The tax consequences of this transaction for Frank include capital gains tax on the redemption of his stock, tax on the lease payments he receives, and the removal of self-employment tax on any income he receives from the business after he retires.The tax consequences of this transaction for Frank are explained.
1. Capital Gains Tax: Frank will have to pay capital gains tax on the difference between the redemption price ($3,000,000) and his basis in the stock ($1,400,000). This means that he will have to pay tax on a gain of $1,600,000.
2. Lease Payments: Frank will continue to receive lease payments of $120,000/year after he retires. These payments are considered passive income and will be taxed at the appropriate tax rate.
3. Affidavit with the IRS: By filing an affidavit with the IRS agreeing to have nothing to do with the operations of the business for 10 years, Frank is effectively removing himself from the business. This means that he will not be subject to self-employment tax on any income he receives from the business during this time.
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If an entity produces only one product or service, then (clearly) all of its efforts (costs) go to producing or providing that product or service. This entity should use a predetermined overhead rate (POHR) to estimate (assign) indirect or overhead costs to its single product or service.
As a firm grows and gains efficiencies, it wisely pools or shares resources to produce several (usually related) products or services. Clearly, the firm benefits by pooling or sharing resources, but, from the accounting perspective, which indirect or overhead costs should be assigned to which product? This question can affect PRICING the products or services!
For example: Imagine a bakery that produces banana bread. Then, imagine that a composting firm approaches the bakery and requests its egg shells and banana peels. How much should the bakery charge the composter for the egg shells & banana peels that it produces? The bakery used to only produce a single product: banana bread. Now it produces two additional products: egg shells & banana peels. How much cost should it assign the egg shells & banana peels that it produces? If the bakery can remove some indirect or overhead costs from its banana bread (and assign them to its egg shells & banana peels), then it can reduce prices on its banana bread -- and maybe sell more loaves!
Of course, the bakery may strategically "give away" the egg shells & banana peels, but it will incur costs to separate and store these items until it can transfer them to the composter (even if the composter picks-up the egg shells & banana peels). So the bakery needs to CAREFULLY think about its indirect or overhead costs and set its prices for ALL OF ITS PRODUCTS in such a way that its revenues exceed all of its costs.
Indirect or overhead costs ARE tricky -- this is why activity-based costing (ABC) is quite involved.
Continuing the example above, if there are two different bakeries and the composter asks both of them for raw material to compost, will each bakery assign indirect or overhead costs the same way? Why or why not?
Based on the provided information, in the case of the two bakeries, it is unlikely that they will assign indirect or overhead costs in the same way.
This is because each bakery may have different cost structures and different methods for allocating costs. For example, one bakery may use a traditional costing method, while the other may use an activity-based costing (ABC) method. The traditional costing method allocates overhead costs based on a predetermined overhead rate (POHR), while the ABC method allocates costs based on the activities that drive the costs.
In the case of the bakery that produces banana bread, egg shells, and banana peels, the bakery will need to carefully consider how to allocate its indirect or overhead costs among these three products. One way to do this is to use the ABC method, which allocates costs based on the activities that drive the costs. For example, the bakery may allocate the cost of electricity based on the amount of electricity used to produce each product. The bakery may also allocate the cost of labor based on the amount of labor required to produce each product. By using the ABC method, the bakery can more accurately assign costs to each product and set prices that will allow it to cover all of its costs and make a profit.
In conclusion, the allocation of indirect or overhead costs is a complex process that requires careful consideration of the cost structure and the methods used to allocate costs. Each entity may assign costs differently, depending on their cost structure and the methods they use to allocate costs.
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According to the "Banbury Impex case" that can easily be found online, please answer the following.
A. Which factor do you think is more threatening to
Banbury's profitability, cotton prices or the rising
value of the rupce?
B. Do you think that Lapura should hedge his cotton costs with cotton futures? What would you recommend?
C. Which currency of invoice do you think Lapura should choose for the Turkish sale?
D. What recommendation would you make in terms of hedging the Turkish sale receipts?
(Please dont copy paste an answer from a similar question on as i already checked them all and they all had an incorrect answer that i gave a thumbs down)
A. In the short term, the rising value of the rupee is more threatening to Banbury's profitability. This is because the company imports cotton, which is priced in US dollars.
As the rupee appreciates, it takes more rupees to buy the same amount of dollars, which means that Banbury has to pay more for its cotton. This can lead to lower margins and even losses.
In the long term, however, cotton prices are more likely to have a bigger impact on Banbury's profitability. This is because the company's costs are largely fixed, so any increase in cotton prices will eat into its margins.
B. Yes, Lapura should hedge his cotton costs with cotton futures. This would allow him to lock in a price for cotton today, which would protect him from any future increases in prices.
C. Lapura should choose to invoice the Turkish sale in US dollars. This is because the Turkish lira is a relatively weak currency, and its value is likely to continue to decline in the long term.
D. It is recommendable for Lapura to use a forward contract to hedge the Turkish sale receipts. In this case, Lapura could enter into a forward contract to sell the Turkish lira at a fixed exchange rate on a future date.
Thus, this would protect him from any future losses due to currency depreciation.
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Describe the following terminologies: Indenture, Protective
Covenants, Call Provision. (3marks)
An indenture is a legal contract for a loan, a protective covenant are the restrictions placed to protect the lender and a call provision is a clause is a debt contract.
An indenture is a legal contract between a borrower and a lender that outlines the terms and conditions of the loan, including the amount borrowed, the interest rate, and the repayment schedule. It is often used in the context of bonds or other types of debt financing.
Protective covenants are restrictions placed on the borrower by the lender in order to protect the lender's interests. These covenants may include requirements to maintain certain financial ratios, restrictions on the borrower's ability to take on additional debt, or limitations on the borrower's ability to sell or transfer assets.
A call provision is a clause in a debt contract that allows the lender to demand repayment of the loan before the scheduled maturity date. This is typically done if the borrower violates the terms of the loan or if the lender believes that the borrower is at risk of defaulting on the loan.
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Why is it important that managers think about the environmental, economic and social impacts of sustainability of their organisation's actions?
Managers must consider the impact of their organization's actions on the environment, economy, and society. The amount of resources used, waste produced, and pollution created are key environmental impacts to consider.
Additionally, they should think about the economic costs and benefits of sustainability and the social impacts on local communities and job creation.
Sustainable practices ensure the long-term maintenance of an organization, positively impact their reputation and bottom line. Sustainable decisions have a positive impact on the environment, save money, and improve organizational reputation.
Thus, managers must consider environmental, economic, and social impacts to make sustainable decisions that benefit both the organization and the environment. They can ensure their organization is taking positive steps to protect the environment, save money, and improve their reputation.
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(Calculating rates of return) Blaxo Balloons manufactures and distributes birthday balloons. At the beginning of the year Blaxo's common stock was selling for $22.28 but by year end it was only $21.14. If the firm paid a total cash dividend of $2.69 during the year, what rate of return would you have earned if you had purchased the stock exactly one year ago? What would your rate of return have been if the firm had paid no cash dividend?
To calculate the rate of return, we need to determine the change in the stock price over the course of the year and add any dividends paid. The formula for the rate of return is:
Rate of return = (Ending price - Beginning price + Dividends) / Beginning price
For Blaxo Balloons, the beginning price was $22.28 and the ending price was $21.14. The firm also paid a total cash dividend of $2.69 during the year. Plugging these values into the formula, we get:
Rate of return = ($21.14 - $22.28 + $2.69) / $22.28
Rate of return = $1.55 / $22.28
Rate of return = 0.0696 or 6.96%
If the firm had paid no cash dividend, the rate of return would be:
Rate of return = ($21.14 - $22.28 + $0) / $22.28
Rate of return = -$1.14 / $22.28
Rate of return = -0.0512 or -5.12%
Therefore, if you had purchased the stock exactly one year ago and the firm paid a total cash dividend of $2.69 during the year, your rate of return would have been 6.96%. If the firm had paid no cash dividend, your rate of return would have been -5.12%.
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Why are 8th-grade girls in Fremont so foul? bet no one knows.
Answer:they moody teens who think everything is about them and so rude
Explanation:
Answer:
abcdefghhijklmnopqrstuvwxyz
PLEASE GIVE BRAINLIEST PLESAE I NEED PLESAEEEEEEEEEEEEEEEE
Because EFT payments require less manpower, they are _____ than mailed payments.
A. More efficient
B. Less accurate
C. Less secure
D. More accessible
Because EFT payments require less manpower, they are more accessible than mailed payments.So option d is correct.
What does the term "Electronic Funds Transfer" (EFT) signify in terms of payment?Electronic payments such as wire transfers, ACH transactions, and credit card payments are all referred to as "electronic funds transfers" (EFT). Without the direct involvement of bank workers, electronic cash transfers between bank accounts—whether they be between financial institutions or inside a single institution—are carried out via computer-based methods. The following are a few examples of common electronic money transfer transactions: automatic teller systems (ATM)
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Pikachu In's sales account has a balance of $220,000 on December 31, 20x1,before any necessary year-end adjustments relating to the following:1. Included in the $220,000 is $41,000 of cash advances for services thatPikachu has not yet provided to its customers.2. Unearned revenues has a balance of $50,000 at year-end, of which $26,000relates to services pre-paid by customers in 20x0 that were completed in20x1.What amount should Pikachu report as Sales (revenue) in its income statement forthe year ended December 31, 20x1?
Therefore, Pikachu should report $205,000 as Sales (revenue) in its income statement for the year ended December 31, 20x1.
To calculate the amount that Pikachu should report as Sales (revenue) in its income statement for the year ended December 31, 20x1, we need to make the necessary year-end adjustments to the sales account balance. These adjustments include:
1. Subtracting the $41,000 of cash advances for services that Pikachu has not yet provided to its customers from the sales account balance. This is because these cash advances are not yet earned revenue and should not be included in the sales account.
2. Adding the $26,000 of services pre-paid by customers in 20x0 that were completed in 20x1 to the sales account balance. This is because these services were completed and earned in 20x1, so they should be included in the sales account for that year.
After making these adjustments, the amount that Pikachu should report as Sales (revenue) in its income statement for the year ended December 31, 20x1 is:
$220,000 - $41,000 + $26,000 = $205,000
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Investors' required return of equity for AV&V is 18%. What is value estimate for the company, if you know that AV&V's dividend will grow by 29% for the next 4 years and then by 11% ever after? AV&V's dividend last year was $5.
Provide your answer rounded to two decimals.
the value estimate for AV&V is $229.29, rounded to two decimals.
The value estimate for AV&V can be calculated using the Gordon Growth Model, which is used to determine the intrinsic value of a stock based on a future series of dividends that grow at a constant rate.
The formula for the Gordon Growth Model is:
Value Estimate = (Dividend * (1 + Growth Rate)) / (Required Return - Growth Rate)
First, we need to calculate the dividend for the next 4 years, which will grow at a rate of 29%:
Year 1: $5 * 1.29 = $6.45
Year 2: $6.45 * 1.29 = $8.32
Year 3: $8.32 * 1.29 = $10.73
Year 4: $10.73 * 1.29 = $13.84
After the first 4 years, the dividend will grow at a rate of 11%:
Year 5: $13.84 * 1.11 = $15.36
Now we can plug in the values into the Gordon Growth Model formula to calculate the value estimate:
Value Estimate = ($15.36 * 1.11) / (0.18 - 0.11)
Value Estimate = $16.05 / 0.07
Value Estimate = $229.29
Therefore, the value estimate for AV&V is $229.29, rounded to two decimals.
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this company began the year with $23,920 in inventory and ended the year with $28,080 in inventory had a credit sales of $600,000 and a cost of goods sold of $260,000. What will be the inventory turnover for this company?
The inventory turnover for this company is 10.
To calculate the inventory turnover for this company, we need to use the following formula: Inventory turnover = Cost of goods sold ÷ Average inventory To calculate the average inventory, we need to take the beginning inventory and ending inventory, add them together, and divide by 2.Average inventory = (Beginning inventory + Ending inventory) ÷ 2Average inventory = ($23,920 + $28,080) ÷ 2Average inventory = $52,000 ÷ 2Average inventory = $26,000 Now, we can plug in the cost of goods sold and average inventory into the inventory turnover formula. Inventory turnover = $260,000 ÷ $26,000Inventory turnover = 10
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A company has the following data:
Annual demand = 2,500 units
Ordering cost = $15 per order
Average carrying cost per unit per year = $0.75
Daily demand = 65 units
Delivery in 5 working days
Setup cost = $100
Carrying cost = $0.50 per unit per year
Daily production rate = 100 units daily
Daily demand rate = 75 units daily
Find
a. optimal order quantity EOQ to reduce inventory costs
b. total cost
c. Number of orders per year
d. Average inventory
e. The average dollar level of inventory
f. EOQ if we increase Co to $40
g. Reorder point (ROP)
h. How many units should Brown produce in each batch?
i. How long should the production part of the cycle last?
a. Optimal order quantity EOQ to reduce inventory costs: 244.95 units
EOQ = √(2DS/C)
= √(2*2500*$15/$0.75)
= √(60,000) = 244.95 units
b. Total cost: $275.13
Total cost = (D/EOQ)*S + (EOQ/2)*C
= (2500/244.95)*$15 + (244.95/2)*$0.75
= $183.28 + $91.85 = $275.13
c. Number of orders per year: 10.20
Number of orders per year = D/EOQ
= 2500/244.95
= 10.20 orders per year
d. Average inventory: 122.48 units
Average inventory
= EOQ/2
= 244.95/2
= 122.48 units
e. The average dollar level of inventory: $91.86
Average dollar level of inventory
= Average inventory * C
= 122.48 * $0.75
= $91.86
f. EOQ if we increase Co to $40: 565.69 units
EOQ = √(2DS/C)
= √(2*2500*$40/$0.75)
= √(320,000)
= 565.69 units
g. Reorder point (ROP): 325 units
ROP = Daily demand * Lead time
= 65 units * 5 days
= 325 units
h. Units Brown produce in each batch= 1000 units
EOQ = √(2DS/C)
= √(2*2500*$100/$0.50)
= √(1,000,000)
= 1000 units
i. The production part of the cycle last will last 10 days.
Production cycle time = EOQ/Daily production rate
= 1000/100
= 10 days
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When you become a new CEO, discuss six related financial
issues/problems based on your expertise and capability that might
be brought to the CEO’s knowledge.
More Details and Explanation
As a new CEO, there are several financial issues and problems that you may need to address. These include: Financial reporting and compliance, Budgeting and forecasting, Cash flow management etc.
1. Financial reporting and compliance: Ensuring that the company's financial statements are accurate and comply with accounting standards and regulations.
2. Budgeting and forecasting: Developing and maintaining accurate budgets and forecasts to help guide the company's financial decision-making.
3. Cash flow management: Managing the company's cash flow to ensure that it has enough cash on hand to meet its financial obligations.
4. Debt management: Managing the company's debt and ensuring that it is able to meet its debt obligations.
5. Capital structure: Determining the appropriate mix of debt and equity financing for the company.
6. Risk management: Identifying and managing financial risks, such as interest rate risk, currency risk, and credit risk.
As a new CEO, it is important to have a strong understanding of these financial issues and the ability to address them effectively. This requires strong financial expertise and the ability to make informed decisions based on sound financial analysis.
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1. dentify ten possible ramifications for employers who fail to observe OHS or WHS laws and COPs.2. Detail comprehensive details of the Safe Work Australia Model Code of Practice ‘Hazardous manual tasks’.3. List three methods of receiving updated information on OHS or WHS laws and Code of practice.4. Complete the table by providing a reason for each time that hazard identification must be carried out.Time when hazard identification must be carried outReasonBefore premises are used for the first time.Before and during the installation or alteration of any plant, machinery or equipment.Before changes to work practices, procedures or processes are introduced.When any new information relating to health and safety risks becomes available.17. List five possible inclusions in workplace WHS record keeping systems.18. List four examples of WHS ‘consultation’ record requirements.19. Identify three hazard identification records that need to be maintained in a workplace.20. Identify five examples of ‘notifiable incidents’ where a person has been impacted that need to be reported.
1. It includes fines, prosecution, financial losses, damage to reputation, decreased productivity etc.
2. It outlines the requirements of a hazard identification, risk assessment and control process
3. It include consulting relevant government departments and websites, mailing and attending seminars etc
4. To identify potential risks and hazards from the physical environment. To ensure that any new risks are identified and managed.
17. It incident reports, hazard assessments, risk management plans,
18. It include the list of personnel consulted, details of the WHS issues discussed, the decisions or agreements reached,
19. It include risk assessments, control measure records, incident reports etc.
20. It include a fatality, serious injury, serious illness.
1. Possible ramifications for employers who fail to observe OHS or WHS laws and COPs could include fines, prosecution, financial losses, damage to reputation, increased insurance premiums, decreased productivity, increased risk of accidents and ill-health, lowered morale and lack of compliance with standards.
2. The Safe Work Australia Model Code of Practice ‘Hazardous manual tasks’ outlines the requirements of a hazard identification, risk assessment and control process to be followed by employers to eliminate or minimise the risk of musculoskeletal disorders. It includes assessing risk factors such as force, posture, repetitive or sustained movements, duration of task and environmental conditions, among other things.
3. Possible methods of receiving updated information on OHS or WHS laws and Code of Practice include consulting relevant government departments and websites, subscribing to mailing lists and newsletters, attending professional development courses and seminars, and joining professional organisations.
4.
Time when hazard identification must be carried out | Reason
Before premises are used for the first time | To identify potential risks and hazards from the physical environment.
Before and during the installation or alteration of any plant, machinery or equipment | To identify potential risks and hazards from the use of the plant, machinery or equipment.
Before changes to work practices, procedures or processes are introduced | To identify potential risks and hazards from changes in the way work is carried out.
When any new information relating to health and safety risks becomes available | To ensure that any new risks are identified and managed.
17. Possible inclusions in workplace WHS record keeping systems are incident reports, hazard assessments, risk management plans, control measure records, safety committee minutes, safety audits and inspections, training records, safety talks and job safety analysis.
18. Examples of WHS ‘consultation’ record requirements include the list of personnel consulted, details of the WHS issues discussed, the decisions or agreements reached, the date of the consultation, the duration of the consultation and any other relevant information.
19. Hazard identification records that need to be maintained in a workplace include risk assessments, control measure records, incident reports, safety audits and inspections, safety talks and job safety analysis.
20. Examples of ‘notifiable incidents’ where a person has been impacted that need to be reported include a fatality, serious injury, serious illness, dangerous incident, non-serious injury, non-serious illness and other.
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Assume you have just been hired as a manager of CoffeePlace, a coffee shop located near Asoke junction. The company’s earnings before interest and taxes (EBIT) was 100,000 baht last year, and it is expected to remain constant (in real terms) over time. CoffeePlace plans to pay out all profits as dividends. The management group owns about 50 percent of the stock.
The firm is currently all-equity financed; it has 20,000 shares outstanding; and current price is 5 baht per share. When you took your MBA corporate finance course, your instructor explained that most firms’ owners could be better off financially if the firms used some debt. When you suggested this to your new boss, he encouraged you to follow up with the idea. As a first step, you consulted with the firm’s investment banker and obtained the following estimated costs of debt for the firm at different capital structures:
If the company were to recapitalize, debt would be issued, and the funds received would be used to repurchase stock. CoffeePlace is in the 20 percent corporate tax bracket, its beta is 1.0, the risk-free rate is 3 percent, and the market risk premium is 5 percent.
Consider capital structure effects (by identifying the ways in which capital structure can affect the weighted average cost of capital and free cash flows). Then discuss whether you agree with the following hypotheses and why:
1. Does the company’s debt policy create value to the firm?
2. Does the company’s debt policy create competitive advantage?
3. Does the company’s debt policy sustain senior management’s visions?
1) Yes company's debt policy create value for the firm.
2) Yes, company's debt policy creates a competitive advantage.
3) Yes, company's debt policy can sustain senior management's vision.
1. The company's debt policy can create value to the firm by reducing the cost of capital. By issuing debt, the company can take advantage of the tax deductibility of interest payments, which lowers the cost of debt. This can lower the weighted average cost of capital (WACC), which in turn can increase the value of the firm. However, the company must be careful not to take on too much debt, as this can increase the risk of financial distress and bankruptcy.
2. The company's debt policy can create a competitive advantage by allowing it to invest in projects with positive net present value (NPV) that may not have been possible with only equity financing.
By using debt financing, the company can take on more projects and potentially generate higher returns for shareholders. However, it is important to note that the company must be able to generate enough cash flow to cover the debt payments.
3. The company's debt policy can sustain senior management's visions by providing the necessary financing to pursue their strategic goals. By using debt financing, the company can invest in growth opportunities and expand its business. However, it is important for senior management to carefully consider the amount of debt the company can reasonably take on and ensure that it can generate enough cash flow to cover the debt payments.
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Suppose your portfolio generates a net return (after expenses)
of -5.00%, and your benchmark generates a net return of
-10.00%. your portfolio's alpha will be
5% explain why and show math
The alpha of a portfolio is the excess return that the portfolio generates relative to a benchmark index. It is a measure of the portfolio's risk-adjusted performance.
In this case, the portfolio's net return is -5.00% and the benchmark's net return is -10.00%. To calculate the alpha, we subtract the benchmark's return from the portfolio's return:
Alpha = Portfolio Return - Benchmark Return
Alpha = -5.00% - (-10.00%)
Alpha = -5.00% + 10.00%
Alpha = 5.00%
Therefore, the portfolio's alpha is 5.00%. This means that the portfolio outperformed the benchmark by 5.00%, despite generating a negative return. In other words, the portfolio lost less money than the benchmark, which is a positive outcome in a declining market.
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Ninja Co. will pay a dividend of $29.00, which will increase by 8 percent each year over the following three years and then grow at an annual rate of 9 percent forever. You expect a 12 percent return on your invested capital.
What price would you pay for a share in this company? (Do not round "PV factor" and other intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.)
Price $
Based on the provided information, you would pay $1,404.54 for a share in this company.
To calculate the price you would pay for a share in this company, you need to find the present value of the future dividends. This can be done using the following formula:
PV = D1/(1 + r) + D2/(1 + r)^2 + D3/(1 + r)^3 + ... + Dn/(1 + r)^n
Where PV is the present value, D is the dividend, r is the expected return on invested capital, and n is the number of years.
First, calculate the dividends for the first three years:
D1 = $29.00 * 1.08 = $31.32
D2 = $31.32 * 1.08 = $33.82
D3 = $33.82 * 1.08 = $36.53
Next, calculate the present value of these dividends:
PV1 = $31.32/(1 + 0.12) = $27.96
PV2 = $33.82/(1 + 0.12)^2 = $26.95
PV3 = $36.53/(1 + 0.12)^3 = $25.98
Now, calculate the present value of the dividends that will grow at an annual rate of 9 percent forever:
PV4 = ($36.53 * 1.09)/(0.12 - 0.09) = $1,323.65
Finally, add up the present values of all the dividends to find the price you would pay for a share in this company:
Price = PV1 + PV2 + PV3 + PV4 = $27.96 + $26.95 + $25.98 + $1,323.65 = $1,404.54
Therefore, you would pay $1,404.54 for a share in this company.
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A manufacturer produces a single product with a production capacity of 2000 units per year. A buyer places quarterly orders of 400 units each, which the manufacturer produces in batches of 400, and ships to the buyer as soon as a batch is produced. What is the manufacturer’s average on-hand inventory?
The manufacturer's average on-hand inventory is 200 units.
The manufacturer's average on-hand inventory can be calculated using the formula:
Average on-hand inventory = (Batch size / 2) + (Lead time * Demand rate)
In this case, the batch size is 400 units, the lead time is 0 (since the manufacturer ships the product as soon as it is produced), and the demand rate is 400 units per quarter or 1600 units per year.
Plugging these values into the formula, we get:
Average on-hand inventory = (400 / 2) + (0 * 1600) = 200 units
Therefore, the manufacturer's average on-hand inventory is 200 units.
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Modern portfolio theory concerns the construction of an investment portfolio. In other words, it refers to the combination of financial products invested and possessed by an investor. Consequently, the investment comprises an aggregate of different investments in (stocks, bonds, mutual funds). Diversification plays an important role in the modern portfolio theory. ABC company is planning to invest in stocks and mutual funds. To encourage a diversified portfolio, the board of directors has placed limits on the amount that can be committed to any one type of investment. ABC wishes to maximize the return on investments made over the next 12 months while satisfying the diversification requirements that were set by the board of directors. The following table specifies the investments possibilities: Investment Expected annual return rate (%) Share A-Manufacturing Sector 15.4 Share B- Manufacturing Sector 19.2 Share C-food and beverage sector 18.7 Share D-food and beverage sector 13.5 Mutual Fund E 17.8 Mutual Fund Z 16.3 In addition, the board specified that the amount to be o invested is $90,000, the amount in shares of a sector no larger than 50% of the total money invested. The amount in shares with the larger return of a sector less or equal to 80% of sector's total amount. The amount in manufacturing company B less than or equal to 10% of the whole share amount. Amount in mutual funds less or equal to 25% of the amount in manufacturing shares. Managerial Report Perform an analysis to the case and prepare a managerial report that summarizes your findings and recommendations. Include the following items in your report:
a) Solve the LP model. What is the total expected return on investment?
b) What is the amount invested in each investment? Show your work
c) What are the expected return on each investment? Show your work
a) Solving the LP model, the total expected return on investment is $171,664. b) the amount invested is $18,000,$2,160, $20,520 and more c) expected return on each investment is $241,600,$40,320, $123,072.
A managerial report to optimize ABC company's investment in stocks and mutual funds should begin by formulating a linear programming (LP) model to maximize the return on investment, subject to the board's diversification requirements. The objective of the model is to maximize the total expected return on investment, while satisfying the limitations specified by the board.
The following LP model can be used to solve this problem:
Maximize: 15.4xA + 19.2xB + 18.7xC + 13.5xD + 17.8xE + 16.3xZ
Subject to:
xA + xB + xC + xD ≤ 0.5(90,000)xB ≤ 0.1(xA + xB + xC + xD)xE + xZ ≤ 0.25(xA + xB + xC + xD)xA, xB, xC, xD, xE, xZ ≥ 0a) Solving the LP model, the total expected return on investment is $171,664.
b) The amount invested in each investment is:
c) The expected return on each investment is:
xA = $241,600xB = $40,320xC = $372,224xD = $415,600xE = $190,400xZ = $123,072For such more questions Modern portfolio theory:
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Discuss the importance of Diversity in the workplace.What are strategies organisations can adopt to create a diversifiedworkplace?How does job satisfaction influence employeeattitude?
Diversity in the workplace is important because it creates an inclusive and respectful environment, promotes creativity and innovation, and helps organizations better understand and serve their diverse customer base.
There are several strategies organizations can adopt to create a diversified workplace, including:
- Implementing diversity and inclusion training for all employees
- Creating employee resource groups to support and advocate for underrepresented groups
- Recruiting and hiring a diverse workforce
- Promoting and valuing diverse perspectives and ideas
- Encouraging open and respectful communication among employees
Job satisfaction is an important factor in employee attitude because it influences their motivation, productivity, and commitment to the organization. Employees who are satisfied with their jobs are more likely to be engaged, motivated, and committed to the organization, leading to better performance and overall success. Conversely, employees who are dissatisfied with their jobs are more likely to have a negative attitude, be disengaged, and have lower productivity, which can negatively impact the organization.
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Suppose that a (European) call option with strike price $40 costs $13, and a (European) call option with strike price $50 costs $8, and a (European) call option with strike price $60 costs $2. All options have identical expiration dates. Is there an arbitrage? Prove it.
Yes, there is an arbitrage opportunity in this situation. An arbitrage occurs when an investor can make a risk-free profit by simultaneously buying and selling the same or equivalent securities at different prices.
In this case, an investor can take advantage of the difference in prices of the call options with different strike prices to make a risk-free profit. Here's how:
1. Buy the call option with strike price $40 for $13.
2. Sell the call option with strike price $50 for $8.
3. Sell the call option with strike price $60 for $2.
The total cost of these transactions is $13 - $8 - $2 = $3. Now, if the underlying stock price is below $40 at expiration, all of the options will expire worthless and the investor will lose $3. However, if the stock price is between $40 and $50, the $40 call option will be in the money and the investor can exercise it to buy the stock for $40 and sell it for the current market price, making a profit of the difference between the stock price and $40 minus the $3 cost of the transactions.
If the stock price is above $50, the $40 call option will be in the money and the investor can exercise it to buy the stock for $40 and sell it for $50 using the $50 call option, making a profit of $50 - $40 - $3 = $7. And if the stock price is above $60, the $40 call option will be in the money and the investor can exercise it to buy the stock for $40 and sell it for $60 using the $60 call option, making a profit of $60 - $40 - $3 = $17.
In all of these scenarios, the investor is able to make a risk-free profit by taking advantage of the difference in prices of the call options with different strike prices. Therefore, there is an arbitrage opportunity in this situation.
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Give an example of reframing a problem by using the ‘Clarify the Problem and Goals’
worksheet in It’s Learning. Create the worksheet in your word document, make sure to
fill it out to show that you understand how to reframe the problem.
Reframing a problem by using the ‘Clarify the Problem and Goals’ worksheet in It’s Learning involves understanding the problem and the goals associated with it. This can be done by breaking down the problem into smaller pieces and looking at it from different angles.
To illustrate this, consider the following example:
Problem: I'm feeling overwhelmed by all of my upcoming exams
Clarify the Problem and Goals Worksheet:
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Produce an analysis of how you can come up with criticallyreviewed literature chapters
In order to come up with critically reviewed literature chapters, First, you should select a topic and then start your research. Conduct a thorough review of all available literature on the subject and use analytical techniques to compare and contrast different sources of information. After this, you should critically assess the sources and form an opinion on the material. Lastly, produce your own written analysis of the topic based on your review of the literature.
To come up with critically reviewed literature chapters, you can follow these steps:
By following these steps, you can produce a high-quality literature review chapter that is well-researched, organized, and critically analyzed.
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"implementation is more challenging than inspiration and ideation phase in design thinking"
explain with example
NB: minimum 200+ word required
In design thinking, the implementation phase is often seen as more challenging than the inspiration and ideation phases. This is because implementation requires actually taking action and putting the ideas and plans developed in the previous phases into practice. This can be difficult and require a great deal of effort and resources.
One example of this can be seen in the development of a new product. During the inspiration phase, a company may come up with a new idea for a product and begin to brainstorm ways to bring that product to life. In the ideation phase, the company will further develop the concept and begin to create prototypes and test the product. However, it is during the implementation phase that the real challenges begin.
During the implementation phase, the company must actually produce the product, which can require significant investment in manufacturing, marketing, and distribution. This can be challenging because it requires a great deal of coordination and communication between different departments within the company, as well as with outside vendors and partners. Additionally, there may be unforeseen problems or obstacles that arise during the implementation phase, such as manufacturing delays or unexpected costs.
Despite these challenges, the implementation phase is crucial for the success of any design thinking project. Without actually putting the ideas into action, the project will never come to fruition. It is important to have a strong plan in place and to be prepared for potential challenges during the implementation phase. This can include setting clear goals and timelines, having contingency plans in place, and being open to feedback and making changes as needed.
In conclusion, while the implementation phase can be challenging, it is a crucial part of the design thinking process. By being prepared and having a strong plan in place, companies can successfully implement their ideas and bring their products to market.
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Diamond Corporation is planning a bond issue with an escalating coupon rate. The annual coupon rate will be 4.6% for the first 5years, 5.6% for the subsequent 3 years, and 6.6% for the final 4 years. If bonds of this risk are yielding 7%, estimate the bond's current price. Face value of the bond is $1,000."
The Diamond Corporation's bond current price is approximately $1,033.60.
The current price of the bond can be estimated by calculating the present value of all the future cash flows, including the coupons and the face value. To do this, we can use the formula PV = CF / (1+r)^n, where PV is the present value, CF is the cash flow, r is the required rate of return, and n is the number of years.
For the first 5 years, the annual coupon rate is 4.6%, so the annual cash flow is $1,000 x 4.6% = $46. The present value of these cash flows is [tex]\frac{46}{(1+0.07)^1}+\frac{46}{(1+0.07)^2}+\frac{46}{(1+0.07)^3}+\frac{46}{(1+0.07)^4}+\frac{46}{(1+0.07)^5}[/tex] = $202.97.
For the subsequent 3 years, the annual coupon rate is 5.6%, so the annual cash flow is $1,000 x 5.6% = $56. The present value of these cash flows is [tex]\frac{56}{(1+0.07)^6}+\frac{56}{(1+0.07)^7}+\frac{56}{(1+0.07)^8}[/tex] = $133.85.
For the final 4 years, the annual coupon rate is 6.6%, so the annual cash flow is $1,000 x 6.6% = $66. The present value of these cash flows is [tex]\frac{66}{(1+0.07)^9}+\frac{66}{(1+0.07)^{10}}+\frac{66}{(1+0.07)^{11}}+\frac{66}{(1+0.07)^{12}}[/tex] = $188.43.
Finally, we need to calculate the present value of the face value, which is $1,000 / (1+7%)^12 = $508.35.
Adding up all the present values, we get $202.97 + $133.85 + $188.43 + $508.35 = $1,033.60. Therefore, the estimated current price of the bond is $1,033.60.
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MBA Course: MKTG 6900-01 Marketing Strategy1. Describe which assets and competencies were effectively leveraged by Tanita for growth.2. Evaluate the quality of its brand extensions using the criteria in the case. Using these criteria, what health products would not make sense for Tanita to introduce?
Tanita effectively leveraged its core competencies in technology, research and development, and manufacturing of body composition analysis scales to create a successful global business.
Additionally, it was able to build brand awareness by advertising and sponsoring sports activities and by releasing mobile applications. Tanita also leveraged its strong relationship with retailers in Japan.
In evaluating the quality of Tanita's brand extensions, we must consider their clarity, strength, relevance, and consistency. Tanita's extensions have been well received due to their clarity in communicating the benefits of their products to consumers.
They are also seen as a strong addition to their current product portfolio. They are relevant to their core body composition analysis business, and are consistent with their existing products.
Health products that would not make sense for Tanita to introduce include products related to weight loss or lifestyle management. These products do not have the same clarity or relevance as their current offerings, and are thus unlikely to be successful extensions of the brand.
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Jordan Company's annual accounting year ends on December 31. It is now December 31, 2018, and all of the 2018 entries have been made except for the following: a. The company owes interest of $700 on a bank loan. The interest will be paid when the loan is repaid on September 30, 2019. No interest has been recorded b. On September 1, 2018, Jordan collected six months' rent of $4,800 on storage space. At that date, Jordan debited Cash and credited Deferred Revenue for $4,800. C. The company earned service revenue of $3,300 on a special job that was completed December 29, 2018. Collection will be made during January 2019. No entry has been recorded. D. On November 1, 2018, Jordan paid a one-year premium for property insurance of $4,200, for coverage starting on that date. Cash was credited and Prepaid Insurance was debited for this amount. E. At December 31, 2018, wages earned by employees but not yet paid totaled $1,100. The employees will be paid on the next payroll date, January 15, 2019. F. Depreciation of $1,000 must be recognized on a service truck purchased this year. G. The income after all adjustments other than income taxes was $30,000. The company's income tax rate is 30%. Compute and record income tax expense. Required: 1. Give the adjusting journal entry required for each transaction at December 31, 2018. 2. If adjustments were not made each period, the financial results could be materially misstated. Determine the amount by which Jordan Company's net income would have been understated, or overstated, had the adjustments in requirement 1 not been made
The net income of Jordan Corporation would have been inflated by $3,550 (700+2,400+350+1,100) if the modifications in requirement 1 had not been implemented.
Journal Entry Corrections as of December 31, 2018:
a. $700 in interest expenses
Interest Due: $750
Rent Revenue $2,400 (4,800/2) Delayed Revenue $2,400
c. $3,300 in accounts receivable
$3,300 in service revenue
d. $350 in insurance costs (4,200/12*2)
$350 for Prepaid Insurance
e. $1,100 in wages expenses
$1,100 in Payable Wages
f. $1,000 in depreciation costs
Service truck accumulated depreciation of $1,000
The financial results could be materially misstated if adjustments weren't made every period.
The net income of Jordan Corporation would have been inflated by $3,550 (700+2,400+350+1,100) if the modifications in requirement 1 had not been implemented. The understatement of income tax expense by $900 (30% of $3,000) would have resulted in an overstatement of net income after taxes by $2,650.
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Global Wings Airlines (GWA) is a publicly traded, Atlanta based airline. GWA is expanding its offering of flights to Western Europe. To facilitate this expansion GWA needs additional capital. Due to the large amount of capital that needs to be raised the company does not have sufficient internal financial capital available. For the same reason private placements of equity securities or bank loans are not a viable option either. The company is considering a new offering of common equity securities
Assume you are a team of analysts who follow this company and industry. You have the task of analyzing the new issue of common equity for the purpose of investing in this security. Consider the company and industry. Examine a set of financial statements for a similar company and do some research on the internet. (Do not use Customer Satisfaction ratings.) Review the information in chapter 3 (and the part of 16 that was covered) of your text. Your team should write a brief, concise response that addresses the following questions. NOTE THAT NO ACTUAL RATIO CALCULATIONS FOR GWA CAN BE DONE, SINCE YOU DON'T HAVE ITS FINANCIALS. You are to layout a model for the analysis.
1. Besides strengths financial ratio analysis unfortunately also has its weaknesses. Sometimes, nonfinancial ratios, indicators or indices can be useful to financial analysts as well. Describe an example of a nonfinancial ratio that could be helpful for a financial analyst in the airline industry. You may develop your own or find a ratio that is currently used in the airline industry. Why would this ratio be helpful? (There is a whole web site on this topic!)
2. Assume your team decided to use the Fixed Asset Turnover as one of the ratios for your model in question 1. You calculated this ratio for GWA and compare it to the ratio for GWA’s most important competitor.
A. Fixed assets are usually the largest asset category on an airline’s balance sheet. What are the largest fixed assets that you would expect an airline to have?
B. In comparing GWA’s fixed asset turnover to that of their most important competitor you notice that there is a considerable difference. You are surprised with this significant difference in fixed asset utilization and you wonder, if accounting methods may have something to do with it. How could accounting methods influence the outcome of a fixed asset turnover? Provide a specific answer with illustration.
One example of a nonfinancial ratio that could be helpful for a financial analyst in the airline industry is the load factor. This ratio measures the percentage of seats that are filled with paying passengers.
It is calculated by dividing the number of revenue passenger miles (RPM) by the number of available seat miles (ASM). A higher load factor indicates that an airline is utilizing its capacity more efficiently and is likely generating more revenue per flight. This ratio is helpful for financial analysts because it provides insight into an airline's ability to generate revenue and manage its capacity.
It can also be used to compare the performance of different airlines or to track an airline's performance over time.
The Answer for Question 2 (A and B)A. The largest fixed assets that you would expect an airline to have are aircraft, airport facilities, and equipment. These assets are essential for an airline's operations and typically represent a significant portion of an airline's total assets.B. Accounting methods can influence the outcome of a fixed asset turnover by affecting the value of fixed assets on the balance sheet. For example, if an airline uses a different depreciation method than its competitor, the value of its fixed assets may be lower, which would result in a higher fixed asset turnover.Learn more about Congressional Airlines https://brainly.com/question/25694705
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"Contrast the various types of operating loans: Standard, nonrevolving, and revolving. Which is best suited for a cash grainfarm? A dairy farm? A large cattle feedlot? Why?"
A cash grain farm is best suited for a nonrevolving operating. A dairy farm is best suited for a standard operating. A large cattle feedlot is best suited for a revolving operating.
Standard operating loans are typically used for short-term working capital needs and are used to finance operating expenses and other costs associated with farming. Nonrevolving operating loans are usually used to finance investments in farm land, facilities, and other long-term assets. Revolving operating loans are used to fund revolving debt such as the purchase of livestock, feed, seed, and fertilizer.
A cash grain farm is best suited for a nonrevolving operating loan since this type of loan is typically used to finance investments in farm land, facilities, and other long-term assets. A dairy farm is best suited for a standard operating loan since this type of loan is typically used to finance operating expenses and other costs associated with farming. A large cattle feedlot is best suited for a revolving operating loan since this type of loan is used to fund revolving debt such as the purchase of livestock, feed, seed, and fertilizer.
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Assume that you are a Manufacturing/Production Manager in a busy engineering company and technology-driven firm. What active measures do you seek to implement in order to improve or optimize the efficiency AND effectivity of your "Input + Transformation = Output" overall process/equation?
As a Manufacturing/Production Manager in a busy engineering company and technology-driven firm, it is important to take active measures to improve or optimize the efficiency and effectivity of the "Input + Transformation = Output" overall process/equation. To do this, there are several steps that can be taken:
1. Conduct a comprehensive audit of the input and transformation processes, to identify and address any areas of inefficiency or areas where improvement is needed.
2. Streamline and update processes to ensure they are optimized for efficiency and effectivity.
3. Introduce automation and new technologies wherever possible, to help maximize production and minimize errors.
4. Make sure that all staff is adequately trained in the use of new systems, processes, and technologies.
5. Implement quality assurance measures to ensure the highest standard of output is achieved.
1. Identifying and eliminating bottlenecks in the production process: This can be done by analyzing the entire process, identifying areas that are causing delays or inefficiencies, and implementing solutions to address these issues.
2. Implementing lean manufacturing principles: This involves reducing waste and improving efficiency throughout the entire production process, from input to output.
3. Utilizing technology to automate and streamline processes: This can include using computerized systems to track and manage inventory, implementing automation in the production process, and using data analytics to identify areas for improvement.
4. Ensuring that all employees are properly trained and have the necessary skills to perform their tasks efficiently: This can involve providing ongoing training and development opportunities, as well as hiring qualified and skilled employees.
5. Continuously monitoring and analyzing the production process to identify areas for improvement: This can involve using data analytics to track key performance metrics, conducting regular audits, and implementing a continuous improvement program.
By implementing these active measures, I can improve the efficiency and effectiveness of the "Input + Transformation = Output" overall process/equation, ultimately leading to increased productivity, reduced costs, and higher profitability for the company.
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Tyrodo Limited a company involved in the manufacture of tyres purchased new equipment on the 1 January 2017 for an amount of R350 000. The equipment had a useful life of 4 years on this date and a 0 residual value. The equipment had a carrying value of R175 000 on the 31st December 2018. On the 1 January 2019 the residual value of the equipment was now estimated to be R15 000. Prepare the depreciation journal entry for the year
The depreciation expense is recorded as a debit to the depreciation expense account and a credit to the accumulated depreciation account. This reflects the decrease in the carrying value of the equipment and the increase in the accumulated depreciation of the equipment.
To prepare the depreciation journal entry for the year, we need to calculate the new depreciation amount for the equipment.
First, we need to calculate the new depreciable amount. This is done by subtracting the new estimated residual value from the carrying value of the equipment:
Depreciable amount = Carrying value - Residual value
Depreciable amount = R175,000 - R15,000
Depreciable amount = R160,000
Next, we need to calculate the new depreciation expense for the year. This is done by dividing the depreciable amount by the remaining useful life of the equipment:
Depreciation expense = Depreciable amount / Remaining useful life
Depreciation expense = R160,000 / 2 years
Depreciation expense = R80,000
Now we can prepare the depreciation journal entry for the year:
Debit: Depreciation expense R80,000
Credit: Accumulated depreciation R80,000
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