The amount Henry would withdraw assuming the investment earns A) simple interest is HK$46,248, B) interest compounded annually is HK$52,207.62, and C) interest compounded semiannually is HK$61,768.94.
A) The amount Henry would withdraw assuming the investment earns simple interest is computed using the formula:
A = P(1 + rt),
where A is the final amount, P is the principal amount, r is the annual interest rate, and t is the time in years.
Plugging in the values:
A = HK$28,200(1 + 0.08*8)
= HK$28,200(1 + 0.64)
= HK$28,200*1.64
= HK$46,248.
Therefore, the amount Henry would withdraw assuming the investment earns simple interest is HK$46,248.
B) The amount Henry would withdraw assuming the investment earns interest compounded annually is computed using the formula:
A = P(1 + r)^t,
where A is the final amount, P is the principal amount, r is the annual interest rate, and t is the time in years.
Plugging in the values:
A = HK$28,200(1 + 0.08)^8
= HK$28,200*1.85093
= HK$52,207.62.
Therefore, the amount Henry would withdraw assuming the investment earns interest compounded annually is HK$52,207.62.
C) The amount Henry would withdraw assuming the investment earns interest compounded semiannually is computed using the formula:
A = P(1 + r/n)^(nt),
where A is the final amount, P is the principal amount, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the time in years.
Plugging in the values:
A = HK$28,200(1 + 0.08/2)^(2*8)
= HK$28,200(1.04)^16
= HK$28,200*2.19112
= HK$61,768.94.
Therefore, the amount Henry would withdraw assuming the investment earns interest compounded semiannually is HK$61,768.94.
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COST OF QUALITY - What is the cost of quality? In your answer,provide specific examples of the cost of quality based on your ownpersonal experiences.
The cost of quality refers to the expenses that a company or organization incurs to prevent or address defects in their products or services. These costs can include expenses related to prevention, appraisal, internal failure, and external failure.
Prevention costs are the expenses incurred to prevent defects from occurring in the first place. For example, a company may invest in training and education for its employees to ensure that they have the skills and knowledge necessary to produce high-quality products.
Appraisal costs are the expenses incurred to inspect and test products or services to ensure that they meet the required quality standards. For example, a company may hire a third-party testing agency to inspect its products before they are shipped to customers.
Internal failure costs are the expenses incurred when defects are discovered before the product or service is delivered to the customer. For example, a company may need to rework or scrap defective products before they are shipped to customers.
External failure costs are the expenses incurred when defects are discovered after the product or service has been delivered to the customer. For example, a company may need to issue a recall for a defective product or provide refunds or compensation to customers who have received defective products.
In my personal experience, I have seen companies invest in prevention and appraisal costs in order to minimize internal and external failure costs. For example, I have worked for a company that invested in training and education for its employees to ensure that they were producing high-quality products. This investment helped to prevent defects and reduce the need for rework or recalls, ultimately saving the company money in the long run.
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Question 28 (5 points) Please calculate the A. Exercise Value B. Time Value Given the following: Price of stock $55 Exercise Value Strike Price $47.50 Time Value Market value $10.50 Question 29 (6 points) We spent some time analyzing options in detail. Please take time to explain: 1. The difference between American Options and European Options. 2. The difference between a Put and a Call 3. The difference between the Black Scholes option pricing model and the Binomial Option pricing model.
The time value of an option is the difference between the market value of the option and its exercise value. It represents the value of the option based on the time remaining until expiration is $3.00.
A. Exercise Value
The exercise value of an option is the difference between the price of the underlying asset and the strike price of the option. It is the amount that the option holder would receive if they exercised the option at the current price of the underlying asset.
Exercise Value = Price of Stock - Strike Price
= $55 - $47.50
= $7.50
B. Time Value
The time value of an option is the difference between the market value of the option and its exercise value. It represents the value of the option based on the time remaining until expiration.
Time Value = Market Value - Exercise Value
= $10.50 - $7.50
= $3.00
Question 29
1. The difference between American Options and European Options:
American options can be exercised at any time before the expiration date, while European options can only be exercised on the expiration date.
2. The difference between a Put and a Call:
A call option gives the holder the right to buy an underlying asset at a specified price, while a put option gives the holder the right to sell an underlying asset at a specified price.
3. The difference between the Black Scholes option pricing model and the Binomial Option pricing model:
The Black Scholes model is a mathematical formula that is used to price options based on the current price of the underlying asset, the strike price, the time until expiration, and other factors. The Binomial Option pricing model is a method that uses a tree diagram to calculate the value of an option based on the possible outcomes of the underlying asset's price movements.
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Explain a reason why your organization might need to change an
aspect/ or aspects of its culture. Link to explain how your
organization could make that change using the advice provided
Organizational culture can have a significant impact on the success of an organization, so it is important to evaluate and adjust it as needed. A reason an organization might need to change an aspect of its culture is that it is not meeting the changing needs of the organization or its environment. For example, an organization may need to update its culture to become more innovative and adapt to the rapidly changing technology landscape.
To make changes to its organizational culture, the organization should take a look at the core values, beliefs, and behaviors that have been established. This will help them to identify which areas of the culture need to be changed. Then, the organization can create a plan to make changes, including how to communicate the changes to staff, how to implement them, and how to measure the results. Finally, the organization should be sure to support the changes with training, policies, and resources to help employees adjust and fully embrace the changes.
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Ethics Project
Decision 3 Taylor decided to turn in the proposal based on the higher projected IRR due to the cost reclassification. Consequences of Behavioral Action: The project was funded and, when completed, the IRR came in much higher than expected. Taylor was able to reverse the reclassification by reinstating the omitted expenditure back to the project rather than normal operations and still achieve an IRR of 8% on the project. One year later Taylor was promoted to vice president.
Decision 4 Taylor decided to turn in the proposal with a 7.5% IRR and it was not accepted. Taylor was not promoted.
It is clear from the scenario presented that there were different consequences for each of the decisions made by Taylor. In Decision 3, Taylor made the unethical choice to reclassify costs in order to increase the projected IRR and get the project funded.
However, when the project was completed, the IRR came in much higher than expected, allowing Taylor to reverse the reclassification and still achieve a satisfactory IRR. As a result of this decision, Taylor was promoted to vice president.
In contrast, in Decision 4, Taylor made the ethical choice to turn in the proposal with a lower IRR, which resulted in the proposal not being accepted. As a result of this decision, Taylor was not promoted.
It is important to note that while Taylor was rewarded for his unethical behavior in Decision 3, this does not necessarily mean that unethical behavior is always rewarded. In fact, there are often negative consequences for unethical behavior, including damage to one's reputation, loss of trust from colleagues and superiors, and even legal consequences. Therefore, it is important to always make ethical decisions, even if there may be short-term benefits to unethical behavior.
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Sayang Selasih Berhad is given the following quotes:
Spot rate USD0.7250/NZD
Six-month forward rate USD0.7350/NZD
Interest rate United States 7 percent per annum
Interest rate New Zealand 6 percent per annum
Assume that Sayang Selasih Berhad can borrow as much as USD1 million or NZD5 million for its coming project. If Interest Rate Parity (IRP) is not holding, determine how would Sayang Selasih Berhad carry out covered interest arbitrage (CIA) opportunity and compute the profit.
If Interest Rate Parity (IRP) is not holding, Sayang Selasih Berhad can carry out a covered interest arbitrage (CIA) opportunity by borrowing USD1 million at 7 percent per annum in the United States and swapping it into NZD5 million at the spot rate of USD0.7250/NZD.
The NZD5 million will be invested in New Zealand at 6 percent per annum, and the NZD5 million will be swapped back into USD at the six-month forward rate of USD0.7350/NZD. This will generate a profit of USD50,000, which is the difference between the interest earned from investing the NZD5 million at 6 percent in New Zealand and the difference between the spot rate and the six-month forward rate.
The profit is generated from the difference in the interest rate between the two countries, as the interest rate in New Zealand is lower than the interest rate in the United States. By entering into this covered interest arbitrage transaction, Sayang Selasih Berhad can take advantage of the difference in interest rates between the two countries, and take advantage of the deviation from the Interest Rate Parity.
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You had learned from your course that Strategic management process has several phases .Explain briefly 2 phases and state the Difference between based on the class discussion and how it affects the Strategic Management Process in organization?
The strategic management process consists of four main phases: (1) setting goals, (2) analyzing the environment, (3) developing strategies, and (4) implementing and evaluating.
The first two phases focus on understanding the external environment and developing an internal understanding of the organization’s goals and objectives. The goal-setting phase involves assessing the organization’s current state, determining the desired future state, and creating measurable objectives to reach the desired state.
The environmental analysis phase involves identifying opportunities and threats in the external environment that can affect the organization’s success.
The difference between these two phases is that the goal-setting phase is focused on the internal environment of the organization and the environmental analysis phase is focused on the external environment.
The internal environment focuses on developing a clear vision and objectives for the organization, while the external environment focuses on recognizing potential opportunities and threats to the organization’s success.
Both of these phases are integral to the strategic management process and are essential for developing effective strategies that are tailored to the organization’s needs.
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A firm is planning to issue two types of 20-year, noncallable bonds to raise a total of $10 million, $5 million from each type of bond. First, 5,000 bonds with a 10% semiannual coupon will be sold at their $1,000 par value to raise $5,000,000. These are called par bonds. Second, Original Issue Discount bonds, also with a 20-year maturity and a $1,000 par value, will be sold, but these bonds will have a semiannual coupon of only 6.25%. The original issue discount bonds must be offered at below par in order to provide investors with the same effective yield as the par bonds.
How many Original issue discount bonds must the firm issue to raise $5,000,000
To determine how many Original Issue Discount bonds the firm must issue to raise $5,000,000, we need to calculate the present value of the bonds using the effective yield of the par bonds.
The effective yield of the par bonds is 10% semiannually, or 20% annually. Using the formula for the present value of a bond, we can calculate the price of the Original Issue Discount bonds:
PV = C / (1 + r)^n + F / (1 + r)^n
Where PV is the present value, C is the coupon payment, r is the effective yield, n is the number of periods, and F is the face value.
For the Original Issue Discount bonds:
PV = ($1,000 x 0.0625) / (1 + 0.20)^40 + $1,000 / (1 + 0.20)^40
PV = $62.50 / (1 + 0.20)^40 + $1,000 / (1 + 0.20)^40
PV = $62.50 / 30.23 + $1,000 / 30.23
PV = $2.07 + $33.09
PV = $35.16
Therefore, the price of the Original Issue Discount bonds is $35.16. To raise $5,000,000, the firm must issue:
$5,000,000 / $35.16 = 142,146.42
The firm must issue approximately 142,146 Original Issue Discount bonds to raise $5,000,000.
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Brief summary and critique on this article and the ninefactors discussed :Making Strategy Work: A Literature Review on the Factorsinfluencing strategic implementation / ICA working paper 2/2008
The article "Making Strategy Work: A Literature Review on the Factors influencing Strategic Implementation" by Alexander T. Nicolai and Julia Holtbrügge discusses the importance of strategic implementation in organizations and the factors that influence its success.
The authors conducted a literature review of previous research on strategic implementation and identified nine factors that influence its success: 1) communication, 2) leadership, 3) culture, 4) structure, 5) control, 6) human resources, 7) external environment, 8) strategic fit, and 9) resources.
The authors argue that these factors are interconnected and that organizations must consider all of them when implementing a strategy. They also discuss the importance of aligning the organization's structure, culture, and control systems with the strategy in order to ensure its success. The authors conclude that further research is needed to understand how these factors interact and to develop practical guidelines for organizations.
Overall, the article provides a comprehensive review of the literature on strategic implementation and identifies the key factors that influence its success. The authors' use of previous research and their identification of the nine factors make the article a valuable resource for organizations and researchers interested in strategic implementation.
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Sally has $25000 in an account that earns an annual interest rate of 7% compounded monthly. What equal monthly payments can she withdraw from the account over a period ofa) 8 years? Answersb) 13 years? Answer = $
Sally has $25000 in an account that earns an annual interest rate of 7% compounded monthly. The equal monthly payments can she withdraw from the account over a period of 8 years is $243.22, for 13 years is $160.21
To find the equal monthly payments that Sally can withdraw from her account over a period of 8 years or 13 years, we need to use the formula for the future value of an annuity:
[tex]FV = PMT [(1 + r/n)^{nt} - 1] / \frac{r}{n}[/tex]
Where FV is the future value, PMT is the monthly payment, r is the annual interest rate, n is the number of compounding periods per year, and t is the number of years.
a) For 8 years:
FV = $25000
r = 0.07
n = 12
t = 8
Plugging in these values into the formula and solving for PMT, we get:
$25000 = PMT × [(1 + 0.07/12)⁹⁶- 1] / (0.07/12)
PMT = $25000 × (0.07/12) / [(1 + 0.07/12)⁹⁶- 1]
PMT = $243.22
So the equal monthly payments that Sally can withdraw from her account over a period of 8 years is $243.22.
b) For 13 years:
FV = $25000
r = 0.07
n = 12
t = 13
Plugging in these values into the formula and solving for PMT, we get:
[tex]25000 = PMT [(1 + 0.07/12)^{156} - 1] / \frac{0.07}{12}[/tex]
PMT = $25000 × (0.07/12) / [(1 + 0.07/12)¹⁵⁶ - 1]
PMT = $160.21
So the equal monthly payments that Sally can withdraw from her account over a period of 13 years is $160.21.
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Hibou Ltd., a private company based in Vancouver, decided to sell its Industrial Design Division (IDD). After two years of losses and heavy competition, a plan to dispose of the division was put in place. At the end of 2020, the plan was finalized and approved by the board of directors. The sale is anticipated to be completed by June 30, 2021.
Other information:
1. Hibou's 2020 after-tax net income (excluding the results from the Industrial Design Division) was $450,000.
2. During the year, the division (IDD) reported an after-tax loss of $120,000 (revenues: $30,000, expenses: $150,000).
3. Management estimates that after-tax legal and audit fees of $32,000 as well as severance payments of $66,000 will be required to finalize the disposal plan. A portion of these costs is expected to be offset by the after-tax proceeds of $61,000 from the sale of the division's (IDD’s) assets.
Instructions (show all supporting calculations)
Assuming the Industrial Design Division (IDD) qualifies for treatment as a discontinued operation, prepare a partial income statement for Hibou for 2020. The statement should begin with income from continuing operations and include an appropriate footnote pertaining to the disposal of the Industrial Design Division.
Hibou Ltd.'s Partial Income Statement for 2020, beginning with income from continuing operations:
Revenues: $450,000
Expenses: $450,000
Income from continuing operations: $0
Less: Income (loss) from discontinued operations: ($48,000)
Net income: ($48,000)
Note: The results of the discontinued Industrial Design Division (IDD) included in the above statement are as follows: Revenue: $30,000, Expenses: $150,000, After-tax legal and audit fees: $32,000, Severance payments: $66,000, and After-tax proceeds from sale of IDD assets: $61,000.
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Instead of talking about great power, please share with us a story of you providing ‘servant leadership’ to others. Even if you are not in a leadership role now, tell us a story of something nice you did for others.
The servant leadership style is founded on the premise that leaders put the greater good first. Leaders with this style prioritise their team and organisation. They do not prioritise their own goals. Workers who work in a servant leadership setting are more likely to feel heard.
I have recently been a mentor for a local high school student who was struggling in math. I spent time every week with them, providing guidance and moral support.
I helped them to understand difficult concepts, answer challenging questions, and ultimately improve their grades. Through my servant leadership, the student was able to improve their understanding of the subject, gain confidence in themselves, and make a successful transition into their next course.
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Explain the two competencies and also give examples to each (50 marks) (a) Learning on the fly (b) Intellectual horsepower
The two competencies, learning on the fly and intellectual horsepower, are important traits that can help individuals succeed in their personal and professional lives.
(a) Learning on the fly refers to the ability to quickly and effectively absorb new information and apply it to solve problems or make decisions. This competency is important in fast-paced environments where individuals need to adapt quickly to new situations or challenges.
Examples of learning on the fly include a manager quickly learning a new software program to complete a project on time, or a student quickly picking up new concepts in a class they are struggling with.
(b) Intellectual horsepower refers to the ability to process complex information and think critically about it. This competency is important in situations where individuals need to analyze data or make strategic decisions.
Examples of intellectual horsepower include a scientist analyzing complex data to develop a new hypothesis, or a business analyst using critical thinking skills to make recommendations for a company's future growth.
In conclusion, both learning on the fly and intellectual horsepower are important competencies that can help individuals succeed in their personal and professional lives.
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a. What are the possible solutions to keep public pension plans well-funded for current and future retirees with minimal disruption to participating members? Provide 3-4 recommendations and implementation plans.
b. What are expected impacts and consequences for each of your recommendations?
Possible solutions to keep public pension plans well-funded are increasing employee contributions, adjusting the retirement age, reducing benefits, and increasing employer contributions. These can lead to long-term sustainability of the pension plan.
A. To keep public pension plans well-funded for current and future retirees with minimal disruption to participating members, the following recommendations and implementation plans can be considered.
RecommendationsIncreasing employee contributions: One possible solution is to increase the contributions of employees to the pension plan. This can be implemented by gradually raising the contribution rate over a period of time to minimize the financial impact on employees.Adjusting the retirement age: Another possible solution is to adjust the retirement age to reflect longer life expectancies. This can be implemented by gradually increasing the retirement age over a period of time, giving current and future retirees time to plan and adjust their retirement plans accordingly.Reducing benefits: Another possible solution is to reduce the benefits provided by the pension plan. This can be implemented by gradually reducing the benefits over a period of time, giving current and future retirees time to plan and adjust their retirement plans accordingly.Increasing employer contributions: Another possible solution is to increase the contributions of employers to the pension plan. This can be implemented by gradually raising the contribution rate over a period of time to minimize the financial impact on employers.B. The expected impacts and consequences for each of the recommendations are as follows.
ConsequencesIncreasing employee contributions: This recommendation may result in employees having less disposable income, which could impact their overall financial well-being. However, it could also help to ensure the long-term sustainability of the pension plan.Adjusting the retirement age: This recommendation may result in employees having to work longer before they can retire, which could impact their overall quality of life. However, it could also help to ensure the long-term sustainability of the pension plan.Reducing benefits: This recommendation may result in retirees receiving less income during retirement, which could impact their overall financial well-being. However, it could also help to ensure the long-term sustainability of the pension plan.Increasing employer contributions: This recommendation may result in employers having to allocate more funds towards employee retirement benefits, which could impact their overall financial well-being. However, it could also help to ensure the long-term sustainability of the pension plan.Learn more about Pension plans:
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Intro The current exchange rate between the dollar and euro is $1.22 per euro. The nominal annual risk-free rate is 2% in the U.S. and 0.8% in Europe. Part 1 | Attempt 1/6 for 10 pts. What should be the one-year forward premium according to interest rate parity? 5+ decimals Submit Part 2 | Attempt 1/6 for 10 pts. What should be the one-year forward rate according to interest rate parity (in dollars per euro)? 2+ decimals Submit
The one-year forward premium according to interest rate parity should be 0.0199585.
This can be calculated using the following formula:
Forward Premium = (1+Nominal Risk-Free Rate in U.S.) / (1+Nominal Risk-Free Rate in Europe) - 1
Therefore, in this case: (1.02/1.008) - 1 = 0.0199585
The one-year forward rate according to interest rate parity should be 1.2419585. This can be calculated using the following formula:
Forward Rate = Spot Rate x (1+Nominal Risk-Free Rate in U.S.) / (1+Nominal Risk-Free Rate in Europe)
Therefore, in this case: 1.22 x (1.02/1.008) = 1.2419585
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(b) Explain any FOUR
(4) differences between financial accounting and cost
accounting.
Financial accounting and cost accounting are two types of accounting used to evaluate the financial performance of a business.
The key differences between them include:
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There are four theories of changes. Distinguish these FOUR (4) theories. An aerospace manufacturing company plans to automate its production of galley equipment. Explain how you could apply Levin’s three step process to implement these changes. As a change agent, list the possible obstacles you could face during each step of the implementation.
The four theories of changes are:
1. Evolutionary Theory
2. Social Cycle Theory
3. Conflict Theory
4. Functionalist Theory
Evolutionary Theory suggests that changes occur gradually over time, while Social Cycle Theory suggests that changes occur in cycles or stages. Conflict Theory suggests that changes occur as a result of conflict between different groups or classes, while Functionalist Theory suggests that changes occur to maintain stability and balance within a society.
In the case of an aerospace manufacturing company automating its production of galley equipment, Levin's three step process can be applied as follows:
1. Unfreezing: This involves preparing the company for the change by creating a sense of urgency and communicating the need for change to employees.
2. Changing: This involves implementing the new automated processes and providing training and support for employees to adapt to the new system.
3. Refreezing: This involves reinforcing the new processes and ensuring that they become the new norm within the company.
As a change agent, some of the possible obstacles that could be faced during each step of the implementation include:
- Resistance from employees who may be hesitant or fearful of the changes
- Technical difficulties or challenges with the new automated processes
- Lack of support or resources for the change
- Difficulty in maintaining the new processes and ensuring that they become the new norm.
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A farmer faces a dilemma in the event of a certain weather freezing situation. The weather forecast is for a cold weather. There is a P% chance that the temperature tonight will be cold enough to freeze and to destroy his entire crop, which is worth some $50,000. He can take the following actions: first, he could set up burners in the orchard; this could cost $5,000, but he could still incur damage of $16,000 whenever the cold weather happens. Second: he could set up sprinklers to spray the tree. If the temperature drops, the water would freeze on the fruits and provide some insulation. This method is cheaper ($2,000) but is less effective. With sprinklers he could incur damage as much as $23,000. Third: the do nothing option. If the weather is freezing he could lose his entire crop. a. Construct a decision tree that represents the problem b. If P according to the forecast is assumed to be 50%, then what option should be selected i.e. has minimal expected cost c. Assess using Risk profiles Which option is the best d. Construct a cumulative Risk profile and assess dominance e. Keep p as a variable and plot a graph where the x-axis is the p value and the y-axis is the EMV. Show how EMV for each option vary with respect to p. can you see where each option has the lowest EMV cost.
a) Decision tree:
[Farmer]-->[Set up burners ($5,000)]-->[Cold weather (P%)]-->[Damage ($16,000)]
|
|-->[Not cold weather (1-P%)]-->[No damage]
|
|
|-->[Set up sprinklers ($2,000)]-->[Cold weather (P%)]-->[Damage ($23,000)]
|
|-->[Not cold weather (1-P%)]-->[No damage]
|
|
|-->[Do nothing ($0)]-->[Cold weather (P%)]-->[Damage ($50,000)]
|
|-->[Not cold weather (1-P%)]-->[No damage]
b)The option with the minimal expected cost is to set up burners, with an expected cost of $13,000. c) The option with the lowest risk profile is to set up burners, as it has the lowest fixed cost ($5,000) and the lowest variable cost ($16,000 * P). d) it has the lowest fixed cost ($5,000) and the lowest variable cost ($16,000 * P). e) The graph will also show the points at which each option has the lowest EMV cost.
a) the decision tree that represents the problem has been drawn,b) Expected cost for each option:
Set up burners: $5,000 + (P% * $16,000) = $5,000 + ($16,000 * P)
Set up sprinklers: $2,000 + (P% * $23,000) = $2,000 + ($23,000 * P)
Do nothing: P% * $50,000 = $50,000 * P
If P = 50%:
Set up burners: $5,000 + ($16,000 * 0.5) = $13,000
Set up sprinklers: $2,000 + ($23,000 * 0.5) = $13,500
Do nothing: $50,000 * 0.5 = $25,000
The option with the minimal expected cost is to set up burners, with an expected cost of $13,000.
c) Risk profiles:
Set up burners: $5,000 + ($16,000 * P)
Set up sprinklers: $2,000 + ($23,000 * P)
Do nothing: $50,000 * P
The option with the lowest risk profile is to set up burners, as it has the lowest fixed cost ($5,000) and the lowest variable cost ($16,000 * P).
d) Cumulative risk profile:
Set up burners: $5,000 + ($16,000 * P)
Set up sprinklers: $2,000 + ($23,000 * P)
Do nothing: $50,000 * P
The option with the lowest cumulative risk profile is to set up burners, as it has the lowest fixed cost ($5,000) and the lowest variable cost ($16,000 * P).
e) EMV graph:
The EMV for each option varies with respect to P:
Set up burners: $5,000 + ($16,000 * P)
Set up sprinklers: $2,000 + ($23,000 * P)
Do nothing: $50,000 * P
The graph will show that the EMV for each option decreases as P increases. The option with the lowest EMV cost at each point will be the best option. For example, at P = 0, the best option is to do nothing, as it has an EMV cost of $0. At P = 1, the best option is to set up burners, as it has an EMV cost of $21,000. The graph will also show the points at which each option has the lowest EMV cost.
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What is the present value of the following set of cash flows, discounted at 15.4% per year? Year CF 1 596 2 $96 $199 -$199 To
The present value of the given set of cash flows, discounted at 15.4% per year, is $603.80.
The present value of a set of cash flows is the sum of the present values of each individual cash flow. To calculate the present value of a cash flow, we use the formula:
PV = CF / (1 + r)^n
Where PV is the present value, CF is the cash flow, r is the discount rate, and n is the number of years.
For the given set of cash flows, we can calculate the present value of each cash flow and then add them together:
PV1 = 596 / (1 + 0.154)^1 = 516.07
PV2 = 96 / (1 + 0.154)^2 = 72.15
PV3 = 199 / (1 + 0.154)^3 = 128.95
PV4 = -199 / (1 + 0.154)^4 = -113.37
The present value of the set of cash flows is:
PV = PV1 + PV2 + PV3 + PV4 = 516.07 + 72.15 + 128.95 + (-113.37) = 603.80
Therefore, the correct answer would be $603.80.
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6. Assume a major investment service has just given Oasis Electronics its highest investment rating, along with a strong buy recommendation. As a result you decide to take a look yourself and to place a value on the company's stock. Here's what you find: This year, Oasis paid stockholders an annual dividend of $3 a share, but because of its high rate of growth in earnings, it dividend is expected to grow at the rate of 12 percent a year for the next four years and then to level out at 9 percent a year. So far, you have also learned that the stock has a beta of 1.80, the risk free rate of return is 6 percent, and the expected rate of return on the market is 11 percent. Using the CAPM to find the required rate of return, put a value on this stock.
The value of the stock is $36 for the first four years and $54 for the remaining years.
The required rate of return for the stock can be found using the Capital Asset Pricing Model (CAPM):
Required rate of return = Risk free rate + Beta*(Expected rate of return on the market - Risk free rate)
Plugging in the values from the question:
Required rate of return = 6% + 1.80*(11% - 6%)
Required rate of return = 6% + 1.80*5%
Required rate of return = 6% + 9%
Required rate of return = 15%
Next, we can use the Gordon Growth Model to find the value of the stock:
Value of stock = (Dividend*(1+Growth rate))/(Required rate of return - Growth rate)
For the first four years, the growth rate is 12%:
Value of stock = ($3*(1+12%))/(15% - 12%)
Value of stock = $36
For the remaining years, the growth rate is 9%:
Value of stock = ($3*(1+9%))/(15% - 9%)
Value of stock = $54
Therefore, the value of the stock is $36 for the first four years and $54 for the remaining years.
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On January 1, 2015, Alaska Corporation purchased P500,000 8% bonds for P475,126 (including broker's commission of P20,000). Interest is payable annually every December 31. The bonds mature on December 31, 2017. The prevailing market rate for the bonds is 9% at December 31, 2015. If the bonds are classified as financial asset at fair value through Other Comprehensive Income, the amount to be recognized in the entity's 2015 OCI is? (Use 4 decimal places in PVF and round answers to nearest peso.)
The amount to be recognized in the entity's 2015 OCI is -P54,833.37. On January 1, 2015, Alaska Corporation purchased P500,000 8% bonds for P475,126 (including broker's commission of P20,000).
The bonds mature on December 31, 2017 and are classified as financial assets at fair value through Other Comprehensive Income.
The prevailing market rate for the bonds is 9% at December 31, 2015. The amount to be recognized in the entity's 2015 OCI is calculated as follows:
Step 1: Calculate the present value of the bonds at the prevailing market rate of 9% using the present value formula: PV = FV / (1 + r)^n
PV = P500,000 / (1 + 0.09)^2
PV = P420,292.63
Step 2: Calculate the difference between the present value of the bonds at the prevailing market rate and the carrying value of the bonds.
Difference = PV - Carrying value
Difference = P420,292.63 - P475,126
Difference = -P54,833.37
Step 3: The amount to be recognized in the entity's 2015 OCI is the difference between the present value of the bonds at the prevailing market rate and the carrying value of the bonds.
Amount to be recognized in 2015 OCI = -P54,833.37
Therefore, the amount to be recognized in the entity's 2015 OCI is -P54,833.37.
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This week’s we will focus on cultural negotiation using the case study about Danone in China (p. 255 in the textbook).
This case is a cautionary tale of how important cultural differences are when forming strategic partnerships or joint ventures with companies from different countries.
Our content this week reflects on the impact of conflict on decision-making. As a decision-maker within your organization, it is important for you to deal with conflict in a skilled manner. Doing so can create positive outcomes and provide opportunities for improvement rather than undesirable results.
After reading the case, reflect and write your paper on the following:
What was the problem in the joint venture that triggered the conflict between the two companies?
What were the differences of each company’s understanding of their own respective roles and responsibilities in this venture?
Did any aspect of organizational culture or national culture affect this perspective?
As a leader, what are some ways you can handle conflict when it arises?
The problem in the joint venture between Danone and Wahaha that triggered the conflict was that Wahaha had been producing and selling beverages under the same name as Danone's brands without permission, resulting in potential brand infringement.
Danone's understanding of their role in the venture was that they would own the majority stake in the company and be in charge of strategic decisions. Wahaha's understanding of their role was that they would retain complete autonomy over their own operations and be in charge of day-to-day business decisions.
Organizational culture and national culture certainly had an effect on the two companies perspectives. Danone was a foreign company operating in a different cultural context, whereas Wahaha was a local company operating in its own native cultural context. This difference in culture likely contributed to the misalignment of expectations and subsequent conflict.
As a leader, it is important to handle conflict in a skilled manner. This can involve having conversations to understand the different perspectives, considering both sides of the issue, negotiating solutions, and being respectful and understanding. Ultimately, it is important to keep the focus on finding a resolution that will benefit both parties.
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What is the role of price in market economy?
Answer:
Price serves as a reminder for unexpected costs, allowing businesses and consumers to adjust to changing market conditions. Prices are instruments for the economic distribution of products and services. Typically, Prices play a significant role in the economy by balancing supply and demand.
Explanation:
ICLOS in financial analysis, the higher are the following ratios the better is the firm financial situation Except for a.Operating working capital tumover b.Inventory turnover c.Cash Ratio d.Quick Ratio
ICLOS in financial analysis, the higher are the following ratios the better is the firm financial situation Except Cash Ratio. (C)
In financial analysis, a higher operating working capital turnover, inventory turnover, and quick ratio all indicate a better financial situation for the firm. However, a higher cash ratio (C) is not necessarily better.
The cash ratio measures a firm's ability to pay off short-term liabilities with cash and cash equivalents. A higher cash ratio means that the firm has more cash and cash equivalents relative to its short-term liabilities, which can be a good thing in terms of liquidity. However, it can also indicate that the firm is not using its cash efficiently to generate profits.
Therefore, while a higher operating working capital turnover, inventory turnover, and quick ratio are generally better for a firm's financial situation, a higher cash ratio is not necessarily better.
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(ETHICS IN BUSINESS - BBCM3053] - Assignment 1 QUESTION 1 Identify an organization in Malaysia and summarize its code of conduct and business ethics. (50 MARKS)
The organization I have chosen to analyze for this question is Petronas, a Malaysian oil and gas company. Petronas has a code of conduct and business ethics that outlines the company's commitment to conducting business in an ethical, lawful, and responsible manner.
Some key aspects of Petronas' code of conduct and business ethics include: Compliance with laws and regulations: Petronas is committed to complying with all applicable laws and regulations in the countries in which it operates. Respect for human rights: Petronas respects the rights and dignity of all individuals and is committed to treating everyone fairly and with respect.
Protection of the environment: Petronas is committed to minimizing the environmental impact of its operations and promoting sustainable development.
Anti-corruption: Petronas has a zero-tolerance policy towards bribery and corruption and is committed to conducting business with integrity.
Fair competition: Petronas is committed to competing fairly in the marketplace and adhering to all applicable competition laws.
Conflicts of interest: Petronas employees are expected to avoid situations that could create a conflict of interest between their personal interests and the interests of the company.
Confidentiality: Petronas employees are expected to protect the confidentiality of the company's information and the information of its business partners.
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Smithen Company, a wholesale distributor, has been operating for only a few months. The company sells three products—sinks, mirrors, and vanities. Budgeted sales by product and in total for the coming month are shown below based on planned unit sales as follows:As shown by these data, operating income is budgeted at $46,400 for the month, break-even sales dollars at $940,996.95, and break-even unit sales at 1,917.10.Assume that actual sales for the month total $1,008,000 (2,100 units), with the CM ratio and per unit amounts the same as budgeted. Actual fixed expenses are the same as budgeted, $740,000. Actual sales by product are as follows: sinks, $252,000 (525 units); mirrors, $420,000 (1,050 units); and vanities, $336,000 (525 units).Required:1. Prepare a contribution format income statement for the month based on actual sales data. (Round your answers to 2 decimal places.)2. Compute the break-even point in sales dollars for the month, based on the actual data. (Round your percentage answers to nearest whole percent. Round other intermediate values and final answer to the nearest whole dollar.)3. Calculate the break-even point in unit sales for the month, based on the actual data. (Do not round your intermediate calculations. Round your final answer to the nearest whole number.)
In order to answer this question, we need to prepare a contribution format income statement for the month based on actual sales data.
compute the break-even point in sales dollars for the month based on the actual data, and calculate the break-even point in unit sales for the month based on the actual data.
Contribution Format Income Statement:
Sales Revenue: Sinks ($252,000 x $100 per unit) = $25,200,000
Mirrors ($420,000 x $95 per unit) = $39,900,000
Vanities ($336,000 x $160 per unit) = $53,760,000
Total Sales Revenue = $118,860,000
Variable Costs: Sinks ($252,000 x $50 per unit) = $12,600,000
Mirrors ($420,000 x $45 per unit) = $18,900,000
Vanities ($336,000 x $90 per unit) = $30,240,000
Total Variable Costs = $61,740,000
Contribution Margin = $118,860,000 - $61,740,000 = $57,120,000
Fixed Costs = $740,000
Operating Income = Contribution Margin - Fixed Costs = $56,380,000
Break-Even Point in Sales Dollars:
Break-Even Point in Sales Dollars = Fixed Costs / Contribution Margin Ratio
Contribution Margin Ratio = Contribution Margin / Sales Revenue
Contribution Margin Ratio = $57,120,000 / $118,860,000 = 0.48
Break-Even Point in Sales Dollars = $740,000 / 0.48 = $1,541,666.67
Break-Even Point in Unit Sales:
Break-Even Point in Unit Sales = Fixed Costs / (Contribution Margin per Unit x Number of Units)
Contribution Margin per Unit = Contribution Margin / Unit Sales
Contribution Margin per Unit = $57,120,000 / 2,100 = $27,257.14
Break-Even Point in Unit Sales = $740,000 / ($27,257.14 x 2,100) = 1,910 units
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For which capital component must you make a tax adjustment when calculating a firm’s weighted average cost of capital (WACC)?
a. Common stock
b. Preferred stock
c. Debt
Cold Goose Metal Works (CGMW) can borrow funds at an interest rate of 10.20% for a period of eight years. Its marginal federal-plus-state tax rate is 30%. CGMW’s after-tax cost of debt is (rounded to two decimal places).
At the present time, Cold Goose Metal Works (CGMW) has a series of five-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,438.04 per bond, carry a coupon rate of 14%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 30%. If CGMW wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)?
a. 0.0332
b. 0.0289
c. 0.026
d. 0.0347
For Debt capital component you must make a tax adjustment when calculating a firm’s weighted average cost of capital (WACC).
Cold Goose Metal Works (CGMW) can borrow funds at an interest rate of 10.20% for a period of eight years. Its marginal federal-plus-state tax rate is 30%. CGMW’s after-tax cost of debt is 0.026 (rounded to two decimal places).
At the present time, Cold Goose Metal Works (CGMW) has a series of five-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,438.04 per bond, carry a coupon rate of 14%, and distribute annual coupon payments.
The company incurs a federal-plus-state tax rate of 30%. If CGMW wants to issue new debt, A reasonable estimate for CGMW's after-tax cost of debt is 0.0347 (rounded to two decimal places). This is calculated by subtracting the tax rate (30%) from the coupon rate (14%) to get the pre-tax cost of debt (8%), and then multiplying this by (1-tax rate) to get the after-tax cost of debt.
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Currently, a company's stock sells for $120 per share. EPS is$20.75 and the company is expected to pay a $18 dividend per shareannually forever. What is the annual rate of return on thisstock?
The annual rate of return on this stock is 32.29%.
The annual rate of return on a stock can be calculated using the following formula: Annual Rate of Return = (Annual Dividend / Stock Price) + Growth RateIn this case, the annual dividend is $18 and the stock price is $120. The growth rate can be calculated by dividing the EPS by the stock price:Growth Rate = EPS / Stock Price = $20.75 / $120 = 0.1729So, the annual rate of return on this stock is:Annual Rate of Return = ($18 / $120) + 0.1729 = 0.15 + 0.1729 = 0.3229 or 32.29%
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Considering current Covid situation explain how does the concept of design thinking might work ?
Design thinking is a problem-solving approach that involves empathizing with the user, defining the problem, ideating solutions, prototyping, and testing. In the current Covid situation, design thinking can be used to find creative and innovative solutions to the challenges posed by the pandemic.
For example, design thinking can be used to redesign public spaces to ensure social distancing, create new ways for people to work and learn remotely.
Once the problem is defined, the next step is to ideate solutions. This can involve brainstorming, sketching, and creating mind maps to come up with a wide range of possible solutions.
Next, prototypes can be created to test the feasibility of the solutions. This can involve creating physical or digital prototypes and testing them with users to gather feedback.
Finally, the solutions can be tested and refined until they are ready to be implemented. By using design thinking in the Covid situation, we can find creative and innovative solutions to the challenges posed by the pandemic.
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Subject : International Marketing
Qustion#2
(a) Why are current account and capital account so important to
measure a country’s international economic position? Which account
is more important? Why?
The current account and the capital account are important to measure a country's international economic position because they provide an overview of the country's economic transactions with the rest of the world.
The current account includes trade in goods and services, income from investments, and unilateral transfers. The capital account includes transactions in financial assets and liabilities, such as foreign direct investment and portfolio investment.
Both accounts are important, but the current account is often considered more important because it reflects the country's ability to produce and export goods and services, and its competitiveness in the global market.
A surplus in the current account indicates that the country is exporting more than it is importing, which can lead to a stronger currency and greater economic stability.
On the other hand, a deficit in the current account indicates that the country is importing more than it is exporting, which can lead to a weaker currency and potential economic instability.
Overall, the current account and capital account are important measures of a country's international economic position and can provide valuable insights into the country's economic health and competitiveness in the global market.
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CARIBBEAN CREAM LIMITED Statement of Profit or Loss and Other Comprehensive Income Year ended February 28, 2021 Gross operating revenue Cost of operating revenue Notes 2021 2020 13 1.870,188,069 1,706,358.991 14 (a) (1,245,049,430) (1,180,747,229) 625,138,639 Gross profit Other income 545,611.762 1,994.192 547,605.954 625.138,639 Administrative, selling and distribution expenses: Administrative Selling and distribution 14 (6) 14 (c) (427,856,374) (395,323,017) (60.656,587) (68.301,238) (488.512,961) (463,624,255) 7 0 Impairment recovered/(loss) on trade receivables Operating profit before finance costs and taxation 1.804,151 138,429,829 (2.673,129) 81,308,570 Finance income - interest 1,333,200 1,133,753 Finance costs 15 (21.262,694) (20,270,787) Profit before taxation 118,500,335 62,171,556 Taxation 16 (17.819,728) 7.602,157) Profit, being total comprehensive income for the year 100.680,607 54,569.399 Earnings per stock unit 17 0.27 0.14 CARIBBEAN CREAM LIMITED Statement of Financial Position February 28, 2021 Notes 2021 2020 4 NON-CURRENT ASSETS Property, plant and equipment Right-of-use assets Total non-current assets 5(8) 825,483,694 93,044,425 918,528, 119 773, 143,905 95,435,877 868,579,782 6 7 217,283,548 93,514,369 CURRENT ASSETS Cash and cash equivalents Trade and other receivables Tax recoverable Inventories Total current assets 129.196,815 58,211,081 779,621 117.774,685 305.982,202 8 162,352,192 473,150,109 9 185,346,512 5(b) 10 CURRENT LIABILITIES Trade and other payables Taxation payable Current portion of lease liabilities Current portion of long-term loans Total current liabilities Net current assets Total assets less current liabilities NON-CURRENT LIABILITIES Long-term loans Lease liabilities Deferred tax liability Total non-current liabilities 214,491,488 10,734,482 17,456,688 6,977,778 249,660,432 223,489,677 1.142,017,796 19.539,121 27,441,951 232,327,584 73,634,618 942,214,400 10 5(b) 11 206,927,474 86,580,789 14,576,941 308,085,204 104,972,207 79,622,207 13,389,525 197.983,939 12 EQUITY Share capital Accumulated profits Total equity Total non-current liabilities and equity 111,411,290 722,521,302 833,932,592 1.142,017,796 111.411,290 832,819,171 744,230,481 942,214,400 a. Working capital b. Acid-test Ratio c. Current Ratio d. Average Payment Period e. Days Cash on Hand, Short-Term Sources.
According to the given credentials the Working capital is $56,321,770,Acid-test Ratio is 0.75,Current Ratio is 1.23, Average Payment Period is 60.77 days, . Days Cash on Hand, Short-Term Sources is 37.94 days.
a. Working capital: This is calculated by subtracting current liabilities from current assets. In this case, working capital for 2021 would be $305,982,202 (current assets) - $249,660,432 (current liabilities) = $56,321,770.
b. Acid-test Ratio: This is calculated by subtracting inventories from current assets and then dividing by current liabilities. In this case, the acid-test ratio for 2021 would be ($305,982,202 - $117,774,685) / $249,660,432 = 0.75.
c. Current Ratio: This is calculated by dividing current assets by current liabilities. In this case, the current ratio for 2021 would be $305,982,202 / $249,660,432 = 1.23.
d. Average Payment Period: This is calculated by dividing accounts payable by the cost of goods sold and then multiplying by 365. In this case, the average payment period for 2021 would be ($206,927,474 / $1,245,049,430) * 365 = 60.77 days.
e. Days Cash on Hand, Short-Term Sources: This is calculated by dividing cash and cash equivalents by the cost of goods sold and then multiplying by 365. In this case, the days cash on hand for 2021 would be ($129,196,815 / $1,245,049,430) * 365 = 37.94 days.
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