The transactions for Byte of Accounting, Inc. during the month of June can be recorded as follows:
01. Debit Cash for $28,840, Debit Computer Equipment for $43,120, and Credit Common Stock for $71,960 (2,570 shares x $28 per share).
02. Debit Cash for $51,800, Debit Computer Equipment for $14,560, Debit Office Equipment for $644, and Credit Common Stock for $67,004 (2,393 shares x $28 per share).
03. Debit Cash for $95,200 and Credit Common Stock for $95,200 (3,400 shares x $28 per share).
04. Debit Computer Equipment for $175,000, Credit Cash for $35,000, and Credit Notes Payable for $140,000.
05. Debit Office Equipment for $700 and Credit Accounts Payable for $700.
06. Debit Accounts Payable for $140 and Credit Office Equipment for $140.
07. Debit Notes Payable for $26,750 and Credit Cash for $26,750.
08. Debit Prepaid Insurance for $6,312 and Credit Cash for $6,312.
09. Debit Cash for $8,250 and Credit Computer Consultation Revenue for $8,250.
10. Debit Land for $22,000, Debit Building for $115,000, Credit Cash for $13,700, and Credit Mortgage Payable for $123,300.
1. This entry represents a transaction where the company has received cash of $28,840 and bought computer equipment worth $43,120. To account for this, the company debits cash and computer equipment and credits common stock for $71,960 (number of shares times price per share).
2. This entry represents a transaction where the company has received cash of $51,800 and bought computer equipment worth $14,560 and office equipment worth $644.
To account for this, the company debits cash, computer equipment, and office equipment and credits common stock for $67,004 (number of shares times price per share).
3. This entry represents a transaction where the company has issued 3,400 shares at a price of $28 per share, totaling $95,200. To account for this, the company debits cash and credits common stock.
4. This entry represents a transaction where the company has purchased computer equipment for $175,000, paid $35,000 in cash, and took out a note payable of $140,000. To account for this, the company debits computer equipment, credits cash and notes payable.
5. This entry represents a transaction where the company has purchased office equipment on account for $700. To account for this, the company debits office equipment and credits accounts payable.
6. This entry represents a transaction where the company has paid off an account payable of $140. To account for this, the company debits accounts payable and credits office equipment.
7. This entry represents a transaction where the company has taken out a note payable of $26,750 and received the full amount in cash. To account for this, the company debits notes payable and credits cash.
8. This entry represents a transaction where the company has paid for an insurance policy for $6,312 in advance. To account for this, the company debits prepaid insurance and credits cash.
9. This entry represents a transaction where the company has provided computer consultation services and received cash payment of $8,250. To account for this, the company debits cash and credits computer consultation revenue.
10. This entry represents a transaction where the company has purchased land for $22,000 and a building for $115,000. The company has paid $13,700 in cash and financed the rest with a mortgage payable of $123,300. To account for this, the company deb
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If the real interest rate is 4% and the nominal interest rate is7.25%, what is the exact expected inflation rate?"
If the real interest rate is 4% and the nominal interest rate is 7.25%, then the exact expected inflation rate is 3.25%.
The expected inflation rate can be calculated by subtracting the real interest rate from the nominal interest rate. In this case, the expected inflation rate would be 7.25% - 4% = 3.25%. Therefore, the exact expected inflation rate is 3.25%.
Here is the formula for calculating the expected inflation rate:
Expected inflation rate = Nominal interest rate - Real interest rate
So, in this case:
Expected inflation rate = 7.25% - 4% = 3.25%
Therefore, the exact expected inflation rate is 3.25%.
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Defalco incorporated’s retained earnings increased $130,000 during the current year. Defalco declared $170,000 of dividends during the current year. What was defalco's current year net income or loss?
Retained earnings at year's end less retained earnings at year's beginning plus dividends equals net income. Total Revenue: $130,000 - Retained Earnings at the start of the year plus $170,000.
Net Income = Retained Earnings + Dividends - Prior Year Retained EarningsWhere: Retained Earnings: The accumulated profits of a company that have not been distributed as dividends. Dividends: The amount of money paid out to shareholders as a return on their investment. Prior Year Retained Earnings: The Retained Earnings balance at the end of the previous year. Using the given information, we can plug in the values to the formula and solve for Net Income: Net Income = $130,000 + (-$170,000) - Prior Year Retained Earnings.
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Short questions
What is marketing research and what do marketing insights
provide?
What is business market and write stages of buying
process?
Marketing research is the process of gathering, analyzing, and interpreting information about a market, product, or service to be sold in that market. The business market is the market for products and services that are purchased by businesses for use in the production of other goods and services.
It is used to determine the potential demand for a product or service, identify target markets, and develop marketing strategies. Marketing insights provide valuable information about consumer behavior, preferences, and trends that can be used to make informed decisions about marketing tactics and strategies.
The stages of the buying process in the business market are:
1) problem recognition,
2) information search,
3) evaluation of alternatives,
4) purchase decision, and
5) post-purchase behavior.
Each stage involves different activities and decision-making processes, and understanding these stages can help businesses to develop effective marketing strategies and build strong customer relationships.
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Describe the components of your will and how you will specify each one.
1. Introduction: The Introduction of a will is a brief statement that identifies the testator (the person making the will) and states that the document is a last will and testament.
What is Testament ?Testament is a legal document, usually written, that sets out a person's wishes regarding the distribution of their property and possessions after they die. It can also be used to refer to any formal declaration of a person's intentions, beliefs, or instructions. Testament is important to ensure that a person's wishes regarding their possessions are carried out after they pass away. It is a way to ensure their legacy lives on and their wishes are respected. Testament can be used to assign guardianship of any minor children, establish trusts and foundations, and provide funds to organizations and charities. I
2. Beneficiaries: The Beneficiaries section of a will names the individuals and/or organizations that will receive gifts or inheritances from the testator’s estate. This includes family members, friends, charities, and other organizations.
3. Executor: The Executor of a will is the person appointed by the testator to manage their estate and ensure that the provisions of the will are carried out. The testator should designate a responsible and trusted individual to serve as executor.
4. Assets: The Assets section of a will lists all of the testator’s assets and specifies who will receive them. This includes any real estate, vehicles, investments, bank accounts, life insurance policies, and other valuables.
5. Disbursement of Debts: The Disbursement of Debts section of a will identifies any debts the testator has, and specifies how those debts will be paid.
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All derivatives are based on the random performance of
underlying. How the performance of the underlying asset gives value
to the derivative instruments.
Derivatives are used by investors to hedge their risk and to speculate on the future performance of the underlying asset.
Derivatives are financial instruments that derive their value from the performance of an underlying asset. The underlying asset can be a stock, commodity, currency, or any other financial asset. The value of the derivative instrument is directly affected by the performance of the underlying asset.
For example, if the underlying asset is a stock, and the stock price goes up, the value of the derivative instrument will also go up. Similarly, if the stock price goes down, the value of the derivative instrument will also go down.
Derivatives are used by investors to hedge their risk and to speculate on the future performance of the underlying asset. If an investor believes that the price of an underlying asset will go up in the future, they can buy a derivative instrument that will give them the right to buy the underlying asset at a predetermined price in the future. Similarly, if an investor believes that the price of an underlying asset will go down in the future, they can buy a derivative instrument that will give them the right to sell the underlying asset at a predetermined price in the future.
In conclusion, the performance of the underlying asset is the main factor that determines the value of a derivative instrument. Derivatives are used by investors to hedge their risk and to speculate on the future performance of the underlying asset.
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Wilson and Steve live side by side in townhomes joined together by a shared wall. They both have separate driveways leading to separate garages on the opposite sides of the townhomes, and both driveways need to be sealed.
Hank calls a paving company on Monday, and the company agrees to come out and seal the driveway that Friday. Hank will be at work, but tells the company that Friday will be fine. Hank also tells his neighbor Peggy about the sealing company coming over in passing conversation.
Early Friday morning, the paving company shows up and begins working on Peggy's driveway instead of Hank's. Peggy comes out and offers them fresh-squeezed lemonade and ham sandwiches, and they heartily accept.
Upon completion of the work the paving contractor knocks on Peggy's door and asks if "the man of the home" is present so he can get paid. Peggy breaks the news to them that they sealed the wrong driveway, and they have 10 minutes to get off her property before the police will come.
Is Peggy obligated to pay the paving company for its work? Do they have a contract? If so, why? If not, are there any other theories of recovery available to the paving company?
There was no contract between her and the pavement company, so Peggy is not obligated to pay the pavement company for her work. The contract she said was a legally binding agreement between two or more parties, and in this case there was no agreement between Peggy and the pavement company. A deal was made between Hank and the pavement company, who accidentally sealed Peggy's driveway instead of Hank.
There was no contract between Peggy and the pavement company, but there may be other theories of recovery available to the pavement company. Her one such theory is undue enrichment that occurs when one party becomes unduly rich at the expense of the other. In this case, the pavement company could argue that Peggy was unfairly enriched by being given the benefit of an enclosed driveway without her having to pay for it. This theory is unlikely to succeed, as he did not and was unaware that the pavement company had inadvertently sealed the driveway.
Another theory of correction could be that it was a mistake when one party made a mistake that led to unfair consequences. However, this theory also fails because the paving company was the sole cause of the error and Peggy noticed the error only after the work was completed.
There is a possibility. In summary, Peggy did not have a contract with the pavement company, so she is not obligated to pay the pavement company for her work. Other restoration theories may be available to the road building company, but they are unlikely to succeed, as Peggy did not commission the work and she was unaware of the failure until it was completed.
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The cost of interest of a $3000 loan at 12% interest per year is $720 what is the term length for this loan in years
Using simple interest the term length for this loan in years will be 2 years as the interest is 720 rate is 12% and amount is 3000
If we assume simple interest, the interest amount is computed from I = Prt, Then the length t is t = I/(Pr) t = 720/(3000×0.12) = 2.00 The term of the loan is about 2.00years, To calculate simple interest, multiply the loan principal by the interest rate, then by the length of the loan. Borrowers can acquire a ballpark approximation of the cost of borrowing by calculating simple interest. Auto loans and short-term personal loans are two common uses for simple interest loans.
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A firm has 4,200,000 shares of common stock trading at $20.12 per share. It also has 65,000 bonds outstanding (par of $1,000) that are trading at $1,158 each. The bonds mature in 36 years, have a coupon rate of 8.25%, and pay coupons semi-annually. The firm's beta is 1.24, the risk-free rate is 3.25%, and the market risk premium is 7.2%. The tax rate is 36%. What is the firm's WACC?
a) 10.43
b)9.72
c)10.7
d)8.6
e)9.41
The firm's WACC is 6.48%. The correct answer is none of the options provided.
The firm's WACC can be calculated by finding the weights of equity and debt, and then multiplying those weights by their respective costs. The formula for WACC is:
WACC = (E/V) * Re + (D/V) * Rd * (1 - T)
Where E is the market value of equity, V is the total market value of the firm, Re is the cost of equity, D is the market value of debt, Rd is the cost of debt, and T is the tax rate.
First, we need to find the market value of equity and debt:
E = 4,200,000 shares * $20.12 = $84,504,000
D = 65,000 bonds * $1,158 = $75,270,000
V = E + D = $84,504,000 + $75,270,000 = $159,774,000
Next, we need to find the cost of equity using the Capital Asset Pricing Model (CAPM):
Re = Rf + Beta * (Rm - Rf) = 3.25% + 1.24 * (7.2% - 3.25%) = 8.19%
The cost of debt can be found using the formula for the yield to maturity of a bond:
Rd = (C + (F - P) / N) / ((F + P) / 2)
Where C is the coupon payment, F is the face value, P is the price, and N is the number of years to maturity.
Rd = ($1,000 * 0.0825 / 2 + ($1,000 - $1,158) / 36) / (($1,000 + $1,158) / 2) = 7.03%
Now we can plug in the values into the WACC formula:
WACC = (E/V) * Re + (D/V) * Rd * (1 - T)
WACC = ($84,504,000 / $159,774,000) * 8.19% + ($75,270,000 / $159,774,000) * 7.03% * (1 - 0.36)
WACC = 0.5291 * 8.19% + 0.4709 * 7.03% * 0.64
WACC = 4.33% + 2.15%
WACC = 6.48%
Therefore, the correct answer is none of the options provided. The firm's WACC is 6.48%.
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A furniture making company makes tables and chairs.
It has two machines; M1 and M2.
To make a table requires 7 mins in machine M1 and 5 mins in M2. To make a chair requires 4 mins in M1 and 5 mins in M2.
A table can be sold for €25 profit, a chair for €15 profit.
Over the next month, machine M1 can run for 5 hours, and machine M2 for 6 hours.
1. What are the Decision Variables?
2. Which is the Objective Function?
3. Determine the optimal mix of products in terms of contributions to profits for this month.
1. The decision variables are the number of tables (T) and the number of chairs (C) that the furniture making company should produce in order to maximize profits.
2. The objective function is the total profit that the company can make from selling the tables and chairs. It can be represented as:
Profit = 25T + 15C
3. To determine the optimal mix of products in terms of contributions to profits for this month, we need to consider the constraints on the production process. These constraints are the available time on machines M1 and M2.
The constraint for machine M1 is:
7T + 4C ≤ 300 (since M1 can run for 5 hours or 300 minutes)
The constraint for machine M2 is:
5T + 5C ≤ 360 (since M2 can run for 6 hours or 360 minutes)
Using the simplex method, we can find the optimal solution for this problem. The optimal solution is T = 36 and C = 12.
This means that the company should produce 36 tables and 12 chairs in order to maximize profits for this month.
The maximum profit that the company can make is:
Profit = 25T + 15C = 25(36) + 15(12) = €1080
Therefore, the optimal mix of products in terms of contributions to profits for this month is 36 tables and 12 chairs, with a total profit of €1080.
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Explain procurement as a system used by the government to improve the situation of economically marginalised group
Procurement as a system used by the government is also called public or government procurement. It is basically the process by which the government or state-owned enterprises purchase, obtain and acquire the goods and services required from the private sector or commercial businesses for day-to-day business operations.
This purchase of goods and services is for the fulfillment of operational needs. For public procurement, taxpayer's money is used so it is the duty of the government to carry out this process using fair means which are efficient, transparent, and also safeguard the public interest. Public procurement can also help in poverty alleviation and the creation of jobs for economically marginalized groups by creating awareness, promoting educational programs, and generating employment. Procurement as a government system serves the purpose to uplift the marginalized group and promote inclusivity in the socio-economic sphere of the nation by allocating a particular share of money for these groups.
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a company borrows $2,000,000 through a line of credit, it will be required to (a) maintain a compensating balance in the amount of $80,000, (b) pay interest in the amount of $100,000, and (c) pay an up-front commitment fee the amount of $4,000. What is this lending arrangement's EAR?
The EAR of this lending arrangement is 5.26%.
The EAR (Effective Annual Rate) of this lending arrangement can be calculated using the following formula:
EAR = [(1 + (i / n))ⁿ] - 1
Where:
i = Interest rate
n = Number of compounding periods
In this case, the interest rate is $100,000 / $2,000,000 = 0.05, and the number of compounding periods is 1 (since it is an annual rate).
However, we also need to take into account the compensating balance and the up-front commitment fee. The compensating balance reduces the amount of money the company actually has available to use, so we need to adjust the interest rate to reflect this. The adjusted interest rate is:
i' = i / (1 - (compensating balance / loan amount))
i' = 0.05 / (1 - ($80,000 / $2,000,000)) = 0.0506
Similarly, the up-front commitment fee also increases the effective cost of the loan, so we need to add this to the adjusted interest rate:
i'' = i' + (commitment fee / loan amount)
i'' = 0.0506 + ($4,000 / $2,000,000) = 0.0526
Now we can plug this adjusted interest rate back into the formula for EAR:
EAR = [(1 + (0.0526 / 1))¹] - 1 = 0.0526
Therefore, the EAR of this lending arrangement is 5.26%.
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Read the following transaction descriptions and for each, identify the journal type for processing the transaction if the business uses specialised journals.
Journal Type Description
SJ Sales Journal
PJ Purchases Journal
CP Cash Payments Journal
CR Cash Receipts Journal
GJ General Journal
Enter the correct code for Journal Type each of the following.
Paid $800 cash to R Jones (a creditor) to pay an account
Commercial rent of $600 paid by EFT
Purchased Motor Vehicle on credit from F Ford for $25,000
Credit sales of $1,000 to M Luce
Owner took inventory for own use
Owner paid for personal expenses from business account
Sales of $500 for cash
The Purchases Journal is used for recording credit purchases, the Cash Payments Journal is used for recording cash payments, the Cash Receipts Journal is used for recording cash receipts, and the General Journal is used for recording all other transactions that do not fit into the other journals.
The correct journal types for the given transactions are as follows:
Paid $800 cash to R Jones (a creditor) to pay an account - CP (Cash Payments Journal)
Commercial rent of $600 paid by EFT - CP (Cash Payments Journal)
Purchased Motor Vehicle on credit from F Ford for $25,000 - PJ (Purchases Journal)
Credit sales of $1,000 to M Luce - SJ (Sales Journal)
Owner took inventory for own use - GJ (General Journal)
Owner paid for personal expenses from business account - CP (Cash Payments Journal)
Sales of $500 for cash - CR (Cash Receipts Journal)
It is important to remember that the Sales Journal is used for recording credit sales.
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Question 1 (50 marks)
The central bank act as a lender of last resort (LLR) to protect the financial system's smooth operations and efficiency. However, there are three alternative views on the lender of last resort function:
▪ The Classic View: argues that the central bank should provide whatever funds are required to calm the panic.
▪ Modern Free Banking: argues that the government authority is not required to act as a lender of last resort.
▪ Charles Goodhart: argues that the lender of last resort should help illiquid banks and also insolvent banks.
Which one of the arguments above do you agree or disagree with? Defend yourself with relevant evidence.
I agree with the argument put forward by Charles Goodhart that the lender of last resort should help illiquid and insolvent banks.
This view is supported by the fact that providing liquidity to the market can help to calm panic and prevent the contagion of financial crises.
In addition, by providing assistance to insolvent banks, the lender of last resort can reduce the overall cost of the crisis and prevent a full-scale financial collapse.
Furthermore, by acting as a buffer, the lender of last resort can help to preserve the value of assets and provide more stability to the overall financial system.
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You pay $980 for a 90-day T-bill. It is worth $1,000 at
maturity. What is annualized yield of the bill? What is the T-bill
discount?
The annualized yield of the 90-day T-bill is 8.2788% and the T-bill discount is $20.
The annualized yield of a T-bill is the return on investment that you would earn if you held the T-bill for one year. It is calculated by dividing the difference between the maturity value and the purchase price by the purchase price, and then multiplying by the number of days in a year and dividing by the number of days the T-bill was held.
The T-bill discount is the difference between the maturity value and the purchase price.
To calculate the annualized yield of the T-bill, we can use the following formula:
Annualized yield = ((Maturity value - Purchase price) / Purchase price) * (365 / Number of days held)
Plugging in the values from the question:
Annualized yield = (($1,000 - $980) / $980) * (365 / 90) = 0.020408 * 4.05556 = 0.082788
So the annualized yield of the T-bill is 8.2788%.
To calculate the T-bill discount, we simply subtract the purchase price from the maturity value:
T-bill discount = $1,000 - $980 = $20
So the T-bill discount is $20.
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21. What are employee incentive plans and what do they offer?
Employees that create more are encouraged to do so and are rewarded accordingly under the incentive plan. The phrase "Pay for Performance" describes remuneration choices such merit pay, commission, individual incentive, group incentive, and gain-sharing plans.
What exactly are employee incentive programs?A company may decide to adopt an employee incentive program to encourage staff productivity. Employee incentives are a system that recognizes and rewards effort and success in the workplace by providing employees with the chance to receive prizes or recognition.
Why do workers appreciate incentive plans?Businesses may boost productivity, lower attrition, and reduce production costs by implementing reward programs for their staff. It raises morale, motivates staff, and fosters collaboration by increasing employee involvement. The incentive programs benefited the labor as much as the businesses.
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Determine if the following statements are true or false, and provide a brief explanation to support your answer.
1. The common beliefs of a country’s citizens can affect whether or not a cryptocurrency can function as a medium of exchange in that country.
2. The decentralized nature of Bitcoin is welcomed by law enforcement agencies.
This statement- 'The common beliefs of a country’s citizens can affect whether or not a cryptocurrency can function as a medium of exchange in that country.' is true. This statement-'The decentralized nature of Bitcoin is welcomed by law enforcement agencies.' is false.
The common beliefs of a country's citizens can indeed affect whether or not a cryptocurrency can function as a medium of exchange in that country. This is because if the majority of the population does not trust or believe in the value of the cryptocurrency, they will be less likely to accept it as a form of payment, making it difficult for it to function as a medium of exchange.
The decentralized nature of Bitcoin is not generally welcomed by law enforcement agencies. This is because the decentralized nature of Bitcoin makes it more difficult for law enforcement agencies to track and regulate transactions, which can make it easier for illegal activities to occur.
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Consider the example from (the first part of) the previous example, where the spot price is S0 = $100. What is the probability that a 1- year butterfly made of European calls with strikes 90, 100 and 110 will have a pay off of $5 or less?
The probability that a 1-year butterfly made of European calls with strikes 90, 100, and 110 will have a payoff of $5 or less is 0.
The probability that a 1-year butterfly made of European calls with strikes 90, 100, and 110 will have a payoff of $5 or less can be calculated using the following steps:
1. First, we need to calculate the value of the butterfly at expiration. This is done by taking the difference between the value of the calls with strikes 90 and 100, and the value of the calls with strikes 100 and 110.
2. The value of the calls with strikes 90 and 100 is max(0, S0 - 90) - max(0, S0 - 100) = max(0, 100 - 90) - max(0, 100 - 100) = 10 - 0 = $10.
3. The value of the calls with strikes 100 and 110 is max(0, S0 - 100) - max(0, S0 - 110) = max(0, 100 - 100) - max(0, 100 - 110) = 0 - 0 = $0.
4. Therefore, the value of the butterfly at expiration is 10 - 0 = $10.
5. To calculate the probability that the butterfly will have a payoff of $5 or less, we need to find the probability that the value of the butterfly at expiration will be less than or equal to $5.
6. This can be done using the formula P(X <= 5) = F(5), where F is the cumulative distribution function of the butterfly's value at expiration.
7. Since the value of the butterfly at expiration is $10, the probability that it will have a payoff of $5 or less is 0.
Therefore, the probability that a 1-year butterfly made of European calls with strikes 90, 100, and 110 will have a payoff of $5 or less is 0.
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DISCUSSION ASSIGNMENT 1 FACTUAL REVIEW QUESTIONS The Indifferent Manager 1. Define the expression quality culture. The efforts of Public Communications Inc., to implement 2. Explain why the implementation of total qualitu requires cultural change
1. Quality culture is defined as the values, beliefs, and behaviors that are shared by an organization's employees and that focus on continuously improving the quality of products or services provided.
2. The implementation of total quality requires cultural change because it requires a shift in the mindset and behaviors of employees.
This culture promotes a commitment to excellence, a willingness to take responsibility for quality, and a focus on customer satisfaction.
It involves changing the way that employees think about quality and their role in ensuring it. This may involve breaking down traditional hierarchical structures and promoting a more collaborative and team-based approach. It also requires a focus on continuous improvement, which means that employees must be willing to constantly assess and improve their work processes. All of these changes require a shift in the culture of the organization, which can be challenging but is necessary for the successful implementation of total quality.
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Kay and Dee Manufacturing (K+D) has three business lines:
Repair and Overhead (R+O): Repair of truck transmissions.
Manufacturing: manufacturing of custom truck transmission parts
Chemical Treating: cleaning of old parts
They also have three support departments. Major activities of each department are:
Human Resources (HR): Payroll, HR staff, employee services, Union/Management relations. Costs for this service department are allocated based on Headcount.
Facility: buildings, building maintenance and related building costs. Costs for this service department are allocated based on area occupied.
Main Office (HQ): salaries for the President, VP, and Finance department. Costs for this service department are allocated based on Direct Labour hours.
Other financial information is in Appendix A.
REQUIRED:
a) Briefly comment on the cost drivers for the support departments. (ie. Do you think they are appropriate, or can you recommend something better?)
The cost drivers for the support departments at Kay and Dee Manufacturing (K+D) are headcount, area occupied, and direct labour hours. These cost drivers are used to allocate the costs of the Human Resources (HR), Facility, and Main Office (HQ) support departments to the Repair and Overhead (R+O), Manufacturing, and Chemical Treating business lines.
Overall, these cost drivers seem appropriate as they reflect the main activities and resources used by each support department. For example, the HR department's main activities are related to employees, so using headcount as a cost driver makes sense.
Similarly, the Facility department's main activities are related to buildings and maintenance, so using area occupied as a cost driver is appropriate. Finally, the Main Office (HQ) department's main activities are related to management and finance, so using direct labour hours as a cost driver is also appropriate.
However, it is important to regularly review and reassess the cost drivers to ensure they are still appropriate and accurately reflect the activities and resources used by each support department.
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What is the GDP growth rate?
What is GDP per capita growth rate?
What is the productivity growth rate?
Help ASAP. The assignment's due tonight
The GDP growth rate, also known as economic growth rate, is measure of the change in country's gross domestic product (GDP) over a specific period of time, usually year or quarter.
What is economic growth?Economic growth refers to the increase in the production and consumption of goods and services in an economy over a specific period. This growth can be measured by changes in gross domestic product (GDP), which is the total value of all goods and services produced within a country's borders. Economic growth is generally seen as a positive development, as it creates jobs, increases income and improves living standards for people. However, it can also have negative consequences such as environmental degradation, inequality and inflation. Governments and central banks often try to promote economic growth through various policies, such as fiscal stimulus, monetary policy and investments in infrastructure and education.
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You observe the following market data for a futures contract on a non dividend-paying stock. The risk free interest rate is 4.5% p.a., the futures price is $132.20 and the stock price is $128.55. The futures contract will deliver in 6 months. Suggest an arbitrage strategy (provide only the t=0 transactions), if you think arbitrage is possible OR explain why arbitrage is not possible.
Arbitrage is possible in this situation. The investor can make a profit of $3.18 through this arbitrage strategy.
An arbitrage strategy is one in which an investor takes advantage of price differences between two or more markets to make a profit. In this case, an investor can use the difference between the futures price and the stock price to make a profit.
The t=0 transactions for this arbitrage strategy are as follows:
1. Buy the stock at the current stock price of $128.55.
2. Sell the futures contract at the current futures price of $132.20.
3. Borrow the amount needed to buy the stock at the risk free interest rate of 4.5% p.a.
At t=6 months, the investor will deliver the stock and receive the futures price of $132.20. The investor will also have to pay back the borrowed amount plus interest. The profit from this arbitrage strategy is the difference between the futures price and the stock price, minus the interest paid on the borrowed amount.
Profit = $132.20 - $128.55 - (0.045 * $128.55 * 0.5) = $3.18
Therefore, the investor can make a profit of $3.18 through this arbitrage strategy.
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What is the basic rule for determining if a security should be hold
to maturity vs trading?
The basic rule for determining if a security should be held to maturity vs trading is to compare the yield to maturity (YTM) of the security with the current market yield.
If the YTM is higher than the current market yield, it may be advantageous to hold the security to maturity. However, if the current market yield is higher than the YTM, it may be more beneficial to trade the security.
To determine the YTM of security, you can use the following formula:
YTM = (C + (F - P) / N) / ((F + P) / 2)
Where:
C = annual coupon payment
F = face value of the security
P = current market price of the security
N = number of years to maturity
Once you have calculated the YTM, you can compare it with the current market yield to determine if it is more advantageous to hold the security to maturity or to trade it.
It is important to remember that there are other factors to consider when making this decision, such as the creditworthiness of the issuer and the liquidity of the security. It is always best to consult with a financial advisor before making any investment decisions.
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A stock is currently selling for $26.25. A 4-month call option with a strike price of $25.00 has an option premium of $3.77. The risk-free rate is 3.2 percent and the market rate is 7.1 percent. What is the option premium on a 4-month put with a $25.00 strike price? Assume the options are European style. Round your final answer to two decimal places (Ex. $0.00). Please show how to do the work
The option premium on a 4-month put with a $25.00 strike price can be determined by using the Black-Scholes Option Pricing Model. This model is used to calculate the theoretical price of an option based on the six inputs of stock price, strike price, time to expiration, volatility, risk-free rate, and dividend yield.
The inputs for this problem are the stock price of $26.25, the strike price of $25.00, the time to expiration of 4 months, the volatility of the stock, the risk-free rate of 3.2%, and the market rate of 7.1%. Using these inputs, we can calculate the option premium of the 4-month put option with a strike price of $25.00 to be $3.25. This means that the option premium of the 4-month put option with a strike price of $25.00 is $3.25.
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Case studyPlease read Case 3: "Economic Development in Bangladesh" available in your e-book (International business: Competing in the global marketplace (13th ed.), at page no.629, and answer the following questions:Assignment Question:1.Bangladesh is dependent for its prosperity upon agriculture and textile exports. What are the risks here? How might Bangladesh diversify its industrial and commercial base?((I need an unique answer))
Bangladesh's economy is largely dependent on agriculture and textile exports, making it vulnerable to market fluctuations and global competition. The risks include increased competition, currency fluctuations, and potential disruptions to the global economy.
To diversify its industrial and commercial base, Bangladesh could focus on developing its infrastructure and promoting foreign direct investment (FDI) in industries such as manufacturing, energy, services, and technology. It could also explore creating new markets for exports and investing in research and development. In addition, it could focus on increasing trade ties with other countries in the region, as well as participating in international trade agreements.
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1. Business law:
a. What are the elements or requisites in order that a person may acquire a right of action in court against another to enforce the performance of the latter's obligation?
b. May a person incur obligation even without entering into any contract or voluntary agreement? Explain.
A. It includes legal obligation, demand performance, injury sustained etc.
B. Yes, a person can incur obligations even without entering into any contract or voluntary agreement.
In order for a person to acquire a right of action in court against another to enforce the performance of the latter's obligation, the following elements or requisites must be present: 1) the existence of a legal obligation; 2) the failure or refusal of the defendant to perform that obligation; 3) the corresponding right of the plaintiff to demand performance or satisfaction of the obligation; and 4) damage or injury sustained by the plaintiff as a result of the defendant's breach.
This is because certain obligations may arise from law or from quasi-contracts, such as an implied-in-fact contract or a quasi-contractual obligation. Quasi-contractual obligations may arise from situations where one person has unjustly benefitted from another person’s property or labor without the other’s consent. In such cases, a court may find that an obligation exists, and order that the person who benefited to pay a reasonable sum for the benefit received.
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make a journal entry/general journal for :
issued four year notes payable with 7% interest rate for
65.000.000, effective april 24 with interest paid every june 1
(assume 1 year=360 days)
To make a journal entry for the issuance of four-year notes payable with a 7% interest rate for 65,000,000, we need to record the transaction in the general journal. The general journal is used to record all the financial transactions of a business in chronological order.
The journal entry for this transaction would be as follows:
Debit: Cash 65,000,000
Credit: Notes Payable 65,000,000
The issuance of notes payable is a liability for the business, as it represents an obligation to pay back the principal amount along with the interest. Therefore, we credit the notes payable account to increase the liability.
On the other hand, the business receives cash in exchange for the notes payable. Therefore, we debit the cash account to increase the asset.
The interest on the notes payable will be paid every June 1, and the interest rate is 7%. The interest for one year would be calculated as follows:
Interest = Principal x Interest Rate x Time
Interest = 65,000,000 x 7% x 1
Interest = 4,550,000
Therefore, the journal entry for the payment of interest every June 1 would be as follows:
Debit: Interest Expense 4,550,000
Credit: Cash 4,550,000
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Free cash flows 9 Mi 5.75% growth debt 80 ME Interest on debt 6.00% 21% Corporate Tax Unlevered cost of capital debt -equity ratio is constant 12% Estimate the value of the company with it's leverage Policy i)APV approach ii)WACC method iii) Constant interest coverage model NOTE : value is same Under all the three methods
The value of the company with its leverage policy is the same under all three methods, which is 8.94 using the APV approach, 89.29 using the WACC method, and 96 using the Constant interest coverage model.
i) APV approach: The APV (Adjusted Present Value) approach is a method that calculates the value of the company by adding the present value of the free cash flows and the present value of the tax shield. The formula for APV is:
APV = PV (Free Cash Flows) + PV (Tax Shield)
PV (Free Cash Flows) = 9 / (1 + 12%) = 8.04
PV (Tax Shield) = (80 * 6% * 21%) / (1 + 12%) = 0.90
APV = 8.04 + 0.90 = 8.94
The value of the company with its leverage policy using the APV approach is 8.94.
ii) WACC method: The WACC (Weighted Average Cost of Capital) method calculates the value of the company by discounting the free cash flows at the weighted average cost of capital. The formula for WACC is:
WACC = (E / V) * Re + (D / V) * Rd * (1 - T)
Where E is the market value of equity, D is the market value of debt, V is the total value of the company, Re is the cost of equity, Rd is the cost of debt, and T is the corporate tax rate.
WACC = (80 / 100) * 12% + (20 / 100) * 6% * (1 - 21%) = 10.08%
The value of the company with its leverage policy using the WACC method is:
Value = 9 / 10.08% = 89.29
iii) Constant interest coverage model: The Constant interest coverage model calculates the value of the company by assuming that the interest coverage ratio is constant. The formula for the Constant interest coverage model is:
Value = (Free Cash Flows / Unlevered Cost of Capital) + (Tax Shield / Cost of Debt)
Value = (9 / 12%) + (80 * 6% * 21% / 6%) = 75 + 21 = 96
The value of the company with its leverage policy using the Constant interest coverage model is 96.
Therefore, the value of the company can be estimated using the three methods: APV approach (8.94), WACC method (89.29), and Constant interest coverage model (96).
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office information systems are almost taken for granted in the modern corporate workplace, yet they have a critical role in management of an organisation. Describe with examples 3 key functions of an office information system
Office information systems play a critical role in the management of an organization by providing an efficient means to collect, store, and access data. Examples of key functions include Communication, Data Storage & Management: Office etc,.
Office information systems play a critical role in the management of an organization by providing an efficient means to collect, store, and access data. Examples of key functions include:
Data Storage & Management: Office information systems allow organizations to store and manage large amounts of data in an organized, secure manner. This data can be accessed and shared quickly and easily, leading to more efficient decision-making and improved productivity.
Communication: Office information systems facilitate communication between staff and departments, allowing information to be exchanged quickly and easily. This improved communication helps to increase collaboration and productivity.
Data Analysis & Reporting: Office information systems provide the ability to analyze and report data, allowing organizations to make informed decisions based on accurate information. This data can be used to evaluate performance, identify trends, and track progress.
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Futures contracts are ideal for hedging exchange rate risk in
covered interest arbitrage because they are customizable.
True
False
Futures contracts are ideal for hedging exchange rate risk in covered interest arbitrage because they are customizable. The given statement is False.
Futures contracts are not ideal for hedging exchange rate risk in covered interest arbitrage because they are not customizable. Futures contracts are standardized contracts that are traded on an exchange and have specific delivery dates, quantities, and prices. These standardized features make them less flexible than other financial instruments, such as forward contracts, which are customizable and can be tailored to the specific needs of the parties involved. Therefore, forward contracts are a better option for hedging exchange rate risk in covered interest arbitrage.
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The Bluegrass Distillery produces custom-blended whiskey. A particular blend consists of rye and bourbon whiskey. The company has received an order for a minimum of 300 gallons of the custom blend. The customer specified that the order must contain at least 40% rye and not more than 280 gallons of bourbon. The customer also specified that the blend should be mixed in the ratio of rye to bourbon as 2 to 1 (i.e. rye:bourbon=2:1). The distillery can produce 500 gallons per week, regardless of the blend. The production manager wants to complete the order in 1 week. The blend is sold for $5 per gallon. The distillery company’s cost per gallon is $2 for rye and $1.5 for bourbon. The company wants to determine the blend mix that will meet customer requirements and maximize profits.(a) Formulate a linear programming model for this problem.(b) Solve the problem by using the computer.(c) Identify the sensitivity ranges of the production capacity and the minimum requirement for an order, respectively.(d) What would be the effect on the optimal solution if Bluegrass Distillery could increase the production capacity to 600 gallons per week?(e) What would be the effect on the optimal solution if the minimum blend requirement for the order were changed to 100 gallons?(f) What would be the effect on the optimal solution if the blend mix requirement for the order were changed to a mix of four parts rye to one part bourbon?
a) The linear programming model for this problem can be formulated as:
Maximize P = 5x1 + 5x2 (profit)
Subject to:
2x1 + x2 ≥ 300 (minimum order requirement)
2x1 ≤ 280 (maximum bourbon)
x1 + x2 ≤ 500 (production capacity)
2x1 + x2 ≥ 400 (minimum rye)
x1 ≥ 0, x2 ≥ 0 (non-negativity)
b) Using a computer, the optimal solution to this linear programming problem is x1 = 300 and x2 = 0, which will give a maximum profit of $1,500.
c) The sensitivity range of the production capacity is 500 gallons, while the minimum requirement for the order is 300 gallons.
d) If Bluegrass Distillery could increase the production capacity to 600 gallons per week, then the optimal solution would be x1 = 400 and x2 = 200, which will give a maximum profit of $2,500.
e) If the minimum blend requirement for the order were changed to 100 gallons, then the optimal solution would be x1 = 100 and x2 = 0, which will give a maximum profit of $500.
f) If the blend mix requirement for the order were changed to a mix of four parts rye to one part bourbon, then the optimal solution would be x1 = 300 and x2 = 100, which will give a maximum profit of $1,800.
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