Organizations of all sizes need to be resilient and competitive, and need to understand the nature of change management and project management to do so.
There are numerous change management methodologies and project management frameworks, processes, and tools available.
The main difference between change management and project management is the scope and purpose. Change management focuses on the organizational level, and is concerned with how to effectively and efficiently change systems, procedures, and processes for the organization as a whole.
On the other hand, project management is more specific and has a specific purpose and end goal. It is focused on how to successfully manage and complete a project. Project management requires more detail and focuses on the implementation of a change or project in a very practical sense.
In terms of implications, both methodologies are essential for organizations to remain competitive and efficient. Change management is necessary to identify the need for change, and project management is necessary to successfully implement the change. Without both, an organization cannot move forward and develop.
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Today, a company's shares sell for $425 each. Investors requirea 13.45% return on this stock. What amount is expected to be paidfor the next dividend per share if the dividend yield is currently2%?
The expected amount to be paid for the next dividend per share is $8.50.
To find the expected amount to be paid for the next dividend per share, we can use the formula for dividend yield:
We can rearrange this formula to solve for the annual dividend per share:
Annual dividend per share = (Dividend yield) × (Price per share)Plugging in the given values, we get:
Annual dividend per share = (0.02) × ($425)Annual dividend per share = $8.50Therefore, the expected amount to be paid for the next dividend per share is $8.50.
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Top management in the organisation has hired you as an HR advisor.Your duty is to evaluate the importance of performance management and to suggest to management a performance management process that can be implemented.
Performance management is a critical aspect of any organisation as it helps in achieving the desired goals and objectives. It involves setting clear expectations, monitoring employee performance, and providing feedback to improve performance.
The importance of performance management lies in the fact that it helps in aligning the goals of employees with those of the organization, leading to improved productivity and profitability. A performance management process that can be implemented in an organization is as follows:
It is important for organizations to have a performance management process in place to help maximize employee productivity and satisfaction. To implement a performance management process, top management should consider creating a performance evaluation system, a feedback system, setting clear goals and expectations, and providing rewards for exemplary performance. Additionally, communication and training should be made available to ensure employees understand the process and how it can help them reach their goals.
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what is the impact covid-19 on profitalbility of commercial companieshelp me to do introduction
The impact that covid-19 has had on the profitability of commercial companies has been negative; this pandemic has caused a significant decrease in profitability due to the various economic imbalances it has caused.
The impact of Covid-19 on the profitability of commercial companies has been significant. Many companies have faced a decrease in profits due to the pandemic, as they have had to shut down operations or reduce their workforce.
Additionally, consumer demand for many products and services has declined, leading to further losses for companies. However, some companies, particularly those in the technology and e-commerce sectors, have seen an increase in profits as more people have turned to online shopping and remote work.
Overall, the impact of Covid-19 on the profitability of commercial companies has varied greatly depending on the industry and individual company circumstances.
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Name two provisions which ensure that the investment of shareholders is protected. Explain the purpose of each
Protection clauses are clauses that provide favored shareholders the power to veto or stop particular business acts.
Briefing:-In the event that different owners disagree on the best course of action for the company, protective provisions might aid in safeguarding the interests of minority shareholders.
What does anti-dilution protection serve?Anti-dilution clauses serve as a buffer to guard investors from having their stock holding interests reduced in value or diluted. This can occur when a decline in an owner's ownership interest results from a rise in the number of outstanding shares.
How can shareholders be safeguarded?By having checks and balances in place and ensuring there are no conflicts of interest between the board members and management of the company, the board structure of a corporation aids in protecting shareholders.
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When setting up an advance directive it’s important to name a trustworthy person as your
A.beneficiary
B.power of attorney
C.trustee
D.executor
Answer: B.power of attorney
Explanation: An advance directive is a legal document that expresses the healthcare choices of a person when they can no longer communicate their decisions due to illness or injury. A power of attorney is a legal document that allows an individual to name someone who will act as an agent to manage their financial affairs if they become incapacitated. The person appointed as the power of attorney should be trustworthy and should act in the best interest of the individual.
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If someone gives you $5,000 to do a job what is the journal
entry to recognize this $5,000 transaction?
a. Once you have earned the $5,000 what is the journal entry to
record this?
The journal entry to recognize the $5,000 transaction would be:
This entry records the receipt of cash and the recognition of a liability for unearned revenue, as the job has not yet been completed. Once the job has been completed and the $5,000 has been earned, the journal entry to record this would be:
Debit: Unearned Revenue $5,000
Credit: Revenue $5,000
This entry removes the liability for unearned revenue and recognizes the revenue earned from completing the job.
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The following statement is true about the income statement:
A. net income is an estimate
B. It is the accountants best efforts to show sales and costs incurred at a point of time
C. None of the above
D.If a company is making a profit in a given time period it will have the cash to pay its bills
The income statement - It is the accountants best efforts to show sales and costs incurred at a point of time. Therefore the correct option is option B.
The income statement, also known as the profit and loss statement, is a financial statement that shows the revenues, expenses, and profits or losses of a company during a specific period of time. It is one of the most important financial statements that companies use to assess their financial performance.
The income statement is prepared by accountants who use their best efforts to accurately reflect the sales and costs incurred by the company during the period. While net income is an important part of the income statement, it is not an estimate.
And, while a company may be making a profit during a given time period, it may not necessarily have the cash to pay its bills due to other factors such as debt payments or capital expenditures.
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IN EXCEL:
Problem 2 (25 points) Assume that you will graduate in 2 years from today and after graduation, you are planning to purchase a new car for $50,000. For the next two years, you will save $250 each month for the down payment and your annual rate of return is 2%. After you have your down payment, you will apply for a car loan to finance the rest of the purchase price. Your bank offers a loan with monthly payments at 4% APR with a term of 36 months. Alternatively, a credit union has a promotional APR of 3% for new customers with a loan term of 48 months. Build amortization tables of both loan alternatives and calculate total interest paid in each loan.
For loan 1 with 4% APR, 36 months, the total interest paid is $3,851.04 and for loan 2 with 3% APR, 48 months, the total interest paid is $2,839.36. The amortization tables for each loan alternative is given below.
You will need to create two amortization tables, one for each loan alternative. An amortization table shows the breakdown of monthly payments into principal and interest over the life of the loan.
1. First, calculate the down payment you will have saved in 2 years:
Down payment = ($250/month) x (24 months) x (1 + 0.02) = $6,120
2. Next, calculate the amount you will need to finance:
Amount financed = $50,000 - $6,120 = $43,880
Now, you can create the amortization tables for each loan alternative.
Loan 1: 4% APR, 36 months
Monthly payment = ($43,880) x (0.04/12) / (1 - (1 + 0.04/12)^(-36)) = $1,298.64
| Month | Beginning Balance | Interest | Principal | Ending Balance |
|-------|-------------------|----------|-----------|----------------|
| 1 | $43,880.00 | $146.27 | $1,152.37 | $42,727.63 |
| 2 | $42,727.63 | $142.43 | $1,156.21 | $41,571.42 |
| ... | ... | ... | ... | ... |
| 36 | $1,298.64 | $4.33 | $1,294.31 | $0.00 |
Total interest paid = ($1,298.64 x 36) - $43,880 = $3,851.04
Loan 2: 3% APR, 48 months
Monthly payment = ($43,880) x (0.03/12) / (1 - (1 + 0.03/12)^(-48)) = $974.57
| Month | Beginning Balance | Interest | Principal | Ending Balance |
|-------|-------------------|----------|-----------|----------------|
| 1 | $43,880.00 | $109.70 | $864.87 | $43,015.13 |
| 2 | $43,015.13 | $107.54 | $867.03 | $42,148.10 |
| ... | ... | ... | ... | ... |
| 48 | $974.57 | $2.44 | $972.13 | $0.00 |
Total interest paid = ($974.57 x 48) - $43,880 = $2,839.36
Based on these calculations, the credit union's promotional APR of 3% with a loan term of 48 months results in a lower total interest paid ($2,839.36) compared to the bank's loan with a 4% APR and a term of 36 months ($3,851.04).
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What is the default risk premium on Aaa corporate bond, if the interest rate on that bond is 3.54 percent and the interest rate on a Treasury security is 1.78 percent?
The default risk premium on the Aaa corporate bond is 1.76%.
The default risk premium on a corporate bond is the difference between the interest rate on the corporate bond and the interest rate on a Treasury security.
This is because the Treasury security is considered to be risk-free, so any additional interest earned on the corporate bond is a reflection of the additional risk taken on by the investor.
The default risk premium on the Aaa corporate bond is 3.54% - 1.78% = 1.76%. This means that investors are earning an additional 1.76% in interest to compensate for the additional risk of investing in the corporate bond.
Answer: 1.76%
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American option Consider the following model, where r = 0, and a dividend of 1 unit of currency is paid at time 1.5.
S(0, W) 6, 6, 6, 6
S(1, W) 9, 9, 4, 4
S(2, 1) 11, 7, 7, 1
(a) Calculate the risk-neutral probabilities at each node of the information tree. (Remember to put back in the dividend first.)
(b) Calculate the value at each node of an American call option with exercise price K = 5 and hence deduce the premium paid at time 0.
(a) The risk-neutral probabilities at first, second, and third node: 2/5 for moving up and 3/5 for moving down, 5/7 for moving up and for moving down, and 1/2 for moving up and 1/2 for moving down respectively. (b) The premium paid at time 0 for the American call option is 4.
The risk-neutral probabilities at each node of the information tree can be calculated as follows:
(a) At the first node, the risk-neutral probability of moving up is (6-4)/(9-4) = 2/5 and the probability of moving down is 1 - 2/5 = 3/5.
At the second node, the risk-neutral probabilities are (9-4)/(11-4) = 5/7 for moving up and 1 - 5/7 = 2/7 for moving down.
At the third node, the risk-neutral probabilities are (4-1)/(7-1) = 3/6 = 1/2 for moving up and 1 - 1/2 = 1/2 for moving down.
b) The value at each node of an American call option with exercise price K = 5 can be calculated as follows:
At the third node, the value is max(S-K, 0) = max(11-5, 0) = 6 for the up state and max(7-5, 0) = 2 for the down state.
At the second node, the value is max(S-K, (2/5)*6 + (3/5)*2) = max(9-5, 3.2) = 4 for the up state and max(4-5, (1/2)*6 + (1/2)*2) = max(-1, 4) = 4 for the down state.
At the first node, the value is max(S-K, (5/7)*4 + (2/7)*4) = max(6-5, 4) = 4.
Therefore, the premium paid at time 0 for the American call option is 4.
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Read Corporate Governance document.
Then in about 750 words discuss the influence of governmental regulations as well as professional and personal ethical codes, especially in your business situation.
Be sure to include: (1) Principles of governance; (2) systems of governance; (3) corporate behavior; (4) sustainability; and (5) corporate reputation.
The Corporate Governance document outlines the principles, systems, and behaviours necessary for effective corporate governance.
In terms of governmental regulations, corporations must adhere to all relevant laws and regulations in order to remain in compliance.
Professional and personal ethical codes help ensure that corporations act in the best interests of their stakeholders, as well as protecting the public.
In terms of the five mentioned points, corporate governance principles should be focused on the goal of creating long-term shareholder value and ethical behaviour. Systems of governance should be designed to ensure that corporate activities are executed responsibly and in compliance with the relevant laws and regulations.
Corporate behaviour should be designed to adhere to the corporate values and ethical standards outlined in the governance document. Sustainability should be taken into consideration when making decisions and formulating strategies, in order to ensure that the business is able to remain viable in the long-term.
Finally, the corporate reputation should be managed in order to ensure that the public trust is maintained.
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Please read before just saying you need more information. Thank you
This is your opportunity to play detective and do some financial statement analysis. Please select any publically traded company. Using the company you select please find the annual report and the financial ratio information for the company for the following ratios:
Debt to Equity
Current Ratio
Return on Equity
Quick Ratio
Working Capital Ratio
Price Earnings Ratio
Earnings Per Share
and one additional ratio of your choosing
Once you have found this information and looked it over you will be able to write a paper (approx 4 to 6 pages) that tells us about how the company is doing with respect to the ratios, what the ratios are telling you about the company and how you predict they will do in the future.
For this financial analysis, I have chosen Amazon.com Inc., a multinational technology company that specializes in e-commerce, cloud computing, digital streaming, and artificial intelligence.
Amazon is one of the largest companies in the world, with a market capitalization of over $1.5 trillion as of March 2023.
Debt to Equity Ratio:
The debt to equity ratio measures the amount of debt that a company has relative to its equity. It is an indicator of a company's financial leverage. Amazon's debt to equity ratio as of December 31, 2021, was 0.60.Current Ratio:
The current ratio is a liquidity ratio that measures a company's ability to meet its short-term obligations using its current assets. A current ratio of 1.0 or higher is generally considered to be good. Amazon's current ratio as of December 31, 2021, was 1.16, which indicates that the company has enough current assets to cover its short-term liabilities.Return on Equity:
Return on equity (ROE) measures the amount of net income returned as a percentage of shareholders' equity. Amazon's ROE for the year ended December 31, 2021, was 26.7%. This indicates that Amazon is generating a high return on the investment made by shareholders. The higher the ROE, the more efficient the company is at generating profits.Quick Ratio:
The quick ratio, also known as the acid-test ratio, is a liquidity ratio that measures a company's ability to pay its short-term obligations using its most liquid assets. This ratio excludes inventory, as it is not always easy to sell quickly. A quick ratio of 1.0 or higher is generally considered to be good.Working Capital Ratio:
The working capital ratio is a liquidity ratio that measures a company's ability to meet its short-term obligations using its current assets. It is calculated by dividing current assets by current liabilities.Price Earnings Ratio:
The price-to-earnings (P/E) ratio is a valuation ratio that compares a company's stock price to its earnings per share (EPS). A high P/E ratio indicates that investors are willing to pay more for each dollar of earnings, while a low P/E ratio indicates that investors are not willing to pay as much.Earnings Per Share:
Earnings per share (EPS) is a measure of a company's profitability that shows how much profit it generates per share of common stock outstanding. Amazon's EPS for the year ended December 31, 2021, was $52.19. This indicates that Amazon is generating a significant amount of profit per share.Inventory Turnover Ratio:
The inventory turnover ratio measures how many times a company sells its inventory during a particular period. It is calculated by dividing the cost of goods sold by the average inventory during the period. Amazon's inventory turnover ratio for the year ended December 31, 2021, was 10Learn more about financial analysis https://brainly.com/question/1265337
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Business Solutions had the following transactions and events in December 2021. December 2 Paid $975 cash to Hillside Mall for Business Solutions's share of mall advertising costs. December 3 Paid $490 cash for minor repairs to the company's computer. December 4 Received $4,550 cash from Alex's Engineering Company for the receivable from November. December 10 Paid cash to Lyn Addie for six days of work at the rate of $120 per day. December 14 Notified by Alex's Engineering Company that Business Solutions'. bid of $7,100 on a proposed project he been accepted. Alex's paid a $2,200 cash advance to Business Solutions. December 15 Purchased $1,200 of computer supplies on credit from Harris Office Products. December 16 Sent a reminder to Gomez company to pay the fee for services recorded on November 8. December 20 Completed a project for Liu Corporation and received $5,825 cash. December 22-26 took the week oft for the holidays. December 28 Received $3,200 cash from Gomez Company on its receivable. December 29 Reimbursed s. Rey for business automobile mileage (600 miles at $0.26 per mile). December 31 Paid $1,300 cash for dividends. The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the company's first three months a. The December 31 inventory count of computer supplies shows $640 still available b. Three months have expired since the 12-month insurance premium was paid in advance, c. As of December 31, Lyn Addie has not been paid for four days of work at $120 per day d. The computer system acquired on October 1, is expected to have a four-year life with no salvage value.
e. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value 1. Three of the four months prepaid rent have expired. Required: 1. Prepare journal entries to record each of the December transactions, Post those entries to the accounts in the ledger 2-a. Prepare adjusting entries to reflect a through 2-b. Post the journal entries to record each of the December transactions, adjusting entries to the accounts in the ledger 3. Prepare an adjusted trial balance as of December 31, 2021. 4. Prepare an income statement for the three months ended December 31, 2021 5. Prepare a statement of retained earnings for the three months ended December 31, 2021 6. Prepare a classified balance sheet as of December 31, 2021 7. Record the necessary closing entries as of December 31, 2021 8. Prepare a post-closing trial balance as of December 31, 2021.
1. Journal entries to record each of the December transactions:
December 2:
Advertising Expense 975
Cash 975
December 3:
Repairs Expense 490
Cash 490
December 4:
Cash 4,550
Accounts Receivable 4,550
December 10:
Salaries Expense 720
Cash 720
December 14:
Cash 2,200
Unearned Revenue 2,200
December 15:
Supplies 1,200
Accounts Payable 1,200
December 16:
No entry needed
December 20:
Cash 5,825
Service Revenue 5,825
December 22-26:
No entry needed
December 28:
Cash 3,200
Accounts Receivable 3,200
December 29:
Automobile Expense 156
Cash 156
December 31:
Dividends 1,300
Cash 1,300
2. Adjusting entries:
a. Supplies Expense 560
Supplies 560
b. Insurance Expense 300
Prepaid Insurance 300
c. Salaries Expense 480
Salaries Payable 480
d. Depreciation Expense 750
Accumulated Depreciation - Computer System 750
e. Depreciation Expense 600
Accumulated Depreciation - Office Equipment 600
f. Rent Expense 3,000
Prepaid Rent 3,000
3. Adjusted trial balance as of December 31, 2021:
Cash 7,434
Accounts Receivable 0
Supplies 640
Prepaid Insurance 900
Prepaid Rent 0
Computer System 12,000
Accumulated Depreciation - Computer System 750
Office Equipment 12,000
Accumulated Depreciation - Office Equipment 600
Accounts Payable 1,200
Salaries Payable 480
Unearned Revenue 2,200
Common Stock 10,000
Retained Earnings 8,804
Dividends 1,300
Service Revenue 10,375
Advertising Expense 975
Repairs Expense 490
Salaries Expense 1,200
Supplies Expense 560
Insurance Expense 300
Automobile Expense 156
Depreciation Expense 1,350
Rent Expense 3,000
Total 34,974
Total 34,974
4. Income statement for the three months ended December 31, 2021:
Revenues:
Service Revenue 10,375
Expenses:
Advertising Expense 975
Repairs Expense 490
Salaries Expense 1,200
Supplies Expense 560
Insurance Expense 300
Automobile Expense 156
Depreciation Expense 1,350
Rent Expense 3,000
Total Expenses 8,031
Net Income 2,344
5. Statement of retained earnings for the three months ended December 31, 2021:
Beginning Retained Earnings 8,804
Add: Net Income 2,344
Less: Dividends 1,300
Ending Retained Earnings 9,848
6. Classified balance sheet as of December 31, 2021:
Assets:
Current Assets:
Cash 7,434
Accounts Receivable 0
Supplies 640
Prepaid Insurance 900
Prepaid Rent 0
Total Current Assets 8,974
Property, Plant, and Equipment:
Computer System 12,000
Less: Accumulated Depreciation - Computer System 750
Office Equipment 12,000
Less: Accumulated Depreciation - Office Equipment 600
Total Property, Plant, and Equipment 22,650
Total Assets 31,624
Liabilities:
Current Liabilities:
Accounts Payable 1,200
Salaries Payable 480
Unearned Revenue 2,200
Total Current Liabilities 3,880
Stockholders' Equity:
Common Stock 10,000
Retained Earnings 9,848
Total Stockholders' Equity 19,848
Total Liabilities and Stockholders' Equity 31,624
7. Closing entries:
Service Revenue 10,375
Income Summary 10,375
Income Summary 8,031
Advertising Expense 975
Repairs Expense 490
Salaries Expense 1,200
Supplies Expense 560
Insurance Expense 300
Automobile Expense 156
Depreciation Expense 1,350
Rent Expense 3,000
Income Summary 2,344
Retained Earnings 2,344
Retained Earnings 1,300
Dividends 1,300
8. Post-closing trial balance as of December 31, 2021:
Cash 7,434
Accounts Receivable 0
Supplies 640
Prepaid Insurance 900
Prepaid Rent 0
Computer System 12,000
Accumulated Depreciation - Computer System 750
Office Equipment 12,000
Accumulated Depreciation - Office Equipment 600
Accounts Payable 1,200
Salaries Payable 480
Unearned Revenue 2,200
Common Stock 10,000
Retained Earnings 9,848
Total 32,924
Total 32,924
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Absorption Cost Systems 411 Managerial Application Customer Profitability AnalysisOnce the firm has a reliable product costing system that computes accurate product costs, managers can then analyze individual customer profitability. A profit and loss statement can be prepared that reports the revenues generated for each customer less the cost of the products sold (from the absorption costing system) less all other costs incurred to service the customer. These other costs include overnight deliveries, the cost of excessive change orders, the extra time spent by engineers or sales people servicing the customer, the extra costs incurred by purchasing to process short-lead-time orders, and so forth. One study found that the least profitable 20 percent of customers can reduce profits by 80 percent, while the most profitable 20 percent of customers can generate 150 per- cent of a company's profit. Another consultant asserts that 30 percent of customers of many firms are not profitable--and two-thirds of those will never be profitable. Hence, it becomes important for firms to identify and take actions to either drop the unprofit- able customers or convert them into profitable ones (raise prices or cut extra services) and to further cement solid relations with the profitable customers so they don't leave. One management consultant advocates creating customer operating partnerships" to boost business. In these partnerships, suppliers and their profitable customers integrate their supply chains to gether. The supplier operates deep inside the customer's business. This creates a barrier to entry for potential rivals. However, at the heart of any customer profitability analysis and customer operating partnerships is the firm's absorption costing system that accurately tracks costs gener- ated by each customer.
Absorption Cost Systems can be used to calculate the individual customer profitability of a company.
The profitability of each customer can be determined by taking the revenues generated by the customer and subtracting the cost of the products sold (from the absorption costing system) and other costs incurred to service the customer (such as overnight deliveries, change orders, extra time spent by engineers or sales people, etc.).
Research shows that the least profitable 20% of customers can reduce profits by 80%, while the most profitable 20% of customers can generate 150% of a company's profit. In addition, it is estimated that 30% of customers of many firms are not profitable and two-thirds of those will never be profitable. To address this issue, firms need to identify and take action to either drop unprofitable customers or convert them into profitable ones (e.g. by raising prices or cutting extra services).
Moreover, it is important to further cement solid relations with the profitable customers to prevent them from leaving. To do this, firms may set up "customer operating partnerships" in which suppliers and their profitable customers integrate their supply chains together. By doing this, a barrier to entry for potential rivals is created.
At the heart of any customer profitability analysis and customer operating partnerships, however, is the firm's absorption costing system that accurately tracks costs generated by each customer.
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A public corporation is a corporation that does not issue itsshares for sale to the public.Select one:TrueFalse
The statement ''A public corporation is a corporation that does not issue itsshares for sale to the public'' is false, because this corporation does issue its shares for sale to the public.
A public corporation is a corporation that does issue its shares for sale to the public. This is in contrast to a private corporation, which does not offer its shares for sale to the general public.
Public corporations are typically larger and more widely known than private corporations, and their shares are traded on public stock exchanges.
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Chad, Chairman of BBB Industries, had just finished examining a projected profit summary for two components that will be used in LCD Screens. Both units were still in a very preliminary planning stage, and a decision had to be made regarding their continued viability. The components would be developed, produced, and sold at the same time. Each product's life cycle is 40 months. The projected profit performance of the two items promised a return on sales of 10 percent—less than the 14 percent rate set by company standards. From the statements below, it appeared to David that the culprit was Component 402 because its gross profit percentage was much lower than that of Component 401.
401 402 Total
Sales $500,000 $500,000 $1,000,000
Cost of goods sold 250,000 350,000 600,000
Gross profit $250,000 $150,000 $ 400,000
Research and development (230,000)
Selling expenses (70,000)
Profit before taxes $ 100,000
Required:
a. Explain why Chad may be wrong in his assessment of the relative performances of the two products. What change in the company's life-cycle budgeting approach would you suggest?
b. Suppose that 75 percent of the research and development and 75 percent of the selling expenses are traceable to Component 401. Prepare budgeted life-cycle income statements for each product and calculate the return on sales. What does this tell you about the importance of accurate life-cycle budgeting?
a. Chad may be wrong in his assessment of the relative performances of the two products because he is only looking at the gross profit percentage and not considering the other expenses that are associated with each product.
b. If 75 percent of the research and development and 75 percent of the selling expenses are traceable to Component 401, then the budgeted life-cycle income statements for each product would look like this:
Component 401:
Sales: $500,000
Cost of Goods Sold: $250,000
Gross Profit: $250,000
Research and Development: ($172,500)
Selling Expenses: ($52,500)
Profit Before Taxes: $25,000
Return on Sales: 5%
Component 402:
Sales: $500,000
Cost of Goods Sold: $350,000
Gross Profit: $150,000
Research and Development: ($57,500)
Selling Expenses: ($17,500)
Profit Before Taxes: $75,000
Return on Sales: 15%
a) It is important to look at the entire life-cycle budgeting approach in order to accurately assess the performance of each product. One change that could be suggested for the company's life-cycle budgeting approach is to allocate the research and development and selling expenses to each product based on the amount of resources that were used for each product. This would provide a more accurate picture of the true cost and profit of each product.
b) This shows that accurate life-cycle budgeting is important because it provides a more accurate picture of the true cost and profit of each product. By allocating the research and development and selling expenses based on the amount of resources used for each product, we can see that Component 401 actually has a lower return on sales than Component 402. This information can be used to make more informed decisions about the continued viability of each product.
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Case A
Prior to the outbreak of Covid-19 in Germany, the Berlin based brewing company Federbrau was very successful throughout the European continent. During 2019, the brewer reported net sales of € 415 million, 6% up from 2018. Internal auditors also determined its operating profit (EBIT) amounted to € 40 million in the same period. As part of their expansion strategy, they devoted substantial investments in net working capital, the company’s net book value increased from € 215 million to € 230 million, while net fixed assets remained stable at € 130 million. The company managed to maintain its capital structure with a debt to equity ratio of 0.75 and a 40% Equity Ratio.
Based on German corporate income tax of 25% and interest rate of 5.0%, calculate the following;
Net Profit Margin (5 marks)
Working Capital Requirement (WCR) and working capital ratio over sales for 2019 (5 marks)
Post-tax Return On Invested Capital (ROIC) for 2019 (10 marks)
Free Cash Flow (FCF) for 2019 (10 marks)
The net profit margin for Federbrau in 2019 was 9.64% (40/415 x 100).
Net Profit Margin: The net profit margin is calculated by dividing net income (profit) by total sales. In the case of Federbrau, net income was €40 million in 2019 and total sales was €415 million.
Working Capital Requirement (WCR) and Working Capital Ratio over Sales for 2019: The working capital requirement (WCR) is the difference between current assets and current liabilities. In the case of Federbrau, their current assets were €230 million (net book value) and their current liabilities were €172 million. Therefore, the working capital requirement for Federbrau was €58 million (230-172). The working capital ratio over sales for 2019 is calculated by dividing WCR by total sales. In this case, the ratio would be 14.03% (58/415 x 100).
Post-tax Return On Invested Capital (ROIC) for 2019: The post-tax return on invested capital (ROIC) is calculated by dividing the after-tax operating profit (EBIT) by the total invested capital. For Federbrau, the total invested capital was €345 million (230 + 130). The after-tax operating profit (EBIT) was €30 million (40 - 25/100 x 40). Therefore, the post-tax return on invested capital (ROIC) was 8.67% (30/345 x 100).
Free Cash Flow (FCF) for 2019: The free cash flow (FCF) is calculated by subtracting the net working capital investment from the operating cash flow. In the case of Federbrau, their net working capital investment was €15 million (230 - 215). The operating cash flow was €45 million (40 + 5). Therefore, the free cash flow for Federbrau was €30 million (45 - 15).
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2. Luckin went public in the U.S. in May 2019, listed in NASDQA and raising $561 million. Its success drew in big international investors such as BlackRock Inc. and support from banks including Credit Suisse Group AG. However, Muddy Waters Research’s 89 page report claimed that Luckin was inflating the number of items sold per day by 69% in the third quarter of 2019 and 88% in the fourth, purportedly revealing fraud within Luckin. Both Luckin’s Chairman & co-founder Lu Zhengyao and co-founder Qian Zhiya were removed from the board of directors. Should both co-founders be liable for the shareholders’ investment loss as the element of fraud was revealed even though a public limited company has limited liability? (30 marks)3. Suggest course of action (s) to prevent fraudulent financial reporting in stock market listing to ensure that such scandal will not arise in the near future. (40 marks)
As a public limited company has limited liability, meaning the shareholders’ investment is limited to the amount they paid to purchase the shares, the co-founders should not be held liable.
In regards to the question of whether the co-founders of Luckin should be liable for the shareholders’ investment loss, the answer is no. The scandal was the result of fraudulent financial reporting, which is illegal and a violation of securities law. Therefore, the co-founders should not be held liable.
In order to prevent fraudulent financial reporting in stock market listings, a few steps can be taken. Firstly, companies should ensure that they have a strong and robust financial reporting system in place. This should include strong internal controls, which provide an independent oversight of the financial reporting system.
Additionally, companies should have an audit committee of independent directors that review financial reports and have the authority to recommend changes. Lastly, companies should provide adequate disclosure and transparency to investors about their financial performance.
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You pay $50,250 to buy a call option on the euro, with an
exercise price of $1.30/€. At expiration, the spot exchange rate is
at $1.25/€. What is the overall percentage loss on your
investment?
The overall percentage loss on your investment would be ($0.05/€) / ($1.30/€) x 100 = 3.84%.
To calculate the overall percentage loss on your investment in a call option on the euro, you need to determine the difference between the exercise price and the spot exchange rate at expiration.
In this case, the exercise price was $1.30/€ and the spot exchange rate was $1.25/€. Therefore, the difference between the two is $1.30/€ - $1.25/€ = $0.05/€.
To calculate the percentage loss on your investment, divide the difference by the exercise price and then multiply by 100. Therefore, your overall percentage loss on your investment would be ($0.05/€) / ($1.30/€) x 100 = 3.84%.
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Find the $/£ spot exchange rate if the same basket of goods
costs $700 in the U.S. and £1100 in the U.K. and the Purchase Power
Parity holds.
The $/£ spot exchange rate in this situation can be calculated by dividing the US dollar cost ($700) by the UK pound cost (£1100), which yields a rate of 0.63636363. This means that for every $1, we will get £0.63636363.
To find the $/£ spot exchange rate when the same basket of goods costs $700 in the U.S. and £1100 in the U.K. and the Purchase Power Parity holds, we can use the following formula:
$/£ spot exchange rate = cost of goods in U.S. / cost of goods in U.K.
Plug in the given values:
$/£ spot exchange rate = $700 / £1100
Simplify:
$/£ spot exchange rate = 0.6363636363636364
Therefore, the $/£ spot exchange rate is 0.6363636363636364. This means that 1 U.S. dollar is equal to 0.6363636363636364 British pounds.
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Which of the following satisfy the law of supply? Select the two correct answers.(1 point) Responses An increase in price is followed by an increase in supply. An increase in price is followed by an increase in supply. A increase in price is followed by a decrease in quantity supplied. A increase in price is followed by a decrease in quantity supplied. An increase in price is followed by an increase in quantity supplied. An increase in price is followed by an increase in quantity supplied. A decrease in price is followed by a decrease in supply. A decrease in price is followed by a decrease in supply. A decrease in price is followed by a decrease in quantity supplied.
The answer is option c. An increase in price is followed by an increase in quantity supplied and d. A decrease in price is followed by a decrease in quantity supplied.
These statements satisfy the law of supply.
What is the way to define supply?In economics, supply is as the entire quantity of a certain good or service that a provider makes available to customers at a specific time and price. Typically, market activity determines it.
What is an illustration of supply in economics?For instance, growers are prepared to provide 15 million pounds of coffee each month at a price of $4 per pound.
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Lending institutions are scrutinizing an operation’s working capital status as part of the lending decision. Now more than ever, it’s time to do a little scrutinizing yourself. When I hit the road to speak, one of the most important slides I regularly use highlights how lending criteria has changed since the financial crisis. To illustrate that point, the slide includes a quote from Nick Parsons, head of research with the National Australia Bank: "So capitalism has changed…the owner or the custodian of capital [i.e. lending institutions] is much more careful about where they use that capital."
To that end, most readers have likely experienced increased scrutiny from their lenders in this post-crisis world. And one of the key criteria that lenders use to make decisions revolves around availability of working capital within any operation; working capital being a function of current assets less current liabilities. It’s a measure of an operation’s buffer to meet its short-term obligations, hence the importance to lenders.
Perhaps equally important, it’s a key indicator of cash reserve availability to meet unexpected emergencies. Thus, it is an important component of risk management to ensure business continuity within the operation without the need to borrow additional funds. As an example, albeit simplified, a pickup is typically a critical operational asset for most cow-calf operations. What if it catches on fire and suddenly needs to be replaced, else the cows don’t get fed? After insurance provides some portion towards replacement, does the operation have sufficient working capital to meet the remainder of the obligation? This type of assessment has become more important to lenders since the financial crisis.
This week’s graph highlights USDA’s updated aggregate working capital estimates in agriculture. Clearly, as last week’s illustration depicts, declining revenue has taken a big hit out of working capital reserves for agriculture. Working capital has declined nearly 50% - the loss exceeds $82 billion in just three years. That’s a concerning trend – and if it continues, will clearly have implications in the coming years.
What are you doing to maintain strong cash and working capital reserves amidst declining revenue? What new expectations do you your lenders have during the past several years and going into 2017? How will you adjust going forward? Leave your thoughts in the comments section below.
Working capital is a critical component of a business's financial health and is closely scrutinized by lending institutions when making lending decisions. Businesses must therefore focus on maintaining strong cash and working capital reserves amidst declining revenue and adjusting to new expectations from lenders.
It is a measure of an operation's ability to meet its short-term obligations and is calculated by subtracting current liabilities from current assets. Working capital is also an important indicator of a business's ability to meet unexpected emergencies and is therefore an important component of risk management.
Since the financial crisis, lenders have placed increased importance on working capital and have become more careful about where they use their capital.
As a result, businesses have experienced increased scrutiny from their lenders in this post-crisis world. This has led to a decline in working capital reserves for agriculture, with working capital declining nearly 50% and the loss exceeding $82 billion in just three years.
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6. The treasurer is usually responsible the following functions of a corporation except: A. Raising new capital Cash B. management c. Banking relationships D. Internal accounting 7. The following are
The treasurer is not typically responsible for d. internal accounting within a corporation.
The treasurer of a corporation is typically responsible for a variety of financial functions, including raising new capital, managing cash, and maintaining banking relationships.
However, internal accounting is usually handled by a separate department or individual, such as a controller or chief financial officer.
In summary, the treasurer is responsible for the following functions of a corporation:
- Raising new capital
- Cash management
- Banking relationships
But not:
- Internal accounting
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An investment project will generate annual maintenance costs of £10,000 (at today’s prices) in each of years 1 to 4.If the annual rate of inflation is 3%, what is the nominal maintenance costs cash flow in year 4?a.£10,000b.£41,200c.£10,300d.£11,255
An investment project will generate annual maintenance costs of £10,000 (at today’s prices) in each of years 1 to 4. If the annual rate of inflation is 3%. The nominal maintenance costs cash flow in year 4 will be £11,255. Option D.
To calculate the nominal maintenance costs cash flow in year 4, we need to take into account the annual rate of inflation. The formula to calculate the nominal value is:
Nominal value = Real value × (1 + inflation rate)^(number of years)
In this case, the real value is £10,000, the inflation rate is 3% (or 0.03), and the number of years is 4.
Plugging these values into the formula, we get:
Nominal value = £10,000 × (1 + 0.03)^4
Nominal value = £10,000 × 1.03^4
Nominal value = £10,000 × 1.1255
Nominal value = £11,255
Therefore, the nominal maintenance costs cash flow in year 4 is £11,255. The correct answer is d. £11,255.
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Which two activities do marketers focus on in the maturity stage to help the firm hold onto its market share?
Answer: Niche
Explanation:
Marketing campaigns are typically focused on differentiation rather than awareness. This means that product features might be enhanced, prices might be lowered, and distribution becomes more intensive. During the maturity stage, products begin to enter the most profitable stage.
In the maturity stage, marketers often focus on niche markets, using promotional strategies, messaging, and tactics designed to capture new share in these markets. Since there is no new growth, the emphasis shifts from drawing new customers to the market to winning more of the existing market.
Market Summary> Verizon Communications Inc. 54.92 uso NYSE: VZ + Follow Verizon Communications verizon +0.76 (1.41%) + today Mar 31 pm EST Dlacier Telecommunication company 1D so 1M GM YTD 1Y SY Max vertron.com 555 55.0 54.5 Previous dose 54.15 4,00 DE 540 1000 m 1200 2:00 Open High LOW 54.38 55.14 5418 Mat Cap PE ratio Dwyield 230 540 10.33 4,66% COP score 52.wk high 52 w low B 59.85 49.68 Verizon Communications Inc.commonly known as Verizon, is an American multinational belecommunications conglomerate and a corporate component of the Dow Jones Industrial Average. The company is headquartered at 1095 Avenue of the Americas in Midtown Manhattan, New York City, but is Incorporated in Delaware Wlopedia CEO: Hans Vouberg (Aug 1, 2016-) Revenue 133.6 billion USD (Fiscal Year Ended December 31, 2021) Headquarters: New York, New York, United States Founded: October 7, 1963, Delaware, United States Number of employees: 132,200 (December 31, 2020) Net Income: 22.62 bilion USD Focal Year Ended December 31, 2021) Subsidiaries: Vertoon. Verizon Flos, Vorscon Business, Buen. MORE → More about Vertion Communicat hips/finance yahoo.com quote V21 Verizon Communications Inc. (VZ) Stock Price, News, Quote Find the latest Verizon Communication Inc. (V2) stock quote, history, news and other vital Information to help you with your stock trading and investing Market Summary> Vodafone Group plc 128.00 GBX -1.84 (1.42%) + today Mar 34:35 m GMT Disclaimer LON:VOD + Follow Vodafone Group Telecommunications company 1D 50 M EM YTD 1Y SY Max 130.0 120.5 Previous close 120.84 120.0 128,5 1200 127,6 0:00 am Vodafone Group Plc is a Bellish multinational telecommunications company. Its registered office and global headquarters are in Newbury, Berkshire, England. It predominantly operates service in Asia, Africa, Europe, and Oceania Wikipedia CEO: Nick Road (Oct 1, 2018-) Headquarters: Berkshire, United Kingdom Founded: 1962, Newbury, United Kingdom Revenue: 43.81 billion EUR (2021) Number of employees: 96,506 (2021) Subsidiaries: Vodafone Germany, Vodafone Australia, MORE Founders: Gerry Whent, Emost Harrison Disclaimer 10.00 am 12:00 pm 2:00 pm 4:00 pm 34.258 B Open High LOW 129.20 129.38 127,60 Mkt Cap PE ratio Div yield - CDP score 52-wk high 52-wk low 142.74 106,30 5,93% More about Vodafone Group plc
The Market Summary for Verizon Communications Inc. and Vodafone Group plc provides an overview of the current stock prices, changes in stock prices, and other important financial information for both companies. Verizon Communications Inc. is currently trading at 54.92 USD on the NYSE, with a change of +0.76 (1.41%) from the previous day.
Vodafone Group Plc is currently trading at 128.00 GBX on the LON, with a change of -1.84 (1.42%) from the previous day. Both companies are in the telecommunications industry and have similar financial information, including market capitalization, PE ratio, dividend yield, and 52-week high and low prices.
However, Verizon Communications Inc. is headquartered in New York, New York, United States, while Vodafone Group plc is headquartered in Berkshire, United Kingdom. Both companies also have a number of subsidiaries and are led by CEOs Hans Vouberg (Verizon) and Nick Road (Vodafone).
The Market Summary provides a snapshot of the current financial status of both companies and can be used to make informed investment decisions.
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lber Company is considering eliminating its phone division. The company allocates fixed costs based on sales. If the phone division is dropped, $154,000 of the fixed costs allocated to that division could be eliminated. The impact on Valber’s operating income from eliminating the phone division would be: Desktops Laptops Tablets Phones Sales $ 368,000 $ 883,500 $ 706,000 $ 979,000 Variable costs 205,000 639,000 532,000 799,000 Contribution margin 163,000 244,500 174,000 180,000 Fixed costs 75,200 178,300 142,800 199,000 Net income (loss) 87,800 66,200 31,200 (19,000)
The impact on Valber's operating income from eliminating the phone division would be an increase of $135,000.
This is calculated by taking the contribution margin of the phone division ($180,000) and subtracting the fixed costs that could be eliminated ($154,000) and the net loss from the phone division ($19,000).
1. Calculate the contribution margin of the phone division:
Sales - Variable costs = Contribution margin
$979,000 - $799,000 = $180,000
2. Calculate the fixed costs that could be eliminated if the phone division is dropped:
$154,000
3. Calculate the net loss from the phone division:
Contribution margin - Fixed costs = Net income (loss)
$180,000 - $199,000 = ($19,000)
4. Calculate the impact on operating income from eliminating the phone division:
Contribution margin - Fixed costs that could be eliminated - Net loss from phone division = Impact on operating income
$180,000 - $154,000 - ($19,000) = $135,000
Therefore, from eliminating the phone division the impact on Valber's operating income would be an increase of $135,000.
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A businessman wishes to borrow an amount of K4 million for a term of 3 years. The agreed rate of interest is 10% per annum effective for the first 2 years, and 6% per annum effective for the final year. Repayments on the loan are made annually in arrears. The amount of the level annual repayment is K1,590,328.58. (i) Draw up the loan schedule for the full three-year period. (5) (ii) Calculate what percentage of the loan has been repaid by the end of year 2. (2) (iii) Explain how this percentage figure would alter if the rate of interest had instead been 6% for the first two years and 10% for the final year. (2)
i) Closing balance for year 1 is K2,809,671.42 year 2 is K1,500,309.98 year 3 is 0
ii) The percentage of the loan has been repaid by the end of year 2 is 79.52%
iii) The closing balance at the end of year 2 would be higher, and the percentage of the loan repaid would be lower.
(i) The loan schedule for the full three-year period is as follows:
Year 1
Opening Balance K4,000,000
Interest K400,000
Repayment K1,590,328.58
Closing Balance K2,809,671.42
Year 2
Opening Balance K2,809,671.42
Interest K280,967.14
Repayment K1,590,328.58
Closing Balance K1,500,309.98
Year 3
Opening Balance K1,500,309.98
Interest K90,018.60
Repayment K1,590,328.58
Closing Balance 0
(ii) The percentage of the loan that has been repaid by the end of year 2 can be calculated as follows:
Repayment in year 1 + Repayment in year 2 = K1,590,328.58 + K1,590,328.58 = K3,180,657.16
Percentage of loan repaid = (K3,180,657.16 / K4,000,000) x 100 = 79.52%
(iii) If the rate of interest had instead been 6% for the first two years and 10% for the final year, the percentage of the loan repaid by the end of year 2 would be lower. This is because the interest charged in the first two years would be lower, resulting in a smaller amount of the repayments going towards reducing the principal. As a result, the closing balance at the end of year 2 would be higher, and the percentage of the loan repaid would be lower.
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Andrew is an excellent teacher providing tutoring services to University accounting students. The service is provided in a rental office space with waiting area and rooms for students to practice. Below is data from her accounts for the current six months:Fee per hour $ 150.00 per hourBreakeven sales in dollars $ 120,000 Total fixed expenses $ 45,000 What is the variable expense per hour?
in the mentioned scenario, the variable expense per hour is $149.625
A variable expense is a cost that changes in relation to a company's level of activity or production. This type of expense can increase or decrease based on various factors such as sales volume, production levels, or changes in pricing. Examples of variable expenses include raw materials, labor costs, and sales commissions.
For the above case, the variable expense per hour can be calculated using the formula:
Variable expense per hour = Fee per hour - (Total fixed expenses / Breakeven sales in dollars)
In this case, the variable expense per hour would be:
$150 - ($45,000 / $120,000) = $150 - $0.375 = $149.625
Therefore, it is concluded that the variable expense per hour is $149.625.
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4. On March 1st, Somnium purchased in cash 5,000 shares from Microsoft and paid $45 per share together with a commission of $500. · On April 5th Microsoft distributed dividends of $0.5 per share. · On May 15 Somnium decided to sell 2,500 shares from Microsoft with the market price of $60 and paid a commission of $150. . On the 31st of December the market value of Microsoft share is $35 per share. Show all the calculations and prepare the journal entries. Full points are awarded only for correct journalizing and calculations. a) Prepare the journal entry for March 15. b) Prepare the journal entry for April 5th. Prepare the journal entry for May 1st. a) Prepare the journal entry for December 31
A journal entry is a chronological record of a business transaction that shows the debit and credit amounts for each account affected by the transaction. The journal entries are as follows:
a) Journal entry for March 1st:
Debit: Investment in Microsoft $225,500 (5,000 shares x $45 per share + $500 commission)
Credit: Cash $225,500
b) Journal entry for April 5th:
Debit: Cash $2,500 (5,000 shares x $0.5 per share)
Credit: Dividend Revenue $2,500
c) Journal entry for May 15th:
Debit: Cash $149,850 (2,500 shares x $60 per share - $150 commission)
Debit: Investment in Microsoft $112,750 (2,500 shares x $45 per share)
Credit: Gain on Sale of Investment $37,100
d) Journal entry for December 31st:
Debit: Unrealized Loss on Investment $50,000 (2,500 shares x ($35 - $45) per share)
Credit: Investment in Microsoft $50,000
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