps:
1. Determine the number of payments: 10 years * 2 semiannual payments per year = 20 payments
2. Calculate the semiannual coupon payment: $1,000 par value * 10% coupon rate / 2 = $50
3. Determine the semiannual yield to maturity (YTM): 12% / 2 = 6%
4. Use the bond pricing formula: Bond value = (Coupon payment / YTM) * (1 - (1 + YTM)⁻ⁿ) + (Par value * (1 + YTM)⁻ⁿ), where n = number of payments
5. Plug in the values: Bond value = ($50 / 0.06) * (1 - (1 + 0.06)⁻²⁰) + ($1,000 * (1 + 0.06)⁻²⁰) = $885.30
Hence, the value of these Hewitt Packing Company bonds is $885.30.
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1. Next year’s expected firm earnings are $8,000, shares outstanding 2000, ROE=16% required rate of return k= 9%, your plowback ratio b=17% and assuming constant growth dividends. Calculate the PVGO
Please use 5 decimal places in your response
2. Next year’s expected firm earnings are $6,000, shares outstanding 1000, ROE=13% required rate of return k= 10%, your plowback ratio b=20% and assuming constant growth dividends. Calculate todays price P0
Please use 4 decimal places in your response
1. To calculate the PVGO with given values, first, find the dividend payout ratio (1 - b) which is 1 - 0.17 = 0.83. Next, calculate the earnings per share (EPS) by dividing the expected firm earnings by the number of shares outstanding, which is $8,000 / 2,000 = $4.
Then, determine the dividend per share (DPS) by multiplying EPS by the dividend payout ratio, which is $4 * 0.83 = $3.32. Now, calculate the growth rate (g) by multiplying the plow back ratio by the ROE, which is 0.17 * 0.16 = 0.0272.
Finally, calculate the PVGO using the formula PVGO = (DPS / (kg)) - (EPS / k), which is ($3.32 / (0.09 - 0.0272)) - ($4 / 0.09) = 48.50617 - 44.44444 = 4.06173.
2. To calculate today's price P0, follow similar steps as in the first calculation. Find the EPS, which is $6,000 / 1,000 = $6.
Calculate the DPS using the payout ratio (1 - b) = 1 - 0.20 = 0.80, resulting in a DPS of $6 * 0.80 = $4.80. Calculate the growth rate (g) as 0.20 * 0.13 = 0.026. Lastly, use the Gordon growth model to find P0: P0 = DPS / (kg), which is $4.80 / (0.10 - 0.026) = $64.0000.
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product mix breadth. corporate stakeholder relations. profitability. brand liability. perceived brand personality.
Product mix breadth: Product mix breadth refers to the number of product lines or categories offered by a company.
A company with a wide product mix breadth offers a diverse range of products, while a company with a narrow product mix breadth offers a limited range of products. The product mix breadth can affect a company's profitability, as a wider product mix breadth may attract a larger customer base, but may also increase the complexity of operations and distribution.
1.Corporate stakeholder relations: Corporate stakeholder relations refer to the interactions and relationships that a company has with its various stakeholders, including customers, employees, investors, suppliers, and the wider community. Good stakeholder relations can help a company build trust and loyalty among its stakeholders, and can also contribute to the company's reputation and long-term success.
2.Profitability: Profitability refers to a company's ability to generate profits, which is essential for its survival and growth. A company's profitability is influenced by a variety of factors, including its pricing strategy, cost structure, market demand, competition, and overall efficiency and productivity.
3.Brand liability: Brand liability refers to the potential legal and financial risks associated with a company's brand, including issues such as trademark infringement, product liability, and false advertising claims. A company with strong brand liability management practices can minimize these risks and protect its reputation and financial stability.
4.Perceived brand personality: Perceived brand personality refers to the traits, characteristics, and values that customers associate with a company's brand. These perceptions can be shaped by a variety of factors, including advertising, product design, customer service, and social responsibility. A strong and positive brand personality can help a company differentiate itself from competitors, build customer loyalty, and ultimately drive sales and profitability.
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The term 'Time inconsistency of optimal policy' refers to:
Select one:
a.
An incentive to deviate from the natural rate of
unemployment.
b.
The setting up of an independent central bank.
c.
An incenti
The term 'Time inconsistency of optimal policy' refers to the tendency of policymakers to deviate from the optimal policy they had originally set due to changing circumstances.
This inconsistency can lead to suboptimal outcomes in the long run. For example, a central bank may promise to keep inflation low, but if unemployment rises, policymakers may be tempted to deviate from this policy to stimulate the economy, which could lead to higher inflation in the future.
To avoid this, policymakers need to consider the long-term consequences of their actions and stick to their original policies as much as possible. The concept of time inconsistency of optimal policy is crucial for understanding the challenges of macroeconomic policy.
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Q1 - A firm that has sold a building is going to receive payment in four installments. The buyer has paid $10,000 at purchase time. The buyer is going to pay $15,000 one year later, $18,000 two years later, and $21,000 three years later. Find the present value of the receipts from the sale if the seller wishes to use a discount rate of 6 percent.
Q2 - An investor deposits $1,000 every year on the same day in a savings account. The amount in the savings accounts earns 5 percent interest compounded annually,
a) What will the investor's account balance be after the third deposits
b) What will the investor's account balance be after the tenth deposits
Q3 - A company has taken out a 3-year bank loan for $50,000. On the third anniversary of the loan, it is repaid with a $64,752 payment. What was the interest rate paid by the company
on this loan?
Q4 - A family has established a trust fund for its children, attending college, and has paid $101.514 to a bank. In return, the bak is going to pay the family $20,000 every year for
the next 6 years. The first payment will be made 1 year from the day the family paid the bank. What is the interest rate that thic trust fund will be earning?
Q5 - What is the present value of a stream of receipts of $10,000 çvery year for the first 6 years and $6,000 every year for years 7 through 16? Thic discount is 8 percent.
Q1 - The present value of the receipts from the sale is $47,374.49 if the seller wishes to use a discount rate of 6 percent.
To calculate the present value of the receipts, we can use the formula PV = CF1 / (1 + r)^1 + CF2 / (1 + r)^2 + CF3 / (1 + r)^3 + CF4 / (1 + r)^4, where PV is the present value, CF1, CF2, CF3, and CF4 are the cash flows in each year, and r is the discount rate. Plugging in the given values, we get PV = 10000 + 15000 / (1 + 0.06)^1 + 18000 / (1 + 0.06)^2 + 21000 / (1 + 0.06)^3 = $47,374.49.
Q2 - a) The investor's account balance will be $3,152.52 after the third deposit.
To calculate the account balance, we can use the formula A = P(1 + r)^n, where A is the account balance, P is the annual deposit, r is the interest rate, and n is the number of years.
Plugging in the given values, we get A = 1000(1 + 0.05)^3 = $1,157.63 after the first deposit, A = (1000 + 1157.63)(1 + 0.05)^1 = $2,315.51 after the second deposit, and A = (1000 + 1157.63 + 2315.51)(1 + 0.05)^1 = $3,152.52 after the third deposit.
b) The investor's account balance will be $15,425.86 after the tenth deposit.
Using the same formula, we get A = 1000[(1 + 0.05)^10 - 1] / 0.05 = $15,425.86.
Q3 - The interest rate paid by the company on this loan was 8 percent.
To find the interest rate, we can use the formula FV = PV(1 + r)^n, where FV is the future value, PV is the present value, r is the interest rate, and n is the number of years. Plugging in the given values, we get 64752 = 50000(1 + r)^3, which gives us r = 0.08 or 8 percent.
Q4 - The trust fund will be earning an interest rate of 9.16 percent.
To find the interest rate, we can use the formula PV = CF / r[1 - 1 / (1 + r)^n], where PV is the present value, CF is the cash flow, r is the interest rate, and n is the number of years. Plugging in the given values, we get 101514 = 20000 / r[1 - 1 / (1 + r)^6], which gives us r = 0.0916 or 9.16 percent.
Q5 - The present value of the stream of receipts is $64,971.24.
To calculate the present value, we can use the formula PV = CF1 / (1 + r)^1 + CF2 / (1 + r)^2 + ... + CF6 / (1 + r)^6 + CF7 / (1 + r)^7 + ... + CF16 / (1 + r)^16, where CF1 to CF6 are $10,000 each and CF7 to CF16 are $6,000 each. Plugging in the given values we found $64,971.24.
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you are purchasing a new machine that costs $12 million, and that has a 7 year expected life span. After 7 years, the estimated salvage value is $2 million. What is the yearly straight-line depreciation? (answer in MILLION dollars, but without the dollar sign, e.g. "0.42" is $0.42 million) Type your answer...
The yearly straight-line depreciation for the machine is $1.43 million.
The yearly straight-line depreciation for the new machine that costs $12 million and has an expected life span of 7 years with a salvage value of $2 million is calculated by subtracting the salvage value from the cost of the machine and dividing it by the expected life span. In this case, the calculation would be:
($12 million - $2 million) / 7 years = $1.43 million per year
Therefore, the yearly straight-line depreciation for the machine is $1.43 million.
Straight-line depreciation is a common method used to calculate the decrease in the value of assets over time. It assumes that the value of the asset decreases by an equal amount each year. In this case, the depreciation expense for the machine is spread out evenly over its expected life span of 7 years. The salvage value is also taken into account to determine the total amount of depreciation. The yearly straight-line depreciation can be useful for companies to determine the cost of owning and operating assets over their useful lives.
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. Based on the course material and recommended text,
explain the difference between each of the following
terms.
Assets and liabilities:
Book value and market value:
Current assets, fixed assets, and
Assets are economic resources that an individual, company or organization owns that have the potential to generate future economic benefits. Examples of assets include cash, investments, property, and equipment.
Liabilities are obligations that an individual, company or organization owes to others and must be fulfilled in the future. Examples of liabilities include bank loans, accounts payable, and bonds.
Book value is the value of an asset or liability as reported on a company's financial statements. It is calculated based on historical cost or acquisition cost of an asset or liability, adjusted for depreciation or amortization.
Market value, on the other hand, is the current value of an asset or liability in the market, based on the supply and demand of buyers and sellers. It can fluctuate frequently based on various market conditions such as interest rates, economic conditions, and investor sentiment.
Current assets are assets that can be easily converted into cash within one year, including cash, marketable securities, accounts receivable, and inventory. Fixed assets are long-term assets that are not expected to be converted into cash within one year, including property, plant, and equipment.
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evaluate how ethical considerations and cultural differences may influence leadership and management styles in in organization.
Ethical considerations and cultural differences should be considered when developing their leadership and management styles. Leaders who prioritize ethical considerations and are sensitive to cultural differences are more likely to create a positive work environment, build trust and respect, and achieve organizational success.
Ethical considerations:
Ethical considerations play an essential role in shaping leadership and management styles in an organization. Leaders must follow ethical principles and guidelines to ensure that their actions are legal, moral, and ethical.
Leaders who prioritize ethical considerations are more likely to engage in participatory management, encourage employee empowerment, promote social responsibility, and take a long-term view of organizational success. They are more likely to create an environment of trust, collaboration, and mutual respect.
Cultural differences:
Cultural differences can also significantly impact leadership and management styles in an organization. Different cultures have different values, beliefs, attitudes, and behaviors, which can influence how leaders communicate, motivate, and manage employees.
Leaders who are aware of and respectful of cultural differences are more likely to adapt their leadership style to meet the needs of their employees. They are more likely to be successful in building trust, fostering collaboration, and promoting employee engagement.
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___________ occurs when a supervisor earns less than his or her subordinates
a) Role conflict
b) Role ambiguity
c) status incongruence
d) informal status
The "status incongruence" occurs when a supervisor earns less than his or her subordinates. The correct option is C.
Status incongruence is a term used to describe a situation where an individual's position or rank within a social hierarchy is incongruent or inconsistent with their income, power or prestige.
In the workplace, the supervisor earns less than subordinates, that can lead to low job satisfaction, low morale, and decreased productivity. There are several supervisor role like counselor, director, and sponsor.
Therefore, the correct option is C, which is status incongruence.
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true or false: transformation processes occur in all organizations, regardless of what the organization produces.
True. Regardless of the products they generate, transformation processes happen in all organisations. All organisations engage in transformation, or the conversion of inputs into outputs, in order to accomplish their aims and objectives.
True. Transformation processes occur in all organizations, regardless of what the organization produces. Transformation refers to the conversion of inputs into outputs, and all organizations engage in this process to achieve their goals and objectives. Inputs may include resources such as materials, labor, and capital, while outputs may include products or services. Whether an organization produces goods or services, it must transform inputs into outputs to create value for its stakeholders.
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Describe how traditional management has had to adapt to modern
digital management. Provide examples to support your answer.
Traditional management has had to adapt to modern digital management by incorporating technology in decision-making, communication, and operations, leading to improved efficiency and productivity.
Traditional management has had to adapt significantly to modern digital management, with the advent of new technologies and the rise of digital communication. In the past, management was more hierarchical, with a top-down approach to decision-making and communication.
However, with the increasing use of digital tools, management has had to become more collaborative, flexible, and responsive.
One key example of this shift is in the way that companies now communicate and collaborate with employees and teams. Digital tools like video conferencing, instant messaging, and project management software have made it possible for teams to work together more seamlessly, no matter where they are located.
Another example is in the way that companies now collect and analyze data. Traditional management often relied on static reports and gut instincts to make decisions, but with the rise of big data and advanced analytics, companies can now gather real-time insights and make data-driven decisions.
Overall, traditional management has had to adapt to modern digital management in order to stay competitive and to meet the needs of a rapidly changing business environment. By embracing new technologies and adopting more collaborative and data-driven approaches to decision-making, companies can become more agile, responsive, and effective in their operations.
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In many nonindustrial societies, adolescence is considered to be either nonexistent or NON existant or growth leading too Sexual maturityq (true or false)
False. In many nonindustrial societies, adolescence is considered to be a distinct period of life, characterized by physical, cognitive, and social changes, although the concept and experience of adolescence may differ from that of industrial societies.
In many nonindustrial societies, adolescence is seen as a transitional period between childhood and adulthood, marked by physical changes such as growth spurts and the onset of puberty, as well as social and cultural changes such as increased responsibilities, initiation rites, and gender roles.
However, the experience of adolescence may vary greatly across different nonindustrial societies, depending on factors such as cultural values, economic conditions, and religious beliefs. For example, some societies may emphasize the importance of marriage and childbearing for adolescent girls, while others may encourage exploration and experimentation before settling into adult roles.
Overall, while the concept of adolescence may not be universal or static, it remains an important period of development and transition in many nonindustrial societies.
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Using Return Distributions Suppose the returns on long-term government bonds are normally distributed. Based on the historical record, what is the approximate probability that your return on these bonds will be less than −3.9 percent in a given year? What range of returns would you expect to see 95 percent of the time? What range would you expect to see 99 percent of the time?
The Range of return of the following is given as:
The probability that the return will be less than -3.9% is 16%The required range of returns for 95 percent of the time for long term government bonds is -13.7% to 25.5%.The range of returns for 99 percent of the time for long term government bonds is -23.5% to 35.3%.Any type of investment instrument, including real estate, bonds, equities, and fine art, can be subject to a rate of return (RoR). Any asset can be used with the RoR as long as it is acquired once and generates cash flow at some point in the future.
The attractiveness of various investments may be determined, in part, by comparing their historical rates of return to those of comparable assets. A needed rate of return is frequently chosen by investors before making an investment decision.
Return range for a security with returns of normal distribution:
When a security's returns are regularly distributed, they are symmetrical around the mean return amount. There is a 68% likelihood that the return in this situation will be within one standard deviation of the mean. A 95% possibility exists that the return will fall between two standard deviations of the mean. Additionally, there is a 99% likelihood that the return will fall within a three standard deviation range of the mean.
With the standard deviation([tex]\sigma[/tex]) and the mean (R) , different probability of the return to fall in a range are mentioned below.
Probability Range
About 68% → [tex]R \pm \sigma[/tex]
About 95% → [tex]R \pm 2\sigma[/tex]
About 95% → [tex]R \pm 3\sigma[/tex]
The approximate probability that your return on these bonds will be less than −3.9 percent in a given year:
[tex]R \pm \sigma =[/tex] (5.9 - 9.8) to (5.9 + 9.8)
= -3.9% to 15.7%.
Hence, the approximate probability that the return will be less than -3.9% is 16%.
With standard deviation = 9.8% and mean = 5.9%
[tex]R \pm 2\sigma =[/tex] (5.9 - 2x9.8) to (5.9 + 2x9.8)
= (5.9% - 19.6%) to (5.9% + 19.6%)
= -13.7% to 25.5%
Hence the required range of returns for 95 percent of the time for long term government bonds is -13.7% to 25.5%.
With standard deviation = 9.8% and mean = 5.9%
[tex]R \pm 3\sigma =[/tex] (5.9 - 3x9.8) to (5.9 + 3x9.8)
= (5.9% - 29.4%) to (5.9% + 29.4%)
= -23.5% to 35.3%
Hence, required range of returns for 99 percent of the time for long term government bonds is -23.5% to 35.3%.
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Your stock has a β = 2.77, the expected return on the stock
market is 16.67%, and the yield on T-bills is 6%. What is the
expected return on your stock?
To calculate the expected return on your stock, we can use the following formula: Expected return = risk-free rate + β * (market return - risk-free rate)Plugging in the given values, we get:
Expected return = 6% + 2.77 * (16.67% - 6%)
Expected return = 6% + 2.77 * 10.67%
Expected return = 6% + 29.50%
Expected return = 35.50%
Therefore, the expected return on your stock is 35.50%.The expected return on the stock can be calculated using the Capital Asset Pricing Model (CAPM):Expected return on stock = Risk-free rate + Beta*(Expected market return - Risk-free rate)
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