The value of Sam's income stream is $3,790.79 if his required rate of return is 10% p.a. for 5 years.
The value of an income stream can be calculated using the formula for the present value of an annuity:
[tex]PV = \frac{CF}{r} * (1 - \frac{1}{ (1 + r)^n} )[/tex]
Where PV is the present value, CF is the cash flow, r is the rate of return, and n is the number of years.
In this case, CF = $1,000, r = 10% = 0.10, and n = 5. Plugging these values into the formula, we get:
[tex]PV = \frac{1000}{0.10} * (1 - \frac{1}{(1 + 0.10)^5} ) = $3,790.79[/tex]
Therefore, the value of Sam's income stream is $3,790.79 if his required rate of return is 10% p.a. for 5 years.
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Read Corporate Governance document.
Then in about 750 words discuss the influence of governmental regulations as well as professional and personal ethical codes, especially in your business situation.
Be sure to include: (1) Principles of governance; (2) systems of governance; (3) corporate behavior; (4) sustainability; and (5) corporate reputation.
The Corporate Governance document outlines the principles, systems, and behaviours necessary for effective corporate governance.
In terms of governmental regulations, corporations must adhere to all relevant laws and regulations in order to remain in compliance.
Professional and personal ethical codes help ensure that corporations act in the best interests of their stakeholders, as well as protecting the public.
In terms of the five mentioned points, corporate governance principles should be focused on the goal of creating long-term shareholder value and ethical behaviour. Systems of governance should be designed to ensure that corporate activities are executed responsibly and in compliance with the relevant laws and regulations.
Corporate behaviour should be designed to adhere to the corporate values and ethical standards outlined in the governance document. Sustainability should be taken into consideration when making decisions and formulating strategies, in order to ensure that the business is able to remain viable in the long-term.
Finally, the corporate reputation should be managed in order to ensure that the public trust is maintained.
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Top management in the organisation has hired you as an HR advisor.Your duty is to evaluate the importance of performance management and to suggest to management a performance management process that can be implemented.
Performance management is a critical aspect of any organisation as it helps in achieving the desired goals and objectives. It involves setting clear expectations, monitoring employee performance, and providing feedback to improve performance.
The importance of performance management lies in the fact that it helps in aligning the goals of employees with those of the organization, leading to improved productivity and profitability. A performance management process that can be implemented in an organization is as follows:
It is important for organizations to have a performance management process in place to help maximize employee productivity and satisfaction. To implement a performance management process, top management should consider creating a performance evaluation system, a feedback system, setting clear goals and expectations, and providing rewards for exemplary performance. Additionally, communication and training should be made available to ensure employees understand the process and how it can help them reach their goals.
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A businessman wishes to borrow an amount of K4 million for a term of 3 years. The agreed rate of interest is 10% per annum effective for the first 2 years, and 6% per annum effective for the final year. Repayments on the loan are made annually in arrears. The amount of the level annual repayment is K1,590,328.58. (i) Draw up the loan schedule for the full three-year period. (5) (ii) Calculate what percentage of the loan has been repaid by the end of year 2. (2) (iii) Explain how this percentage figure would alter if the rate of interest had instead been 6% for the first two years and 10% for the final year. (2)
i) Closing balance for year 1 is K2,809,671.42 year 2 is K1,500,309.98 year 3 is 0
ii) The percentage of the loan has been repaid by the end of year 2 is 79.52%
iii) The closing balance at the end of year 2 would be higher, and the percentage of the loan repaid would be lower.
(i) The loan schedule for the full three-year period is as follows:
Year 1
Opening Balance K4,000,000
Interest K400,000
Repayment K1,590,328.58
Closing Balance K2,809,671.42
Year 2
Opening Balance K2,809,671.42
Interest K280,967.14
Repayment K1,590,328.58
Closing Balance K1,500,309.98
Year 3
Opening Balance K1,500,309.98
Interest K90,018.60
Repayment K1,590,328.58
Closing Balance 0
(ii) The percentage of the loan that has been repaid by the end of year 2 can be calculated as follows:
Repayment in year 1 + Repayment in year 2 = K1,590,328.58 + K1,590,328.58 = K3,180,657.16
Percentage of loan repaid = (K3,180,657.16 / K4,000,000) x 100 = 79.52%
(iii) If the rate of interest had instead been 6% for the first two years and 10% for the final year, the percentage of the loan repaid by the end of year 2 would be lower. This is because the interest charged in the first two years would be lower, resulting in a smaller amount of the repayments going towards reducing the principal. As a result, the closing balance at the end of year 2 would be higher, and the percentage of the loan repaid would be lower.
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The Manufacturing Overhead (MOH) is applied at the rate of TK. 7/- per direct labor hour.During the period direct labor hours are 30,000 and the actual Manufacturing Overhead (MOH)is TK. 235,000/-a) State whether the Manufacturing Overhead (MOH) is over applied or underappliedand compute the amount of under or over-applied Manufacturing Overhead (MOH).Marks: 2b) If the cost of goods manufactured is TK. 950,000/- that includes applied MOH, computethe cost of goods manufactured which is adjusted for under/over applied MOH.Marks: 3
Since the actual MOH is TK. 235,000/- and the applied MOH is TK. 210,000/-, the MOH is underapplied by TK. 25,000/- (235,000 - 210,000).
a) To determine whether the Manufacturing Overhead (MOH) is over applied or underapplied, we need to calculate the applied MOH and compare it with the actual MOH. The applied MOH is calculated as follows:
Applied MOH = MOH rate × Direct labor hours
= TK. 7/- × 30,000
= TK. 210,000/-
Therefore, the cost of goods manufactured which is adjusted for under/over applied MOH is TK. 975,000/-.
b) The cost of goods manufactured which is adjusted for under/over applied MOH is calculated as follows:
Adjusted cost of goods manufactured = Cost of goods manufactured + Underapplied MOH - Overapplied MOH
= TK. 950,000/- + TK. 25,000/- - TK. 0/-
= TK. 975,000/-
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9. Receipt of cash 1. Devising an idea 8. Delivery of goods to customers 2. Making purchases (e.g. of Inventories) 7. Receipt of orders after completing production 3. Receipt of orders before commencing production Completion of production 4. Commencing production 5. Progressively throughout production The operating cycle (Source: AARF, ED 51B) Using the operating cycle provided above, identify in each case at what point in the operating cycle (1-9) the revenue should be recognised. Provide justification for your choice. (a) A soft-drink manufacturer (b) A legal firm © A theatre that sells season tickets to musical productions (d) A gold-mining company () A company which sells houses on an instalment plan: term of payment extending to 20 years: buyers assume all risks of ownership: buyers pay a deposit of 25% pf the sales price (f) A contractor building a bridge for the government
The revenue recognized at different points in the operating cycle for each of the six businesses listed: (a) A soft-drink manufacturer at Point 8. (b) A legal firm at Point 6. (c) A theatre that sells season tickets to musical productions at Point 6. (d) A gold-mining company at Point 8. (e) A company which sells houses on an instalment plan at Point 9. (f) A contractor building a bridge for the government at Point 6.
The recognition of revenue in the operating cycle depends on the type of business and the terms of the transaction. Below is an explanation of when revenue should be recognized for each of the given businesses:
(a) A soft-drink manufacturer: Revenue should be recognized at point 8, when the goods are delivered to the customers. This is because the manufacturer's performance obligation is fulfilled when the goods are delivered to the customers and they have control over the goods.
(b) A legal firm: Revenue should be recognized at point 6, when the legal services are completed. This is because the legal firm's performance obligation is fulfilled when the services are completed, and the customers have received the benefits of the services.
(c) A theatre that sells season tickets to musical productions: Revenue should be recognized at point 6, when the production is completed. This is because the theatre's performance obligation is fulfilled when the customers have attended the production and received the benefits of the season tickets.
(d) A gold-mining company: Revenue should be recognized at point 8, when the gold is delivered to the customers. This is because the mining company's performance obligation is fulfilled when the customers have control over the gold.
(e) A company which sells houses on an instalment plan: Revenue should be recognized at point 9, when the cash is received. This is because the company's performance obligation is fulfilled when the customers have paid the instalments and have control over the houses.
(f) A contractor building a bridge for the government: Revenue should be recognized at point 6, when the bridge is completed. This is because the contractor's performance obligation is fulfilled when the bridge is completed and the government has control over the bridge.
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Subject: International MarketingQustion#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 emphasizes the importance of culture in influencing every aspect of business, particularly international marketing.
b.) Language can be a particularly troublesome problem in international marketing. Different languages can lead to misunderstandings, as the intended message may be lost in translation or interpreted differently.
Culture can influence the way a company advertises, what kinds of products it produces, and how it distributes them. It also influences the way consumers perceive and interact with the company, which in turn affects the success of its marketing strategy.
Language can also create cultural barriers, as the language and vocabulary used to promote products may be unfamiliar or inappropriate in certain markets. In addition, language can create legal barriers, as certain product labels may be required to be in the local language.
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Analyze how one of the culture typologies explains the culture
and link your explanation to your own organization (or one that you
are familiar with)
One of the culture typologies that can be used to explain culture is the Competing Values Framework (CVF). This framework categorizes organizational culture into four different types: Clan, Adhocracy, Market, and Hierarchy. Each of these types has a different set of values and characteristics that define the organization's culture.
Clan culture is characterized by a strong sense of collaboration and teamwork. Organizations with this type of culture value loyalty and relationship building, and they prioritize the well-being of their employees.
An adhocracy culture is characterized by innovation and creativity. Organizations with this type of culture value risk-taking and are willing to experiment with new ideas and approaches.
Market culture is characterized by a strong focus on results and competitiveness. Organizations with this type of culture value efficiency and productivity, and they prioritize achieving their goals.
Hierarchy culture is characterized by a strong emphasis on structure and control. Organizations with this type of culture value stability and predictability, and they prioritize maintaining order and following rules.
In my own organization, I would say that we have a Clan culture. Our organization values collaboration and teamwork, and we prioritize the well-being of our employees. We have a strong sense of loyalty and relationship-building, and we work together to achieve our goals. This type of culture has helped us to build a strong and supportive work environment, and it has contributed to our success as an organization.
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lber Company is considering eliminating its phone division. The company allocates fixed costs based on sales. If the phone division is dropped, $154,000 of the fixed costs allocated to that division could be eliminated. The impact on Valber’s operating income from eliminating the phone division would be: Desktops Laptops Tablets Phones Sales $ 368,000 $ 883,500 $ 706,000 $ 979,000 Variable costs 205,000 639,000 532,000 799,000 Contribution margin 163,000 244,500 174,000 180,000 Fixed costs 75,200 178,300 142,800 199,000 Net income (loss) 87,800 66,200 31,200 (19,000)
The impact on Valber's operating income from eliminating the phone division would be an increase of $135,000.
This is calculated by taking the contribution margin of the phone division ($180,000) and subtracting the fixed costs that could be eliminated ($154,000) and the net loss from the phone division ($19,000).
1. Calculate the contribution margin of the phone division:
Sales - Variable costs = Contribution margin
$979,000 - $799,000 = $180,000
2. Calculate the fixed costs that could be eliminated if the phone division is dropped:
$154,000
3. Calculate the net loss from the phone division:
Contribution margin - Fixed costs = Net income (loss)
$180,000 - $199,000 = ($19,000)
4. Calculate the impact on operating income from eliminating the phone division:
Contribution margin - Fixed costs that could be eliminated - Net loss from phone division = Impact on operating income
$180,000 - $154,000 - ($19,000) = $135,000
Therefore, from eliminating the phone division the impact on Valber's operating income would be an increase of $135,000.
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TUTORIAL - RISK, RETURN AND BOND VALUATION QUESTION 1 (P-3) a) Mbo Ltd has the following rate of return under different economic conditions: Economic Condition Rate of return Probability Good 20% 0.1
average 16% 0.4
bad 10% 0.3
poor 3% 0.2
assume the impact of the expected rate of return and variation Mbo Ltd. Justify your answer
The variation of Mbo Ltd's rate of return is 0.1738, or 17.38%.
The expected rate of return for Mbo Ltd can be calculated by multiplying the rate of return under each economic condition by its respective probability, and then adding all the results together. This is known as the weighted average. The formula for expected rate of return is:
Expected rate of return = (rate of return under good economic condition × probability of good economic condition) + (rate of return under average economic condition × probability of average economic condition) + (rate of return under bad economic condition × probability of bad economic condition) + (rate of return under poor economic condition × probability of poor economic condition)
Using the given information, we can plug in the values and calculate the expected rate of return for Mbo Ltd:
Expected rate of return = (20% × 0.1) + (16% × 0.4) + (10% × 0.3) + (3% × 0.2) = 2% + 6.4% + 3% + 0.6% = 12%
Therefore, the expected rate of return for Mbo Ltd is 12%.
The variation of Mbo Ltd's rate of return can be calculated by finding the standard deviation of the rates of return under different economic conditions. The formula for standard deviation is:
Standard deviation = √[(rate of return under good economic condition - expected rate of return)² × probability of good economic condition + (rate of return under average economic condition - expected rate of return)² × probability of average economic condition + (rate of return under bad economic condition - expected rate of return)² × probability of bad economic condition + (rate of return under poor economic condition - expected rate of return)² × probability of poor economic condition]
Plugging in the values, we get:
Standard deviation = √[(20% - 12%)² × 0.1 + (16% - 12%)² × 0.4 + (10% - 12%)² × 0.3 + (3% - 12%)² × 0.2] = √[0.0064 + 0.0064 + 0.0012 + 0.0162] = √0.0302 = 0.1738
Therefore, the variation of Mbo Ltd's rate of return is 0.1738, or 17.38%. This indicates that there is a relatively high level of risk associated with investing in Mbo Ltd, as the rate of return can vary significantly under different economic conditions.
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2. Luckin went public in the U.S. in May 2019, listed in NASDQA and raising $561 million. Its success drew in big international investors such as BlackRock Inc. and support from banks including Credit Suisse Group AG. However, Muddy Waters Research’s 89 page report claimed that Luckin was inflating the number of items sold per day by 69% in the third quarter of 2019 and 88% in the fourth, purportedly revealing fraud within Luckin. Both Luckin’s Chairman & co-founder Lu Zhengyao and co-founder Qian Zhiya were removed from the board of directors. Should both co-founders be liable for the shareholders’ investment loss as the element of fraud was revealed even though a public limited company has limited liability? (30 marks)3. Suggest course of action (s) to prevent fraudulent financial reporting in stock market listing to ensure that such scandal will not arise in the near future. (40 marks)
As a public limited company has limited liability, meaning the shareholders’ investment is limited to the amount they paid to purchase the shares, the co-founders should not be held liable.
In regards to the question of whether the co-founders of Luckin should be liable for the shareholders’ investment loss, the answer is no. The scandal was the result of fraudulent financial reporting, which is illegal and a violation of securities law. Therefore, the co-founders should not be held liable.
In order to prevent fraudulent financial reporting in stock market listings, a few steps can be taken. Firstly, companies should ensure that they have a strong and robust financial reporting system in place. This should include strong internal controls, which provide an independent oversight of the financial reporting system.
Additionally, companies should have an audit committee of independent directors that review financial reports and have the authority to recommend changes. Lastly, companies should provide adequate disclosure and transparency to investors about their financial performance.
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Which two activities do marketers focus on in the maturity stage to help the firm hold onto its market share?
Answer: Niche
Explanation:
Marketing campaigns are typically focused on differentiation rather than awareness. This means that product features might be enhanced, prices might be lowered, and distribution becomes more intensive. During the maturity stage, products begin to enter the most profitable stage.
In the maturity stage, marketers often focus on niche markets, using promotional strategies, messaging, and tactics designed to capture new share in these markets. Since there is no new growth, the emphasis shifts from drawing new customers to the market to winning more of the existing market.
Case A
Prior to the outbreak of Covid-19 in Germany, the Berlin based brewing company Federbrau was very successful throughout the European continent. During 2019, the brewer reported net sales of € 415 million, 6% up from 2018. Internal auditors also determined its operating profit (EBIT) amounted to € 40 million in the same period. As part of their expansion strategy, they devoted substantial investments in net working capital, the company’s net book value increased from € 215 million to € 230 million, while net fixed assets remained stable at € 130 million. The company managed to maintain its capital structure with a debt to equity ratio of 0.75 and a 40% Equity Ratio.
Based on German corporate income tax of 25% and interest rate of 5.0%, calculate the following;
Net Profit Margin (5 marks)
Working Capital Requirement (WCR) and working capital ratio over sales for 2019 (5 marks)
Post-tax Return On Invested Capital (ROIC) for 2019 (10 marks)
Free Cash Flow (FCF) for 2019 (10 marks)
The net profit margin for Federbrau in 2019 was 9.64% (40/415 x 100).
Net Profit Margin: The net profit margin is calculated by dividing net income (profit) by total sales. In the case of Federbrau, net income was €40 million in 2019 and total sales was €415 million.
Working Capital Requirement (WCR) and Working Capital Ratio over Sales for 2019: The working capital requirement (WCR) is the difference between current assets and current liabilities. In the case of Federbrau, their current assets were €230 million (net book value) and their current liabilities were €172 million. Therefore, the working capital requirement for Federbrau was €58 million (230-172). The working capital ratio over sales for 2019 is calculated by dividing WCR by total sales. In this case, the ratio would be 14.03% (58/415 x 100).
Post-tax Return On Invested Capital (ROIC) for 2019: The post-tax return on invested capital (ROIC) is calculated by dividing the after-tax operating profit (EBIT) by the total invested capital. For Federbrau, the total invested capital was €345 million (230 + 130). The after-tax operating profit (EBIT) was €30 million (40 - 25/100 x 40). Therefore, the post-tax return on invested capital (ROIC) was 8.67% (30/345 x 100).
Free Cash Flow (FCF) for 2019: The free cash flow (FCF) is calculated by subtracting the net working capital investment from the operating cash flow. In the case of Federbrau, their net working capital investment was €15 million (230 - 215). The operating cash flow was €45 million (40 + 5). Therefore, the free cash flow for Federbrau was €30 million (45 - 15).
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A public corporation is a corporation that does not issue itsshares for sale to the public.Select one:TrueFalse
The statement ''A public corporation is a corporation that does not issue itsshares for sale to the public'' is false, because this corporation does issue its shares for sale to the public.
A public corporation is a corporation that does issue its shares for sale to the public. This is in contrast to a private corporation, which does not offer its shares for sale to the general public.
Public corporations are typically larger and more widely known than private corporations, and their shares are traded on public stock exchanges.
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Market Summary> Verizon Communications Inc. 54.92 uso NYSE: VZ + Follow Verizon Communications verizon +0.76 (1.41%) + today Mar 31 pm EST Dlacier Telecommunication company 1D so 1M GM YTD 1Y SY Max vertron.com 555 55.0 54.5 Previous dose 54.15 4,00 DE 540 1000 m 1200 2:00 Open High LOW 54.38 55.14 5418 Mat Cap PE ratio Dwyield 230 540 10.33 4,66% COP score 52.wk high 52 w low B 59.85 49.68 Verizon Communications Inc.commonly known as Verizon, is an American multinational belecommunications conglomerate and a corporate component of the Dow Jones Industrial Average. The company is headquartered at 1095 Avenue of the Americas in Midtown Manhattan, New York City, but is Incorporated in Delaware Wlopedia CEO: Hans Vouberg (Aug 1, 2016-) Revenue 133.6 billion USD (Fiscal Year Ended December 31, 2021) Headquarters: New York, New York, United States Founded: October 7, 1963, Delaware, United States Number of employees: 132,200 (December 31, 2020) Net Income: 22.62 bilion USD Focal Year Ended December 31, 2021) Subsidiaries: Vertoon. Verizon Flos, Vorscon Business, Buen. MORE → More about Vertion Communicat hips/finance yahoo.com quote V21 Verizon Communications Inc. (VZ) Stock Price, News, Quote Find the latest Verizon Communication Inc. (V2) stock quote, history, news and other vital Information to help you with your stock trading and investing Market Summary> Vodafone Group plc 128.00 GBX -1.84 (1.42%) + today Mar 34:35 m GMT Disclaimer LON:VOD + Follow Vodafone Group Telecommunications company 1D 50 M EM YTD 1Y SY Max 130.0 120.5 Previous close 120.84 120.0 128,5 1200 127,6 0:00 am Vodafone Group Plc is a Bellish multinational telecommunications company. Its registered office and global headquarters are in Newbury, Berkshire, England. It predominantly operates service in Asia, Africa, Europe, and Oceania Wikipedia CEO: Nick Road (Oct 1, 2018-) Headquarters: Berkshire, United Kingdom Founded: 1962, Newbury, United Kingdom Revenue: 43.81 billion EUR (2021) Number of employees: 96,506 (2021) Subsidiaries: Vodafone Germany, Vodafone Australia, MORE Founders: Gerry Whent, Emost Harrison Disclaimer 10.00 am 12:00 pm 2:00 pm 4:00 pm 34.258 B Open High LOW 129.20 129.38 127,60 Mkt Cap PE ratio Div yield - CDP score 52-wk high 52-wk low 142.74 106,30 5,93% More about Vodafone Group plc
The Market Summary for Verizon Communications Inc. and Vodafone Group plc provides an overview of the current stock prices, changes in stock prices, and other important financial information for both companies. Verizon Communications Inc. is currently trading at 54.92 USD on the NYSE, with a change of +0.76 (1.41%) from the previous day.
Vodafone Group Plc is currently trading at 128.00 GBX on the LON, with a change of -1.84 (1.42%) from the previous day. Both companies are in the telecommunications industry and have similar financial information, including market capitalization, PE ratio, dividend yield, and 52-week high and low prices.
However, Verizon Communications Inc. is headquartered in New York, New York, United States, while Vodafone Group plc is headquartered in Berkshire, United Kingdom. Both companies also have a number of subsidiaries and are led by CEOs Hans Vouberg (Verizon) and Nick Road (Vodafone).
The Market Summary provides a snapshot of the current financial status of both companies and can be used to make informed investment decisions.
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IN EXCEL:
Problem 2 (25 points) Assume that you will graduate in 2 years from today and after graduation, you are planning to purchase a new car for $50,000. For the next two years, you will save $250 each month for the down payment and your annual rate of return is 2%. After you have your down payment, you will apply for a car loan to finance the rest of the purchase price. Your bank offers a loan with monthly payments at 4% APR with a term of 36 months. Alternatively, a credit union has a promotional APR of 3% for new customers with a loan term of 48 months. Build amortization tables of both loan alternatives and calculate total interest paid in each loan.
For loan 1 with 4% APR, 36 months, the total interest paid is $3,851.04 and for loan 2 with 3% APR, 48 months, the total interest paid is $2,839.36. The amortization tables for each loan alternative is given below.
You will need to create two amortization tables, one for each loan alternative. An amortization table shows the breakdown of monthly payments into principal and interest over the life of the loan.
1. First, calculate the down payment you will have saved in 2 years:
Down payment = ($250/month) x (24 months) x (1 + 0.02) = $6,120
2. Next, calculate the amount you will need to finance:
Amount financed = $50,000 - $6,120 = $43,880
Now, you can create the amortization tables for each loan alternative.
Loan 1: 4% APR, 36 months
Monthly payment = ($43,880) x (0.04/12) / (1 - (1 + 0.04/12)^(-36)) = $1,298.64
| Month | Beginning Balance | Interest | Principal | Ending Balance |
|-------|-------------------|----------|-----------|----------------|
| 1 | $43,880.00 | $146.27 | $1,152.37 | $42,727.63 |
| 2 | $42,727.63 | $142.43 | $1,156.21 | $41,571.42 |
| ... | ... | ... | ... | ... |
| 36 | $1,298.64 | $4.33 | $1,294.31 | $0.00 |
Total interest paid = ($1,298.64 x 36) - $43,880 = $3,851.04
Loan 2: 3% APR, 48 months
Monthly payment = ($43,880) x (0.03/12) / (1 - (1 + 0.03/12)^(-48)) = $974.57
| Month | Beginning Balance | Interest | Principal | Ending Balance |
|-------|-------------------|----------|-----------|----------------|
| 1 | $43,880.00 | $109.70 | $864.87 | $43,015.13 |
| 2 | $43,015.13 | $107.54 | $867.03 | $42,148.10 |
| ... | ... | ... | ... | ... |
| 48 | $974.57 | $2.44 | $972.13 | $0.00 |
Total interest paid = ($974.57 x 48) - $43,880 = $2,839.36
Based on these calculations, the credit union's promotional APR of 3% with a loan term of 48 months results in a lower total interest paid ($2,839.36) compared to the bank's loan with a 4% APR and a term of 36 months ($3,851.04).
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Business Solutions had the following transactions and events in December 2021. December 2 Paid $975 cash to Hillside Mall for Business Solutions's share of mall advertising costs. December 3 Paid $490 cash for minor repairs to the company's computer. December 4 Received $4,550 cash from Alex's Engineering Company for the receivable from November. December 10 Paid cash to Lyn Addie for six days of work at the rate of $120 per day. December 14 Notified by Alex's Engineering Company that Business Solutions'. bid of $7,100 on a proposed project he been accepted. Alex's paid a $2,200 cash advance to Business Solutions. December 15 Purchased $1,200 of computer supplies on credit from Harris Office Products. December 16 Sent a reminder to Gomez company to pay the fee for services recorded on November 8. December 20 Completed a project for Liu Corporation and received $5,825 cash. December 22-26 took the week oft for the holidays. December 28 Received $3,200 cash from Gomez Company on its receivable. December 29 Reimbursed s. Rey for business automobile mileage (600 miles at $0.26 per mile). December 31 Paid $1,300 cash for dividends. The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the company's first three months a. The December 31 inventory count of computer supplies shows $640 still available b. Three months have expired since the 12-month insurance premium was paid in advance, c. As of December 31, Lyn Addie has not been paid for four days of work at $120 per day d. The computer system acquired on October 1, is expected to have a four-year life with no salvage value.
e. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value 1. Three of the four months prepaid rent have expired. Required: 1. Prepare journal entries to record each of the December transactions, Post those entries to the accounts in the ledger 2-a. Prepare adjusting entries to reflect a through 2-b. Post the journal entries to record each of the December transactions, adjusting entries to the accounts in the ledger 3. Prepare an adjusted trial balance as of December 31, 2021. 4. Prepare an income statement for the three months ended December 31, 2021 5. Prepare a statement of retained earnings for the three months ended December 31, 2021 6. Prepare a classified balance sheet as of December 31, 2021 7. Record the necessary closing entries as of December 31, 2021 8. Prepare a post-closing trial balance as of December 31, 2021.
1. Journal entries to record each of the December transactions:
December 2:
Advertising Expense 975
Cash 975
December 3:
Repairs Expense 490
Cash 490
December 4:
Cash 4,550
Accounts Receivable 4,550
December 10:
Salaries Expense 720
Cash 720
December 14:
Cash 2,200
Unearned Revenue 2,200
December 15:
Supplies 1,200
Accounts Payable 1,200
December 16:
No entry needed
December 20:
Cash 5,825
Service Revenue 5,825
December 22-26:
No entry needed
December 28:
Cash 3,200
Accounts Receivable 3,200
December 29:
Automobile Expense 156
Cash 156
December 31:
Dividends 1,300
Cash 1,300
2. Adjusting entries:
a. Supplies Expense 560
Supplies 560
b. Insurance Expense 300
Prepaid Insurance 300
c. Salaries Expense 480
Salaries Payable 480
d. Depreciation Expense 750
Accumulated Depreciation - Computer System 750
e. Depreciation Expense 600
Accumulated Depreciation - Office Equipment 600
f. Rent Expense 3,000
Prepaid Rent 3,000
3. Adjusted trial balance as of December 31, 2021:
Cash 7,434
Accounts Receivable 0
Supplies 640
Prepaid Insurance 900
Prepaid Rent 0
Computer System 12,000
Accumulated Depreciation - Computer System 750
Office Equipment 12,000
Accumulated Depreciation - Office Equipment 600
Accounts Payable 1,200
Salaries Payable 480
Unearned Revenue 2,200
Common Stock 10,000
Retained Earnings 8,804
Dividends 1,300
Service Revenue 10,375
Advertising Expense 975
Repairs Expense 490
Salaries Expense 1,200
Supplies Expense 560
Insurance Expense 300
Automobile Expense 156
Depreciation Expense 1,350
Rent Expense 3,000
Total 34,974
Total 34,974
4. Income statement for the three months ended December 31, 2021:
Revenues:
Service Revenue 10,375
Expenses:
Advertising Expense 975
Repairs Expense 490
Salaries Expense 1,200
Supplies Expense 560
Insurance Expense 300
Automobile Expense 156
Depreciation Expense 1,350
Rent Expense 3,000
Total Expenses 8,031
Net Income 2,344
5. Statement of retained earnings for the three months ended December 31, 2021:
Beginning Retained Earnings 8,804
Add: Net Income 2,344
Less: Dividends 1,300
Ending Retained Earnings 9,848
6. Classified balance sheet as of December 31, 2021:
Assets:
Current Assets:
Cash 7,434
Accounts Receivable 0
Supplies 640
Prepaid Insurance 900
Prepaid Rent 0
Total Current Assets 8,974
Property, Plant, and Equipment:
Computer System 12,000
Less: Accumulated Depreciation - Computer System 750
Office Equipment 12,000
Less: Accumulated Depreciation - Office Equipment 600
Total Property, Plant, and Equipment 22,650
Total Assets 31,624
Liabilities:
Current Liabilities:
Accounts Payable 1,200
Salaries Payable 480
Unearned Revenue 2,200
Total Current Liabilities 3,880
Stockholders' Equity:
Common Stock 10,000
Retained Earnings 9,848
Total Stockholders' Equity 19,848
Total Liabilities and Stockholders' Equity 31,624
7. Closing entries:
Service Revenue 10,375
Income Summary 10,375
Income Summary 8,031
Advertising Expense 975
Repairs Expense 490
Salaries Expense 1,200
Supplies Expense 560
Insurance Expense 300
Automobile Expense 156
Depreciation Expense 1,350
Rent Expense 3,000
Income Summary 2,344
Retained Earnings 2,344
Retained Earnings 1,300
Dividends 1,300
8. Post-closing trial balance as of December 31, 2021:
Cash 7,434
Accounts Receivable 0
Supplies 640
Prepaid Insurance 900
Prepaid Rent 0
Computer System 12,000
Accumulated Depreciation - Computer System 750
Office Equipment 12,000
Accumulated Depreciation - Office Equipment 600
Accounts Payable 1,200
Salaries Payable 480
Unearned Revenue 2,200
Common Stock 10,000
Retained Earnings 9,848
Total 32,924
Total 32,924
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6. The treasurer is usually responsible the following functions of a corporation except: A. Raising new capital Cash B. management c. Banking relationships D. Internal accounting 7. The following are
The treasurer is not typically responsible for d. internal accounting within a corporation.
The treasurer of a corporation is typically responsible for a variety of financial functions, including raising new capital, managing cash, and maintaining banking relationships.
However, internal accounting is usually handled by a separate department or individual, such as a controller or chief financial officer.
In summary, the treasurer is responsible for the following functions of a corporation:
- Raising new capital
- Cash management
- Banking relationships
But not:
- Internal accounting
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Question 1:Explain three (3) purposes of the statement of cash flows.(6 marks)Question 2:Provide two (2) reasons why a profitable business can find itself short of cash for the following reasons(2 marks)Question 3:Describe two (2) ways that a loss-making company can increase its cash balance.(2 marks)
Three main purposes of the statement of cash flows are:
To provide information about the company's cash receipts and cash payments during a specific period of time.To provide information about the company's operating, investing, and financing activities.To help users of the financial statements assess the company's ability to generate future cash flows and to meet its financial obligations.There are several reasons why a profitable business can find itself short of cash. Two common reasons are:
Slow collection of accounts receivable. For example, if customers are taking a long time to pay their invoices, the company may not have enough cash on hand to meet its immediate needs.High levels of inventory. For instance, if a company has a lot of inventory on hand, it may be tying up a significant amount of cash that could be used for other purposes.There are several ways that a loss-making company can increase its cash balance. Two common ways are:
Selling assets - If the company has assets that it can sell, it can generate cash quickly.Reducing expenses - If the company can find ways to reduce its expenses, it can free up cash that can be used for other purposes.Learn more about cash flows : https://brainly.com/question/24179665
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Explain TWO (2) examples of misconduct that can lead to
termination of the contract of employment. (10 marks)
Two examples of misconduct that can lead to termination of the contract of employment are: Theft or fraud and Insubordination.
Two examples of misconduct that can lead to termination of the contract of employment are:
1. Theft or fraud: If an employee is caught stealing from the company or committing any form of fraud, this can be grounds for immediate termination of the contract of employment. This type of misconduct is a serious breach of trust and can have a negative impact on the company's reputation and bottom line.
2. Insubordination: If an employee refuses to follow the reasonable and lawful directions of their supervisor or manager, this can be considered insubordination and can lead to termination of the contract of employment. Insubordination can disrupt the smooth functioning of the workplace and can create a toxic work environment.
Both of these examples of misconduct can have serious consequences for the employee and the company, and are considered valid reasons for termination of the contract of employment.
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Andrew is an excellent teacher providing tutoring services to University accounting students. The service is provided in a rental office space with waiting area and rooms for students to practice. Below is data from her accounts for the current six months:Fee per hour $ 150.00 per hourBreakeven sales in dollars $ 120,000 Total fixed expenses $ 45,000 What is the variable expense per hour?
in the mentioned scenario, the variable expense per hour is $149.625
A variable expense is a cost that changes in relation to a company's level of activity or production. This type of expense can increase or decrease based on various factors such as sales volume, production levels, or changes in pricing. Examples of variable expenses include raw materials, labor costs, and sales commissions.
For the above case, the variable expense per hour can be calculated using the formula:
Variable expense per hour = Fee per hour - (Total fixed expenses / Breakeven sales in dollars)
In this case, the variable expense per hour would be:
$150 - ($45,000 / $120,000) = $150 - $0.375 = $149.625
Therefore, it is concluded that the variable expense per hour is $149.625.
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Lending institutions are scrutinizing an operation’s working capital status as part of the lending decision. Now more than ever, it’s time to do a little scrutinizing yourself. When I hit the road to speak, one of the most important slides I regularly use highlights how lending criteria has changed since the financial crisis. To illustrate that point, the slide includes a quote from Nick Parsons, head of research with the National Australia Bank: "So capitalism has changed…the owner or the custodian of capital [i.e. lending institutions] is much more careful about where they use that capital."
To that end, most readers have likely experienced increased scrutiny from their lenders in this post-crisis world. And one of the key criteria that lenders use to make decisions revolves around availability of working capital within any operation; working capital being a function of current assets less current liabilities. It’s a measure of an operation’s buffer to meet its short-term obligations, hence the importance to lenders.
Perhaps equally important, it’s a key indicator of cash reserve availability to meet unexpected emergencies. Thus, it is an important component of risk management to ensure business continuity within the operation without the need to borrow additional funds. As an example, albeit simplified, a pickup is typically a critical operational asset for most cow-calf operations. What if it catches on fire and suddenly needs to be replaced, else the cows don’t get fed? After insurance provides some portion towards replacement, does the operation have sufficient working capital to meet the remainder of the obligation? This type of assessment has become more important to lenders since the financial crisis.
This week’s graph highlights USDA’s updated aggregate working capital estimates in agriculture. Clearly, as last week’s illustration depicts, declining revenue has taken a big hit out of working capital reserves for agriculture. Working capital has declined nearly 50% - the loss exceeds $82 billion in just three years. That’s a concerning trend – and if it continues, will clearly have implications in the coming years.
What are you doing to maintain strong cash and working capital reserves amidst declining revenue? What new expectations do you your lenders have during the past several years and going into 2017? How will you adjust going forward? Leave your thoughts in the comments section below.
Working capital is a critical component of a business's financial health and is closely scrutinized by lending institutions when making lending decisions. Businesses must therefore focus on maintaining strong cash and working capital reserves amidst declining revenue and adjusting to new expectations from lenders.
It is a measure of an operation's ability to meet its short-term obligations and is calculated by subtracting current liabilities from current assets. Working capital is also an important indicator of a business's ability to meet unexpected emergencies and is therefore an important component of risk management.
Since the financial crisis, lenders have placed increased importance on working capital and have become more careful about where they use their capital.
As a result, businesses have experienced increased scrutiny from their lenders in this post-crisis world. This has led to a decline in working capital reserves for agriculture, with working capital declining nearly 50% and the loss exceeding $82 billion in just three years.
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Please read before just saying you need more information. Thank you
This is your opportunity to play detective and do some financial statement analysis. Please select any publically traded company. Using the company you select please find the annual report and the financial ratio information for the company for the following ratios:
Debt to Equity
Current Ratio
Return on Equity
Quick Ratio
Working Capital Ratio
Price Earnings Ratio
Earnings Per Share
and one additional ratio of your choosing
Once you have found this information and looked it over you will be able to write a paper (approx 4 to 6 pages) that tells us about how the company is doing with respect to the ratios, what the ratios are telling you about the company and how you predict they will do in the future.
For this financial analysis, I have chosen Amazon.com Inc., a multinational technology company that specializes in e-commerce, cloud computing, digital streaming, and artificial intelligence.
Amazon is one of the largest companies in the world, with a market capitalization of over $1.5 trillion as of March 2023.
Debt to Equity Ratio:
The debt to equity ratio measures the amount of debt that a company has relative to its equity. It is an indicator of a company's financial leverage. Amazon's debt to equity ratio as of December 31, 2021, was 0.60.Current Ratio:
The current ratio is a liquidity ratio that measures a company's ability to meet its short-term obligations using its current assets. A current ratio of 1.0 or higher is generally considered to be good. Amazon's current ratio as of December 31, 2021, was 1.16, which indicates that the company has enough current assets to cover its short-term liabilities.Return on Equity:
Return on equity (ROE) measures the amount of net income returned as a percentage of shareholders' equity. Amazon's ROE for the year ended December 31, 2021, was 26.7%. This indicates that Amazon is generating a high return on the investment made by shareholders. The higher the ROE, the more efficient the company is at generating profits.Quick Ratio:
The quick ratio, also known as the acid-test ratio, is a liquidity ratio that measures a company's ability to pay its short-term obligations using its most liquid assets. This ratio excludes inventory, as it is not always easy to sell quickly. A quick ratio of 1.0 or higher is generally considered to be good.Working Capital Ratio:
The working capital ratio is a liquidity ratio that measures a company's ability to meet its short-term obligations using its current assets. It is calculated by dividing current assets by current liabilities.Price Earnings Ratio:
The price-to-earnings (P/E) ratio is a valuation ratio that compares a company's stock price to its earnings per share (EPS). A high P/E ratio indicates that investors are willing to pay more for each dollar of earnings, while a low P/E ratio indicates that investors are not willing to pay as much.Earnings Per Share:
Earnings per share (EPS) is a measure of a company's profitability that shows how much profit it generates per share of common stock outstanding. Amazon's EPS for the year ended December 31, 2021, was $52.19. This indicates that Amazon is generating a significant amount of profit per share.Inventory Turnover Ratio:
The inventory turnover ratio measures how many times a company sells its inventory during a particular period. It is calculated by dividing the cost of goods sold by the average inventory during the period. Amazon's inventory turnover ratio for the year ended December 31, 2021, was 10Learn more about financial analysis https://brainly.com/question/1265337
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An investment project will generate annual maintenance costs of £10,000 (at today’s prices) in each of years 1 to 4.If the annual rate of inflation is 3%, what is the nominal maintenance costs cash flow in year 4?a.£10,000b.£41,200c.£10,300d.£11,255
An investment project will generate annual maintenance costs of £10,000 (at today’s prices) in each of years 1 to 4. If the annual rate of inflation is 3%. The nominal maintenance costs cash flow in year 4 will be £11,255. Option D.
To calculate the nominal maintenance costs cash flow in year 4, we need to take into account the annual rate of inflation. The formula to calculate the nominal value is:
Nominal value = Real value × (1 + inflation rate)^(number of years)
In this case, the real value is £10,000, the inflation rate is 3% (or 0.03), and the number of years is 4.
Plugging these values into the formula, we get:
Nominal value = £10,000 × (1 + 0.03)^4
Nominal value = £10,000 × 1.03^4
Nominal value = £10,000 × 1.1255
Nominal value = £11,255
Therefore, the nominal maintenance costs cash flow in year 4 is £11,255. The correct answer is d. £11,255.
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. [20 pts] Consider a 10-month forward contract on 100 shares of stock when the stock price is $50. We assume that the risk-free interest rate continuously compounded is 8% per annum for all maturities. We also assume that dividends of $0.75 per share are expected after three months, six months, and nine months. What should be the equilibrium forward price now? What arbitrage opportunity is possible if the forward price for a contract is $55 (Case 1) or $46 (Case 2)? Show your works for both cases.
The equilibrium forward price of the 10-month forward contract on 100 shares of stock is $52.98
The equilibrium forward price of a 10-month forward contract on 100 shares of stock can be calculated using the formula:
F = S * e^(r*t) - D * e^(-r*t)
where F is the forward price, S is the spot price, r is the risk-free interest rate, t is the time to maturity, and D is the present value of dividends.
In this case, S = $50, r = 8% = 0.08, t = 10/12, and D = ($0.75 * e^(-0.08*3/12)) + ($0.75 * e^(-0.08*6/12)) + ($0.75 * e^(-0.08*9/12)) = $2.15
Plugging in the values, we get:
F = $50 * e^(0.08*10/12) - $2.15
F = $52.98
Case 1: If the forward price for a contract is $55, there is an arbitrage opportunity. An investor can buy the stock at the spot price of $50 and enter into a short forward contract at the forward price of $55. At maturity, the investor can sell the stock at the forward price of $55 and make a profit of $55 - $50 - $2.15 = $2.85 per share, or $285 for 100 shares.
Case 2: If the forward price for a contract is $46, there is also an arbitrage opportunity. An investor can enter into a long forward contract at the forward price of $46 and borrow $50 at the risk-free rate of 8% to buy the stock at the spot price of $50. At maturity, the investor can sell the stock at the forward price of $46 and repay the loan with interest of $50 * e^(0.08*10/12) = $53.27. The investor will make a profit of $46 - $53.27 + $2.15 = -$5.12 per share, or -$512 for 100 shares.
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Chad, Chairman of BBB Industries, had just finished examining a projected profit summary for two components that will be used in LCD Screens. Both units were still in a very preliminary planning stage, and a decision had to be made regarding their continued viability. The components would be developed, produced, and sold at the same time. Each product's life cycle is 40 months. The projected profit performance of the two items promised a return on sales of 10 percent—less than the 14 percent rate set by company standards. From the statements below, it appeared to David that the culprit was Component 402 because its gross profit percentage was much lower than that of Component 401.
401 402 Total
Sales $500,000 $500,000 $1,000,000
Cost of goods sold 250,000 350,000 600,000
Gross profit $250,000 $150,000 $ 400,000
Research and development (230,000)
Selling expenses (70,000)
Profit before taxes $ 100,000
Required:
a. Explain why Chad may be wrong in his assessment of the relative performances of the two products. What change in the company's life-cycle budgeting approach would you suggest?
b. Suppose that 75 percent of the research and development and 75 percent of the selling expenses are traceable to Component 401. Prepare budgeted life-cycle income statements for each product and calculate the return on sales. What does this tell you about the importance of accurate life-cycle budgeting?
a. Chad may be wrong in his assessment of the relative performances of the two products because he is only looking at the gross profit percentage and not considering the other expenses that are associated with each product.
b. If 75 percent of the research and development and 75 percent of the selling expenses are traceable to Component 401, then the budgeted life-cycle income statements for each product would look like this:
Component 401:
Sales: $500,000
Cost of Goods Sold: $250,000
Gross Profit: $250,000
Research and Development: ($172,500)
Selling Expenses: ($52,500)
Profit Before Taxes: $25,000
Return on Sales: 5%
Component 402:
Sales: $500,000
Cost of Goods Sold: $350,000
Gross Profit: $150,000
Research and Development: ($57,500)
Selling Expenses: ($17,500)
Profit Before Taxes: $75,000
Return on Sales: 15%
a) It is important to look at the entire life-cycle budgeting approach in order to accurately assess the performance of each product. One change that could be suggested for the company's life-cycle budgeting approach is to allocate the research and development and selling expenses to each product based on the amount of resources that were used for each product. This would provide a more accurate picture of the true cost and profit of each product.
b) This shows that accurate life-cycle budgeting is important because it provides a more accurate picture of the true cost and profit of each product. By allocating the research and development and selling expenses based on the amount of resources used for each product, we can see that Component 401 actually has a lower return on sales than Component 402. This information can be used to make more informed decisions about the continued viability of each product.
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Which of the following satisfy the law of supply? Select the two correct answers.(1 point) Responses An increase in price is followed by an increase in supply. An increase in price is followed by an increase in supply. A increase in price is followed by a decrease in quantity supplied. A increase in price is followed by a decrease in quantity supplied. An increase in price is followed by an increase in quantity supplied. An increase in price is followed by an increase in quantity supplied. A decrease in price is followed by a decrease in supply. A decrease in price is followed by a decrease in supply. A decrease in price is followed by a decrease in quantity supplied.
The answer is option c. An increase in price is followed by an increase in quantity supplied and d. A decrease in price is followed by a decrease in quantity supplied.
These statements satisfy the law of supply.
What is the way to define supply?In economics, supply is as the entire quantity of a certain good or service that a provider makes available to customers at a specific time and price. Typically, market activity determines it.
What is an illustration of supply in economics?For instance, growers are prepared to provide 15 million pounds of coffee each month at a price of $4 per pound.
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what is the impact covid-19 on profitalbility of commercial companieshelp me to do introduction
The impact that covid-19 has had on the profitability of commercial companies has been negative; this pandemic has caused a significant decrease in profitability due to the various economic imbalances it has caused.
The impact of Covid-19 on the profitability of commercial companies has been significant. Many companies have faced a decrease in profits due to the pandemic, as they have had to shut down operations or reduce their workforce.
Additionally, consumer demand for many products and services has declined, leading to further losses for companies. However, some companies, particularly those in the technology and e-commerce sectors, have seen an increase in profits as more people have turned to online shopping and remote work.
Overall, the impact of Covid-19 on the profitability of commercial companies has varied greatly depending on the industry and individual company circumstances.
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What is the default risk premium on Aaa corporate bond, if the interest rate on that bond is 3.54 percent and the interest rate on a Treasury security is 1.78 percent?
The default risk premium on the Aaa corporate bond is 1.76%.
The default risk premium on a corporate bond is the difference between the interest rate on the corporate bond and the interest rate on a Treasury security.
This is because the Treasury security is considered to be risk-free, so any additional interest earned on the corporate bond is a reflection of the additional risk taken on by the investor.
The default risk premium on the Aaa corporate bond is 3.54% - 1.78% = 1.76%. This means that investors are earning an additional 1.76% in interest to compensate for the additional risk of investing in the corporate bond.
Answer: 1.76%
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Today, a company's shares sell for $425 each. Investors requirea 13.45% return on this stock. What amount is expected to be paidfor the next dividend per share if the dividend yield is currently2%?
The expected amount to be paid for the next dividend per share is $8.50.
To find the expected amount to be paid for the next dividend per share, we can use the formula for dividend yield:
We can rearrange this formula to solve for the annual dividend per share:
Annual dividend per share = (Dividend yield) × (Price per share)Plugging in the given values, we get:
Annual dividend per share = (0.02) × ($425)Annual dividend per share = $8.50Therefore, the expected amount to be paid for the next dividend per share is $8.50.
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A manufacturer produces a single product with a production capacity of 2000 units per year. A buyer places quarterly orders of 400 units each, which the manufacturer produces in batches of 400, and ships to the buyer as soon as a batch is produced. What is the manufacturer’s average on-hand inventory?
The manufacturer's average on-hand inventory is 200 units.
The manufacturer's average on-hand inventory can be calculated using the formula:
Average on-hand inventory = (Batch size / 2) + (Lead time * Demand rate)
In this case, the batch size is 400 units, the lead time is 0 (since the manufacturer ships the product as soon as it is produced), and the demand rate is 400 units per quarter or 1600 units per year.
Plugging these values into the formula, we get:
Average on-hand inventory = (400 / 2) + (0 * 1600) = 200 units
Therefore, the manufacturer's average on-hand inventory is 200 units.
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