The budgeted income statements for each of the months of July, August, and September are as follows:
July:Sales (10,000 units x $115) = $1,150,000
Cost of Goods Sold (10,000 units x $60) = $600,000
Gross Profit = $550,000
Operating Expenses:
Advertising (25% increase) = $12,500
Sales Commissions (10% of sales) = $115,000
Other Expenses = $100,000
Total Operating Expenses = $227,500
Operating Income = $322,500
August:Sales (11,000 units x $115) = $1,265,000
Cost of Goods Sold (11,000 units x $60) = $660,000
Gross Profit = $605,000
Operating Expenses:
Advertising (25% increase) = $12,500
Sales Commissions (10% of sales) = $126,500
Other Expenses = $100,000
Total Operating Expenses = $239,000
Operating Income = $366,000
September:Sales (12,100 units x $115) = $1,391,500
Cost of Goods Sold (12,100 units x $60) = $726,000
Gross Profit = $665,500
Operating Expenses:
Advertising (25% increase) = $12,500
Sales Commissions (10% of sales) = $139,150 Other Expenses = $100,000
Total Operating Expenses = $251,650
Operating Income = $413,850
About budgeted income statementsBased on the budgeted income statements, it is recommended that management implement the proposed plan. The plan results in an increase in sales and operating income for each of the three months.
The increase in advertising expenses and the reduction in selling price are offset by the increase in unit sales. As a result, the company is able to generate higher profits with the proposed plan.
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Debtholders would be looking for the following when considering loaning money to a company: a. Ability to vote on corporate issues b. Preference over stockholders on liquidation c. Unlimited life d. Payment of dividends
The elements that debtholders will look for when lending money to a company are as follows Preference over stockholders on liquidation and Payment of dividends. Alternatives b. and d. are correct.
Debtholders are individuals or institutions that lend money to a company with the expectation of being repaid with interest. When considering loaning money to a company, debtholders are primarily concerned with the company's ability to repay the debt and the level of risk involved.
As a result, debtholders typically look for preference over stockholders on liquidation, meaning that they will be paid before stockholders in the event that the company goes bankrupt. Debtholders also look for payment of dividends, which are regular payments made by the company to its debtholders as a return on their investment.
In conclusion, the correct alternatives are:
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If you invest EUR 100 at an interest rate of 12%, how much will
you have at the end of 4 years?
To calculate the amount you will have at the end of 4 years of investment, you can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
- A is the final amount
- P is the initial principal amount
- r is the annual interest rate
- n is the number of times interest is compounded per year
- t is the number of years
In this case, P = 100, r = 0.12, n = 1 (since interest is compounded annually), and t = 4. Plugging these values into the formula gives:
A = 100(1 + 0.12/1)^(1*4)
A = 100(1.12)^4
A = 157.62
Therefore, you will have EUR 157.62 at the end of 4 years.
Here is the answer in HTML format:
To calculate the amount you will have at the end of 4 years, you can use the formula for compound interest:</p>
A = P(1 + r/n)^(nt)</p>
In this case, P = 100, r = 0.12, n = 1 (since interest is compounded annually), and t = 4. Plugging these values into the formula gives:</p>
A = 100(1 + 0.12/1)^(1*4)</p>
A = 100(1.12)^4</p>
A = 157.62</p>
Therefore, you will have EUR 157.62 at the end of 4 years.</p>
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(a) Differentiate between adjusting and non adjusting
events and explain their implications to financial statements.
(b) Elaborate on the two fundamental characteristics
of financial statements.
(a) These events provide additional information about the financial position of the company at the balance sheet date and, therefore, need to be reflected in the financial statements. Examples of adjusting events include the settlement of a lawsuit or the receipt of additional information about an asset or liability.
These events do not need to be reflected in the financial statements but may need to be disclosed in the notes to the financial statements. Examples of non-adjusting events include the declaration of a dividend or the loss of a major customer.
(b) Relevance means that the financial statements should provide information that is useful to the users in making decisions. Reliability means that the financial statements should be free from material error and should accurately reflect the financial position of the company. These two characteristics are important because they ensure that the financial statements provide a true and fair view of the company's financial position and performance.
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5. A stock price is currently R60. Over each of the next two three-month periods it is expected to be up
by 10% or down by 10%. The risk-free interest rate is 12% per annum with continuous compounding.
a. What is the value of a six-month European put option with a strike price of R64?
b. What is the value of a six-month American put option with a strike price of R64?
a. The value of the six-month European put option with a strike price of R64 is R1.4323.
b. The value of the six-month American put option with a strike price of R64 is R4.
The value of a European put option can be calculated using the binomial option pricing model. The value of an American put option can also be calculated using the binomial option pricing model, but with an additional step to account for the possibility of early exercise.
a. The value of a six-month European put option with a strike price of R64 can be calculated as follows:
Calculate the up and down factors: u = e^(0.1*0.25) = 1.0253, d = e^(-0.1*0.25) = 0.9752Calculate the risk-neutral probabilities: p = (e^(0.12*0.25) - d) / (u - d) = 0.5289, 1-p = 0.4711Calculate the value of the option at the end of the second period: Vuu = max(0, 64 - 60*1.0253^2) = 0, Vud = max(0, 64 - 60*1.0253*0.9752) = 2.4316, Vdd = max(0, 64 - 60*0.9752^2) = 5.8947Calculate the value of the option at the end of the first period: Vu = (0.5289*0 + 0.4711*2.4316) / e^(0.12*0.25) = 0.9196, Vd = (0.5289*2.4316 + 0.4711*5.8947) / e^(0.12*0.25) = 2.7986Calculate the value of the option at the beginning of the first period: V = (0.5289*0.9196 + 0.4711*2.7986) / e^(0.12*0.25) = 1.4323Therefore, the value of the six-month European put option with a strike price of R64 is R1.4323.
b. The value of a six-month American put option with a strike price of R64 can be calculated as follows:
Calculate the up and down factors: u = e^(0.1*0.25) = 1.0253, d = e^(-0.1*0.25) = 0.9752Calculate the risk-neutral probabilities: p = (e^(0.12*0.25) - d) / (u - d) = 0.5289, 1-p = 0.4711Calculate the value of the option at the end of the second period: Vuu = max(0, 64 - 60*1.0253^2) = 0, Vud = max(0, 64 - 60*1.0253*0.9752) = 2.4316, Vdd = max(0, 64 - 60*0.9752^2) = 5.8947Calculate the value of the option at the end of the first period: Vu = max((0.5289*0 + 0.4711*2.4316) / e^(0.12*0.25), 64 - 60*1.0253) = 0.9196, Vd = max((0.5289*2.4316 + 0.4711*5.8947) / e^(0.12*0.25), 64 - 60*0.9752) = 3.8083Calculate the value of the option at the beginning of the first period: V = max((0.5289*0.9196 + 0.4711*3.8083) / e^(0.12*0.25), 64 - 60) = 4Therefore, the value of the six-month American put option with a strike price of R64 is R4.
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Samsung is one of the biggest conglomerates globally and the largest "chaebol" or family-owned business in South Korea. Established in 1938 by Lee Byung-chul as a trading company selling noodles and dried seafood, Samsung has since diversified into various industries, including electronics, chemicals, shipbuilding, financial services, and construction. As a result, Samsung is widely diversified with over 80 standalone subsidiaries. The conglomerate accounts for a fifth of all South Korean exports.
In 1987, Lee Kun-hee, the youngest son of the founder, took over as the chairman of the conglomerate. His strategic intent was to make Samsung a world leader in high-tech industries such as consumer electronics. To execute his strategy, Lee Kun-hee focused first on gaining market share by invading markets from the bottom up with lower-priced products at an acceptable value. Over time, quality and consumer perception became more important. Samsung’s image, however, was overshadowed by Sony and Motorola, the undisputed world leaders in consumer electronics and mobile phones during this time. During a 1993 trip, Lee Kun-hee saw firsthand how poorly Samsung’s electronics were perceived in the United States and Europe, and he vowed to change that. Back in Korea, to show his disappointment and determination alike, he destroyed 150,000 brand-new Samsung cell phones in a large bonfire in front of all 2,000 employees of Samsung’s Gami factory. Many employees credit this as the pivotal moment in redefining Samsung Electronics’ strategic focus and initiating a successful turnaround.
Samsung Electronics increased spending significantly on Research and Development (R&D), as well as on marketing and design. Meanwhile, Lee Kun-hee was undertaking a complete overhaul of the conglomerate’s structure to change Samsung’s sclerotic culture to a culture that deeply values seniority; he introduced merit-based pay and promotion. Lee Kun-hee, who holds an MBA degree from George Washington University, hired Western managers and designers into leading positions and sent homegrown talent to learn best business practices from other firms wherever they could be found. Lee Kun-hee also set up the Global Strategic Group to assist non-Korean MBAs and PhDs with a smooth transition into their positions in a largely homogenous cadre of Korean executives. In addition, he moved Samsung to the high end market, offering premium consumer electronics such as flat-screen TVs, appliances, semiconductors, and mobile devices such as its famous Galaxy line of smartphones.
Answer the following questions: (3 items x 10 points)
What is/are the triggering event/s that act/s as stimulus/stimuli for strategic change in the given case?
Which characteristic/s of strategic decisions is/are described in the case study?
3. How will Samsung maintain its successful market position by using one of the modes in strategic decision-making?
1. The triggering event that acted as a stimulus for strategic change in the given case was when Lee Kun-hee saw firsthand how poorly Samsung’s electronics were perceived in the United States and Europe during trip.
2. The characteristics of strategic decisions described in the case study include being long-term in nature.
3. Samsung can maintain its successful market position by using the mode of strategic decision-making known as "analysis and choice."
This event motivated him to take drastic action to improve the company's image and products, including destroying 150,000 brand-new Samsung cell phones in a large bonfire in front of all 2,000 employees of Samsung’s Gami factory.
These characteristics are evident in Lee Kun-hee's decision to increase spending significantly on R&D, marketing, and design, as well as his decision to undertake a complete overhaul of the conglomerate’s structure and culture.
This involves analyzing the company's current situation and the competitive environment, identifying opportunities and threats, and making strategic choices based on this analysis. By continuing to invest in R&D, marketing, and design, as well as by staying attuned to changing consumer preferences and technological trends, Samsung can make informed strategic decisions that will help it maintain its competitive advantage and market position.
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Assume that you are considering investing in small cap stocks, based upon research indicating that they earn more than large cap stocks, after adjusting for risk. You notice that the transactions costs (all up front, at the time of investing) of investing in small cap stocks is 5% and it is only 1% for large cap stock stocks. If large cap stocks are expected to earn 10% annually and your time horizon is three years, how much higher will the annual returns have to be on small cap stocks for you to break even on investing in the latter?
Question 8 options: 1.43%
1.52%
1.67%
1.83%
2.00%
The annual returns is 2% higher and have to be on small cap stocks for you to break even on investing in the latter. (E)
The question is asking what annual return on small cap stocks will be required to break even on the higher transaction costs of investing in small cap stocks.
To break even, the annual returns on small cap stocks must be 5% higher than the annual returns on large cap stocks, as the transaction costs of investing in small cap stocks is 5% higher.
Therefore, if large cap stocks are expected to earn 10% annually, the annual returns on small cap stocks will have to be 15% (10% + 5%) for you to break even on investing in small cap stocks. Therefore, the answer is 2.00%.(E)
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List the GLOBE Study clusters. How is the study application tied
to Emotional intelligence?
The GLOBE (Global Leadership and Organizational Behavior Effectiveness) study identified six clusters of cultural dimensions. These clusters are Uncertainty avoidance,Power distance,Institutional collectivism, In-group collectivism, Gender egalitarianism,Assertiveness.
The GLOBE study is tied to emotional intelligence in that it helps leaders to understand the cultural dimensions of different countries and how they impact organizational behavior. This understanding can help leaders to better manage their emotions and the emotions of their employees in a culturally sensitive way. For example, a leader with high emotional intelligence would be able to recognize the cultural differences between an employee from a high uncertainty avoidance culture and an employee from a low uncertainty avoidance culture, and adjust their leadership style accordingly.
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What is the relationship between safety and quality?
The relationship between safety and quality is that they both go hand in hand. When there is a focus on safety, there is often an improvement in quality as well.
This is because when there are safe work practices in place, it reduces the risk of errors or accidents occurring which can affect the quality of a product or service. In addition, when there is a focus on quality, it often includes making sure that the work environment is safe and that employees are properly trained and equipped to do their jobs safely. Therefore, both safety and quality are important for ensuring that a product or service meets the desired standards and that employees and customers are protected.
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What is a good approach to "Sell me this pen!"?What is a good conversation flow? Why?Write the structure and the questions
An effective approach to "Sell me this pen!" would involve understanding the customer's needs and motivations. Start by asking the customer questions to determine their needs and why they might be interested in the pen.
Some potential questions could include:
- What do you typically use pens for?
- What features are you looking for in a pen?
- What budget do you have in mind for a pen?
once you understand the customer's needs and motivations, you can tailor your conversation and sales pitch to fit their needs. Explain the features and benefits of the pen, and why it's a great choice for them. Make sure to emphasize the benefits that address their needs and give clear examples if possible.
Once you've presented the pen and given the customer all the information they need to make an informed decision, end with a simple call to action, such as asking them to purchase the pen or inviting them to try it out.
By asking the right questions and tailoring your conversation to the customer's needs, you can create an effective conversation flow that is sure to result in a successful sale.
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Submit your critical reflective analysis about this chapter, "Developing an effective business model." Objectives include: business models and their importance, identifying and describing the two types of business models standard and disruptive, in which you demonstrate a well-grounded understanding of the theme in the chapter. Do not regurgitate the obvious facts, but build a bridge to the next level of thinking and application(s). At least 3 paragraphs. Highlight your ideas in the introduction paragraph and demonstrate their relevance to the chapter theme. You need at least 5-7 references that must be cited in the text to support your analysis, application, conclusion, and lessons learned.
Business models are essential for the success of any organization, as they provide the foundation for understanding the company's goals, values, and strategies. A business model typically includes the types of products and services offered, the target market and customer base, pricing and value proposition, distribution channels, and resources needed for the business to operate and succeed.
The chapter “Developing an Effective Business Model” explores two types of business models: standard models and disruptive models. Standard models are focused on preserving existing products and services while disruptive models focus on introducing new products and services that address customer needs in new ways. Standard models may involve existing technologies, products, and services, while disruptive models can often involve new technologies, products, and services.
Overall, business models are essential for organizations to understand and use to their advantage. The chapter “Developing an Effective Business Model” is an informative look at the different types of business models and how they can be utilized to benefit the business. Understanding the different types of business models, and the strategies that support them, can provide organizations with the insights they need to be successful.
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In a multi-step production line, if the process time of thebottleneck step increases by 10 minutes, the process of the linemust also increase by 10 minutes. True or false? True False
True. A bottleneck step is the process step that limits the rate at which the production line can work, and thus determines the overall output rate of the line. If the process time of the bottleneck step increases, then the total process time of the line must also increase, by the same amount as the bottleneck step.
This is because the throughput of the line is determined by the time at which the bottleneck step completes, and thus any increase to the process time of the bottleneck step will add a corresponding amount of time to the overall process time of the line. In addition, the other steps in the production line will also take longer to complete, as they are dependent on the completion of the bottleneck step.
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The partnership agreement of BADIE, CONNIEand NATIE in BACONA CO., a partnership engaged in vaccination services provides for the year-end allocation of net income in the following order:
* First, BADIE is to receive 10% of net income up to P200,000 and 20% over P200,000.
* Second, CONNIE and NATIE each are to receive 5% of the remaining income over P300,000.
* The balance of income is to be allocated equally among the three partners.
During the year, the partners made a total withdrawal of P30,000, P20,000, and P10,000 respectively.
The partnership’s 2021 income statement shows a total revenue of P1,200,000 and total operating expenses of P700,000 before any allocations to partners.
Required:
1. Prepare a division of profit and loss in good form for BACONA CO.
2. Give the journal entries to close all the nominal and temporary accounts.
1. The division of profit and loss for BACONA CO. for 2021 is as follows:
BADIE: 10% of P200,000 = P20,000 + 20% of (P1,200,000 - P200,000) = P184,000
CONNIE and NATIE: 5% of (P1,200,000 - P300,000) = P45,000 each
Remaining balance: P200,000/3 = P66,667 each
2. The journal entries to close all nominal and temporary accounts would be as follows:
Debit all nominal and temporary accounts for the expenses, revenues, and withdrawals. Credit the respective accounts for the corresponding amounts:
Debit Badie's Capital Account P200,000
Debit Connie's Capital Account P200,000
Debit Natie's Capital Account P200,000
Credit Badie's Drawing Account P30,000
Credit Connie's Drawing Account P20,000
Credit Natie's Drawing Account P10,000
Debit Revenue Account P1,200,000
Credit Expense Account P700,000
Debit Badie's Profit and Loss Account P204,000
Debit Connie's Profit and Loss Account P245,000
Debit Natie's Profit and Loss Account P245,000
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a-What’s themost importantitems in the Assets for bank?b-OperatingEfficiency means?
Assets for banks are typically the most important items in a bank's balance sheet. These include cash, securities, loans and other investments. Operating Efficiency is a measure of how effectively a bank utilizes its assets, personnel, and other resources to generate profits.
a- The most important items in the Assets for bank are:
Cash and balances with central banksLoans and advances to customersFinancial investmentsDerivativesProperty, plant, and equipmentb- Operating Efficiency means the ratio of a company's operating expenses to its operating income. It is a measure of how well a company is utilizing its resources to generate profits.
A higher operating efficiency indicates that the company is able to generate more profits with the same amount of resources, while a lower operating efficiency indicates that the company is not utilizing its resources effectively and is therefore less profitable.
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Which of the four strategy levels is most concerned withsocial, ethical., or public issues? Discuss the characteristics ofthis level. Also, identify the steps involved in the strategicmanagement pr
The four strategy levels that are most concerned with social, ethical, or public issues are the corporate level, the business level, the functional level, and the operating level. The corporate level is responsible for setting the overall direction of the company and for making decisions that affect the entire organization.
The business level is responsible for making decisions about how the company will compete in specific markets. The functional level is responsible for making decisions about how to support the business level strategy. The operating level is responsible for making decisions about how to execute the functional level strategy.
The corporate level is the most concerned with social, ethical, or public issues because it is responsible for setting the overall direction of the company and for making decisions that affect the entire organization. This includes decisions about the company's social and ethical responsibilities, as well as decisions about how the company will interact with the public and respond to public concerns.
The steps involved in the strategic management process include:
1. Setting the company's mission and goals
2. Conducting a situation analysis
3. Developing a strategy
4. Implementing the strategy
5. Evaluating and controlling the strategy.
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PROJECT CASE: Establish a Vaccination CentreBackgroundA virus named Covid-Zetta is spreading across the world with high contagious and mortality rates. Many countries have tried to tackle the virus with various measures. Human interactions have to be limited and Work from Home (WFH) needs to be imposed. Fortunately, a newly invented vaccine, Anti Zetta Vaccine (AZV), has been proven to be 90% effective against the virus. The Singapore government has set up a Covid-Zetta Task Force chaired by the Minister for Health to fight against the virus. One of Task Force’s impetus is to vaccinate the citizens with AZV. As a start, a Vaccination Centre with vaccine storage facility has to be established. The Task Force names it the Covid-Zetta Vaccination Centre (CVC) Project.Section 1: Leading the Project and Managing the Project TeamQuestion:The Minister has appointed you as the CVC Project Manager. A three-member (including yourself) core project team is needed. As the vital fight against Covid-Zetta is done at the national level, you can request for resources within the civil service. Examine how the team can be formed by recruiting members from relevant ministries or statuary boards. Discuss two (2) major advantages of this formation.
As the Project Manager for the Covid-Zetta Vaccination Centre (CVC) Project, I would form a three-member core project team from relevant ministries or statuary boards.
This team formation has two major advantages.
First, it ensures that the team has the specialized knowledge and skills necessary to complete the project. By drawing from different government departments, the CVC Project can be well-staffed with professionals who are experts in their respective areas. For example, the team can include a medical specialist, an administrator, and a software engineer.
Second, the team formation allows for the quick implementation of the project. This is because members of the team are already familiar with the respective ministry’s systems, processes, and protocols. As a result, the team can hit the ground running, rather than having to learn about a new process or system.
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Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management has designed an activity-based costing system with the following activity cost pools and activity rates:Activity Cost Pool Activity RateSupporting direct labor $ 16 per direct labor-hourOrder processing $ 192 per orderCustom design processing $ 255 per custom designCustomer service $ 426 per customerManagement would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ordered the following products over the last 12 months:Standard Model Custom DesignNumber of gliders 12 2Number of orders 2 2Number of custom designs 0 2Direct labor-hours per glider 26.50 32.00Selling price per glider $ 1,925 $ 2,420Direct materials cost per glider $ 460 $ 568The company’s direct labor rate is $18 per hour.Required:Using the company’s activity-based costing system, compute the customer margin of Big Sky Outfitters. (Round your intermediate calculations and final answer to the nearest whole dollar amount. Loss amounts should be entered with a minus sign.)
The customer margin for Big Sky Outfitters is $6,894.
How did we get the value?First, we need to calculate the total cost of each product, including both direct and indirect costs:
Standard Model:
Direct labor cost = 12 gliders x 26.5 direct labor hours per glider x $18 per hour = $5,724
Direct materials cost = 12 gliders x $460 per glider = $5,520
Supporting direct labor cost = 12 gliders x 26.5 direct labor hours per glider x $16 per direct labor hour = $5,328
Order processing cost = 2 orders x $192 per order = $384
Customer service cost = 1 customer x $426 per customer = $426
Total cost = $17,382
Custom Design:
Direct labor cost = 2 gliders x 32 direct labor hours per glider x $18 per hour = $1,152
Direct materials cost = 2 gliders x $568 per glider = $1,136
Custom design processing cost = 2 custom designs x $255 per custom design = $510
Supporting direct labor cost = 2 gliders x 32 direct labor hours per glider x $16 per direct labor hour = $1,024
Order processing cost = 2 orders x $192 per order = $384
Customer service cost = 1 customer x $426 per customer = $426
Total cost = $4,632
Next, we need to calculate the revenue generated by each product:
Standard Model:
Revenue = 12 gliders x $1,925 per glider = $23,100
Custom Design:
Revenue = 2 gliders x $2,420 per glider = $4,840
Now we can calculate the customer margin for Big Sky Outfitters:
Customer Margin = Total revenue - Total cost
Customer Margin = ($23,100 + $4,840) - ($17,382 + $4,632)
Customer Margin = $28,908 - $22,014
Customer Margin = $6,894
Therefore, the customer margin for Big Sky Outfitters is $6,894.
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Q2: Suppose that a farmer plants corn on his farm. In the first year, his yield is 1000 kilograms of corn. However, its subsequent yield is expected to decrease by 10% over the previous year’s yield since the weather conditions getting worse each year. Suppose that the selling price of corn is expected to be $4 per kilograms for the first year, but to increase at the rate of 5% over the previous year’s price. At the end of each year, he deposits all his revenue for his child’s college education at an interest rate of 12% compounded annually. What would be the amount in the bank at the end of seventh year?
The amount in the bank at the end of the seventh year would be $39420.73.
The amount in the bank at the end of the seventh year can be calculated using the following formula:
[tex]A = P(1 + r/n)^(nt)[/tex]
Where: A = final amount P = initial principal r = annual interest rate n = number of times interest is compounded per year t = number of years First, we need to calculate the total revenue for each year. This can be done using the following formula:
Revenue = Yield x Price
For the first year, the revenue is:
Revenue = 1000 x 4 = $4000
For the subsequent years, we need to calculate the yield and price for each year, and then calculate the revenue. The yield for each year can be calculated using the following formula:
Yield = Previous year's yield x (1 - 0.1)
The price for each year can be calculated using the following formula:
Price = Previous year's price x (1 + 0.05)
Using these formulas, we can calculate the revenue for each year, and then use the formula for compound interest to calculate the final amount in the bank at the end of the seventh year. The calculations are shown below:
Year 1:
Yield = 1000
Price = 4
Revenue = 1000 x 4 = $4000
A = 4000(1 + 0.12/1)^(1*1) = $4480
Year 2:
Yield = 1000 x (1 - 0.1) = 900
Price = 4 x (1 + 0.05) = 4.2
Revenue = 900 x 4.2 = $3780
A = (4480 + 3780)(1 + 0.12/1)^(1*1) = $9254.40
Year 3:
Yield = 900 x (1 - 0.1) = 810
Price = 4.2 x (1 + 0.05) = 4.41
Revenue = 810 x 4.41 = $3570.90
A = (9254.40 + 3570.90)(1 + 0.12/1)^(1*1) = $14368.74
Year 4:
Yield = 810 x (1 - 0.1) = 729
Price = 4.41 x (1 + 0.05) = 4.63
Revenue = 729 x 4.63 = $3374.07
A = (14368.74 + 3374.07)(1 + 0.12/1)^(1*1) = $20092.50
Year 5:
Yield = 729 x (1 - 0.1) = 656.1
Price = 4.63 x (1 + 0.05) = 4.86
Revenue = 656.1 x 4.86 = $3188.64
A = (20092.50 + 3188.64)(1 + 0.12/1)^(1*1) = $26274.53
Year 6:
Yield = 656.1 x (1 - 0.1) = 590.49
Price = 4.86 x (1 + 0.05) = 5.10
Revenue = 590.49 x 5.10 = $3013.10
A = (26274.53 + 3013.10)(1 + 0.12/1)^(1*1) = $32982.13
Year 7:
Yield = 590.49 x (1 - 0.1) = 531.44
Price = 5.10 x (1 + 0.05) = 5.36
Revenue = 531.44 x 5.36 = $2848.52
A = (32982.13 + 2848.52)(1 + 0.12/1)^(1*1) = $39420.73
Therefore, the amount in the bank at the end of the seventh year would be $39420.73.
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convention on the rights of the childconvention type from the formal and substantive type.whats the conditions of conservatism.can the terms be edit, and whats the standards.can we reconsider of the terms of the treaty.can we quit the treaty.summary from the substantive type.
The Convention on the Rights of the Child is a formal and substantive treaty created to protect the rights of children around the world. The conditions of conservatism involve the application of the Convention’s standards to traditional societies and cultural values.
The terms of the Convention cannot be edited and must be respected by signatories. Quitting the Convention is possible, but only after two years’ notice is given and all rights outlined by the Convention must be maintained until the Convention is officially terminated.
Substantive rights outlined in the Convention are those related to civil, cultural, economic, political, and social rights, such as the right to life, education, and health care.
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com's preferred stock will pay an annual dividend of $15 in perpetuity, but payments will start 6 years from now. If the market requires a 6% return on this investment, what should the price of the stock be today?
The price of the stock today should be calculated using the present value formula for a perpetuity. The formula is:
PV = D / r
Where PV is the present value, D is the annual dividend, and r is the required rate of return.
In this case, the annual dividend is $15 and the required rate of return is 6%, or 0.06. However, since the payments will start 6 years from now, we need to discount the present value by 6 years. This can be done using the formula:
PV = D / (r * (1 + r)^n)
Where n is the number of years until the payments start. In this case, n is 6.
Plugging in the values, we get:
PV = 15 / (0.06 * (1 + 0.06)^6)
PV = 15 / (0.06 * 1.4185)
PV = 15 / 0.08511
PV = $176.22
Therefore, the price of the stock today should be $176.22.
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Based on: Tadelis, S. (2013). Game theory : an introduction. Princeton University Press.
Consider the Bertrand game with c1(q1) = 100q1 and c2(q2) = 120q2, demand equal to p = 10000 − q, and where firms must choose prices in increments of twenty HUF. The whole demand goes to the firm which offers lower prices and if both firms have the same price, the market is shared equally.
a) How many Nash equilibria in pure strategies does the game have? Describe them.
b) What happens to the set of equilibria in pure strategies if a third firm enters the market with c3(q3) = 100q3?
a) The Bertrand game has only one Nash equilibrium in pure strategies. This occurs when both firms choose the same price, which is equal to the marginal cost of the higher-cost firm.
In this case, the equilibrium price is 120 HUF, and both firms share the market equally. Each firm produces q = (10000 - 120)/2 = 4940 units, and earns a profit of (120 - 100) * 4940 = 98800 HUF.
b) If a third firm enters the market with c3(q3) = 100q3, the Nash equilibrium in pure strategies changes. Now, the equilibrium price is equal to the marginal cost of the lowest-cost firm, which is 100 HUF.
The third firm captures the entire market, producing q3 = 10000 - 100 = 9900 units, and earning a profit of (100 - 100) * 9900 = 0 HUF.
The other two firms do not produce anything, and earn zero profits. Therefore, the entry of the third firm eliminates the profits of the other two firms, and leads to a more competitive market outcome.
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Suppose the market follows a single index model, where the index has expected return of 10% and risk- free rate is 5%. For a stock with risk premium of 4% and abnormal return of 1%, what is the beta of this stock?
To find the beta of the stock, we can use the Capital Asset Pricing Model (CAPM) formula:
E(Ri) = Rf + beta(Rm - Rf) + AR
Where:
E(Ri) = expected return of the stock
Rf = risk-free rate
beta = beta of the stock
Rm = expected return of the market
AR = abnormal return
We can rearrange the formula to solve for beta:
beta = (E(Ri) - Rf - AR) / (Rm - Rf)
Plugging in the given values:
beta = (10% - 5% - 1%) / (10% - 5%)
beta = (4%) / (5%)
beta = 0.8
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Susan the Saver is going to retire in 30 years and has calculated that she will need to have $700,000 to cover her retirement costs. To achieve this goal, before retirement she will have to:
a. Put more than $700,000 of her earnings into savings
b. Put exactly $700,000 of her earnings into savings
c. Put less than $700,000 of her earnings into savings
Explain your choice.
The correct answer is option c. Put less than $700,000 of her earnings into savings.
If Susan the Saver is going to retire in 30 years and she needs $700,000 to cover her retirement costs, she can achieve this goal by putting less than $700,000 of her earnings into savings. This is because of the power of compound interest.
Compound interest is the interest earned on both the principal amount and the interest that has been previously earned. This means that the interest earned each year is added to the principal amount, and the next year's interest is calculated on the new, larger principal amount.
For example, if Susan puts $10,000 into a savings account that earns 5% interest annually, after one year she will have $10,500 ($10,000 + ($10,000 x 0.05)). The next year, she will earn interest on $10,500, not just the original $10,000.
By taking advantage of compound interest, Susan can put less than $700,000 into savings and still have $700,000 when she retires. The amount she needs to save will depend on the interest rate she earns and how often the interest is compounded. Therefore, the correct answer is option c.
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Mr. and Mrs. Good purchased a ski chalet for $310487. They paid $16001 down and agreed to make equal payments at the end of every three months for 14 years. Interest is 4.79% compounded quarterly.
Compute the equal quarterly payment.
Round your answer to 2 decimal places. Do not enter the dollar sign. Sample input: 124.34
The equal quarterly payment is $6587.46. Rounded to 2 decimal places, the answer is 6587.46.
To compute the equal quarterly payment, we can use the formula for the present value of an annuity:
PV = PMT × [(1 - (1 + i)^-n) / i]
Where PV is the present value, PMT is the quarterly payment, i is the quarterly interest rate, and n is the number of quarters.
Rearranging the formula to solve for PMT, we get:
PMT = PV × [i / (1 - (1 + i)^-n)]
Plugging in the given values:
PMT = ($310487 - $16001) × [(0.0479 / 4) / (1 - (1 + 0.0479 / 4)^-(14 × 4))]
PMT = $294486 × [(0.011975 / (1 - (1.011975)^-56))]
PMT = $294486 × 0.022369
PMT = $6587.46
Therefore, the equal quarterly payment is $6587.46. Rounded to 2 decimal places, the answer is 6587.46.
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A government that is concerned about inflation wants to
A government that is concerned about inflation wants to take measures to reduce the rate of inflation. Inflation refers to the increase in prices of goods and services over time. To reduce inflation, the government can take various measures, including:
1. Monetary Policy: The government can adjust the money supply in the economy through its central bank. They can increase interest rates or decrease the money supply to reduce inflation.
2. Fiscal Policy: The government can also adjust its spending and taxation policies to manage inflation. They can increase taxes or reduce government spending to slow down economic growth and reduce inflation.
3. Supply-side policies: The government can implement policies that aim to increase the supply of goods and services in the economy. This can help to reduce prices and inflation.
4. Wage and Price Controls: The government can also impose price and wage controls to reduce inflation. This involves setting a cap on the prices of goods and services and limiting the amount that employers can pay their workers. However, this approach is controversial and can have unintended consequences, such as shortages of goods and services.
These are some of the measures that a government can take to reduce inflation. The specific measures taken depend on the economic conditions and the particular circumstances of the country.
Recording Entries for Long-Term Note Receivable; Effective-Interest Method On January 1, 2020, Jacobs Company sells land financed through a $32,000 note, issued by Andress Company. The note is a $32,000,9%, annual interest-bearing note. Andress agrees to repay the $32,000 proceeds on December 31, 2021, The prevailing interest rate on similar notes is 11%. Assume that the cost of the land is equal to the fair value of the note. Required Prepare all entries for Jacobs over the note term, including any year-end adjustments. Use the effective interest method to amortize the discount. Round answers to the nearest whole dollar
The entries over the note term are: January 1, 2020: Dr Note Receivable $32,000 Cr Land $32,000, December 31, 2020: Dr Interest Receivable $2,880 Cr Interest Income $2,880, and December 31, 2021: Dr Interest Receivable $2,880 Dr Cash $34,880 Cr Note Receivable $32,000 Cr Interest Income $2,880. Using the effective interest method to amortize the discount, the entries are: January 1, 2020 Dr Note Receivable $29,269 Cr Discount on Note Receivable $2,731 Cr Land $29,269, December 31, 2020 Dr Interest Receivable $3,219 Dr Discount on Note Receivable $339
Cr Interest Income $3,219, and December 31, 2021 Dr Interest Receivable $3,250 Dr Discount on Note Receivable $370 Dr Cash $34,880 Cr Note Receivable $29,269 Cr Interest Income $3,250 Cr Discount on Note Receivable $2,731.
The effective interest method is a method of calculating the amortized cost of a financial asset or liability and allocating the interest income or expense over the relevant period. Under the effective interest method, the effective interest rate is applied to the carrying amount of the financial asset or liability at the beginning of the period to determine the interest income or expense for the period.
The following entries are required for Jacobs Company over the note term:
1) On January 1, 2020, record the sale of the land and the issuance of the note:
Debit: Note Receivable - Andress Company $32,000
Credit: Land $32,000
2) On December 31, 2020, record the interest income for the year:
Debit: Interest Receivable - Andress Company $2,880 (32,000 x 9%)
Credit: Interest Income $2,880
3) On December 31, 2021, record the interest income for the year and the repayment of the note:
Debit: Interest Receivable - Andress Company $2,880 (32,000 x 9%)
Debit: Cash $34,880 (32,000 + 2,880)
Credit: Note Receivable - Andress Company $32,000
Credit: Interest Income $2,880
Using the effective interest method to amortize the discount, the following entries are required:
1) On January 1, 2020, record the sale of the land and the issuance of the note at its fair value:
Debit: Note Receivable - Andress Company $29,269 (32,000 / 1.11)
Credit: Discount on Note Receivable - Andress Company $2,731 (32,000 - 29,269)
Credit: Land $29,269
2) On December 31, 2020, record the interest income for the year and the amortization of the discount:
Debit: Interest Receivable - Andress Company $3,219 (29,269 x 11%)
Debit: Discount on Note Receivable - Andress Company $339 (3,219 - 2,880)
Credit: Interest Income $3,219
3) On December 31, 2021, record the interest income for the year, the amortization of the discount, and the repayment of the note:
Debit: Interest Receivable - Andress Company $3,250 (29,608 x 11%)
Debit: Discount on Note Receivable - Andress Company $370 (3,250 - 2,880)
Debit: Cash $34,880 (32,000 + 2,880)
Credit: Note Receivable - Andress Company $29,269
Credit: Interest Income $3,250
Credit: Discount on Note Receivable - Andress Company $2,731
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4. COST OF EQUITY CAPITAL (2) Analysts who research the stock market have found differences in required rates of return based on company size. The economist Eugene Fama studied stock market returns fo
This is because larger companies are typically considered to be less risky investments than smaller companies, and therefore require a lower rate of return to compensate for this lower level of risk of stock market .
Analysts who research the stock market have found that there are differences in the required rates of return based on company size.
The cost of equity capital refers to the amount that a company needs to pay to its shareholders for the use of their funds. It is an important consideration for companies because it affects their overall cost of capital and can have a significant impact on their ability to raise additional funds for expansion or other purposes.
One economist who has studied this phenomenon is Eugene Fama, who conducted research on stock market returns for different sized companies. Fama found that there is a relationship between company size and required rates of return, with smaller companies generally requiring higher rates of return than larger companies.
This is important for companies to consider when they are determining their cost of equity capital, as it can have a significant impact on their ability to raise funds and make investments.
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34. A risk- avers investor prefers to hold: a. More risky
assets. b. Less- risky assets. c. Assets with less uncertainty
associated with their returns: d. Both (b) and (c).
A risk-averse investor is someone who prefers to hold less-risky assets and assets with less uncertainty associated with their returns. Therefore, the correct answer is option d. Both (b) and (c).
Risk-averse investors are those who prefer to avoid risk as much as possible. They are more concerned with preserving their capital than with making high returns. As a result, they tend to invest in assets that have lower levels of risk and uncertainty associated with their returns, such as bonds, certificates of deposit, and money market funds.
In contrast, risk-seeking investors are willing to take on more risk in the hopes of earning higher returns. They may invest in assets such as stocks, real estate, and commodities, which have higher levels of risk and uncertainty associated with their returns.
Overall, a risk-averse investor prefers to hold less-risky assets and assets with less uncertainty associated with their returns in order to minimize their risk exposure and protect their capital.
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B. Do you think 'Designing the Communication' of those
advertisements was appropriate and convincing enough to communicate
its message to the potential customers? Why or Why not?
Yes, I think that the 'Designing the Communication' of those advertisements was appropriate and convincing enough to communicate its message to the potential customers. This is because the advertisements were designed in a way that was visually appealing and eye-catching, which helped to attract the attention of potential customers.
Additionally, the advertisements used clear and concise messaging that effectively communicated the benefits of the product or service being advertised. This helped to convince potential customers to take action and make a purchase. Overall, the 'Designing the Communication' of those advertisements was well-done and helped to effectively communicate the message to potential customers.
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Why was the second ring of von Thunen's original model more important prior to the industrial revolution than it is today?
*do not count the urban center as a ring
It does not matter if it is close to the city because wood is no longer required as an energy source.
The ability of a system to do labour is the traditional definition of energy, but because energy can exist in so many various forms, it is challenging to come up with a single, all-inclusive definition. Natural resources for renewable energy are abundant and sustainable. These organic, renewable energy sources are kind to the environment. Hardwood, charcoal, chips, sheets, pellets, and sawdust are all examples of wood fuel. Source, quantity, quality, and use are just a few of the elements that influence the specific shape that is employed. Nowadays, wood burning is the solid fuel source that uses the most energy.
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You have just been employed as the Management Accountant of Ismael & Co, a newly
established manufacturing company in Kurdistan. The managing director of Ismael & Co has told
you that in the first year of operation, the company's aim is to ensure that its total revenue is
equal to its total costs, meaning they are not expecting to make any profit or loss.
The managing director of Ismael & Co has asked you (the Management Accountant) to list the
methods of achieving this aim in the first year?
As a Management Accountant at Ismael & Co, there are several methods that can be implemented to achieve the aim of ensuring that the company's total revenue is equal to its total costs in the first year of operation. These methods include:
1. Cost control: This involves keeping track of all the company's expenses and finding ways to reduce them without compromising the quality of the company's products or services.
2. Pricing strategy: Setting the right prices for the company's products or services is crucial in achieving the aim of equalizing total revenue and total costs. This can be done by conducting market research to determine the prices that customers are willing to pay and setting prices accordingly.
3. Sales volume: Increasing the company's sales volume can also help in achieving the aim of equalizing total revenue and total costs. This can be done by implementing effective marketing strategies to attract more customers and increase sales.
4. Product mix:The company can also consider adjusting its product mix to include products with higher profit margins. This can help in achieving the aim of equalizing total revenue and total costs.
5. Efficiency: Improving the efficiency of the company's operations can also help in achieving the aim of equalizing total revenue and total costs. This can be done by streamlining processes and eliminating waste.
In conclusion, as the Management Accountant of Ismael & Co, implementing the above methods can help in achieving the aim of ensuring that the company's total revenue is equal to its total costs in the first year of operation.
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