To calculate the monthly interest payment and monthly principal payment for the add-on loan, we need to first determine the total amount to be repaid over the life of the loan.
The loan amount is $500,000 and the simple interest rate is 16.00%. Therefore, the total interest payable will be $80,000 ($500,000 x 16.00%).
Since the loan is to be paid in nine monthly installments, the monthly interest payment will be $8,888 ($80,000/9). To calculate the monthly principal payment, we need to subtract the monthly interest payment from the total monthly payment. The total monthly payment will be $61,111 ($500,000/9).
Therefore, the monthly principal payment will be $52,223 ($61,111 - $8,888).
To calculate the approximate annual percentage rate (APR) and the approximate effective annual rate (EAR), we need to use the following formulas:
APR = (Total interest payable / Loan amount) x (12 / Number of months)
EAR = (1 + APR / Number of compounding periods)^Number of compounding periods - 1
Using the values we have calculated, the APR for the add-on loan is approximately 38.40% ((80,000/500,000) x (12/9) x 100). The EAR is approximately 46.16% ((1 + 0.3840/12)^12 - 1).
In summary, the monthly interest payment for the add-on loan is $8,888, the monthly principal payment is $52,223, the approximate annual percentage rate (APR) is 38.40%, and the approximate effective annual rate (EAR) is 46.16%.
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personal selling involves more than presenting the product and closing the deal. other activities include the search for new prospects and follow-up services after the sale. group of answer choices true false
The statement is true. Personal selling involves building relationships with potential customers, identifying their needs, presenting the product or service, negotiating and closing the sale, and providing follow-up services after the sale.
However, it also includes activities such as prospecting, which is the process of identifying and qualifying potential customers, and lead generation, which involves generating interest in the product or service among potential customers. Additionally, personal selling may also involve post-sale activities such as customer service, providing support and assistance, and ensuring customer satisfaction. Therefore, personal selling is a comprehensive process that involves several activities beyond presenting the product and closing the deal.
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competitors' reactions to a price change flow from a set reaction policy or ________.
Competitors reactions to a price change flow from a set reaction policy or strategy.
This policy is a framework that guides a competitor's response to changes in the pricing strategy of their rivals. The nature of this policy is dependent on several factors, including the nature of the industry, the competitive landscape, and the goals of the competitors.
For example, in a highly competitive industry with low-profit margins, competitors may have a price-matching policy. This policy would require them to adjust their prices in response to changes made by their rivals. Alternatively, a competitor may adopt a premium pricing strategy, focusing on delivering higher value to customers and differentiating themselves from their rivals.
The set reaction policy is not necessarily fixed and can evolve over time. Competitors may adapt their reaction policies to changes in the market or adopt new strategies to respond to new entrants or disruptive technologies. In conclusion, competitors' reactions to a price change are influenced by a set reaction policy or strategy, which varies depending on the nature of the industry and the competitive landscape.
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use the forward rate to forecast the percentage change in the mexican peso over the next year a 5 b 5 c 10 d 20
They can still serve as useful tools for predicting potential currency movements.
To use the forward rate to forecast the percentage change in the Mexican peso over the next year, we first need to understand the concept of forward rates. Forward rates are derived from the spot exchange rate and are used to predict future exchange rates between two currencies. These rates are based on the interest rate differential between the two countries and can be helpful in predicting currency fluctuations.
Given the options A 5%, B 5%, C 10%, and D 20%, we will analyze the forward rate and use it to estimate the percentage change in the value of the Mexican peso over the next year. Please note that without the specific spot and forward rates or interest rate differential, it is impossible to provide an exact answer.
Assuming that you have access to the relevant financial data, follow these steps:
1. Obtain the current spot exchange rate between the Mexican peso and the reference currency (e.g., the US dollar).
2. Obtain the forward rate for the same currency pair for a one-year period.
3. Calculate the percentage difference between the forward rate and the spot rate. This difference represents the expected change in the value of the Mexican peso over the next year.
Based on this information, you can compare the calculated percentage change with the options provided (A 5%, B 5%, C 10%, and D 20%) to determine which one best matches your forecast. Keep in mind that currency markets are volatile, and forecasts based on forward rates are not guaranteed to be accurate.
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When a country fixes the price of foreign exchange (in terms of the domestic currency) below equilibrium, which of the following will result?
a. A black market will develop for foreign exchange.
b. Residents of that country can buy as much foreign currency as they want.
c. There will be a surplus of foreign exchange.
d. A depreciation of the currency will restore equilibrium in the foreign exchange market.
When a country fixes the price of foreign exchange (in terms of the domestic currency) below equilibrium, the demand for foreign exchange will exceed the supply, creating a shortage.
This means that people will be willing to pay more for foreign currency than the fixed price set by the government, leading to the development of a black market for foreign exchange. The government may also face difficulties in obtaining enough foreign exchange to meet the demand, leading to a scarcity of foreign currency.
Ultimately, a black market for foreign exchange is likely to develop in order to meet the excess demand.
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a company has a sales forecast for the following five months as shown in the table. if they have a beginning inventory of 225 units, what amount should be produced under a level plan in order for them to have an ending inventory of zero units at the end of the five-month period?
Based on the given sales forecast and beginning inventory, we can calculate the total demand for the five-month period by summing up the forecasted sales and the beginning inventory. Therefore, the total demand would be 1875 units.
In order to have an ending inventory of zero units, the total production must be equal to the total demand. However, since we are using a level production plan, we will divide the total demand by the number of months (five) to determine the monthly production level.
Total demand= 225 + 300 + 375 + 450 + 525 = 1875 units
Thus, the monthly production level should be 1875 / 5 = 375 units. Therefore, the company should produce 375 units each month for the next five months in order to meet the total demand and have zero ending inventory. In summary, the company should produce 375 units per month for the next five months in order to meet the level production plan and have an ending inventory of zero units.
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question 1 according to the author in the video, what does dark horse analytics state are the 3 best practices for creating a visual?
According to the given question, the author stated that Dark Horse Analytics suggests three best practices for creating effective visuals. The first is to focus on the message and ensure that the visual is designed to convey that message clearly and concisely. The second is to use pre-attentive attributes, such as color and size, to draw attention to the most important elements of the visual. Finally, it is important to choose the right chart type for the data being presented to ensure that it is easy to understand and interpret.
By following these three best practices, Dark Horse Analytics believes that visuals can be created that are not only aesthetically pleasing but also effectively communicate important information.
Answer: Dark Horse Analytics suggests the following three best practices for creating a visual:
1. Simplify: Remove any unnecessary elements, such as excessive colors, lines, or text, to ensure the visual is easy to understand. Focus on the most important information and avoid clutter.
2. Highlight: Emphasize the key points or data in the visual to draw the viewer's attention to the most critical information. This can be done using contrasting colors, bold text, or other visual cues.
3. Clarify: Make sure the visual is clear and easy to comprehend by using concise labels, appropriate scales, and a well-organized layout. This helps viewers quickly grasp the main message of the visual.
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8. A bond had a coupon rate of 5.5%, with interest paid semi-annually. The face value of the bonds is $1,000 and the bonds mature in 2 years. What is the intrinsic value of the bond with a required return of 7%?
If a bond had a coupon rate of 5.5%, with interest paid semi-annually. The intrinsic value of the bond with a required return of 7% is : $974.42.
How to find the Intrinsic Value?First step is to find the coupon payment
Coupon Payment = Coupon Rate / 2 * Face Value
Coupon Payment = 0.055 / 2 * 1000
Coupon Payment = $27.50
Second step is to find the PV of Annuity
PV of Annuity = Coupon Payment * [1 - 1/(1+r)^n] / r
Where:
r = 7% / 2 = 0.035
n = 4
Let plug in the formula
PV of Annuity = $27.50 * [1 - 1/(1+0.035)^4] / 0.035
PV of Annuity = $100.99
Now let find the PV of lump sum
PV of Lump Sum = Face Value / (1+r)^n
PV of Lump Sum = $1000 / (1+0.035)^4
PV of Lump Sum = $873.43
Intrinsic Value = PV of Annuity + PV of Lump Sum
Intrinsic Value = $100.99 + $873.43
Intrinsic Value = $974.42
Therefore the intrinsic value is $974.42.
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true or false: the extended ad-as model predicts that the economy will, in the long run, adjust to a recession caused by declining ad through a drop in nominal wages, which brings the economy back to full employment.
True. The extended AD-AS model predicts that in the long run, the economy will adjust to a recession caused by declining aggregate demand (AD) through a drop in nominal wages, which will bring the economy back to full employment.
This is due to the downward sloping aggregate supply (AS) curve, which indicates that as prices and wages adjust to changes in AD, the economy will eventually reach a new equilibrium at full employment. The extended AD-AS model suggests that in the long run, a recession caused by a decline in aggregate demand (AD) will be adjusted through a drop in nominal wages. This drop in nominal wages will lower production costs, which in turn increases short-run aggregate supply (SRAS) and moves the economy back to full employment equilibrium.
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select all that apply atz co. sells equipment that cost $9,000 with current accumulated depreciation of $8,000 for $2,000 cash. to record this transaction, atz will credit which accounts? (check all that apply.) multiple select question. equipment gain on sale of equipment depreciation expense loss on sale of equipment accumulated depreciation - equipment
ATZ will credit Equipment, Gain on Sale of Equipment, and Accumulated Depreciation - Equipment accounts.
In this transaction, ATZ sells equipment originally costing $9,000 with accumulated depreciation of $8,000 for $2,000 cash.
To record the transaction, ATZ will credit the Equipment account for the original cost ($9,000), the Accumulated Depreciation - Equipment account for the depreciation amount ($8,000), and the Gain on Sale of Equipment account for the difference between the cash received ($2,000) and the equipment's net book value (original cost minus accumulated depreciation, or $1,000).
The Gain on Sale of Equipment will be credited for $1,000.
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the leader who says, "do this or you're fired" is exercising ________ power.
The leader who says "do this or you're fired" is exercising coercive power.
What's coercive powerCoercive power is based on fear of punishment or negative consequences. It involves the ability to punish or remove rewards, such as promotions or recognition, to influence behavior.
This type of power is often associated with an autocratic leadership style, where the leader makes all decisions and enforces strict rules and regulations.
While coercive power can be effective in the short term, it can also lead to resentment and low morale among team members.
It is important for leaders to balance the use of coercive power with other forms of power, such as expert power, which is based on knowledge and expertise, and referent power, which is based on respect and admiration.
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A company has net sales of $746,000 and cost of goods sold of $299,000. Its gross profit equals: Multiple Choice $(447,000). $746,000. $299,000. $447,000. $1,045,000
The gross profit of the company can be calculated by subtracting the cost of goods sold from the net sales. Therefore, the gross profit of the company is equal to $746,000 - $299,000 = $447,000. Therefore, the correct answer is option D, which is $447,000.
This means that the company has earned $447,000 after deducting the cost of goods sold from the revenue earned through sales. Gross profit is an important financial metric as it helps to understand the profitability of the company before deducting other expenses such as operating expenses, taxes, interest, etc. A high gross profit margin indicates that the company is generating sufficient revenue to cover its cost of goods sold and other direct expenses, which is a positive sign for the investors. However, it is important to note that a high gross profit margin does not necessarily mean that the company is profitable as other expenses also need to be taken into consideration.
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an article in the wall street journal noted: ""u.s. oil producers ... are using hedges to lock in prices."" a.would oil producers be worried about prices rising or falling? briefly explain.
US oil producers using hedges to lock in prices are likely worried about prices falling.
Hedging is a risk management strategy used by businesses to protect against potential losses from adverse price movements in a particular market. In the case of oil producers, they can use hedging contracts to lock in a specific price for future oil deliveries, thereby protecting themselves against the risk of falling oil prices.
If oil prices fall below the price set in the hedging contract, the oil producers will still receive the higher price they locked in, thus reducing their losses.
However, if oil prices rise above the hedged price, the producers will miss out on the opportunity to sell their oil at the higher market price, but they would still be protected from any further price drops.
Oil producers would be worried about prices falling. By using hedges to lock in prices, they are essentially protecting themselves from potential losses if the market price of oil were to decrease.
By locking in a price, they are guaranteeing a certain level of revenue even if the market price were to fall. Therefore, the use of hedges suggests that oil producers are concerned about the possibility of prices falling.
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true or false: "certified pre-owned" cars are guaranteed, by the seller, for quality.
The given statement "Certified pre-owned" cars are typically guaranteed, by the seller, for quality is True due to the certification of the dealership or manufacturer.
The certified pre-owned or CPO cars, these are used vehicles that have undergone certification process by the manufacturer.
This certification process includes a inspection of the vehicle's mechanical systems and review of its service history and the repair of any necessary parts.
This certification is reviews by automobile industry. To sold with a warranty that provides coverage for certain repairs and maintenance items.
Therefore, the given statement is true.
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the reasons why so many is software development projects do not deliver their potential value include:
The answer is that many software development projects fail to deliver their potential value due to a combination of factors, such as unclear objectives, inadequate planning, poor communication, and insufficient testing.
1. Unclear objectives: A lack of clear goals and objectives can lead to misalignment between the project team and stakeholders, making it difficult to measure success and deliver the desired value.
2. Inadequate planning: Poor planning can result in unrealistic deadlines, insufficient resources, and inadequate risk management. These issues can cause delays, increased costs, and reduced project value.
3. Poor communication: Ineffective communication among team members and stakeholders can lead to misunderstandings, missed deadlines, and suboptimal decision-making. This can negatively impact project success and value delivery.
4. Insufficient testing: Insufficient testing can result in overlooked bugs and issues in the software, leading to a lower-quality product that may not meet user expectations or deliver the anticipated value.
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although aquaculture has increased our ability to meet the increased demand for seafood, it is subject to problems, such as
It is important to acknowledge that while aquaculture has certainly increased our ability to meet the rising demand for seafood, there are indeed several problems associated with this practice. One of the primary issues with aquaculture is its potential impact on the environment.
The practice of farming fish in large quantities can lead to water pollution, the depletion of wild fish stocks used for fish feed, and the spread of disease among farmed fish populations. In addition to environmental concerns, there are also ethical considerations surrounding the treatment of farmed fish. Many fish are raised in cramped conditions and are often subject to practices such as fin clipping, which can cause pain and distress.
Finally, there are also economic challenges associated with aquaculture, particularly in developing countries where small-scale fishing communities may be negatively impacted by large-scale fish farms. In summary, while aquaculture has certainly helped to meet the demand for seafood, it is important to consider the potential environmental, ethical, and economic implications of this practice.
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________ _______ refers to the illegal actions of a corporation or people acting on its behalf.
a. Corporate crime
b. Organized crime
c. Victimless crime
d. Secondary deviance
Corporate crime refers to the illegal actions of a corporation or people acting on its behalf. Option A is correct.
This type of crime can include a wide range of illegal activities, such as fraud, embezzlement, bribery, insider trading, environmental violations, and workplace safety violations.
Corporate crime is often committed for financial gain, and it can have significant negative impacts on society, including economic harm, damage to the environment, and harm to individuals and communities.
Corporate crime is usually investigated and prosecuted by government agencies, and penalties can include fines, imprisonment, and other sanctions.
Therefore, option A is correct.
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which of the following statements are correct? check all that apply. the dow jones industrial average is an example of a stock exchange where he can purchase bayzer stock. expectations of a recession that will reduce economywide corporate profits will likely cause the value of karim's shares to decline. bayzer earns revenue when karim purchases 250 shares, even if he purchases them from an existing shareholder. alternatively, karim could undertake their financial investment by purchasing bonds issued by the u.s. government. assuming that everything else is equal, a municipal bond issued by a state most likely pays a interest rate than a corporate bond issued by an electronics manufacturer.
The correct statements are: Expectations of a recession that will reduce economywide corporate profits will likely cause the value of Karim's shares to decline.
Alternatively, Karim could undertake their financial investment by purchasing bonds issued by the U.S. government. Assuming that everything else is equal, a municipal bond issued by a state most likely pays a lower interest rate than a corporate bond issued by an electronics manufacturer.
The other statements are incorrect:
The Dow Jones Industrial Average is not an example of a stock exchange where Karim can purchase Bayzer stock. The Dow Jones Industrial Average is an index that tracks the performance of 30 large publicly traded companies in the United States, and it is not a stock exchange.
Bayzer does not earn revenue when Karim purchases 250 shares, even if he purchases them from an existing shareholder. Once a company has issued its shares, it does not receive any additional revenue from the trading of those shares in the secondary market. The Dow Jones Industrial Average (DJIA) is an index that tracks the performance of 30 large publicly traded companies in the United States. It is not a stock exchange. The stock exchanges where Karim can purchase Bayzer stock would depend on where the company is listed. For example, if Bayzer is listed on the New York Stock Exchange (NYSE) or the NASDAQ, Karim can purchase its stock on those exchanges.
Bayzer does not earn revenue when Karim purchases shares of its stock in the secondary market, even if he purchases them from an existing shareholder. When a company issues its shares through an initial public offering (IPO), it receives revenue from the sale of those shares. However, once the shares are traded in the secondary market, the company does not receive any additional revenue from the trading of those shares. The only way Bayzer can earn revenue from Karim purchasing its shares is if Bayzer issues additional shares through a secondary offering and Karim purchases those newly issued shares.
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the central element of the marketing strategy for pez candy, inc., is the __________.
The central element of the marketing strategy for Pez Candy, Inc. is the unique and collectible Pez dispenser. Pez dispensers are small, colorful, and often depict popular characters from movies, TV shows, and cartoons, making them highly sought after by collectors and fans alike. This strategy of offering limited edition and exclusive Pez dispensers has helped Pez Candy, Inc. establish a loyal customer base and attract new consumers.
In addition to the collectible aspect, Pez Candy, Inc. also focuses on the fun and interactive experience of using a Pez dispenser. The company encourages customers to share their Pez collections on social media and offers games and contests on their website. This approach not only promotes the brand but also creates a sense of community among Pez fans.
Overall, the Pez dispenser is the driving force behind Pez Candy, Inc.'s marketing strategy, combining the appeal of collectibility with a playful and interactive experience.
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If the Fed makes an open market purchase of $1 million of government securities, the monetary basea. Is decreased by $1 million.b. Is unchanged in size, though its composition changes.c. Is increased by $1 million.d. Will decrease by a multiple of $1 million over time.e. Will increase by a multiple of $1 million over time.
When the Fed makes an open market purchase of $1 million of government securities, the monetary base is increased by $1 million. The correct option is c.
When the Fed conducts an open market purchase of $1 million of government securities, it increases the monetary base by $1 million.
The monetary base is the total amount of currency in circulation plus reserves held by banks at the Fed.
When the Fed purchases securities in the open market, it pays for them with newly created reserves, which are added to the reserves held by banks at the Fed.
This increase in reserves allows banks to increase their lending, which in turn increases the money supply.
It's important to note that the increase in the monetary base may not necessarily lead to an equivalent increase in the money supply, as the money multiplier effect depends on a number of other factors, such as the reserve requirements and the willingness of banks to lend.
Therefore, option e, "the monetary base will increase by a multiple of $1 million over time," is not necessarily true.
The actual impact on the money supply will depend on a variety of factors and cannot be determined solely from the Fed's open market operations.
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16.Profitability Index QuestionsAngry Little Black is trying to choose between the followingtwo design projects that are intertwined.a. If the required rate of return is 10% and the company applies the profitability index rule as a decision rule, which project should it adopt?
b. If the company applies the net present value rule as a decision rule, which project should it adopt?
C. Explain why the answers to question a. and question b. are different.
Option (a.) and ( b.) are different because they are using different decision rules. The profitability index rule focuses on the ratio of present value of future cash flows to the initial investment, while the net present value rule focuses on the difference between the present value of future cash inflows and the initial investment.
To give a detail explanation of why the answers to question a. and question b. are different, it is important to understand the difference between profitability index and net present value. Profitability index is a ratio of the present value of future cash flows to the initial investment, while net present value is the difference between the present value of future cash inflows and the initial investment.
When using the profitability index rule, the company is looking for the project that provides the highest ratio of present value of future cash flows to the initial investment. This means that the project with the higher profitability index will be selected, regardless of the size of the initial investment.
On the other hand, when using the net present value rule, the company is looking for the project that provides the highest difference between the present value of future cash inflows and the initial investment. This means that the project with the higher net present value will be selected, even if it has a higher initial investment.
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Dixon Menswear Shop purchased shirts from Colt Company on May 28, 2019, and received an invoice with a list price amount of $5,000 and payment terms of 2/10, n/30. Dixon uses the net method to record purchases. Dixon should record purchases of:
a. $4,000
b. $4,900
c. $5,000
d. $5,100
Dixon Menswear Shop should record the purchases as $4,900 (option b).
To determine how Dixon Menswear Shop should record the purchases from Colt Company, we need to consider the payment terms and the net method.
The payment terms stated as "2/10, n/30" mean that Dixon is eligible for a 2% discount if they pay within 10 days. Otherwise, the full amount is due within 30 days.
Using the net method, Dixon would record the purchases at the net amount, which is the invoice amount minus any discounts. Therefore, if Dixon pays within 10 days, they would receive a discount of 2% on the list price amount of $5,000.
Calculating the discount:
Discount = List price amount x Discount rateDiscount = $5,000 x 0.02Discount = $100The net amount, after subtracting the discount, would be:
Net amount = List price amount - DiscountNet amount = $5,000 - $100Net amount = $4,900Therefore, Dixon Menswear Shop should record the purchases as $4,900 (option b).
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a collection of national income accounts that summarize the flow of international trade between one country and all other countries is called of payments.
A collection of national income accounts that summarize the flow of international trade between one country and all other countries is called the balance of payments.
All economic exchanges between a nation and the rest of the world, including transfers, investment income, and the exports and imports of commodities and services, are recorded in the balance of payments.
The current account and the capital account are the two main accounts that make up the balance of payments. The capital account measures the flow of financial assets, such as loans and foreign investments, whereas the current account measures the flow of products, services, and revenue.
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a(n) ________ involves the seller entrusting possession of goods to a buyer on a trial basis.
A consignment involves the seller entrusting possession of goods to a buyer on a trial basis.
What's meant by consignment?This means that the seller retains ownership of the goods until they are sold. The buyer takes possession of the goods and displays them in their store or showroom, but they do not pay for them until they are sold to a customer. The seller may agree to provide the buyer with a percentage of the sale as commission.
Consignment is a popular way for businesses to expand their product line without having to pay for the inventory upfront. It is also a way for sellers to test the market demand for their products before investing in a full production run.
Consignment agreements should be carefully drafted to ensure that the rights and responsibilities of both parties are clearly defined.
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What is the process that guides firms in the recognition of revenue? What does each of the steps mean? How does this process works for a company like Abercrombie & fitch Co. a clothing retailer? How would it work for a construction company that builds offices under long term contracts with developers?
The process that guides firms in the recognition of revenue is called revenue recognition. It outlines the principles that companies must follow to determine the timing and amount of revenue that they should report in their financial statements. The process has five steps:
Identify the contract with the customer: The company must determine whether a contract exists and what are the terms and conditions of the agreement.
Identify the performance obligations in the contract: The company must identify the goods or services that it has promised to provide to the customer.
Determine the transaction price: The company must determine the amount of consideration that it expects to receive from the customer in exchange for the goods or services.
Allocate the transaction price to the performance obligations in the contract: The company must allocate the transaction price to the performance obligations based on their relative standalone selling prices.
Recognize revenue when the performance obligation is satisfied: The company must recognize revenue when it satisfies the performance obligation by transferring control of the promised goods or services to the customer.
For Abercrombie & Fitch Co., a clothing retailer, the revenue recognition process would involve identifying the contracts with customers, which would be the sales of clothing items to customers. The performance obligation would be to transfer the ownership of the clothing items to the customer, and the transaction price would be the amount that the customer pays for the clothing. Revenue would be recognized when the customer takes ownership of the clothing items.
For a construction company that builds offices under long-term contracts with developers, the revenue recognition process would involve identifying the contracts with the developers, determining the performance obligations, which would include the construction of the office building and any other services promised in the contract, and allocating the transaction price to the performance obligations. Revenue would be recognized over time as the construction work progresses, based on the percentage of completion method, where revenue is recognized based on the percentage of costs incurred compared to total expected costs.
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b. what will be the value of your portfolio in january (net of the proceeds from the options) if the stock price ends up at $40? c. what will be the value of your portfolio in january (net of the proceeds from the options) if the stock price ends up at $50?
The value of your portfolio in January (net of the proceeds from the options) will be $4,000 if the stock price ends up at $40 and $5,000 if the stock price ends up at $50.
To provide a detailed answer to your question, we need to first understand the components of your portfolio. Let's assume your portfolio consists of 100 shares of stock and 1 call option contract. The call option has a strike price of $35 and an expiration date in January.
b. If the stock price ends up at $40, your call option will be in-the-money as it allows you to purchase the stock at $35, which is lower than the current market price of $40. Therefore, you will exercise the call option and buy 100 shares of stock at $35 each.
The cost of the stock will be $3,500 ($35 x 100). You will also receive the proceeds from selling the call option, which will be the difference between the stock price and the strike price ($40 - $35 = $5) multiplied by the number of shares (100) and the contract multiplier (100).
Therefore, you will receive $500 ($5 x 100 x 100). Adding the cost of the stock to the proceeds from selling the call option, your portfolio value will be $4,000 ($3,500 + $500).
c. If the stock price ends up at $50, your call option will also be in-the-money. However, in this scenario, the value of the option will be higher as it allows you to purchase the stock at $35, which is significantly lower than the current market price of $50.
Therefore, you will exercise the call option and buy 100 shares of stock at $35 each. The cost of the stock will be $3,500 ($35 x 100). You will also receive the proceeds from selling the call option, which will be the difference between the stock price and the strike price ($50 - $35 = $15) multiplied by the number of shares (100) and the contract multiplier (100).
Therefore, you will receive $1,500 ($15 x 100 x 100). Adding the cost of the stock to the proceeds from selling the call option, your portfolio value will be $5,000 ($3,500 + $1,500).
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the risk that a bank will have to sell its assets at a loss to meet its cash demands is called
The risk that a bank will have to sell its assets at a loss to meet its cash demands is called liquidity risk.
This risk arises when a bank's assets cannot be easily converted into cash to meet its short-term obligations. A lack of liquidity can lead to a bank being unable to fund its operations, pay its depositors, or meet its regulatory requirements.
Banks face liquidity risk due to various reasons such as unexpected withdrawals by depositors, a decline in market confidence, and a reduction in the availability of credit from other banks. Managing liquidity risk is essential for banks to maintain their financial stability and avoid potential failures. Banks often maintain a buffer of liquid assets that can be easily sold or pledged to secure funding in times of stress.
Regulators also play a crucial role in managing liquidity risk in banks by setting standards for liquidity risk management and monitoring banks' liquidity positions. For instance, the Basel III framework introduced in response to the global financial crisis of 2008-09 includes new liquidity standards that require banks to maintain a minimum amount of high-quality liquid assets to meet their short-term liquidity needs.
In conclusion, liquidity risk is a critical risk faced by banks, and effective management of this risk is essential for maintaining the financial stability of the banking system.
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all u.s. employees, including federal, state, and local government employees, are covered under the old age, survivors, disability, and health insurance (oasdhi) program. true false
True, all U.S. employees, including federal, state, and local government employees, are covered under the Old Age, Survivors, Disability, and Health Insurance (OASDHI) program.
The OASDHI program, commonly known as Social Security, was created in 1935 and provides retirement, survivor, disability, and health insurance benefits to eligible individuals. The program is funded through payroll taxes paid by employees and their employers. The Social Security Administration (SSA) is responsible for administering the program and determining eligibility for benefits.
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a corporation issued 160 shares of its $5 par value common stock in payment of a $2,400 charge from its accountant for assistance in filing its charter with the state. the entry to record this transaction will include: multiple choice a $2,400 credit to cash. a $800 debit to organization expenses. a $2,400 debit to legal expenses. a $1,600 credit to paid-in capital in excess of par value, common stock. a $2,400 credit to common stock.
This transaction results in an increase in the corporation's paid-in capital in excess of par value, common stock, reflecting the additional amount paid by investors for the common stock beyond its par value.
The entry to record the transaction of a corporation issuing 160 shares of its $5 par value common stock in payment of a $2,400 charge from its accountant for assistance in filing its charter with the state would be as follows:
Debit: Organization Expenses - $800
Debit: Common Stock - $1,600 (160 shares x $5 par value)
Credit: Paid-in Capital in Excess of Par Value, Common Stock - $2,400
The $2,400 credit to cash and the $2,400 debit to legal expenses are not applicable in this transaction as the payment was made through issuing common stock instead of using cash, and the charge was for assistance in filing the charter with the state and not for legal expenses.
It is important to note that organization expenses are costs incurred in forming a corporation, such as legal and filing fees, and are typically amortized over a period of time. The $800 debit to organization expenses in this transaction reflects the portion of the total charge that relates to these formation costs.
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The information below illustrates a comparison made on an ________ basis.Company AGross Profit 2012: $2,742,000Gross Profit 2013: $ 3,600,100Gross Profit 2014: $4,785,550A. intracompanyB. incomeC. industry averagesD. intercompany
The information below illustrates a comparison made on an intercompany basis. Therefore, correct option is D.
This is because the data provided in this case is focused on a single company's gross profit across multiple years. Hence, it is a comparison between different periods within the same company. An intracompany comparison refers to comparing different aspects within the same company, while income and industry averages are not relevant to this type of comparison.
In an intercompany comparison, financial data from the same company over different periods are analyzed to identify trends, growth, and areas for improvement. Hence, the correct answer is option D.
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why a purely competitive firm who earns a zero total economic profit is actually earning a normal profit, as viewed by economists.
A purely competitive firm earning zero total economic profit is actually earning a normal profit from an economist's perspective. In this case, normal profit is the minimum level of profit required to keep the firm operating in the market. It occurs when total revenue equals total cost, including both explicit and implicit costs.
Explicit costs include monetary expenses like wages, rent, and materials, while implicit costs are the opportunity costs of resources, such as the potential earnings a firm owner could have made in another business. Normal profit ensures that the firm is covering all its costs and earning enough to make its owners as well-off as they would be in their next best alternative.
When a firm earns zero economic profit, it is earning just enough to cover both explicit and implicit costs, thereby achieving normal profit. This outcome implies that the firm is efficiently allocating its resources in the market and no additional incentives are needed for it to stay in business or to exit the market.
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