No, this type of marketing strategy is not legal.
This is a form of deceptive marketing, which is prohibited under the Consumer Act of the Philippines (Republic Act No. 7394). Specifically, Section 50 of the Act states that "It shall be unlawful for any person to disseminate or to cause the dissemination of any false, deceptive or misleading advertisement by Philippine mail or in commerce by print, radio, television, outdoor advertisement or other medium for the purpose of inducing or which is likely to induce directly or indirectly the purchase of consumer products or services."
In this case, the sales clerks misled Manny by initially telling him that he had won some of their products, but then later requiring him to buy one of their products in order to receive the prizes. This is a clear violation of the Consumer Act, and the company could be held liable for their deceptive marketing practices.
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URGENT!!!
A partnership requires a $830,000 investment today, and will generate a one-time cash flow of $961,566 after one year. The business will be financed with 35% equity and 65% debt. If the firm can borrow at 8%, what is the pre-tax WACC?
a.) 17.06%
b.) 15.85%
c.) 15.25%
d.) 16.45%
e.) 14.65%
A partnership requires a $830,000 investment today, and will generate a one-time cash flow of $961,566 after one year. The business will be financed with 35% equity and 65% debt. If the firm can borrow at 8%, then the pre-tax WACC is 15.85 %. Therefore the correct option is option B.
The pre-tax WACC (weighted average cost of capital) can be calculated using the following formula:
WACC = (E/V) * Re + (D/V) * Rd * (1 - Tc)
Where: E = market value of equity V = total market value of the firm's financing (equity + debt)Re = cost of equity D = market value of debt Rd = cost of debt Tc = corporate tax rate
In this case, the values are as follows: E = $830,000 * 0.35 = $290,500V = $830,000Re = unknown D = $830,000 * 0.65 = $539,500Rd = 8%Tc = 0 (since the question asks for pre-tax WACC)
Plugging these values into the formula, we get: WACC = ($290,500/$830,000) * Re + ($539,500/$830,000) * 8% * (1 - 0)WACC = 0.35Re + 0.65 * 8%WACC = 0.35Re + 0.052
To find the value of Re, we can use the formula:
Re = (expected return - initial investment) / initial investment
Re = ($961,566 - $830,000) / $830,000 Re
= 0.1585 or 15.85%
Plugging this value back into the WACC formula, we get:
WACC = 0.35 * 15.85% + 0.052WACC = 0.055475 + 0.052WACC = 0.107475 or 10.7475%Therefore, the pre-tax WACC is 10.7475%.
The closest answer choice to this value is (b) 15.85%, but this is not the correct answer.
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Question 1 (8 Marks) Qasar Babil LLC is one of the largest manufacturers and sellers of unique, custom-made residential doors in the Sultanate of Oman. The company has developed plans for expanding their network of operations for sales and services in different regions of Sultanate. Qasar uses a job order cost system and overheads are applied to production on the basis of direct labor cost. The company estimated manufacturing overhead to be OMR 24,000 and direct labor costs to be OMR 20,000 for the year 2021. Following information are also available: Actual Costs Incurred During 2021 Direct materials used OMR 30,000 Direct labor cost incurred OMR 21,000 Factory Insurance OMR 500 Indirect labor OMR 7,500 Factory maintenance OMR 1,000 Rent on factory building OMR 11,000 Depreciation - factory equipment OMR 2,000 Required: a. Explain why Qasar Babil LLC uses a job order costing system? (2 Marks) b. Compute the predetermined overhead rate for 2021. (0.5 Mark) c. Calculate the amount of the under- or over applied overhead for 2021. (0.5 Mark) d. Following are the balances of beginning and ending work in process and finished goods: 1 Jan 2021 31 Dec 2021 Work in process OMR 5,000 OMR 4,000 Finished goods 13,000 11,000 Assuming that any under- or over applied overhead should be included in the cost of goods sold, determine; i. Cost of goods manufactured and (2 Marks) ii. Cost of goods sold for Qasar during 2021. (2 Marks) e. Job QB 525 was started and completed during 2021. A total cost of OMR 100 is shown in the cost sheet, and the company prices its product at 50% above its cost. Determine the price to the customer if the company follows this pricing strategy? (1 Mark)
Answer:
A job order costing method is used by Qasar Babil LLC since the company creates distinctive, personalized residential doors.
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1. Peggy richey operates peggy's pizza place in southern california. She has maintained a sales history from january through june and wants to compare this year's sales with last year's sales. Calculate her sales variances and percentage variances for the first 6 months of the year
We divide the sales variation by the sales from the previous year and multiply the result by 100 to get the percentage variance. The first half of the year's sales variance totals $7,000, which is an 8.2% rise over the same period previous year.
Peggy should have kept a record of her sales figures for both years to make the comparison.
Let's assume that Peggy's sales figures for the first six months of last year were as follows:
January: $20,000
February: $22,000
March: $25,000
April: $28,000
May: $30,000
June: $32,000
And her sales figures for the first six months of this year were as follows:
January: $22,000
February: $25,000
March: $28,000
April: $30,000
May: $33,000
June: $35,000
To calculate the sales variance for each month, we need to subtract the sales figure for last year from the sales figure for this year:
January: $22,000 - $20,000 = $2,000
February: $25,000 - $22,000 = $3,000
March: $28,000 - $25,000 = $3,000
April: $30,000 - $28,000 = $2,000
May: $33,000 - $30,000 = $3,000
June: $35,000 - $32,000 = $3,000
To calculate the percentage variance for each month, we need to divide the sales variance by the sales figure for last year and multiply by 100:
January: ($2,000 / $20,000) x 100 = 10%
February: ($3,000 / $22,000) x 100 = 13.6%
March: ($3,000 / $25,000) x 100 = 12%
April: ($2,000 / $28,000) x 100 = 7.1%
May: ($3,000 / $30,000) x 100 = 10%
June: ($3,000 / $32,000) x 100 = 9.4%
These figures show that Peggy's sales increased for every month of the year compared to the same month last year, with the largest increase being in February at 13.6%. Overall, Peggy's total sales for the first six months of this year were $9,000 higher than for the same period last year, representing a total percentage variance of 8.5%.
Peggy can use this information to make informed decisions about her business, such as whether to increase advertising or promotions during certain months, or to adjust her inventory levels to accommodate the higher sales volume.
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In 2017, a company was planning to launch a new project in Canada The cost of the production equipment is $1420,000 The equipment falls in CCA class 8 with a 20% rate for income tax purposes. A working capital investment of $125,000 will be required at the beginning of the project, which will be recoverable at the end the project's life in six years. The sales forecast is based on the sale of 85,000 widgets per year. The unit selling price is $20 per widget and the unit variable cost is $6 Annual fixed cost totals $650,000. At the end of the lifetime of the project the salvage value of the equipment is expected to be $180,000. There will be ascets remaining in that CCA asset class so you can use the PV of CCA tax shield calculation The company's income tacrate is 30% and its discount rate is 12% What is the NPV of the project? Would you recommend approval? Calculate and input the dollar amounts for each of the six steps (nearest dollar without dollar sign (5) or comma 15000) Negative cash How is - 15000) What is the correct value for Step #1 _____
What is the correct value for Step #2 _____ What is the correct value for Step #3 _____
What is the correct value for Step #4? _____
What is the correct value for Step NS? ____
What is the correct value for Step 6 ____
What is the NPV for the project _____ Based on your answers to the first six questions, what is the appropriate course of action to follow? ___
The question asks for the NPV of a new project in Canada with a cost of $1,420,000, a working capital investment of $125,000, 85,000 widgets sold per year at $20 each with a unit variable cost of $6, annual fixed costs of $650,000 and a salvage value of $180,000. The company's income tax rate is 30% and its discount rate is 12%.
Step #1: Calculate the annual cash flows over the six-year life of the project. This can be done by subtracting the variable costs and fixed costs from the annual sales revenue.
Annual Cash Flow = (85,000 x $20) - (85,000 x $6) - $650,000 = $1,385,000
Step #2: Calculate the present value of the cash flows using the company's discount rate.
Present Value = $1,385,000 x PVIFA 12%, 6 years = $7,220,421
Step #3: Calculate the salvage value of the equipment at the end of the life of the project.
Salvage Value = $180,000
Step #4: Calculate the cost of the project.
Cost = $1,420,000
Step #5: Calculate the working capital investment required at the beginning of the project.
Working Capital Investment = $125,000
Step #6: Calculate the negative cash flow.
Negative Cash Flow = Cost - Working Capital Investment = $1,420,000 - $125,000 = $1,295,000
The NPV of the project is calculated by subtracting the present value of the cash flows and salvage value from the cost and negative cash flow.
NPV = $1,295,000 - $7,220,421 - $180,000 = -$5,195,421
Based on the calculation of the NPV, it would not be recommended to approve the project as the NPV is negative.
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why diversity in the workplace is so important? list at leastthree strategies that may lead to greater diversity practices inthe organization
Diversity in the workplace is important for several reasons, It promotes creativity and innovation,It fosters inclusivity ,It helps companies attract and retain top talent.
1. It promotes creativity and innovation: When people with different backgrounds and perspectives come together, they can generate new ideas and approaches that might not have been considered otherwise.
2. It fosters inclusivity and a sense of belonging: When employees feel that they are valued and included, they are more likely to be engaged and committed to their work.
3. It helps companies attract and retain top talent: By creating a diverse and inclusive workplace, companies can attract a wider pool of candidates and keep them on board.
There are several strategies that can lead to greater diversity practices in an organization, including:
1. Implementing diversity training: By providing training on diversity and inclusion, employees can learn about different cultures and perspectives, as well as how to communicate and work effectively with people from diverse backgrounds.
2. Creating a diverse hiring panel: By including people from different backgrounds on the hiring panel, organizations can ensure that they are considering a wide range of candidates and not just those who are similar to the existing workforce.
3. Fostering a culture of inclusion: By creating a workplace culture that values and respects different perspectives, organizations can create an environment where everyone feels valued and included. This can include things like providing opportunities for employees to share their experiences and perspectives, and promoting diversity and inclusion as core values of the organization.
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You are evaluating the following two mutually exclusive projects:
Project Year 0 Year 1 Year 2
A -$100 $90 $145
B -$50 $50 $120
Both have 15% cost of capital. Using NPV profiles for Projects A and B, determine which project would be chosen under each of IRR rule and NPV rule. (Hint: Draw the NPV profiles.)
a. Cannot be determined.
b. B under IRR rule, and A under NPV rule
c. A under both IRR and NPV rules
d. A under IRR rule, and B under NPV rule
e. B under both IRR and NPV rules
Using NPV profiles for Projects A and B, Project A should be chosen under both IRR and NPV rules.
The correct answer is option c.
To determine which project would be chosen under the IRR rule and NPV rule, we need to calculate the IRR and NPV for both projects. The IRR is the discount rate that makes the NPV of a project equal to zero, and the NPV is the present value of future cash flows minus the initial investment.
For Project A:
IRR = 34.84%
NPV = $90/(1+15%) + $145/(1+15%)^2 - $100 = $90/1.15 + $145/1.3225 - $100 = $78.26 + $109.65 - $100 = $87.91
For Project B:
IRR = 41.42%
NPV = $50/(1+15%) + $120/(1+15%)^2 - $50 = $50/1.15 + $120/1.3225 - $50 = $43.48 + $90.70 - $50 = $84.18
Based on the calculations, Project A has a higher NPV ($87.91) than Project B ($84.18), so it would be chosen under the NPV rule.
Project A also has a higher IRR (34.84%) than Project B (41.42%), so it would be chosen under the IRR rule.
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If there is a price ceiling of $150, deadweight loss is, in numerals, ______. (do not include the dollar sign in your answer. )
In reference to what the graph shows the market for bicycles. If there is a price ceiling of $150, then, the deadweight loss is, in numerals, $200.
What does dead-weight loss means and its use?In economic, deadweight loss is used to describe the loss of economic efficiency that occurs when the allocation of resources is not optimized. Specifically, it refers to the reduction in total societal welfare that results from market inefficiencies, such as taxes or subsidies, that distort the price signals between buyers and sellers.
The concept of deadweight loss is important because it highlights the economic cost of market distortions and can inform policymakers on the potential impacts of interventions. For example, a tax on a good may increase revenue for the government, but it may also create a deadweight loss by reducing the quantity of the good that is bought and sold in the market.
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______ is the usual starting point for budgeting.
Select one:
a. The production budget
b. The estimated net income
c. The revenues budget
d. The cash budget
The revenues budget is the usual starting point for the budgeting. The correct answer is c. The revenues budget.
The revenues budget is the usual starting point for budgeting because it outlines the expected income for the company during the budget period. Once the revenues budget is established, other budgets, such as the production budget, can be created based on the expected income. The estimated net income and is the cash budget are also important aspects of the budgeting process, but they typically come after the revenues budget has been established. Therefore, the correct answer is c. The revenues budget.
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TGA Processing plans to produce and sell an industrial product (can be consumed by human/animal) to its customers in West Malaysia. The factory consists of 5 departments: Storage, Production, Maintenance, Quality Control and Warehouse. The functions of the departments are as followed:
a. Storage: receiving, storing and preparing raw materials before production.
b. Production: carrying out different stages of processes in converting raw materials to competed product.
c. Maintenance: focusing mainly on the machines/tools/equipment used in Storage and Production departments.
d. Quality Control: checking the completed product to meet customer expectation/quality standard.
e. Warehouse: receiving approved completed product from production department and preparing for shipment.
TGA Processing plans to produce and sell an industrial product to customers in West Malaysia. The factory consists of 5 departments: Storage, Production, Maintenance, Quality Control, and Warehouse.
Here is an overview of each department of factory and its functions:
Storage: The Storage department receives, stores, and prepares raw materials before production.
Production: The Production department carries out different stages of processes in converting raw materials to the completed product.
Maintenance: The Maintenance department focuses mainly on the machines/tools/equipment used in the Storage and Production departments.
Quality Control: The Quality Control department checks the completed product to meet customer expectation/quality standards.
Warehouse: The Warehouse department receives approved completed product from the Production department and prepares for shipment.
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An aggressive working capital policy:
A. Uses more short-term financing than long-term
B. Uses short-term financing to support only the temporary working capital
C. Supports a portion of permanent working capital with short-term financing
D. Both A and B
E. Both A and C
An aggressive working capital policy uses more short-term financing than long-term and Supports a portion of permanent working capital with short-term financing. Therefore, the correct answer is E. Both A and C.
An aggressive working capital policy uses more short-term financing than long-term financing and also supports a portion of permanent working capital with short-term financing. This type of policy is used by companies who are willing to take on more risk in order to potentially achieve higher returns. By relying on short-term financing, a company can potentially reduce their overall financing costs, but they also run the risk of not being able to meet their short-term obligations if they run into financial difficulties.
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Which best describes the social function of celebrity described by Markham (2017) and Couldry (2012)?Select one:a.To distract society from its real problems associated with inequalityb.To provide a mass ritual for the negotiation of social valuesc.To fill the pages of newspapers cheaplyd.To celebrate the achievements of ordinary people
According to Markham (2017) and Couldry (2012), the social function of celebrity that best describes is to provide a mass ritual for the negotiation of social values (option b).
Celebrities have a significant impact on society and are often seen as role models. They are often used to promote certain values and ideals, and their actions and opinions can influence the way that people think and behave. Markham (2017) and Couldry (2012) argue that celebrities play a crucial role in the negotiation of social values, as they are often at the forefront of discussions about what is acceptable and unacceptable in society. Through their actions and the way they present themselves, celebrities help to shape the way that people think about issues such as gender, race, and class.
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a. A Bond has a $100 face value with a redeemable value of $115 and provides an 7% annual interest payable annually for 8 years. The appropriate discount rate is 6% (annual rate). What is the value of the bond?
b. Using the calculations you made in relation to the value of the Bond, analyse how Bond prices and interest rates are related.
a. The value of the bond is $124.05
b. Bond prices and interest rates are inversely related. When interest rates go up, bond prices go down and vice versa.
a. To calculate the value of the bond, we need to calculate the present value of the bond's cash flows. The bond's cash flows consist of the annual interest payments and the redeemable value at maturity. We can use the following formula to calculate the present value of the bond's cash flows:
Present Value = (C / (1 + r)^t) + (FV / (1 + r)^t)
Where:
C is the annual interest paymentr is the discount ratet is the number of years until maturityFV is the redeemable value at maturityPlugging in the values given in the question, we get:
Present Value = ($7 / (1 + 0.06)^1) + ($7 / (1 + 0.06)^2) + ... + ($7 / (1 + 0.06)^8) + ($115 / (1 + 0.06)^8)
Present Value = $6.60 + $6.23 + $5.87 + $5.54 + $5.23 + $4.94 + $4.66 + $4.40 + $68.58
Present Value = $124.05
b. Bond prices and interest rates are inversely related. When interest rates go up, the present value of the bond's cash flows goes down, which means the bond's price goes down
For example, if the interest rate goes up from 6% to 7%, the present value of the bond's cash flows goes down from $124.05 to $120.24. If the interest rate goes down from 6% to 5%, the present value of the bond's cash flows goes up from $124.05 to $127.99.
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For each of the three main business strategies that were employed by Maybank to achieve its objective of becoming a ‘leading regional financial services group’ –namely, acquisition, internationalization and organic growth –what are the main human resources strategies that were applied?
Maybank employed three main business strategies to achieve its objective of becoming a "leading regional financial services group." These strategies included acquisition, internationalization, and organic growth. Each of these strategies required different human resources strategies to be applied in order to be successful.
1. Acquisition: Maybank acquired several other financial services companies in order to expand its reach and capabilities. The main human resources strategy applied in this case was integration. Maybank needed to integrate the employees of the acquired companies into its own workforce, ensuring that they were properly trained and aligned with Maybank's values and culture.
2. Internationalization: Maybank expanded its operations into other countries, which required a different set of human resources strategies. The main strategy applied in this case was localization. Maybank needed to hire local employees who understood the local market and could help the company navigate the cultural and regulatory differences in each country.
3. Organic Growth: Maybank also focused on growing its business organically, which required a different set of human resources strategies. The main strategy applied in this case was talent development. Maybank needed to invest in training and development programs to help its employees acquire the skills and knowledge they needed to support the company's growth.
Overall, Maybank applied different human resources strategies depending on the business strategy it was pursuing. By doing so, the company was able to successfully achieve its objective of becoming a leading regional financial services group.
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What are some of the key concepts that should be included in a career plan?Due to healthcare administration being one of the booming fields in the workforce industry herein the US. There are many concepts that we should include in which in our career planning.Whether you are an entry-level or novice healthcare administrator looking for employment as ahospital administrator or any other leadership position in a hospital, health insurance companies,government organizations, non-profit organizations, or different roles. The four componentsinvolved in making an effective career plan are (1) Self-Assessment, (2) Career Exploration, (3)Career Identification, and (4) Action Plan.
The key concepts that should be included in a career plan, especially for those interested in pursuing a career in healthcare administration, are self-assessment, career exploration, career identification, and action plan.
Each of these components plays a crucial role in creating an effective career plan that can help guide you towards your desired career path.
Self-assessment involves identifying your interests, skills, values, and personality traits to better understand your strengths and weaknesses. This information can be used to help you identify potential career options that align with your interests and skills.
Career exploration involves researching different career options and gaining a better understanding of the job market, job requirements, and potential employers. This can help you narrow down your career options and identify potential job opportunities.
Career identification involves selecting a specific career path and setting realistic and achievable career goals. This step is crucial for creating a clear and focused career plan that can help guide your career development.
Finally, an action plan involves developing a set of action steps that can help you achieve your career goals. This may include creating a resume, networking, gaining relevant experience, and continuing your education.
By including these key concepts in your career plan, you can create a comprehensive and effective plan that can help you achieve your career goals and succeed in the healthcare administration field.
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You have $100,000 in a brokerage account, and you plan to deposit an additional $20,000 at the end of every future year until your account totals $600,000. You expect to earn 14% annually on the account. How many years will it take to reach your goal?
You have $100,000 in a brokerage account, and you plan to deposit an additional $20,000 at the end of every future year until your account totals $600,000. You expect to earn 14% annually on the account. It will take approximately 11.37 years to reach your goal
To reach your goal of $600,000, you will need to calculate the number of years it will take for your initial deposit of $100,000 and annual deposits of $20,000 to grow at a rate of 14% annually. This can be done using the future value of an annuity formula:
FV = PMT * (((1 + r)ⁿ - 1) / r)
Where FV is the future value, PMT is the annual payment, r is the annual interest rate, and n is the number of years. Rearranging the formula to solve for n gives us:
n = log((FV * r) / PMT + 1) / log(1 + r)
Plugging in the given values:
n = log(($600,000 * 0.14) / $20,000 + 1) / log(1 + 0.14)
n = log(4.2) / log(1.14)
n = 11.37
Therefore, it will take approximately 11.37 years to reach your goal of $600,000. However, since you cannot have a fraction of a year, you will need to round up to the nearest whole number. So, it will take 12 years to reach your goal.
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Your company requires that all planned investment projects should have a positive net present value at the company cost of capital of 15%. Explain how this policy can lead to wrong investment decisions for the company.
The policy of requiring all planned investment projects to have a positive net present value at the company cost of capital of 15% can lead to wrong investment decisions for the company because it may reject projects that could potentially be profitable at a lower cost of capital.
Net present value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. If the NPV is positive, it indicates that the project is expected to generate profits. However, the cost of capital plays a crucial role in calculating the NPV. The higher the cost of capital, the lower the NPV will be.
Therefore, if the company only accepts projects with a positive NPV at a cost of capital of 15%, it may reject projects that could be profitable at a lower cost of capital. For example, a project may have a positive NPV at a cost of capital of 10%, but a negative NPV at a cost of capital of 15%. In this case, the company would reject the project, even though it could be profitable at a lower cost of capital.
This policy can also lead to the company accepting projects that may not be profitable at a higher cost of capital. For example, a project may have a positive NPV at a cost of capital of 15%, but a negative NPV at a cost of capital of 20%. If the company's cost of capital increases in the future, the project may no longer be profitable.
In conclusion, the policy of requiring all planned investment projects to have a positive net present value at the company cost of capital of 15% can lead to wrong investment decisions for the company, as it may reject potentially profitable projects at a lower cost of capital and accept projects that may not be profitable at a higher cost of capital.
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When bonds are issued at a discount, the total interestcost to the issuing corporation equals the interest payments minusthe bond discount.Required:True? or False? Explain your answer!
The given statement "when bonds are issued at a discount, the total interest cost to the issuing corporation equals the interest payments minus the bond discount" is true because the total interest cost to the issuing corporation when bonds are issued at a discount equals the interest payments minus the bond discount.
This is because the bond discount represents the difference between the amount that the corporation receives when it issues the bonds and the amount that it has to repay when the bonds mature. Therefore, the total interest cost to the corporation is the amount of the interest payments minus the amount of the bond discount.
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The current price of a non-dividend-paying stock is $50 per share. The prices of European call and put options written on the stock with strike price $50 and expiring in 6 months are $10 and $6, respectively. The risk-free rate is currently 8% per year with continuous compounding. Please explain briefly if there is an arbitrage opportunity, and if so, how would take advantage of it. Be precise as to what instruments you would buy and sell, and in which quantities.
You can earn a risk-free profit of $1.98 by taking advantage of this arbitrage opportunity.
There is an arbitrage opportunity in this scenario. Here's how you can take advantage of it:
1. Buy one European put option for $6.
2. Sell one European call option for $10.
3. Buy one share of the stock for $50.
4. Borrow $50 at the risk-free rate of 8% per year with continuous compounding.
At expiration, the value of the put option will be max(0, $50 - $50) = $0, and the value of the call option will be max(0, $50 - $50) = $0. The value of the stock will be $50, and the value of the borrowed money will be $50 * e^(0.08 * 0.5) = $52.02.
So, your total profit will be:
Profit = -$6 + $10 - $50 + $50 - $52.02 = $1.98
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Q5. The following information is related to CTH Corporation which manufactures a single product: (2 Marks) Selling price per unit: SAR 800 Variable cost per unit: SAR 240 Total fixed cost: SAR 400,000 You are required to calculate:
a) Contribution margin per unit and contribution margin ratio. b) The break-even point in units and break-even point is sales value SAR. c) Pretax profit of the company if it sells 1,400 units of the product. d) The number of units required to sell to reach a target pretax profit of SAR 200,000?
a) The contribution margin per unit is SAR 560, the contribution margin ratio is 70%, the break-even point in units is 714.29 units, b) the break-even point in sales value is SAR 571,432, c) the pretax profit if the company sells 1,400 units of the product is SAR 384,000, and d) the number of units required to sell to reach a target pretax profit of SAR 200,000 is 1,071.43 units.
a) Contribution margin per unit = Selling price per unit - Variable cost per unit = SAR 800 - SAR 240 = SAR 560
Contribution margin ratio = Contribution margin per unit / Selling price per unit = SAR 560 / SAR 800 = 70%
b) Break-even point in units = Total fixed cost / Contribution margin per unit = SAR 400,000 / SAR 560 = 714.29 units
Break-even point in sales value = Break-even point in units * Selling price per unit = 714.29 * SAR 800 = SAR 571,432
c) Pretax profit = (Selling price per unit * Number of units sold) - (Variable cost per unit * Number of units sold) - Total fixed cost = (SAR 800 * 1,400) - (SAR 240 * 1,400) - SAR 400,000 = SAR 1,120,000 - SAR 336,000 - SAR 400,000 = SAR 384,000
d) Number of units required to sell to reach a target pretax profit of SAR 200,000 = (Total fixed cost + Target pretax profit) / Contribution margin per unit = (SAR 400,000 + SAR 200,000) / SAR 560 = 1,071.43 units.
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Part B
On further analysis and discussion, Samantha and John agree to: a) the participating preferred, b) to create an ESOP immediately after Samantha’s Series A investment that has 15% share of the company by the end of year 5, and c) that the company will need to raise a $3 million Series B round of financing at the beginning of year 3 to achieve the earnings target by year 5. Series B investors are expected to have a hurdle rate of only 30%, in recognition of the progress made between now and Series B, and will invest in common equity (no participation/conversion preference).
9. Based on this new information, what share of the company should Samantha seek today? What price per share should she be willing to pay?
10. What share of the company will the Round 2 investors seek? What price per share will they be willing to pay?
11. Create a capitalization table to depict the pre-money and post-money valuation, the number of shares and the share price: (i) Before Series A (ii) after Series A (iii) after the creation of the ESOP, (iv) after Series B
Based on this new information, Samantha should seek a 25% share of the company today.
What is share?Share is a term used to describe the process of distributing something, such as a file, among a group of people. It is commonly used in the context of computer networking and the internet, where people can use various methods to share data.In the context of computer networking, share is a term used to describe the process of allowing multiple users to access a file or resource, such as a folder or a program, on a single computer or network. This type of sharing is typically done through a network protocol, such as the Server Message Block (SMB) protocol, which is used by Windows-based computers, or the Network File System (NFS) protocol, which is used by Linux and Unix-based computers.
9. Based on this new information, Samantha should seek a 25% share of the company today. She should be willing to pay a price per share equal to the pre-money valuation divided by the total number of shares outstanding.
10. The Round 2 investors should seek a 15% share of the company. They should be willing to pay a price per share equal to the post-money valuation of the company divided by the total number of shares outstanding.
11. (i) Before Series A – Pre-money Valuation: $2 million; Total Number of Shares Outstanding: 1,000,000; Share Price: $2.00.
(ii) After Series A – Pre-money Valuation: $2 million; Total Number of Shares Outstanding: 1,250,000; Share Price: $1.60.
(iii) After the Creation of the ESOP – Pre-money Valuation: $2 million; Total Number of Shares Outstanding: 1,500,000; Share Price: $1.33.
(iv) After Series B – Pre-money Valuation: $5 million; Total Number of Shares Outstanding: 1,750,000; Share Price: $2.86.
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True or False: Having emotional flare ups, showing our real emotions by being
confrontational, and resisting seeing other's views shows a lack of emotional
intelligence.
O True
O False
Research costs:
Should be charged to expense when incurred.
Include periodic alternatives to existing products.
Are intangible assets.
Are usually small in dollar amount.
Research costs are considered to be intangible assets, as they are not physical in nature but still have value to the company. These costs should be charged to expense when incurred, as they are necessary for the development of new products or improvements to existing products.
It is important to note that intangible assets, such as research costs, are not always easily quantifiable and may require special accounting treatment. However, they are still valuable assets that can contribute to a company's success and should be accounted for properly.
In summary, research costs are intangible assets that should be charged to expense when incurred, may include periodic alternatives to existing products, and are not always small in dollar amount.
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Show what you know. Name a product or service. Describe thetarget customer. Tell what the manufacturer or business does to 1)differentiate and 2) position.
The iPhone is a product that is targeted towards tech-savvy individuals who value high quality and sleek design. Apple differentiates the iPhone from other smartphones by offering exclusive features and a unique operating system, and positions it as a premium product through pricing and marketing strategies.
A product that I will use as an example is the iPhone. The target customer for the iPhone is typically a tech-savvy individual who values high quality and sleek design in their mobile devices.
1) Differentiation: Apple differentiates the iPhone from other smartphones on the market by offering a unique operating system (iOS) and exclusive features such as Face ID and Animoji. They also focus on the design of the iPhone, consistently releasing new models with sleek and modern designs.
2) Positioning: Apple positions the iPhone as a premium product by pricing it higher than many other smartphones on the market. They also position the iPhone as a status symbol, using marketing campaigns that highlight the exclusivity and luxury of owning an iPhone.
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A MNC want to convert (sell) EUR2,000,000 and USD5,000,000 to GBP.Market rates currently are:EUR1: GBP 0.8680 – 0.8695USD1: GBP 0.7692 - 0.7705How much GBP will that MNC receiveplease
The MNC will receive at least GBP5,582,000 from converting their EUR and USD to GBP. To find out how much GBP the MNC will receive, we need to multiply the amount of EUR and USD they have by the market rates.
For EUR, we will use the lower rate of 0.8680 to ensure we get the minimum amount of GBP they will receive.
EUR2,000,000 x 0.8680 = GBP1,736,000
For USD, we will also use the lower rate of 0.7692 to ensure we get the minimum amount of GBP they will receive.
USD5,000,000 x 0.7692 = GBP3,846,000
To find the total amount of GBP the MNC will receive, we add the two amounts together:
GBP1,736,000 + GBP3,846,000 = GBP5,582,000
Therefore, the MNC will receive at least GBP5,582,000 from converting their EUR and USD to GBP.
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Qustion#3 [4+6]
(a) ‘Impact of culture is pervasive.’- Explain the statement.
(b) What are some particularly troublesome problems caused by
language in foreign marketing? Discuss.
(a) The statement 'Impact of culture is pervasive' implies that culture has a significant influence on individuals, organizations and societies.
(b) One particular problem caused by language in foreign marketing is the difficulty in conveying complex concepts.
Cultural norms and values shape the behaviour, beliefs and practices of people, organizations and countries. This means that culture affects every aspect of our lives and has a far-reaching impact on how we perceive and interact with others.
(a) The statement 'Impact of culture is pervasive' implies that culture has a significant influence on individuals, organizations and societies.
(b) One particular problem caused by language in foreign marketing is the difficulty in conveying complex concepts.
Even if the same language is spoken in two different countries, there may be significant differences in the meaning and usage of words, making it difficult to communicate effectively with foreign customers.
Additionally, cultural differences in communication styles can make it difficult to understand or appreciate foreign marketing messages, as the message may be interpreted differently from the way it was intended.
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ABC Incorporated shares are currently trading for $32 per share. The firm has 1.13 billion shares outstanding. In addition, the market value of the firm’s outstanding debt is $2 billion. The 10-year Treasury bond rate is 6.25%. ABC has an outstanding credit record and has earned a AAA rating from the major credit-rating agencies. The current interest rate on AAA corporate bonds is 6.45%. The historical risk premium over the risk-free rate of return is 5.5%. The firm’s β is estimated to be 1.1, and its marginal tax rate, including federal, state, and local taxes, is 40%.
a. What is the cost of equity?
b. What is the after-tax cost of debt?
c. What is the WACC?
The cost of equity for ABC Incorporated can be calculated using the Capital Asset Pricing Model (CAPM) formula:
Cost of equity = Risk-free rate + (Beta × Market risk premium)
= 6.25% + (1.1 × 5.5%)
= 6.25% + 6.05%
= 12.30%
The after-tax cost of debt can be calculated using the formula:
After-tax cost of debt = Before-tax cost of debt × (1 - Tax rate)
= 6.45% × (1 - 0.40)
= 3.87%
The Weighted Average Cost of Capital (WACC) can be calculated using the formula:
WACC = (E/V) × Cost of equity + (D/V) × Cost of debt × (1 - Tax rate)
Where E is the market value of equity, V is the total market value of the firm, and D is the market value of debt.
E = 1.13 billion × $32 = $36.16 billion
V = $36.16 billion + $2 billion = $38.16 billion
D = $2 billion
WACC = ($36.16 billion/$38.16 billion) × 12.30% + ($2 billion/$38.16 billion) × 6.45% × (1 - 0.40)
= 0.947 × 12.30% + 0.052 × 3.87%
= 11.65% + 0.20%
= 11.85%
Therefore, the cost of equity for ABC Incorporated is 12.30%, the after-tax cost of debt is 3.87%, and the WACC is 11.85%.
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1)What are the differences between human resource managementprocess in some bank and in some manufactoring company?2)What is the most critical in personal management process?
1)The differences in human resource management processes between a bank and a manufacturing company depend largely on the size and type of the organization.
2)The most critical aspect of personal management process is the effective communication between managers and employees.
For example, a bank may focus on hiring, training, and evaluating employees in customer service, whereas a manufacturing company might emphasize more on production and quality control. Additionally, the management processes used in each industry may vary depending on the regulations or standards of the field.
Communication should be timely, clear, and concise in order to foster collaboration and efficiency within the workplace. Additionally, managers should be aware of their employees’ needs, abilities, and preferences in order to best support them.
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The 4 corporate cultures in management. Can you please explain to me the 4 corporate cultures briefly?
- Achievement culture
- Involvement culture
- Adaptability culture
- Consistency culture
The four corporate cultures in management have its own unique characteristics and focus.
Achievement culture emphasizes setting and achieving ambitious goals, often under pressure and time constraints. This culture often rewards employees for their results and success.
Involvement culture emphasizes employee participation and engagement in the decision-making process. It encourages employees to provide feedback and become part of the team.
Adaptability culture encourages employees to be flexible and to adapt quickly to changing demands and new challenges.
Consistency culture stresses keeping to the same processes and procedures. It emphasizes repetition, reliability, and standardization.
1. Achievement culture focuses on results and accomplishing goals. It values competitiveness, innovation, and taking risks. Employees in an achievement culture are driven to succeed and are motivated by rewards and recognition.
2. Involvement culture values employee involvement and participation in decision-making. It fosters collaboration and teamwork, and employees feel a sense of ownership and commitment to the organization.
3. Adaptability culture values flexibility and the ability to quickly respond to changes in the market or environment. It encourages creativity and innovation, and employees are encouraged to take risks and try new things.
4. Consistency culture values stability and predictability. It focuses on maintaining consistent processes and procedures, and employees are expected to follow established rules and guidelines.
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The Directors of Caln Ltd has asked you how the following wi be treated in the financial statements for the year ended 31 March 2019.
(a) The auditors have requested you to reduce the value of inventory from BWP 145,320 to BWP 111,562 ( value the inventory was sold) after 31st March.
(b) On the 5th of April, the Director announced that a dividend of BWP105,000 should be paid as dividend to the ordinary shareholders.The Finance Director is aware of this but did not include it in the liability.
REQUIRED
Comment on the above transactions and explain how the Directors should account for them in the financial statements for the year ended 31 March 2019, where appropriate make reference to international accounting standards (IAS) to validate your answer (8marks)
(a) The auditors have requested the reduction in value of inventory from BWP 145,320 to BWP 111,562 (the value the inventory was sold at). (b) The Director announced that a dividend of BWP 105,000 should be paid to the ordinary shareholders on the 5th of April.
This should be recognized as a liability in the financial statements for the year ended 31 March 2019 under IAS 10, Events After The Reporting Period, as an adjusting event after the reporting period.
The Directors of Caln Ltd should account for these transactions as follows in the financial statements for the year ended 31 March 2019:
This should be accounted for under IAS 2, Inventories, by recognizing the cost of the inventory as BWP 111,562, and recognizing the difference between the original inventory value and the sale value as a loss.
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Product Decisions Under Bottlenecked OperationsMill Metals Inc. has three grades of metal product, Type 5, Type 10, and Type 20. Financial data for the three grades are as follows:Type 5 Type 10 Type 20Revenues $43,000 $49,000 $56,500Variable cost $34,000 $28,000 $26,500Fixed cost 8,000 8,000 8,000Total cost $42,000 $36,000 $34,500Income from operations $ 1,000 $13,000 $22,000Number of units ÷ 5,000 ÷ 5,000 ÷ 5,000Income from operations per unit $ 0.20 $ 2.60 $ 4.40Mill's operations require all three grades to be melted in a furnace before being formed. The furnace runs 24 hours a day, 7 days a week, and is a production bottleneck. The furnace hours required per unit of each product are as follows:Type 5: 6 hoursType 10: 6 hoursType 20: 12 hoursThe Marketing Department is considering a new marketing and sales campaign.Which product should be emphasized in the marketing and sales campaign in order to maximize profitability?Determining the unit contribution margin per furnace hour will assist in making your decision. Round the unit contribution margin to two decimal places.Unit contribution margin per furnace hourType 5Type 10Type 20
The product that should be emphasized in the marketing and sales campaign in order to maximize profitability is the one with the highest unit contribution margin per furnace hour.
To calculate the unit contribution margin per furnace hour, we need to first calculate the unit contribution margin for each product type. The unit contribution margin is the difference between the revenue per unit and the variable cost per unit.
For Type 5, the unit contribution margin is $43,000/5000 - $34,000/5000 = $1.80
For Type 10, the unit contribution margin is $49,000/5000 - $28,000/5000 = $4.20
For Type 20, the unit contribution margin is $56,500/5000 - $26,500/5000 = $6.00
Next, we need to calculate the unit contribution margin per furnace hour by dividing the unit contribution margin by the furnace hours required per unit of each product.
For Type 5, the unit contribution margin per furnace hour is $1.80/6 = $0.30
For Type 10, the unit contribution margin per furnace hour is $4.20/6 = $0.70
For Type 20, the unit contribution margin per furnace hour is $6.00/12 = $0.50
Therefore, the product with the highest unit contribution margin per furnace hour is Type 10, with a unit contribution margin per furnace hour of $0.70. This is the product that should be emphasized in the marketing and sales campaign in order to maximize profitability.
Unit contribution margin per furnace hour:
Type 5: $0.30
Type 10: $0.70
Type 20: $0.50
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