option A is the correct solution: a decrease in wage rates in an economy would increase aggregate supply.
Why it is?
In the short-run, a decrease in wage rates in an economy would increase aggregate supply. When wage rates decrease, the cost of production for firms decreases, making it more profitable for firms to produce goods and services.
This leads to an increase in the quantity of output supplied by firms, which in turn increases aggregate supply. The relationship between wage rates and aggregate supply is depicted by the upward sloping aggregate supply curve, which shows that a decrease in costs of production, including wages, leads to an increase in aggregate supply.
Therefore, option A is the correct answer: a decrease in wage rates in an economy would increase aggregate supply.
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A project requires an initial investment of EUR 10 000 and has a discount rate of 11%. It generates cash flows of EUR 5 000 one year from now, EUR 5 500 two years from now, and EUR 7 000 three years from now. What is the NPV of the project?
EUR 3 983.85. is the NPV of the project.
The NPV (Net Present Value) of a project is the sum of the present values of all the expected cash flows from the project. To calculate the NPV, we need to use the following formula:
NPV = CF1 / (1 + r)^1 + CF2 / (1 + r)^2 + CF3 / (1 + r)^3 + ... + CFn / (1 + r)^n
Where CF1, CF2, CF3, ... , CFn are the expected cash flows in year 1, year 2, year 3, ... , year n, and r is the discount rate.
In this case, the initial investment is EUR 10 000, the discount rate is 11%, and the expected cash flows are EUR 5 000 one year from now, EUR 5 500 two years from now, and EUR 7 000 three years from now. Therefore, we can plug these values into the formula and calculate the NPV:
NPV = -10 000 + 5 000 / (1 + 0.11)^1 + 5 500 / (1 + 0.11)^2 + 7 000 / (1 + 0.11)^3
NPV = -10 000 + 4 504.50 + 4 469.61 + 5 009.74
NPV = EUR 3 983.85
Therefore, the NPV of the project is EUR 3 983.85.
In conclusion, the NPV is a popular method for evaluating investment opportunities, as it provides a comprehensive assessment of the profitability of an investment, taking into account both the initial cost and the expected future cash flows. However, it's important to use a realistic discount rate and cash flow projections to ensure accurate results.
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critically discuss the journey of an act of parliament
(primary legislation) as a source of law in the uk.
The journey of an Act of Parliament (primary legislation) as a source of law in the UK can be summarized in the following steps:
1. Proposal: The first step in the journey of an Act of Parliament is the proposal of a new law. This can be done by the government, individual members of Parliament, or through a private member's bill.
2. First Reading: The proposed legislation is introduced to the House of Commons or the House of Lords and is given a first reading. This is a formal introduction and no debate takes place at this stage.
3. Second Reading: The proposed legislation is given a second reading, where it is debated and scrutinized by members of Parliament. If the legislation is approved at this stage, it will move on to the next step.
4. Committee Stage: The proposed legislation is examined in detail by a committee of members of Parliament. The committee may suggest amendments to the legislation, which are then debated and voted on.
5. Report Stage: The proposed legislation, with any amendments, is presented to the House of Commons or the House of Lords for further debate and scrutiny.
6. Third Reading: The proposed legislation is given a third and final reading, where it is debated and voted on. If it is approved, it will move on to the next step.
7. Royal Assent: The proposed legislation is presented to the monarch for approval. If the monarch approves the legislation, it becomes an Act of Parliament and is officially a source of law in the UK.
Overall, the journey of an Act of Parliament as a source of law in the UK is a complex and multi-step process that involves careful scrutiny and debate at every stage.
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Altair,Inc., gathered the following data from its accounting records for the year ended December 31, 2006:
Sales $750,000
Gain on sale of investments 5,000
Cost of goods sold 450,000
Depreciation expense 25,000
Other operating expenses 198,000
Loss on sale of plant assets 2,000
Income tax expenses 24,000
Net income 56,000
Increases (decreases) in selected account balances:
Cash $ 7,000
Accounts receivable 80,000
Inventory (35,000)
Prepaid expenses 2,000
Accounts payable 75,000
Accrued liabilities (10,000)
Income taxes payable 8,000
Prepare the operating activities section of Altair's 2006 statement of cash flows using BOTH the direct method and the indirect method.
Both the direct and indirect methods result in the same net cash provided by operating activities of $29,000.
Direct Method:
Cash received from customers = Sales - Increase in accounts receivable
= $750,000 - $80,000
= $670,000
Cash paid for merchandise = Cost of goods sold + Decrease in inventory - Increase in accounts payable
= $450,000 + $35,000 - $75,000
= $410,000
Cash paid for operating expenses = Other operating expenses + Depreciation expense + Increase in prepaid expenses + Decrease in accrued liabilities
= $198,000 + $25,000 + $2,000 - $10,000
= $215,000
Cash paid for income taxes = Income tax expenses - Increase in income taxes payable
= $24,000 - $8,000
= $16,000
Net cash provided by operating activities = Cash received from customers - Cash paid for merchandise - Cash paid for operating expenses - Cash paid for income taxes
= $670,000 - $410,000 - $215,000 - $16,000
= $29,000
Indirect Method:
Net income = $56,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense = $25,000
Loss on sale of plant assets = $2,000
Gain on sale of investments = ($5,000)
Decrease in inventory = $35,000
Increase in accounts receivable = ($80,000)
Increase in prepaid expenses = ($2,000)
Increase in accounts payable = $75,000
Decrease in accrued liabilities = ($10,000)
Increase in income taxes payable = $8,000
Net cash provided by operating activities = $56,000 + $25,000 + $2,000 - $5,000 + $35,000 - $80,000 - $2,000 + $75,000 - $10,000 + $8,000
= $29,000
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Assume LetsGoBuffalo Co. starts to run into cash flow problems because of the novel Corona virus. This makes the company and its bonds more risky. What do you expect will happen to the price and yield to maturity of the bonds when the market prices in this new risk?
When a company runs into cash flow problems, it becomes riskier for investors to invest in its bonds. This is because the company may not be able to make the required interest payments or repay the principal amount at maturity.
As a result, the market will price in this new risk by lowering the price of the bonds. This is because investors will demand a higher yield to compensate for the increased risk.
Therefore, the price of LetsGoBuffalo Co.'s bonds will decrease, and the yield to maturity will increase. This is because the yield to maturity is inversely related to the price of the bond. When the price of a bond decreases, the yield to maturity increases, and vice versa.
In summary, the price of LetsGoBuffalo Co.'s bonds will decrease and the yield to maturity will increase when the market prices in the new risk associated with the company's cash flow problems due to the novel Corona virus.
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18. Flax Corp. Uses the direct method to prepare its statement of cash flows. Flax's trial balances at December 31, year 2 and year 1 are as follows:
Year 1:
Debits
Cash: $32,000
Accounts receivable: $30,000
Inventory: $47,000
Property, plant, & equipment: $95,000
Unamortized bond discount: $5,000
Cost of goods sold: $380,000
Selling expenses: $172,000
General and administrative expenses: $151,300
Interest expense: $2,600
Income tax expense: $61,200
Total Debits: $976,100
Credits
Allowance for uncollectible accounts: $1,100
Accumulated depreciation: $15,000
Trade accounts payable: $17,500
Income taxes payable: $27,100
Deferred income taxes: $4,600
8% callable bonds payable: $20,000
Common stock: $40,000
Additional paid-in capital: $7,500
Retained earnings: $64,600
Sales: $778,700
Total Credits: $976,100
Year 2:
Debits
Cash: $35,000
Accounts receivable: $33,000
Inventory: $31,000
Property, plant, & equipment: $100,000
Unamortized bond discount: $4,500
Cost of goods sold: $250,000
Selling expenses: $141,500
General and administrative expenses: $137,000
Interest expense: $4,300
Income tax expense: $20,400
Total Debits: $756,700
Credits
Allowance for uncollectible accounts: $1,300
Accumulated depreciation: $16,500
Trade accounts payable: $25,000
Income taxes payable: $21,000
Deferred income taxes: $5,300
8% callable bonds payable: $45,000
Common stock: $50,000
Additional paid-in capital: $9,100
Retained earnings: $44,700
Sales: $538,800
Total Credits: $756,700
-Flax purchased $5,000 in equipment during year 2.
-Flax allocated one third of its depreciation expense to selling expenses and the remainder to general and administrative expenses. There were no write-offs of accounts receivable during year 2.
What amount should Flax report in its statement of cash flows
for the year ended December 31 , year 2, for cash paid for goods to be sold?
a. $258,500
b. $257,500
c. $242,500
d. $226,500
From the income statement given, the final balance on the statement of cash flow is $257,500
What amount should Flax report in its statement of cash flowsTo calculate the cash paid for goods to be sold, we need to start with cost of goods sold from the income statement and make adjustments for changes in inventory and accounts payable.
Starting with cost of goods sold for year 2 of $250,000, we need to adjust for the increase in inventory, which is $31,000 - $47,000 = -$16,000. This means inventory decreased by $16,000, so we need to add it to cost of goods sold to get the cost of goods sold for cash purposes, which is $250,000 + $16,000 = $266,000.
Next, we need to adjust for the change in accounts payable, which is $25,000 - $17,500 = $7,500. This means accounts payable increased by $7,500, so we need to subtract it from the cost of goods sold for cash purposes, which is $266,000 - $7,500 = $258,500.
Finally, we need to subtract the $1,000 increase in accounts payable due to the equipment purchase, which gives us the final answer of $257,500.
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Why is time important to competitive advantage? Identify andexplain six keycontri- butions that speed can make to logisticsstrategy.
Time is important to competitive advantage because it allows a company to respond quickly to changes in the market and to customer demands. There are six key contributions that speed can make to logistics strategy.
1. Improved customer service: By delivering products quickly and efficiently, a company can provide a higher level of customer service.
2. Increased efficiency: Speed can help a company operate more efficiently by reducing the time it takes to process orders, ship products, and complete other logistical tasks.
3. Reduced costs: By increasing efficiency, a company can reduce costs associated with logistics, such as warehousing and transportation costs.
4. Competitive advantage: By being able to respond quickly to changes in the market, a company can gain a competitive advantage over its competitors.
5. Increased market share: By providing better customer service and operating more efficiently, a company can increase its market share.
6. Increased profitability: By reducing costs and increasing market share, a company can increase its profitability.
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Suppose Mr. A is faced with the possibility of an auto accident this coming year. Assume the probability of the accident is 40% (0.40). [Obviously, Mr. A is a more reckless driver than you are]. Also assume that the cost of the auto accident for Mr. A is $20,000. Finally, assume that Mr. A will have $100,000 at the end of the year if he does not have an accident. Without insurance Mr. A’s wealth at the end of the year is uncertain.
What is the standard deviation of Mr. A’s wealth at the end of the year?
The standard deviation of Mr. A's wealth at the end of the year can be calculated using the formula for standard deviation of a discrete random variable:
Standard deviation = √[(x1 - μ)^2 * P(x1) + (x2 - μ)^2 * P(x2) + ... + (xn - μ)^2 * P(xn)]
Where x1, x2, ... , xn are the possible values of the random variable, μ is the expected value, and P(x1), P(x2), ... , P(xn) are the probabilities of the possible values.
In this case, the possible values of Mr. A's wealth at the end of the year are $100,000 (if he does not have an accident) and $80,000 (if he has an accident), with probabilities of 0.60 and 0.40, respectively. The expected value of Mr. A's wealth at the end of the year is:
μ = ($100,000 * 0.60) + ($80,000 * 0.40) = $92,000
The standard deviation of Mr. A's wealth at the end of the year is:
Standard deviation = √[($100,000 - $92,000)^2 * 0.60 + ($80,000 - $92,000)^2 * 0.40] = √[$3,200,000,000 * 0.60 + $1,440,000,000 * 0.40] = √[$1,920,000,000 + $576,000,000] = √[$2,496,000,000] = $49,899.99
Therefore, the standard deviation of Mr. A's wealth at the end of the year is $49,899.99.
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Tina sells cookie what is Tina’s ROI 
Tina's ROE, based on the production cost and the selling price can be found to be 57 %.
How to find the ROE ?ROI is a financial metric that measures the profitability of an investment relative to its cost. It is typically calculated as a percentage, using the following formula:
ROI = (Gains from Investment - Cost of Investment) / Cost of Investment
In this case, the gains from investment would be the total revenue from selling cookies, and the cost of investment would be the expenses associated with producing and selling the cookies.
For Tina, the ROE would therefore be:
= ( ( 12 - 7. 65) ) / 7. 65
= 57 %
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The full question is:
Tina sells cookies. What is Tina's ROI? a. Production cost: $7.65/box of cookies b. Selling price: $12/boxes of cookies
Flight overbooking is a problem for airlines and passengers of a
flight. What could be 5 possible solutions to overbooked flights in
the airline industry?
Overbooking of flights is a common problem in the airline industry that leads to inconvenience for both the airline and the passengers. The 5 ways to reduce this - accuracy, offer incentives, introduce the bidding, increase the flights and penalty system.
Here are five possible solutions to overbooked flights:
1. Improve the accuracy of forecasting: Airlines can use data analytics to accurately forecast the number of passengers that are likely to show up for a flight. This can help them avoid overbooking flights.
2. Offer incentives for passengers to voluntarily give up their seats: Airlines can offer incentives such as vouchers, upgrades, or refunds to passengers who are willing to give up their seats on overbooked flights.
3. Implement a bidding system: Airlines can implement a bidding system where passengers can bid for seats on overbooked flights. The highest bidders get the seats, while the others are accommodated on alternative flights.
4. Increase the number of flights: Airlines can increase the number of flights on popular routes to accommodate more passengers and avoid overbooking.
5. Implement a penalty system for no-shows: Airlines can implement a penalty system for passengers who don't show up for their flights. This can discourage passengers from booking flights that they are not sure they will take, reducing the likelihood of overbooking.
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Interpret TWO (2) dimensions of external environment about how
they affect HR practices.
The external environment has two main dimensions that can significantly affect HR practices are economic environment and social environment.
The external environment has two main dimensions that can significantly affect HR practices.
The first dimension is the external economic environment, which includes factors such as inflation, interest rates, and employment levels. These factors can impact an organization's recruiting and staffing strategies, as well as their compensation plans.
The second dimension is the external social environment, which includes factors such as societal values, trends, and laws. This can affect how HR practices, such as job descriptions, workplace policies, and workplace cultures, are structured and implemented.
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Derek borrows $318,624.00 to buy a house. He has a 30-year
mortgage with a rate of 5.26%. After making 112.00 payments, how
much does he owe on the mortgage
Derek owes $293,872.96 on the mortgage after making 112 payments.
To calculate this, we first need to find the monthly payment using the formula P = L[c(1 + c)^n]/[(1 + c)^n - 1], where P is the monthly payment, L is the loan amount, c is the monthly interest rate, and n is the number of monthly payments.
Plugging in the given values, we get:
P = 318624[0.00526(1 + 0.00526)^360]/[(1 + 0.00526)^360 - 1] = $1755.12
Next, we need to find the remaining balance after 112 payments. We can do this by using the formula B = L(1 + c)^n - P[(1 + c)^n - 1]/c, where B is the remaining balance, L is the loan amount, c is the monthly interest rate, n is the number of monthly payments, and P is the monthly payment.
Plugging in the given values, we get:
B = 318624(1 + 0.00526)^112 - 1755.12[(1 + 0.00526)^112 - 1]/0.00526 = $293,872.96
Therefore, Derek owes $293,872.96 on the mortgage after making 112 payments.
It is important to consider the investment aspect of purchasing a home. While Derek is paying off his mortgage, he is also building equity in his home, which can be seen as a form of investment. As the value of his home potentially increases over time, Derek may be able to sell it for a profit in the future.
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Due to the extreme situations caused by Covid, your MRO company planned to close one
department. Employees in that department would either be retrenched or redeployed to another
department. Rate the different Clampitt communication strategies to communicate to the
people affected. How could the company help the people affected to transit the changes?
In response to the extreme situations caused by Covid, there are a few different Clampitt communication strategies that can be used to communicate with the employees - The strategy is to be open and transparent about the reasons for the closure. Another strategy is to provide support and resources to help the affected employees transition to new roles or find new employment.
The third strategy is to communicate clearly and consistently throughout the process, to ensure that all employees are aware of what is happening and what steps they need to take. By using these strategies, the company can help to support the affected employees through the transition.
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Spire plc is raising funds for expansion through a rights issue. Spire plc’s shares have a nominal value of £1 and a market value of £2.90. In the issue, one new share will be issued for every three shares at a price of £2.30.
What is the theoretical ex-rights price of a share?
a.£1.33
b.£2.75
c.£3.67
d.£11.00
The correct option of theoretical ex-rights price of a share are b. £2.75
The theoretical ex-rights price of a share can be calculated using the formula: (Market value of existing shares + Issue price of new shares) / (Number of existing shares + Number of new shares). In this case, the market value of existing shares is £2.90,
the issue price of new shares is £2.30, the number of existing shares is 3, and the number of new shares is 1. Plugging these values into the formula, we get:
(2.90 * 3 + 2.30 * 1) / (3 + 1) = 10.00 / 4 = 2.50
Therefore, the theoretical ex-rights price of a share is £2.50.
The closest answer to this is option b. £2.75.
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The situation of corporate governance in UAE (local
& Federal level). (500 words)
Corporate governance in the UAE is regulated by both local and federal laws.
At the local level, each Emirate has its own laws and regulations that govern the operation of companies within its jurisdiction. These laws are designed to ensure that companies are managed in a way that is consistent with the interests of their shareholders and other stakeholders.
At the federal level, the UAE has a number of laws and regulations that apply to all companies operating within the country. These include the UAE Companies Law, which sets out the requirements for the formation and management of companies, and the UAE Securities and Commodities Authority (SCA) Law, which regulates the operation of the UAE's securities markets.
One of the key principles of corporate governance in the UAE is the requirement for companies to have a board of directors. The board is responsible for overseeing the company's management and ensuring that it operates in the best interests of its shareholders. The UAE Companies Law sets out the requirements for the composition and operation of the board, including the requirement for a minimum of three directors and the need for regular board meetings.
Another important aspect of corporate governance in the UAE is the requirement for companies to have an external auditor. The auditor is responsible for reviewing the company's financial statements and providing an independent opinion on their accuracy. The UAE Companies Law requires all companies to have an auditor, and the SCA Law sets out the requirements for the appointment and operation of auditors.
Overall, the UAE has a strong regulatory framework for corporate governance, with laws and regulations at both the local and federal level designed to ensure that companies are managed in a way that is consistent with the interests of their shareholders and other stakeholders. However, there is always room for improvement, and the UAE authorities are constantly working to strengthen the country's corporate governance framework and ensure that it remains in line with international best practices.
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Under ---- technique, researchers provide respondents with the opportunity to express their feelings through nonverbal form such as sounds, music, and drawings. *Focus group interviewObservational researchMetaphor analysisProjective techniquesPeople with ------ Need for Cognition (NFC) likes the part of an ad that is rich in product-related information and people with ---- NFC are attracted to background aspects of an ad, such as attractive model or well-known celebrity. *Low, HighLow, ModerateHigh, LowHigh, ModerateIndividuals who successfully achieve their goals usually set new and higher goals for themselves. They raise their -------. *Level of Defense mechanismLevel of MotivationLevel of CognitionLevel of aspirationSome theorists have emphasized the dual influence of ----- and ----- on personality development. *Heredity and Early childhood experiencesSocial and Political influencesEarly childhood experiences and SocietyHeredity and environmental influences
The correct option are D, A, D, D.
1 - Under Projective techniques researchers provide respondents with the opportunity to express their feelings.
2 - People with high Need for Cognition (NFC) likes the part of an ad that is rich in product-related information
3 - Individuals who successfully achieve their goals usually set new and higher goals for themselves.
4 - Some theorists have emphasized the dual influence of heredity and environmental influences
The correct answers to the questions are as follows:
1. Projective techniques: Under projective techniques, researchers provide respondents with the opportunity to express their feelings through nonverbal form such as sounds, music, and drawings.
2. High, Low: People with high Need for Cognition (NFC) likes the part of an ad that is rich in product-related information and people with low NFC are attracted to background aspects of an ad, such as attractive model or well-known celebrity.
3. Level of aspiration: Individuals who successfully achieve their goals usually set new and higher goals for themselves. They raise their level of aspiration.
4. Heredity and environmental influences: Some theorists have emphasized the dual influence of heredity and environmental influences on personality development.
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SUBJECT : Freight Transport Management
1. Containerization is one of important consideration to move the items in good and secure way.
(b) Explain the benefits of using container to move the items.
[25 marks]. Please provide list and example
Containerization is the process of using standardized containers to transport goods efficiently and securely. There are several benefits of using containers to move items, including:Efficiency, Security. Flexibility, Environmental benefits and Cost-effectiveness
1. Efficiency: Containers can be easily loaded and unloaded onto ships, trains, and trucks, making the transportation process faster and more efficient. This reduces the time it takes for goods to reach their destination and can help to lower transportation costs.
2. Security: Containers are sealed and locked, providing a secure way to transport goods. This reduces the risk of theft or damage during transit, ensuring that items arrive at their destination in good condition.
3. Flexibility: Containers come in a variety of sizes and can be used to transport a wide range of items, from small consumer goods to large industrial equipment. This makes containerization a flexible and versatile option for freight transport.
4. Cost-effectiveness: Because containers can be easily transferred between different modes of transportation, they help to reduce the cost of moving goods. This makes containerization a cost-effective option for businesses looking to transport goods.
5. Environmental benefits: Containers can be reused and recycled, reducing the environmental impact of freight transport. In addition, the efficiency of containerization means that fewer trips are required to move goods, which can help to reduce emissions and other environmental impacts.
Example: A company that manufactures furniture can use containers to transport their products to retailers around the world. By using containers, the company can ensure that their furniture arrives at its destination in good condition, while also reducing transportation costs and minimizing their environmental impact.
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hurry please i need the answer im on a quiz
The transcontinental railroad change life for people in the United States because it became much easier to travel from the east to the west.
What is transcontinental railroad?
Contiguous railroad trackage that spans a continental land mass and has terminals at various oceans or continental borders is known as a transcontinental railroad or transcontinental railway. Such networks can be over lines that are owned or controlled by a single railroad, a network of railroad companies, or both along a continuous path.
Although there are railroads all over Europe, they are typically not regarded as transcontinental, with the potential exception of the legendary Orient Express.
Transcontinental railroads made it possible to explore and settle previously unreachable uninhabited interior areas of continents.
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1 Started in business with £10,500 cash. 2 Put £9,000 of the cash into a bank account. 3 Bought goods for cash £550. 4 Bought goods on time from: T. Dry £800; F. Hood £930; M. Smith £160; G. Low £510. 5 Bought stationery on time from Buttons Ltd £89. 6 Sold goods on time to: R. Tong £170; L. Fish £240; M. Singh £326; A. Tom £204. 8 Paid rent by cheque £220. 10 Bought fixtures on time from Chiefs Ltd £610. 11 Paid salaries in cash £790. 14 Returned goods to: F. Hood £30; M. Smith £42. 15 Bought van by cheque £6,500. 16 Received loan from B. Barclay by cheque £2,000. 18 Goods returned to us by: R. Tong £5; M. Singh £20. 21 Cash sales £145. 24 Sold goods on time to: L. Fish £130; A. Tom £410; R. Pleat £158. We paid the following by cheque: F. Hood £900; M. Smith £118. 29 Received cheques from: R. Pleat £158; L. Fish £370. 30 Received a further loan from B. Barclay by cash £500. 30 Received £614 cash from A. Tom. 26
The transactions listed in the question involve a variety of business activities, including starting a business, putting cash into a bank account, buying goods and stationery, selling goods, paying rent and salaries, returning goods, buying a van, receiving loans, and receiving cash and cheques from customers.
Each of these transactions has an impact on the business's financial position and should be recorded in the appropriate accounts.
For example, the transaction "Bought van by cheque £6,500" would be recorded as a debit to the "Vehicles" account and a credit to the "Bank" account. This reflects the fact that the business has acquired a new asset (the van) and has paid for it with funds from the bank account.
Similarly, the transaction "Received loan from B. Barclay by cheque £2,000" would be recorded as a debit to the "Bank" account and a credit to the "Loans Payable" account. This reflects the fact that the business has received cash from the loan and now has a liability to repay the loan in the future. By recording each of these transactions in the appropriate accounts, the business can keep track of its financial position and make informed decisions about its operations.
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20242023Current Assets:Cash$81,900$18,500Accounts Receivable14,90021,700Merchandise Inventory63,60058,800Current Liabilities:Accounts Payable14,90021,700Merchandise Inventory63,60058,800Current Liabilities:Accounts Payable31,60030,100Accrued Liabilities11,20011,700Payment of cash dividends$15,200Depreciation expense$17,100Purchase of equipment with cash55,100Purchase of building with cash104,000Issuance of long-term notes payable to borrow cash44,000Net income62,600Issuance of common stock for cash111,000Requirement 1. Prepare the statement of cash flows ofJohnsonEducational Supply for the year ended December 31,2024.Use the indirect method to report cash flows from operating activities. (Use a minus sign or parentheses for amounts that result in a decrease in cash. If a box is not used in the statement, leave the box empty; do not select a label or enter a zero.)Complete the statement one section at a time, beginning with the cash flows from operating activities.Johnson Educational SupplyStatement of Cash FlowsYear Ended December 31, 2024Cash Flows from Operating Activities:Net IncomeAdjustments to Reconcile Net Income to Net CashProvided by (Used for) Operating Activities:Net Cash Provided by (Used for) Operating ActivitiesPart 2Cash Flows from Investing Activities:Net Cash Provided by (Used for) Investing ActivitiesPart 3Cash Flows from Financing Activities:Net Cash Provided by (Used for) Financing ActivitiesPart 4Net Increase (Decrease) in CashCash Balance, December 31, 2023Cash Balance, December 31, 2024Part 5Requirement 2. EvaluateJohnson'scash flows for the year. Mention all three categories of cash flows, and give the reason for your evaluation.Complete the following statements to evaluateJohnson'scash flows.Operations are▼generatingusing upcash.The company is▼divesting itself ofinvesting in newplant assets.There is more financing by▼borrowingissuing stockthan by▼borrowing.issuing stock.Cash▼decreasedincreasedduring the year.Part 6For the reasons given above,Johnson'scash flows look▼strongweak.Part 7Requirement 3. IfJohnsonplans similar activity for2025,what is its expected free cash flow? (Use a minus sign or parentheses for amounts that result in a decrease in cash. Abbreviations used: Cash pmts for planned invest. = Cash payments for planned investments in long-term assets; NCOA = Net cash provided by operating activities; NCFA = Net cash provided by financing activities.)Select the labels and enter the amounts to calculateJohnson'sexpected free cash flow for2025.
1. Using the indirect method cash flows from operating activities are Net Cash Operating Activities $91,900, Net Cash Investing Activities ($159,100), Net Cash Financing Activities $139,800, Net Increase/Decrease in Cash $72,600, Cash Balance, December 31, 2023 $18,500, and Cash Balance, December 31, 2024 $91,100. 2. Operations are generating cash. The company is investing in new plant assets. There is more financing by issuing stock than by borrowing. Cash increased during the year. 3. Expected free cash flow for 2025 is $72,600.
1. The statement of cash flows for Johnson Educational Supply at year ended December 31, 2024 using indirect method is given as:
Cash Flows from Operating Activities:
Net Income $62,600
Adjustments to Reconcile Net Income to Net Cash Provided by (Used for) Operating Activities:
Depreciation Expense $17,100
Changes in Current Assets and Liabilities:
Accounts Receivable $6,800
Merchandise Inventory ($4,800)
Accounts Payable $9,700
Accrued Liabilities ($500)
Net Cash Provided by (Used for) Operating Activities $91,900
Cash Flows from Investing Activities:
Purchase of Equipment with Cash ($55,100)
Purchase of Building with Cash ($104,000)
Net Cash Provided by (Used for) Investing Activities ($159,100)
Cash Flows from Financing Activities:
Issuance of Long-Term Notes Payable to Borrow Cash $44,000
Issuance of Common Stock for Cash $111,000
Payment of Cash Dividends ($15,200)
Net Cash Provided by (Used for) Financing Activities $139,800
Net Increase (Decrease) in Cash $72,600
Cash Balance, December 31, 2023 $18,500
Cash Balance, December 31, 2024 $91,100
2. Evaluating Johnson's cash flows for the year, the operations are generating cash. The company is investing in new plant assets. There is more financing by issuing stock than by borrowing. Cash increased during the year. For the reasons given above, Johnson's cash flows look strong.
3. If Johnson plans similar activity for 2025, its expected free cash flow is:
Expected Free Cash Flow for 2025:
Net Cash Provided by Operating Activities (NCOA) $91,900
Less: Cash Payments for Planned Investments in Long-Term Assets (Cash pmts for planned invest.) ($159,100)
Less: Net Cash Provided by Financing Activities (NCFA) $139,800
Expected Free Cash Flow for 2025 $72,600
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Klingon Enterprises is considering opening a retail store selling classic weapons from history. Gowron, the CEO of the company has estimated it will cost $500K today to open the store today, and the best guess is after-tax cash flows will be $95K next year, and this is expected to grow each year after. The store has a lease of 7 years.
a) If the appropriate discount rate for this project is 12.0%, what level of annual growth will the business need to break-even on an NPV basis? Assume cash flows occur at the end of each year. (Construct a model on Excel and use Goal Seek.)
b) Suppose we make a more realistic assumption that the annual cash flows occur at the middle of each year, how does this fact change your answer to a)?
a) To break-even on an NPV basis, the NPV of the project needs to be equal to zero. We can use the Goal Seek function in Excel to find the level of annual growth that will make the NPV equal to zero.
b) If we assume that the annual cash flows occur at the middle of each year, we need to adjust the discount rate to reflect this fact. The adjusted discount rate is given by:
Adjusted discount rate = (1 + 12.0%)^(1/2) - 1 = 5.83%
a) To find level of annual growth, first, we need to construct a model on Excel with the following inputs:
- Initial investment: -$500K
- Discount rate: 12.0%
- Cash flows: $95K in year 1, and growing at an annual rate of x% for the next 6 years
- NPV: The sum of the present value of the cash flows, discounted at 12.0%
Next, we can use the Goal Seek function to find the value of x that will make the NPV equal to zero. To do this, we need to:
1. Click on the Data tab in Excel
2. Click on the What-If Analysis button
3. Click on Goal Seek
4. Set the NPV cell equal to zero
5. Set the annual growth rate cell as the changing cell
6. Click on OK
The Goal Seek function will find the value of x that will make the NPV equal to zero. This is the level of annual growth that the business needs to break-even on an NPV basis.
b) If we assume that the annual cash flows occur at the middle of each year, we need to adjust the discount rate to reflect this fact. The adjusted discount rate is given by:
Adjusted discount rate = (1 + 12.0%)^(1/2) - 1 = 5.83%
We can then use the Goal Seek function in Excel to find the level of annual growth that will make the NPV equal to zero, using the adjusted discount rate. The steps are the same as in part a), except that we need to use the adjusted discount rate in the NPV calculation. The Goal Seek function will find the value of x that will make the NPV equal to zero, using the adjusted discount rate. This is the level of annual growth that the business needs to break-even on an NPV basis, assuming that the annual cash flows occur at the middle of each year.
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What happens if you break employment contract?
If you break an employment contract, it can result in various consequences depending on the specific terms of the contract and the nature of the breach. Some possible consequences include Financial penalties,Legal action, Damage to reputation, Loss of benefits.
1. Financial penalties: You may be required to pay a financial penalty for breaking the contract, as specified in the contract itself.
2. Legal action: The employer may take legal action against you for breaking the contract, seeking damages for any losses they incurred as a result of the breach.
3. Damage to reputation: Breaking an employment contract can damage your professional reputation and make it harder to find new employment in the future.
4. Loss of benefits: If you had certain benefits as part of your employment contract, such as health insurance or retirement benefits, you may lose those benefits if you break the contract.
It is important to carefully review the terms of your employment contract and consider the potential consequences before making the decision to break it.
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What explains the spread between the interest rate on a 20-year Treasury bond and a 2-year Treasury note? What explains the difference between a 10-year corporate bond (rated BBB) and a 5-year municipal bond (rated A)?
If a yield curve looks like the ones shown here, what is the market predicting about the movement of future short-term interest rates? What might the yield curve indicate about the market’s predictions concerning the inflation rate in the future? Give a separate answer for each yield curve.
The spread between the interest rate on a 20-year Treasury bond and a 2-year Treasury note can be explained by the difference in maturity dates. The longer the maturity date, the higher the interest rate.
This is because investors are taking on more risk by holding onto the bond for a longer period of time. Therefore, they require a higher return for their investment.
The difference between a 10-year corporate bond (rated BBB) and a 5-year municipal bond (rated A) can be explained by the difference in credit ratings. A bond with a higher credit rating is considered to be less risky, and therefore, will have a lower interest rate. A bond with a lower credit rating is considered to be riskier, and therefore, will have a higher interest rate.
If a yield curve looks like the one shown in the first image, the market is predicting that future short-term interest rates will rise. This is because the yield curve is upward sloping, indicating that longer-term bonds have higher interest rates than shorter-term bonds.
If a yield curve looks like the one shown in the second image, the market is predicting that future short-term interest rates will fall. This is because the yield curve is downward sloping, indicating that longer-term bonds have lower interest rates than shorter-term bonds.
The yield curve can also indicate the market's predictions concerning the inflation rate in the future. If the yield curve is upward sloping, the market is predicting that inflation will rise in the future. If the yield curve is downward sloping, the market is predicting that inflation will fall in the future.
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1. How does the accounting for Investments (such as marketable securities) violate the historical cost principle? Why is this considered appropriate?2. Explain why it takes so long for a home buyer to reduce the principal amount of a 30-year mortgage.3. Explain the following in relation to payroll:a. why workers’ paychecks are often significantly less than the amount quoted in their contract when hiredb. who pays Social Security tax if someone is self-employed and who pays it if the person is employed by a company
1. The accounting for investments violates the historical cost principle as the value of the security may vary over time, meaning it is not recorded at its original cost. It is considered appropriate as it provides a more accurate representation of the company’s current financial position. 2. A 30-year mortgage takes a long time to reduce the principal amount because the monthly payments consist mostly of interest, which means only a small portion of the principal is paid off each month. 3. a. Workers’ paychecks are significantly less than the contract amount due to deductions. b. If self-employed individual is responsible for paying the Social Security tax and if individual is employed, both employer and employee are responsible for paying their portion of the Social Security tax.
1. The accounting for investments, such as marketable securities, violates the historical cost principle because it requires the recording of the investment at its fair value, rather than its original cost. This is considered appropriate because it provides a more accurate reflection of the current value of the investment, rather than its original cost. This is important because it allows investors and other stakeholders to make informed decisions about the company's financial position.
2. It takes a long time for a home buyer to reduce the principal amount of a 30-year mortgage because the majority of the monthly payments in the early years of the mortgage are applied to interest rather than principal. As a result, the principal balance decreases at a slower rate. It is not until the later years of the mortgage that a larger portion of the monthly payments are applied to the principal, allowing for a faster reduction in the principal balance.
3. a. Workers' paychecks are often significantly less than the amount quoted in their contract when hired because of various deductions, such as taxes, retirement contributions, and health insurance premiums. These deductions reduce the amount of take-home pay that the worker receives.
b. If someone is self-employed, they are responsible for paying both the employer and employee portions of the Social Security tax. If the person is employed by a company, the employer pays the employer portion of the Social Security tax and the employee pays the employee portion of the tax.
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The risk-free rate is 5% and given recent levels of Risk Aversion and Volatility (approximately 12%), the Market return is expected to be 10%. For a stock with Beta of 0.8, what would be the expected return as predicted by the Security Market Line?
The Security Market Line (SML) is a graphical representation of the relationship between expected return of a stock and its beta. The expected return of a stock can be calculated by adding the risk-free rate to the product of market return and the stock's beta. In this case, the risk-free rate is 5%, the market return is 10% and the beta of the stock is 0.8. Therefore, the expected return of the stock as predicted by the SML is 8%.
The SML is used to determine whether a stock is undervalued or overvalued. It does this by comparing the expected return of the stock as predicted by the SML with the actual return of the stock in the market. If the actual return of the stock is higher than the expected return predicted by the SML, then the stock is overvalued, and if the actual return of the stock is lower than the expected return predicted by the SML, then the stock is undervalued.
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If budgeted annual manufacturing indirect cost is $ 240,000 and cost allocation base is
6,000 labor hour, then budgeted manufacturing overhead rate will be…………………
a. $82 per labor hour
b. $ 80 per labor hour
c. $ 40 per labor hour
d. $ 90 per labor hour
If budgeted annual manufacturing indirect cost is $ 240,000 and cost allocation base is 6,000 labor hour, then budgeted manufacturing overhead rate will be $ 40 per labor hour. Therefore the correct option is option C.
The budgeted manufacturing overhead rate can be calculated by dividing the budgeted annual manufacturing indirect cost by the cost allocation base. In this case, the budgeted annual manufacturing indirect cost is $240,000 and the cost allocation base is 6,000 labor hours.
Therefore, the budgeted manufacturing overhead rate is:
$240,000 / 6,000 labor hours = $40 per labor hour. The correct answer is option c. $40 per labor hour.
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Think of a product or service that you use regularly and describe what it is. Consider if you were an entrepreneur just starting up your own business to develop and sell that product. How would you go
The product that I use regularly is my smartphone.If I were an entrepreneur starting up my own business to develop and sell smartphones, I would first need to do market research to determine what features and specifications consumers are looking for in a smartphone.
It also allows me to access the internet, take pictures and videos, listen to music, and use a variety of other apps for productivity, entertainment, and more.
I would also need to analyze the competition to determine how I can differentiate my product from others on the market. Next, I would need to find a manufacturer and secure funding for the development and production of the smartphone. I would also need to develop a marketing strategy to promote the product and attract customers. Finally, I would need to focus on providing excellent customer service to ensure customer satisfaction and encourage repeat business.
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3-8. Sailright Inc. manufactures and sells sailboards. Management believes that the price elasticity of demand is -3.0. Currently, boards are priced at $500 and the
quantity demanded is 10,000 per year.
a. If the price is increased to 5606, how many sailboards will the company be able
to sell each year?
b. How much will total revenue change as a result of the price increase?
3-9 Demand for a softback managerial economics text is given by Q=20,000-300P. The book is initially priced at $30.
a. Compute the point price elasticity of demand at P=$30
b. If the objective is to increase total revenue, should the price be increased or decreased? Explain.
c. Compute the arc price elasticity for a price decrease from $30 to $20.
d. Compute the arc price elasticity for a price decrease from $20 to $15.
3-8. Based on the provided formation, a. the company will be able to sell 8,200 sailboards each year at the new price of $560 and b. the total revenue will decrease by $300,000 as a result of the price increase. 3- 9 a. The point price elasticity of demand at P=$30 is E = -0.818. b. If the objective is to increase total revenue, the price should be increased. c. The arc price elasticity for a price decrease from $30 to $20 is E = 0.6. d. The arc price elasticity for a price decrease from $20 to $15 is E = 0.467.
3-8 a.The price elasticity of demand is given by the formula:
E = (ΔQ/ΔP) * (P/Q)
Where E is the price elasticity of demand, ΔQ is the change in quantity demanded, ΔP is the change in price, P is the initial price, and Q is the initial quantity demanded.
We can rearrange the formula to solve for the change in quantity demanded:
ΔQ = (E * ΔP * Q)/P
Plugging in the given values:
ΔQ = (-3.0 * ($560 - $500) * 10,000)/$500
ΔQ = -1,800
So the new quantity demanded will be:
Q = 10,000 - 1,800 = 8,200
Therefore, the company will be able to sell 8,200 sailboards each year at the new price of $560.
b. The change in total revenue is given by the formula:
ΔTR = ΔP * Q + P * ΔQ
Plugging in the given values:
ΔTR = ($560 - $500) * 10,000 + $500 * (-1,800)
ΔTR = $600,000 - $900,000
ΔTR = -$300,000
So the total revenue will decrease by $300,000 as a result of the price increase.
3-9. The point price elasticity of demand is given by the formula:
E = (ΔQ/ΔP) * (P/Q)
At P = $30, the quantity demanded is:
Q = 20,000 - 300 * $30 = 11,000
Plugging in the given values:
E = (ΔQ/ΔP) * ($30/11,000)
Since we are calculating the point price elasticity of demand at P = $30, ΔQ and ΔP are both infinitesimally small. Therefore, we can use the derivative of the demand function with respect to price to find the point price elasticity of demand:
E = -(dQ/dP) * (P/Q)
E = -(-300) * ($30/11,000)
E = -0.818
b. Since the point price elasticity of demand is negative and greater than -1, demand is inelastic at P = $30. This means that an increase in price will lead to an increase in total revenue, and a decrease in price will lead to a decrease in total revenue. Therefore, if the objective is to increase total revenue, the price should be increased.
c. The arc price elasticity of demand is given by the formula:
E = (ΔQ/ΔP) * ((P1 + P2)/(Q1 + Q2))
Where P1 and P2 are the initial and final prices, and Q1 and Q2 are the initial and final quantities demanded.
Plugging in the given values:
E = ((11,000 - 14,000)/($20 - $30)) * (($30 + $20)/(11,000 + 14,000))
E = (-3,000/(-$10)) * ($50/25,000)
E = 0.6
d. Plugging in the new values:
E = ((14,000 - 16,000)/($15 - $20)) * (($20 + $15)/(14,000 + 16,000))
E = (-2,000/(-$5)) * ($35/30,000)
E = 0.467
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BID ASK Time Trader Size Price Price Size Trader Time 09:55 HSU 300 3.30 3.60 200 CUH 09:15 10:09 CTU 200 3.10 3.90 500 HKU 09:30 09:45 PLU 600 2.85 4.10 300 MPU 10:00 10:05 UST 500 2.65 4.25 100 BUH 09:58 No.# Time Trades or Orders 1 10:15 2 10:20 3 10:27 4 10:30 5 10:35 A market order to buy 300 shares A market order to sell 200 shares A limit order to buy 500 shares at $3.00 A limit order to sell 300 shares at $3.90 The limit order to buy at $3.10 was all cancelled A market order to sell 300 shares. This triggered a stop loss sell order of 300 shares at $3.00 A limit order to buy 500 shares at $3.20 6 10:38 7 10:38 8 10:39
(A) If you execute a market buy order of 400 shares of ABC, how much in total will you pay (ignore all other costs)? What is the average price per share you buy? What are the best market price and quantity immediately following your action?
(B) Suppose you have purchased 300 shares of ABC previously at a cost of $3.00 per share. If the maximum amount you are willing to lose for this investment is 20%, suggest a kind of order you will use for this purpose, with reference to the current market condition as depicted in the table above. (Give the type of order: market/limit/stop loss; buy/sell; and price)
(C) Suppose you have short sold 200 shares of ABC previously at a cost price of $4.60 per share. If you intend to have a minimum return of 20% for this investment, suggest a kind of order you will use for this purpose, with reference to the current market condition as depicted in the table above. (Give the type of order: market/limit/stop loss; buy/sell; and price)
(D) Suppose right now, one of your clients requests to buy 800 shares of ABC "by the end of the trading day". There are two possible strategies you may take to handle this order: use a market order or use a limit order. Explain a. How would you use market order in this case? What will be the result? What are the pros and cons of using market order in this case. b. How would you use limit order in this case? What will be the result? What are the pros and cons of using limit order in this case.
A) The average price per share your buy is $3.20
B) You can use a stop loss sell order at $2.40.
C) You can use a limit buy order at $3.68.
D) You can use either a market order or a also can limit any order.
(A) If you execute a market buy order of 400 shares of ABC, you will pay a total of $1,280 (200 shares at $3.60 and 200 shares at $3.90). The average price per share you buy is $3.20 ($1,280/400 shares).
The best market price immediately following your action is $3.90 for 300 shares (from the limit order by MPU at 10:00) and the best quantity is 300 shares.
(B) If you have purchased 300 shares of ABC previously at a cost of $3.00 per share and the maximum amount you are willing to lose for this investment is 20%, you can use a stop loss sell order at $2.40 (20% below $3.00) to protect your investment.
This will ensure that if the price of ABC drops to $2.40 or below, your shares will be automatically sold at the best available price, minimizing your loss.
(C) If you have short sold 200 shares of ABC previously at a cost price of $4.60 per share and you intend to have a minimum return of 20% for this investment, you can use a limit buy order at $3.68 (20% below $4.60) to cover your short position.
This will ensure that if the price of ABC drops to $3.68 or below, you will buy back the shares at the best available price, locking in your profit.
(D) If one of your clients requests to buy 800 shares of ABC "by the end of the trading day", you can use either a market order or a limit order.
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(Items with ABC Company have the same data but different requirements). ABC Company is a thriving company that sells car accessories. During 2020, the company encountered tremendous increases in sales and earnings. Because of this, the CFO wants to make sure that money available are optimized. The policy of the company is to retain the following capital structure: 30%-Long-term debt; 10% preferred stock, 60% common stock for the next 3 years. The company’s tax rate is 40%. Due to limited funds, projects have to be chosen out of the various opportunities for investments presented by the managers of each division to the CFO. Investment Opportunity A (IOA) has an internal rate of return of 15% with an investment cost of P400,000. IOB-22%, P200,000; IOC-25%, P700,000; IOD-23%, P400,000; IOE-17%, P500,000; IOF-19%, P600,000; IOG-14%, P500,000. Other data that the CFO considered are the following: For Long-Term Debt, the firm can obtain additional P450,000 by issuing a P1,000 par value bond with to be repaid for 15 years. The bond’s current selling price is P960. The company’s annual percentage of coupon interest is based on its competitor’s bond’s details wherein the competitor’s bond’s selling price is P1,039.9271 with a yield to maturity of 8%, a par value of P1,000, and to be repaid within 5 years. In excess of P450,000 ABC Company will incur a before-tax cost of debt equivalent to the rounded off cost of debt within the P450,000 range plus 7.33%. Preferred stock shall also be issued at P65 per share with a par value of P70 and a 14% dividend rate per annum. For Common Stock Equity, the company anticipates that its dividend per share in 2021 shall be P.96 while its earnings per share shall be P3.20. The amount of net income available to common stockholders is P500,000 while the average total common equity is P2,500,000. Further, the company observes a 55% retention ratio. The current selling price of its stock is P12 per share. In the coming year, the company anticipates Retained Earnings to reach P1,500,000. After the retained earnings are used up, additional funds can be obtained by the firm through additional common stock issuance at P9 per share (net). Requirement: WACC within the range of P0 to P1,500,000.
The weighted average cost of capital (WACC) for ABC Company within the range of P0 to P1,500,000 is 9.67%.
To calculate the weighted average cost of capital (WACC) for ABC Company within the range of P0 to P1,500,000, we need to use the following formula:
WACC = (Wd)(Kd)(1-T) + (Wp)(Kp) + (Ws)(Ks)
Where:
Wd = weight of debt in the capital structure
Kd = before-tax cost of debt
T = tax rate
Wp = weight of preferred stock in the capital structure
Kp = cost of preferred stock
Ws = weight of common stock in the capital structure
Ks = cost of common stock equity
To find the WACC within the range of P0 to P1,500,000, we need to calculate the weights and costs of each component of the capital structure.
Weight of debt (Wd) = 30% = 0.30
Weight of preferred stock (Wp) = 10% = 0.10
Weight of common stock (Ws) = 60% = 0.60
Before-tax cost of debt (Kd) = 8% + 7.33% = 15.33%
Tax rate (T) = 40% = 0.40
Cost of preferred stock (Kp) = (14%)(70)/65 = 15.08%
Cost of common stock equity (Ks) = (0.96/12) + [(3.20)(0.55)/(12)] = 8.73%
Now we can plug these values into the WACC formula:
WACC = (0.30)(15.33%)(1-0.40) + (0.10)(15.08%) + (0.60)(8.73%)
WACC = 9.67%
Therefore, the weighted average cost of capital (WACC) for ABC Company within the range of P0 to P1,500,000 is 9.67%. This means that the company's cost of capital for investments within this range is 9.67%.
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According to the Consumer Price Index maintained by Statistics Finland, what was the inflation rate in December 2021? If the ECB is concerned that this level of inflation is unacceptable, should they try and increase or decrease interest rates? Why?
According to the Consumer Price Index maintained by Statistics Finland, the inflation rate in December 2021 was 1.2%.
The European Central Bank (ECB) is in charge of setting interest rates. If they believe the inflation rate is too high, they would likely try and decrease interest rates in order to slow the rate of inflation. This could also encourage people to spend money, thus creating economic growth. On the other hand, if the ECB believes the inflation rate is too low, they would likely try and increase interest rates in order to stimulate the economy and boost inflation.
Additionally, the ECB may use other tools, such as open market operations and reserve requirements, to influence inflation and the economy.
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