Susan needs to save $550,627.98 for financial independence. Rounding to the nearest dollar, the answer is $550,628.
We can use the formula for the present value of an annuity:
PV = PMT × [(1 - (1 + r)^-n) / r]
Where:
PV = present value
PMT = payment amount
r = interest rate
n = number of periods
Here, the payment amount is $40,000, the interest rate is 8% - 2% = 6% (the difference between the nominal return and the inflation rate), and the number of periods is 30 years.
PV = $40,000 × [(1 - (1 + 0.06)^-30) / 0.06]
PV = $40,000 × [(1 - 0.17411) / 0.06]
PV = $40,000 × 13.7657
PV = $550,627.98
Therefore, Susan needs to save $550,627.98 .
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Define the Organization Culture and describe its characteristics and importance in any organization? i need it detailed please and thanks !
Organization Culture refers to the beliefs, values, attitudes, and behaviors that are shared by members of an organization. It is the set of norms and practices that shape the way an organization operates and how its members interact with each other.
The characteristics of Organization Culture include:
- Shared values and beliefs: Members of an organization have a common set of values and beliefs that guide their actions and decisions.
- Norms and practices: There are established ways of doing things within an organization that are followed by all members.
- Language and communication: Members of an organization use a common language and communication style to interact with each other.
- Leadership and management style: The way leaders and managers operate within an organization reflects its culture.
- Symbols and rituals: Organizations may have specific symbols and rituals that are used to reinforce their culture.
The importance of Organization Culture cannot be overstated. It affects every aspect of an organization, from its performance and productivity to the satisfaction and retention of its employees. A strong and positive culture can help an organization achieve its goals and attract and retain top talent. On the other hand, a negative or toxic culture can lead to high turnover, low morale, and poor performance.
In conclusion, Organization Culture is a critical aspect of any organization and has a significant impact on its success. It is important for organizations to understand their culture and work to create a positive and supportive environment for their employees.
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Identify how the changes in the internal environment affect the OM strategy for a company.
For example, what impact are the following factors likely affect OM strategy? How does the Pandemic affects it?
a) SDG 8 Decent Work and Economic Growth
b) SDG 12 Responsible Consumption and Production
Maximum of 2 paragraphs at 8 sentences each.
The changes in the internal environment effect on OM strategies by causing companies to adjust their production schedules and workflows to accommodate safety measures and increased demand.
For example, if a company values sustainability, then it would need to focus on SDG 8 Decent Work and Economic Growth and SDG 12 Responsible Consumption and Production when developing its OM strategy.
Companies may need to focus on different aspects of operations management such as the automation of processes, employee morale, and the use of technology to help in their operations.
Additionally, companies must also be aware of external factors such as government regulations, customer needs, and global economic conditions. All of these internal and external factors need to be taken into consideration when developing an OM strategy.
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Banyan Co.’s common stock currently sells for $37.25 per share. The growth rate is a constant 6%, and the company has an expected dividend yield of 5%. The expected long-run dividend payout ratio is 40%, and the expected return on equity (ROE) is 10.0%. New stock can be sold to the public at the current price, but a flotation cost of 10% would be incurred. What would be the cost of new equity? Do not round intermediate calculations. Round your answer to two decimal places.
The cost of new equity can be calculated using the following formula:
Cost of new equity = (Expected dividend / Net proceeds) + Growth rate
Where:
- Expected dividend = Expected dividend yield * Current stock price
- Net proceeds = Current stock price - Flotation cost
Plugging in the given values:
- Expected dividend = 5% * $37.25 = $1.86
- Net proceeds = $37.25 - (10% * $37.25) = $33.53
Cost of new equity = ($1.86 / $33.53) + 6% = 11.55%
Therefore, the cost of new equity for Banyan Co. is 11.55%.
Answer: \boxed{11.55}.
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Clown Around, Inc., provides party entertainment for children of all ages. The following is the
company’s trial balance dated February 1, current year.
CLOWN AROUND, INC.
TRIAL BALANCE
FEBRUARY 1, CURRENT YEAR
Cash
$3,420
Accounts receivable
1,080
Accounts payable
$ 960
Capital stock
2,400
Retained earnings
900
Dividends
________
Party revenue
1,620
Salaries expense
996
Party food expense
28
Travel expense
96
$5,880 $5,880
Clown Around engaged in the following transactions in February.
Feb. 2 Paid $900 in partial settlement of the outstanding account payable reported in the trial
balance dated February 1.
Feb. 6 Collected $1,080 in full settlement of the outstanding accounts receivable reported in
the trial balance dated February 1.
Feb. 18 Billed Sunflower Child Care $210 for clown services. The entire amount is due March 15.
Feb. 26 Billed and collected $576 for performing at several birthday parties.
Feb. 28 Paid clown salaries of $312 for work done in February.
Feb. 28 Recorded and paid $48 for travel expenses incurred in February.
Feb. 28 Declared and paid a $120 dividend to Ralph Jaschob, the company’s only shareholder.
a. Record the company’s February transactions in general journal form. Include a brief explanation
of the transaction as part of each journal entry.
b. Post each entry to the appropriate ledger accounts (use the T account format as illustrated in
Exhibit 3–8).
www.downloadslide.net
140 Chapter 3 The Accounting Cycle: Capturing Economic Events
c. Prepare a trial balance dated February 28, current year. (Hint: Retained Earnings will be
reported at the same amount as it was on February 1. Accounting for changes in the Retained
Earnings account resulting from revenue, expense, and dividend activities is discussed in
Chapter 5.)
d. Will the $120 dividend paid on February 28 decrease the company’s income? Explain.
A. The transactions are in journal form.
B. The ledger accounts are given in details.
C. A trial balance dated February 28 is $7,042 $7,042
D. No. The $120 dividend paid on February 28 decrease the company’s income.
a.
Feb. 2: Debit Accounts Payable $900, Credit Cash $900 (partial settlement of outstanding accounts payable)
Feb. 6: Debit Cash $1,080, Credit Accounts Receivable $1,080 (full settlement of outstanding accounts receivable)
Feb. 18: Debit Accounts Receivable $210, Credit Party Revenue $210 (clown services billed to Sunflower Child Care)
Feb. 26: Debit Party Revenue $576, Credit Cash $576 (payment for performing at birthday parties)
Feb. 28: Debit Salaries Expense $312, Credit Cash $312 (payment for clown salaries)
Feb. 28: Debit Travel Expense $48, Credit Cash $48 (payment for travel expenses)
Feb. 28: Debit Cash $120, Credit Dividends $120 (payment of dividends to shareholder)
b.
Cash:
Debit: $3,420 + 1,080 + 576 + 312 + 48 = $5,436
Credit: $900 + 1,080 = $1,980
Accounts Receivable:
Debit: $1,080
Credit: $210 + 1,080 = $1,290
Accounts Payable:
Debit: $960
Credit: $900 = $60
Capital Stock:
Debit: $2,400
Credit: $0
Retained Earnings:
Debit: $900
Credit: $0
Dividends:
Debit: $120
Credit: $120
Party Revenue:
Debit: $1,620
Credit: $576 + 210 = $786
Salaries Expense:
Debit: $996
Credit: $312 = $684
Party Food Expense:
Debit: $28
Credit: $0
Travel Expense:
Debit: $96
Credit: $48 = $48
c. CLOWN AROUND, INC.
TRIAL BALANCE
FEBRUARY 28, CURRENT YEAR
Cash- $5,436
Accounts receivable- 1,290
Accounts payable- $60
Capital stock- 2,400
Retained earnings- 900
Dividends- 120
Party revenue- 2,406
Salaries expense- 996
Party food expense- 28
Travel expense- 96
$7,042 $7,042
d. No, the $120 dividend paid on February 28 does not decrease the company's income. Dividends are distributions of a company's profits to its shareholders and do not affect the company's net income.
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Howe Ltd. had 34,000 common shares on January 1, 2021. On May 1, 3,000 common shares were reacquired and retired. On August 31 and November 30, 9,000 and 6,000 common shares were issued, respectively.Howe Ltd. reported net income of $370,000. Howe Ltd. also had 10,000 $2 cumulative preferred shares, on which the dividend for the current year was declared and paid.Your answers for blanks 1 and 2 should be provided with NO DOLLAR SIGNS ($), COMMAS (,),or PERIODS (.) and be rounded to the nearest dollar. For example, $100,000.34 should be entered as 100000 whereas $100,000.67 should be entered as 100001Blank 1 – what is the dollar value of the numerator used to calculate the basic earnings per share.Blank 2 – what is the denominator used to calculate the basic earnings per shareYour answers for blank 3 should include the period to separate the dollars from the centsBlank 3 – What is the basic earnings per share. Answer rounded to two decimal places – for example if earnings per share is $7.42, enter 7.42
$350,000 is the dollar value of the numerator used to calculate the basic earnings per share. 35500 is the denominator used to calculate the basic earnings per share. $9.86 is the basic earnings per share.
To calculate the basic earnings per share, we need to find the numerator and denominator. The numerator is the net income available to common shareholders, which is the net income minus the preferred dividends. The denominator is the weighted average number of common shares outstanding during the year.
The dollar value of the numerator is the net income minus the preferred dividends. The net income is $370,000 and the preferred dividends are 10,000 x $2 = $20,000.
So the numerator is $370,000 - $20,000 = $350,000.
Therefore, the answer for blank 1 is 350000.
The denominator is the weighted average number of common shares outstanding during the year. We need to calculate the weighted average for each period and then add them together. For the period from January 1 to April 30, there were 34,000 shares outstanding for 4 months. For the period from May 1 to August 30, there were 31,000 shares outstanding for 4 months. For the period from September 1 to November 29, there were 40,000 shares outstanding for 3 months. And for the period from November 30 to December 31, there were 46,000 shares outstanding for 1 month.
The weighted average is (34,000 x 4) + (31,000 x 4) + (40,000 x 3) + (46,000 x 1) = 136,000 + 124,000 + 120,000 + 46,000 = 426,000.
To find the average for the year, we divide by 12: 426,000 / 12 = 35,500.
Therefore, the answer for blank 2 is 35500.
The basic earnings per share is the numerator divided by the denominator. So we divide $350,000 by 35,500 to get $9.86.
Therefore, the answer for blank 3 is 9.86.
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A fire destroyed xyz manufacturing company completely on january 29, 2004. Fortunately certain accounting records were kept in another building. It revealed the following for the period from january 1, 2004 to january 29, 2004. Direct material purchased br. 160, 000 wip january1 34,000 direct material january1, 2004 16,000 finished goods january1, 2004 30,000 moh cost 40% of conversion cost revenue 500,000 direct labor cost 180,000 prime cost 294,000 gross profit based on sales 20% cost of goods available for sale 450,000 required: a. Direct material of ending inventory b. Work in progress of ending inventory C. Finished good of ending inventory
Answer:
can you be more specific
Explanation:
becausebecause the fire was so wild and the machines for stomach how will you expect a company that big not too bad so you need to reduce the size of the machines there so that it won't get some points that is why you need that is why I spend so much money on your books are going so please I will expect you that you should use some of your machine so you can finish
To find the ending inventory of direct materials, we need to subtract the direct materials used from the direct materials purchased.
What is inventory?
Inventory, also known as stock, refers to the goods and materials that a company keeps for the purpose of resale, production, or use.
To find the ending inventory of direct materials, we need to subtract the direct materials used from the direct materials purchased.
Direct materials used = Beginning inventory of direct materials + Direct materials purchased - Ending inventory of direct materials
Direct materials used = Prime cost - Direct labor cost
Direct materials used = 294,000 - 180,000
Direct materials used = 114,000
Now we can calculate the ending inventory of direct materials:
Ending inventory of direct materials = Direct materials purchased - Direct materials used
Ending inventory of direct materials = 160,000 - 114,000
Ending inventory of direct materials = 46,000
Therefore, the ending inventory of direct materials is 46,000.
To find the ending inventory of work in progress, we need to use the following formula:
Conversion cost = Direct labor cost + Manufacturing overhead cost
Conversion cost = 180,000 + (40% x Conversion cost)
0.6 x Conversion cost = 180,000
Conversion cost = 300,000
Manufacturing overhead cost = Conversion cost - Direct labor cost
Manufacturing overhead cost = 300,000 - 180,000
Manufacturing overhead cost = 120,000
To find the cost of goods manufactured, we need to use the following formula:
Cost of goods manufactured = Beginning inventory of finished goods + Cost of goods available for sale - Ending inventory of finished goods
Cost of goods manufactured = Gross profit based on sales - Revenue - Selling and administrative expenses
Cost of goods manufactured = (20% x 500,000) - 500,000 - 0
Cost of goods manufactured = 100,000 - 500,000 - 0
Cost of goods manufactured = -400,000
So we can rearrange the formula for the ending inventory of finished goods as:
EI_FG = Beginning inventory of finished goods + Cost of goods manufactured - Cost of goods sold
EI_FG = 30,000 + 461,600 - (450,000 - EI_FG)
2EI_FG = 41,600
EI_FG = $20,800
Therefore, the ending inventory of finished goods is $20,800.
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A Friend of yours recently graduated from law school with $125,000 in student debt. The interest rate on these loans is 6.25%. Your friends has various options on how to repay the loans and is asking for your help to understand the pros and cons of the various options. 3. The third and final option is to repay the loan using a graduated repayment plan. Under the graduated repayment plan, your friend's payments will start low and increase each month' at an annualized rate of 3%. With the graduated repayment plan, your friend will repay the loan over a 10-year period. a. How much will your friend pay the first month? b. How much will your friend pay the second month? c. How much will your friend pay the final month? d. How much will your friend pay in interest over the life of the loan?
For the graduated repayment plan, your friend's payments will start low and increase each month at an annualized rate of 3%. (A) In the first month, your friend will pay $651.04. (B) In the second month, the payment will increase to $654.48. (C) In the final month, the payment will be $1,218.82. (D) Over the life of the loan, your friend will pay $30,906.86 in interest.
Under a graduated repayment plan, your friend will start with lower monthly payments that will gradually increase over time. The first month's payment will be based on the original loan amount of $125,000 and the interest rate of 6.25%. The second month's payment will be based on the remaining loan balance and the increased interest rate of 6.25% plus 3% annualized increase. The final month's payment will be based on the remaining loan balance and the final interest rate of 6.25% plus 3% annualized increase for each year of the 10-year repayment period.
a. The first month's payment will be $125,000 x 6.25% / 12 = $651.04
b. The second month's payment will be ($125,000 - $651.04) x (6.25% + 3% / 12) / 12 = $654.48
c. The final month's payment will be ($125,000 - $651.04 - $654.48 - ... - $1,218.82) x (6.25% + 3% x 10 / 12) / 12 = $1,218.82
d. The total interest paid over the life of the loan will be ($651.04 + $654.48 + ... + $1,218.82) - $125,000 = $30,906.86
Therefore, under the graduated repayment plan, your friend will pay $651.04 for the first month, $654.48 for the second month, $1,218.82 for the final month, and a total of $30,906.86 in interest over the life of the loan.
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Work out the net present value of the following investments. The risk-free rate is 3%, and the average return on the market index is 7%.
a) You invest £1,000 in a 1.2-beta project with an annual cash flow of £300. The first cash flow arrives in year two. The final cash flow comes in year six.
The net present value of the given investment is £-109.55.
The net present value (NPV) of an investment is the present value of its future cash flows minus the initial investment. It is used to determine the profitability of a project or investment.
To calculate the NPV of the given investment, we need to first calculate the required rate of return using the Capital Asset Pricing Model (CAPM) formula:
Required rate of return = risk-free rate + beta * (market return - risk-free rate)
Required rate of return = 3% + 1.2 * (7% - 3%) = 7.8%
NPV = (CF1 / (1 + r)^1) + (CF2 / (1 + r)^2) + ... + (CFn / (1 + r)^n) - initial investment
Where CF is the annual cash flow, r is the required rate of return, and n is the number of years.
For the given investment:
NPV = (£300 / (1 + 7.8%)^2) + (£300 / (1 + 7.8%)^3) + (£300 / (1 + 7.8%)^4) + (£300 / (1 + 7.8%)^5) - £1,000
NPV = £248.47 + £230.28 + £213.55 + £198.15 - £1,000
NPV = £-109.55
Therefore, the net present value of the given investment is £-109.55.
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2. Stratford Corp. (SC) is considering a new project. SC estimates that there is a 25% probability that cash flows in one year will be $250,000, and a 75% probability the cash flows will be $350,000. The cost of the project is $200,000. The project’s cost of capital is 15% and the risk-free rate is 5%.
What is the NPV of the project?
If the $200,000 cost of the project is financed 100% with equity, what is the expected return on the unlevered equity?
If the project is financed with 50% debt (at the risk-free rate), what should the value of the equity be?
What is the expected return on the levered equity?
If the company finances the project with 30% debt (at the risk-free rate), what should the value of the equity be?
What is the expected return on the levered equity?
The expected return on the levered equity is equal to the cost of capital plus the present value of the debt times the ratio of debt to total capital is equal to 17%.
The NPV of the project is the present value of the cash flows minus the cost of the project. The NPV can be calculated as follows:
NPV = $250,000 x (1 - 0.25) + $350,000 x (1 - 0.75) - $200,000 = $25,000
If the project is financed 100% with equity, then the expected return on the unlevered equity is equal to the cost of capital, or 15%.
If the project is financed with 50% debt (at the risk-free rate of 5%), then the value of the equity is equal to the NPV plus the present value of the debt. The present value of the debt is equal to the cost of the debt times the present value factor for the term of the loan. The value of the equity is thus equal to:
Value of Equity = NPV + Cost of Debt x Present Value Factor = $25,000 + $100,000 x (1 - 0.05) = $125,000
The expected return on the levered equity is equal to the cost of capital plus the present value of the debt times the ratio of debt to total capital, or 15% + $100,000 x 0.5 = 20%.
If the company finances the project with 30% debt (at the risk-free rate of 5%), then the value of the equity is equal to the NPV plus the present value of the debt. The value of the equity is thus equal to:
Value of Equity = NPV + Cost of Debt x Present Value Factor = $25,000 + $60,000 x (1 - 0.05) = $85,000
The expected return on the levered equity is equal to the cost of capital plus the present value of the debt times the ratio of debt to total capital, or 15% + $60,000 x 0.3 = 17%.
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The income statement of the Bryant Corporation is as follows:
Bryant Corportaion
Income Statement
For the year ended December 31, 2011
Sales $350,000
Cost of Goods sold $125,000
Gross Margin $225,000
Operating Exp (other than depreciation) $60,000
Depreciation $20,000 $80,000
Net Income $145,000
Changes in current assets (other than cash) and current liabilities during the year were:
Accounts receivable increase of $10,000
inventory decrease of $20,000
prepaid insurance increase $8000
accounts payable decrease $15,000
accured liabilities increase $4000
Depreciation is the only item impacting net income.
Required:
1.Prepare cash flow from operating activities under the direct method
2. prepare cash flow from operating activities under the indirect method.
Both the direct and indirect methods result in the same cash flow from operating activities of $156,000.
1. Cash flow from operating activities under the direct method:
Cash received from customers = Sales - Increase in accounts receivable = $350,000 - $10,000 = $340,000
Cash paid for inventory = Cost of goods sold - Decrease in inventory + Decrease in accounts payable = $125,000 - $20,000 + $15,000 = $120,000
Cash paid for operating expenses = Operating expenses (other than depreciation) + Increase in prepaid insurance - Increase in accrued liabilities = $60,000 + $8,000 - $4,000 = $64,000
Cash flow from operating activities = Cash received from customers - Cash paid for inventory - Cash paid for operating expenses = $340,000 - $120,000 - $64,000 = $156,000
2. Cash flow from operating activities under the indirect method:
Net income = $145,000
Adjustments for non-cash items:
Depreciation = $20,000
Changes in current assets and current liabilities:
Increase in accounts receivable = -$10,000
Decrease in inventory = $20,000
Increase in prepaid insurance = -$8,000
Decrease in accounts payable = -$15,000
Increase in accrued liabilities = $4,000
Cash flow from operating activities = Net income + Adjustments for non-cash items + Changes in current assets and current liabilities = $145,000 + $20,000 - $10,000 + $20,000 - $8,000 - $15,000 + $4,000 = $156,000
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Critically conduct an environmental scan focused onenvironmental factors in the short and medium term, short being upto one year, longer term being up to three years.(Crocs Inc.) +resources
An environmental scan is the process of gathering information about the external environment in order to identify potential risks and opportunities. It is an essential part of strategic planning for any organization, including Crocs Inc.
Short term environmental factors (up to one year):
1. Economic conditions: The state of the economy can have a significant impact on consumer spending and demand for Crocs products.
2. Regulatory changes: Changes in regulations, such as new import tariffs or environmental regulations, can affect the cost of doing business and the competitiveness of Crocs products.
3. Technological advancements: New technologies, such as 3D printing, can create new opportunities for product innovation and improved efficiency.
4. Competitor activity: The actions of competitors, such as new product launches or marketing campaigns, can affect the market share of Crocs.
Medium term environmental factors (up to three years):
1. Demographic trends: Changes in the age, income, and preferences of the consumer population can affect the demand for Crocs products.
2. Sustainability concerns: Increasing awareness of environmental and social issues can affect consumer preferences and the reputation of Crocs as a company.
3. Globalization: The expansion of global trade and the growth of emerging markets can create new opportunities and challenges for Crocs.
4. Innovation and product development: The ability of Crocs to develop new products and stay ahead of competitors will be crucial to its success in the medium term.
Resources:
- Industry reports and market research can provide valuable insights into the external environment and the competitive landscape.
- Government agencies and trade associations can provide information on regulatory changes and economic conditions.
- News articles and social media can provide insights into consumer preferences and trends.
- Company financial reports and analyst reports can provide information on the financial performance and strategic plans of competitors.
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If the risk-free rate is 4% and the Beta of Consolidated Marshmallow is 2, then if the non-market risk of Consolidated Marshmallow is negligible, what is its standard deviation of return if the risk (SD) of the market is 20
The standard deviation of return of Consolidated Marshmallow can be estimated using the Capital Asset Pricing Model (CAPM). According to the CAPM, the expected return of Consolidated Marshmallow is equal to the risk-free rate plus its systematic risk (beta) multiplied by the market risk premium.
In this case, the risk-free rate is 4%, the beta of Consolidated Marshmallow is 2, and the market risk premium is the risk (SD) of the market (20) less the risk-free rate (4%), which is 16. Therefore, the expected return of Consolidated Marshmallow is equal to 4% + (2 x 16) = 36%.
The standard deviation of return of Consolidated Marshmallow is equal to the market risk premium divided by the square root of one plus the beta squared. In this case, the standard deviation of return of Consolidated Marshmallow is equal to 16/√(1+2^2) = 16/√5 = 12.64%. Therefore, the standard deviation of return of Consolidated Marshmallow is 12.64%.
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The research topic is Copycat Brands. Submit your research topic proposal. In your proposal, you must demonstrate the rationale for your topic and what you intend to address (Problem), and the ultimate solution. Include an outline starting with an introduction and on until the conclusion and lessons learned and at least 10 key terms to be used in the final research paper. Read chapters 1-4 to get a sense of their themes and how to address specific problematic aspects of the chapter of interest. Included is what we learned in each chapter:Chapter 1- entrepreneurship, corporate entrepreneurship, start- up firms, demographics, positive effects.Chapter 2- Opportunities, approaches, and techniques of entrepreneurs.Chapter 3- Feasibility analysis, product feasibility, market feasibility, organizational and financial feasibility.Chapter 4- Business Models, standard and disruptive business models.
Your research topic proposal should focus on the effects of copycat brands on the market. Specifically, you should explore how copycat brands can affect the market both positively and negatively, including how they can create opportunities and challenges for entrepreneurs. You should also analyze how copycat brands influence the creation and success of start-up firms and corporate entrepreneurs.
To provide a comprehensive exploration of this topic, your research paper should incorporate the key themes explored in chapters 1-4, including entrepreneurship, corporate entrepreneurship, start-up firms, demographics, approaches and techniques of entrepreneurs, feasibility analysis, product feasibility, market feasibility, organizational and financial feasibility, and business models.
Your research paper should begin with an introduction to the topic and a statement of the problem that your paper aims to address. Then, you should move into the body of your paper, which should cover the aforementioned key terms and themes in detail. Finally, your paper should conclude with a summary of the lessons learned and any potential implications for future research.
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1- The difference between Musharaka and Mudaraba is:
a.Musharaka involves unlimited liability.
b.Musharaka involves limited liability.
c.Mudaraba involves unlimited liability.
2-The difference between Musharaka and Mudaraba is (All Except):
a.Investment in Mudaraba comes only from the Rab ul Mall.
b.In Mudaraba any losses are suffered by the Mudarib alone.
c.In Musharaka all the partners share the loss in proportion to the ratio of their investment.
3-In Musharaka Losses are shared according to:
a.50:50.
b.The proportion of the amount invested.
c.According to a fixed amount.
1- The difference between Musharaka and Mudaraba is b: "Mudaraba involves limited liability."
2-The difference between Musharaka and Mudaraba is (All Except) b: "In Mudaraba any losses are suffered by the Mudarib alone".
3-In Musharaka Losses are shared according to b: "The proportion of the amount invested".
1- The difference between Musharaka and Mudaraba is: b. Musharaka involves limited liability.
Musharaka is a partnership in which all partners contribute capital and share profits and losses according to an agreed-upon ratio. In contrast, Mudaraba is a partnership in which one partner, the Rab ul Mall, provides the capital while the other partner, the Mudarib, manages the business. In Musharaka, all partners have limited liability, meaning that they are only liable for the amount they have invested. In Mudaraba, the Rab ul Mall has unlimited liability while the Mudarib has limited liability.
2- The difference between Musharaka and Mudaraba is (All Except): b. In Mudaraba any losses are suffered by the Mudarib alone.
In Mudaraba, any losses are suffered by the Rab ul Mall alone, as they are the ones who provided the capital. The Mudarib is only liable for any losses caused by their negligence or misconduct. In Musharaka, all partners share the losses in proportion to the ratio of their investment.
3- In Musharaka Losses are shared according to: b. The proportion of the amount invested.
In Musharaka, losses are shared according to the proportion of the amount invested by each partner. This means that if one partner invested more than the other, they will bear a larger share of the losses. This is different from Mudaraba, where the Rab ul Mall bears all the losses unless the Mudarib is found to be negligent or engaged in misconduct.
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(a) How does marketing activity of "ChalDal.com" is
affected by the elements of micro marketing environment during
COVID-19? Explain your thoughts.
Need quick answer, broad question
Marketing 101
COVID-19 has affected all aspects of the micro marketing environment for ChalDal.com, including the following - Customers, Competitors, suppliers and distributors.
COVID-19 has affected all aspects of the micro marketing environment for ChalDal.com, including the following:
Customers: Many customers are being financially impacted, leading to lower spending on products and services.
Competitors: With more people staying at home and spending less, other companies may become direct competitors, resulting in increased competition.
Distributors: Due to restrictions in place, some distributors may be limited in their capacity to get products to customers.
Suppliers: Supply chain issues have caused delays and higher costs for some suppliers, leading to pricing and availability changes.
Therefore, ChalDal.com must adjust their marketing activities to account for the changes in the micro marketing environment brought on by COVID-19.
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30. according to the cash flow cycle. and other things being
equal you want to---the "time in inventory"
1. increase
2. measure
3. enhance
4. reduce
According to the cash flow cycle, and other things being equal, you want to reduce the "time in inventory".
This is because the longer inventory sits on the shelves, the more money is tied up in it and the less cash flow there is for the business. By reducing the time in inventory, a business can increase its cash flow and have more money available for other expenses and investments.
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7. Callie owns and operates Callie’s Creative Coaching (3C), a sole proprietorship. 3C sponsors a 401(k)/ profit-sharing plan. Callie had net income of $210,000 and paid self-employment taxes of $20,000 (assumed) during the year. Assuming Callie is over the age of 50, what is the maximum amount that Callie and her company can contribute on her behalf to the plan for 2021? a. $26,000. b. $58,000. c. $64,500. d. $66,000
Option B.The maximum amount that Callie and her company can contribute on her behalf to the plan for 2021 is $58,000.
This is because the maximum contribution limit for a 401(k) plan for individuals over the age of 50 in 2021 is $26,000. This includes the standard contribution limit of $19,500 plus an additional catch-up contribution of $6,500 for individuals over the age of 50.
In addition, the maximum contribution limit for a profit-sharing plan in 2021 is $58,000 or 25% of an employee's compensation, whichever is less.
Since Callie is both the owner and the employee of her sole proprietorship, she can contribute the maximum amount for both the 401(k) and the profit-sharing plan, which is $58,000.
Therefore, the correct answer is b. $58,000.
Note: The self-employment taxes paid by Callie do not affect the maximum contribution limit for the 401(k)/profit-sharing plan.
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An 8-year bond paying 6% coupon is currently trading at $833.96.What yield is the market demanding at this price?8%9%10%11%12%
The yield that the market is demanding at this price is C: 10%.
To calculate the yield, we can use the formula for bond price:
Bond Price = C × (1 - (1 + YTM)^(-N)) / YTM + F / (1 + YTM)^N
Where:
C = coupon payment
YTM = yield to maturity
N = number of years to maturity
F = face value
Plugging in the given values:
$833.96 = $60 × (1 - (1 + YTM)^(-8)) / YTM + $1000 / (1 + YTM)^8
Solving for YTM using trial and error or a financial calculator, we get YTM = 0.10, or 10%.
Therefore, the market is demanding a yield of 10% at this price.
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ISTP-T
create a paragraph connect to your personalities
People with the ISTP-T personality type are often viewed as independent, analytical, and practical. They are known for their ability to take on challenging tasks and solve complex problems. They often prefer to work individually or in small groups and are usually very good at assessing situations, breaking them down into smaller pieces, and then coming up with creative solutions. In addition to their analytical and creative abilities, ISTP-T personalities are often seen as being brave, adventurous, and confident. They are often willing to take risks and have a strong sense of self-reliance. People with this personality type are often very good at adapting to new situations and can handle change quite well.
2. Nixon Limited manufactures and sells a single product. The following data have been extracted from the current year budget.Selling Price £50/unitVariable Cost £10/unitBudgeted Weekly Sales 2,000 unitsWeekly Profit £72,000Total weekly fixed cost £8,000Required:1. Calculate weekly sales units to generate the profit of £52,000?2. Calculate break even sales units?3. Calculate margin of safety?
1 - The weekly sales units to generate the profit of £52,000 are 1,500 units.
2 - The break-even sales units are 200 units
3- The margin of safety is 1,800 units.
1. To calculate the weekly sales units to generate the profit of £52,000, we need to use the following formula:
Profit = Total Revenue - Total Cost
Profit = (Selling Price x Sales Units) - (Variable Cost x Sales Units + Fixed Cost)
£52,000 = (£50 x Sales Units) - (£10 x Sales Units + £8,000)
£52,000 + £8,000 = £40 x Sales Units
£60,000 = £40 x Sales Units
Sales Units = £60,000 / £40
Sales Units = 1,500 units.
Therefore, the weekly sales units to generate the profit of £52,000 are 1,500 units.
2. To calculate the break-even sales units, we need to use the following formula:
Break Even Sales Units = Fixed Cost / (Selling Price - Variable Cost)
Break Even Sales Units = £8,000 / (£50 - £10)
Break Even Sales Units = £8,000 / £40
Break Even Sales Units = 200 units
Therefore, the break-even sales units are 200 units.
3. To calculate the margin of safety, we need to use the following formula:
Margin of Safety = Budgeted Sales Units - Break Even Sales Units
Margin of Safety = 2,000 units - 200 units
Margin of Safety = 1,800 units
Therefore, the margin of safety is 1,800 units.
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The electronic monitoring of employee communication in organizations fits clearly with classical aspects of workplace communication?! Analyze the issues of Content, direction, channel, and style of communication.
(10: Marks)
Students are required to form their essay questions as follows: (How to write your essay question)
1-Opening paragraph (introduction)
2-Main body with examples
3-Closing paragraph (conclusion and your own opinion)
The electronic monitoring of employee communication in organizations does indeed fit clearly with classical aspects of workplace communication. However, there are several issues that arise when considering the content, direction, channel, and style of communication in this context.
Opening paragraph (introduction):
Electronic monitoring of employee communication is becoming increasingly common in organizations. This practice involves using technology to track and monitor employee communication, including emails, phone calls, and instant messages.
While electronic monitoring can be used to ensure that employees are following company policies and procedures, there are also several issues that arise when considering the content, direction, channel, and style of communication.
Main body with examples:
One of the main issues with electronic monitoring is the potential for invasion of privacy. While employers may have a legitimate interest in monitoring employee communication, employees also have a right to privacy in their personal lives. This can create tension between the employer's need to monitor and the employee's right to privacy.
Another issue is the potential for misuse of electronic monitoring. For example, employers may use electronic monitoring to spy on employees or to unfairly target certain employees. This can create a negative work environment and may lead to legal issues.
The direction of communication is also an important consideration when it comes to electronic monitoring. While electronic monitoring can be used to monitor communication from employees to external parties, it can also be used to monitor communication between employees. This can create a sense of distrust among employees and may lead to a breakdown in workplace relationships.
The channel of communication is also an important consideration. Electronic monitoring is typically used to monitor electronic forms of communication, such as email and instant messaging. However, it is important to consider the impact of electronic monitoring on other forms of communication, such as face-to-face communication.
Finally, the style of communication is an important consideration when it comes to electronic monitoring. For example, employees may feel that they need to be more formal in their communication when they know that they are being monitored. This can lead to a lack of authenticity and may create a barrier to effective communication.
Closing paragraph (conclusion and your own opinion):
In conclusion, electronic monitoring of employee communication in organizations does fit clearly with classical aspects of workplace communication. However, there are several issues that arise when considering the content, direction, channel, and style of communication. It is important for organizations to carefully consider these issues and to strike a balance between the need for monitoring and the rights of employees. In my opinion, electronic monitoring can be a useful tool for organizations, but it should be used in a way that is fair and respectful to employees.
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Type the correct answer in the box. Spell all words correctly.
Which type of statement is used to communicate one's feelings in a nonconfrontational manner
An
is a statement used to communicate one's feelings in a nonconfrontational
Reset
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An "I" statement is a type of statement used to communicate one's feelings in a nonconfrontational manner. It is a way of expressing how you feel without blaming or attacking the other person.
Which type of statement is used to communicate one's feelings in a nonconfrontational manner ?"I" statements typically start with "I feel" or "I am feeling" followed by a description of the emotion you are experiencing. For example, instead of saying "You never listen to me," you could say "I feel frustrated when I don't feel heard." This approach emphasizes your personal experience and helps the other person understand how their behavior affects you.
Using "I" statements can promote healthy communication and conflict resolution by reducing defensiveness and encouraging empathy. By expressing your feelings in a nonconfrontational way, you can foster understanding and reach mutually beneficial solutions to problems.
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You have $46,000 and observe the following exchange rates:
Exchange rate Bid Ask
Value of euro in U.S. dollars $1.13 $1.14
Value of Swiss franc in U.S. dollars $1 $1.01
Value of euro in Swiss francs CHF1.08 CHF1.09
What is the no-arbitrage value of the euro in Swiss francs (the cross exchange rate)? Use the ask quotes.
Is there an arbitrage opportunity? If so, what should you do to exploit it?
No
Yes: buy Swiss francs with euros
Yes: buy euros with Swiss francs
How many Swiss francs do you get from converting your dollars?
How many euros do you get from converting your Swiss francs?
How many dollars do you get from converting your euros?
What is your profit from exploiting the opportunity once (in $)?
The no-arbitrage value of the euro in Swiss francs is the ask quote of the euro in U.S. dollars divided by the ask quote of the Swiss franc in U.S. dollars, or $1.14/$1.01 = 1.1287.
This means that 1 euro is worth 1.1287 Swiss francs in a no-arbitrage situation.
There is an arbitrage opportunity in this case because the value of the euro in Swiss francs in the market (CHF1.09) is lower than the no-arbitrage value (CHF1.1287). To exploit this opportunity, you should buy Swiss francs with euros.
First, convert your $46,000 to Swiss francs using the ask quote of the Swiss franc in U.S. dollars: $46,000/$1.01 = 45,544.55 Swiss francs.
Next, convert your Swiss francs to euros using the ask quote of the euro in Swiss francs: 45,544.55/CHF1.09 = 41,778.48 euros.
Finally, convert your euros back to dollars using the ask quote of the euro in U.S. dollars: 41,778.48*$1.14 = $47,628.43.
Your profit from exploiting the opportunity once is $47,628.43 - $46,000 = $1,628.43.
In conclusion, the no-arbitrage value of the euro in Swiss francs is 1.1287, there is an arbitrage opportunity to put investment in Swiss francs with euros, and the profit from exploiting the opportunity once is $1,628.43.
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Question 1 (20 marks) Consider the following transportation tableau with three origins and three destinations. To From Windhoek Gobabis Walvis Bay Supply Rundu 4 10 6 100 Oshakati 8 16 6 300 Katima Mulilo 14 18 10 300 Demand 200 300 200 Required Marks Sub total Total Use the Vogel Approximation method (VAM) to find an initial feasible solution? 20 20 To
The total cost of this solution is (4*0) + (10*0) + (6*100) + (8*100) + (16*0) + (6*200) + (14*200) + (18*100) + (10*0) = 4600.
The Vogel Approximation Method (VAM) is a method used to find an initial feasible solution for a transportation problem. It involves finding the difference between the two smallest costs in each row and column and then assigning as much as possible to the cell with the smallest difference. This process is repeated until all supply and demand values are met.
Step 1: Find the difference between the two smallest costs in each row and column.
| | Windhoek | Gobabis | Walvis Bay | Supply | Difference |
|----|----------|---------|------------|--------|------------|
|Rundu| 4 | 10 | 6 | 100 | 2 |
|Oshakati| 8 | 16 | 6 | 300 | 2 |
|Katima Mulilo| 14 | 18 | 10 | 300 | 4 |
|Demand| 200 | 300 | 200 | | |
|Difference| 4 | 6 | 0 | | |
Step 2: Assign as much as possible to the cell with the smallest difference. In this case, the cell with the smallest difference is the one in the Walvis Bay column. We can assign 100 units to the Rundu-Walvis Bay cell and 200 units to the Oshakati-Walvis Bay cell.
| | Windhoek | Gobabis | Walvis Bay | Supply | Difference |
|----|----------|---------|------------|--------|------------|
|Rundu| 4 | 10 | 100 | 0 | 2 |
|Oshakati| 8 | 16 | 200 | 100 | 2 |
|Katima Mulilo| 14 | 18 | 10 | 300 | 4 |
|Demand| 200 | 300 | 0 | | |
|Difference| 4 | 6 | 0 | | |
Step 3: Repeat the process until all supply and demand values are met. We can assign 100 units to the Oshakati-Windhoek cell, 200 units to the Katima Mulilo-Windhoek cell, and 100 units to the Katima Mulilo-Gobabis cell.
| | Windhoek | Gobabis | Walvis Bay | Supply | Difference |
|----|----------|---------|------------|--------|------------|
|Rundu| 4 | 10 | 100 | 0 | 2 |
|Oshakati| 100 | 16 | 200 | 0 | 2 |
|Katima Mulilo| 200 | 100 | 10 | 0 | 4 |
|Demand| 0 | 200 | 0 | | |
|Difference| 4 | 6 | 0 | | |
The initial feasible solution is:
| | Windhoek | Gobabis | Walvis Bay | Supply |
|----|----------|---------|------------|--------|
|Rundu| 0 | 0 | 100 | 0 |
|Oshakati| 100 | 0 | 200 | 0 |
|Katima Mulilo| 200 | 100 | 0 | 0 |
|Demand| 0 | 0 | 0 | |
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All of the following expenditures are classified as research and development except:
Engineering costs incurred to advance a new product to full production stage.
Salaries of research staff designing a new product.
Costs of marketing research to promote a new product.
Acquisition of R&D equipment for use on current project only
The expenditure that is not classified as research and development is the "Costs of marketing research to promote a new product."
Research and development (R&D) costs are expenses associated with the research and development of a company's goods or services. R&D costs are typically associated with the creation and design of new products and processes, as well as the improvement of existing ones.
Engineering costs incurred to advance a new product to full production stage, salaries of research staff designing a new product, and acquisition of R&D equipment for use on current project only are all classified as R&D expenditures. However, costs of marketing research to promote a new product are not classified as R&D expenditures because they are associated with promoting and selling a product, rather than creating or improving it.
Therefore, the correct answer is: Costs of marketing research to promote a new product.
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Question Financial Derivatives
1. Literature reviews – Provide at least 5 journal articles to
support the Disadvantages of using Box Spread to an arbitrager,
hedger and speculator. （Box Spread）
Financial derivatives are financial instruments that derive their value from an underlying asset, such as a stock, bond, or commodity.
One type of financial derivative is a box spread, which is a combination of a bull call spread and a bear put spread. While box spreads can be used by arbitragers, hedgers, and speculators to manage risk and make a profit, there are also some disadvantages to using them.
Here, we will discuss five journal articles that support the disadvantages of using box spreads for these three types of traders.
1. "The Risks and Rewards of Box Spreads" by John C. Hull (2010): This article discusses the potential risks and rewards of using box spreads for arbitrage, hedging, and speculation. One of the main disadvantages of using box spreads for these purposes is that they can be very complex and difficult to understand, which can lead to mistakes and losses.
2. "The Impact of Box Spreads on Market Efficiency" by Robert A. Jarrow and Stuart M. Turnbull (2008): This article examines the impact of box spreads on market efficiency and finds that they can actually reduce market efficiency by creating artificial demand for the underlying asset, which can lead to distorted prices.
3. "The Limitations of Box Spreads for Hedging" by Frank J. Fabozzi and Steven V. Mann (2006): This article discusses the limitations of using box spreads for hedging, including the fact that they can be very expensive and may not provide adequate protection against market movements.
4. "The Role of Box Spreads in Speculative Trading" by Richard L. McDonald (2004): This article examines the role of box spreads in speculative trading and finds that they can be very risky, as they involve taking on large amounts of leverage and can lead to significant losses.
5. "The Effect of Box Spreads on Market Liquidity" by David Easley and Maureen O'Hara (2002): This article discusses the effect of box spreads on market liquidity and finds that they can reduce liquidity by tying up large amounts of capital, which can make it more difficult for other traders to buy and sell the underlying asset.
Overall, these five journal articles provide strong support for the disadvantages of using box spreads for arbitrage, hedging, and speculation. While they can be useful tools for managing risk and making a profit, they also have some significant drawbacks that traders should be aware of before using them.
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Case Study:The case for a central source to oversee project resource scheduling is well known by practitioners. Here is a synopsis of a conversation with one middle manager.Interviewer: Congratulations on acceptance of your multiproject scheduling proposal. Everyone tells me you were very convincing.Middle Manager: Thanks. Gaining acceptance was easy this time. The board quickly recognized we have no choice if we are to keep ahead of competition by placing our resources on the right projects.Interviewer: Have you presented this to the board before?Middle Manager: Yes, but not this company. I presented the same spiel to the firm I worked for two years ago. For their annual review meeting I was charged to present a proposal suggesting the need and benefits of central capacity resource planning for managing the projects of the firm.I tried to build a case for bringing projects under one umbrella to standardize practices and to forecast and assign key people to mission critical projects. I explained how benefits such as resource demands would be aligned with mission critical projects, proactive resource planning, and a tool for catching resource bottlenecks and resolving conflicts.Almost everyone agreed the idea was a good one. I felt good about the presentation and felt confident something was going to happen. But the idea never really got off the ground; it just faded into the sunset.With hindsight, managers really did not trust colleagues in other departments, so they only gave half-hearted support to central resource planning. Managers wanted to protect their turf and ensure that they would not have to give up power. The culture there was simply too inflexible for the world we live in today. They are still struggling with constant conflicts among projects.I'm glad I made the switch to this firm. The culture here is much more team-oriented. Management is committed to improving performance.It has often been asserted in project management literature that a centralised project office is essential for efficient scheduling of scarce project resources such as specialised skills and costly equipment across multiple projects. Do you agree? State your position. Support your answer with evidence and reasonable arguments from the case scenario and/or your work experience.
I agree that a centralised project office is essential for efficient scheduling of scarce project resources across multiple projects. In contrast, the current firm’s team-oriented culture and commitment to improving performance provides evidence of the advantages of having a centralised project office.
From the case scenario, it is clear that the former firm’s lack of commitment to central resource planning, with managers protecting their own turf, caused project conflicts.
This centralised approach would allow resources to be managed more effectively, by aligning them with mission-critical projects, proactively forecasting and assigning key people, and helping to catch and resolve resource bottlenecks.
My own work experience also confirms this position, as I have found a centralised project office to be critical in ensuring projects have the resources they need.
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What is a product life cycle and mention the role of
innovation in each step, minimum word required 200
A product life cycle is the process that a product goes through from its initial conception to its eventual discontinuation. There are four main stages in the product life cycle: introduction, growth, maturity, and decline. Innovation plays a crucial role in each step of the product life cycle.
In the introduction stage, innovation is critical for creating a unique and desirable product that will attract the attention of potential customers. This can include developing new features, designs, or technologies that differentiate the product from competitors.
In the growth stage, innovation is important for maintaining and expanding the product's market share. This can include updating or improving the product to meet changing customer needs, or introducing new marketing strategies to reach new audiences.
In the maturity stage, innovation is necessary for keeping the product relevant and competitive in the market. This can include adding new features or improving existing ones, or finding new ways to differentiate the product from competitors.
Finally, in the decline stage, innovation can help extend the product's life cycle by finding new uses or markets for the product. This can include introducing new versions of the product, or adapting it for use in different industries or applications.
Overall, innovation is a key driver of success throughout the product life cycle. By constantly developing and improving products, companies can stay competitive and maintain their market share.
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Reynolds Construction (RC) needs a piece of equipment that costs $165,000. The equipment has an economic life of 3 years and no residual value. The equipment will not require maintenance because its useful life is so short. RC can borrow the full cost of the equipment at an interest rate of 7% with payments due at the end of the year. Alternatively, RC can lease the equipment for $60,000 with payments due at the end of the year. Assume RC chooses the lease, which is a finance lease for financial reporting purposes. Answer the following questions.
a. What is the initial lease liability that must be reported on the balance sheet? Do not round intermediate calculations. Round your answer to the nearest cent. Enter your answer as a positive value.
$ __________
b. What is the initial right-of-use asset? Do not round intermediate calculations. Round your answer to the nearest cent.
$ __________
c. What will RC report as an interest expense at Year 1? Round your answer to the nearest cent. Enter your answer as a positive value.
$ __________
d. What will RC report as an amortization expense at Year 1? Do not round intermediate calculations. Round your answer to the nearest cent. Enter your answer as a positive value.
$ ___________
e. What will RC report as the lease liability at Year 1? Do not round intermediate calculations. Round your answer to the nearest cent. Enter your answer as a positive value.
$ ___________
f. What will RC report as the right-of-use asset at Year 1? Do not round intermediate calculations. Round your answer to the nearest cent.
$ ___________
A) the initial lease liability that must be reported on the balance sheet is :$158,025.23.
B) initial right-of-use asset is: $158,025.23
C) RC will report an interest expense of $11,061.77 at Year 1.
D) RC will report an amortization expense of $52,675.08 at Year 1.
E) RC will report a lease liability of $109,087.00 at Year 1.
F) RC will report a right-of-use asset of $105,350.15 at Year 1.
What is the justification for the above response?a. The initial lease liability that must be reported on the balance sheet is the present value of lease payments discounted at the incremental borrowing rate, which is 7%. Using the present value of an ordinary annuity formula with n=3 and i=7%, we have:
PV = $60,000 x (1 - 1/(1+7%)^3)/7% = $158,025.23
Therefore, the initial lease liability is $158,025.23.
b. The initial right-of-use asset is the initial lease liability plus any initial direct costs. Since there are no initial direct costs, the initial right-of-use asset is:
$158,025.23 + $0 = $158,025.23
c. The interest expense at Year 1 is the interest on the lease liability at the beginning of the year. Using the beginning lease liability of $158,025.23 and the interest rate of 7%, we have:
Interest expense = $158,025.23 x 7% = $11,061.77
Therefore, RC will report an interest expense of $11,061.77 at Year 1.
d. The amortization expense at Year 1 is the depreciation of the right-of-use asset over the lease term. Since the lease term is 3 years and the right-of-use asset has an initial value of $158,025.23, the annual amortization expense is:
Amortization expense = $158,025.23 / 3 = $52,675.08
Therefore, RC will report an amortization expense of $52,675.08 at Year 1.
e. The lease liability at Year 1 is the beginning lease liability minus the lease payments made during the year plus the interest on the lease liability for the year. Using the beginning lease liability of $158,025.23, the lease payments of $60,000, and the interest expense of $11,061.77, we have:
Lease liability = $158,025.23 - $60,000 + $11,061.77 = $109,087.00
Therefore, RC will report a lease liability of $109,087.00 at Year 1.
f. The right-of-use asset at Year 1 is the beginning right-of-use asset minus the amortization expense for the year. Using the beginning right-of-use asset of $158,025.23 and the amortization expense of $52,675.08, we have:
Right-of-use asset = $158,025.23 - $52,675.08
= $105,350.15
Therefore, RC will report a right-of-use asset of $105,350.15 at Year 1.
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QUESTIONS 1 An entity enters into a finance lease to lease an ocean liner. The ocean liner's fair value is RM40 million and the lease rentals are payable monthly over the lease term of five years. The present value of the minimum lease payments at the inception of the lease is RM38.5 million, and the unguaranteed residual value of the ocean liner is estimated at RM5 million. Required: Discuss the accounting treatment of the lease in the financial statements of the lessee.
The lessee will recognize a right-of-use asset and a lease liability at the inception of the lease.
The right-of-use asset will be measured at the present value of the minimum lease payments, which is RM38.5 million. The lease liability will also be measured at the present value of the minimum lease payments.
The lessee will recognize depreciation expense on the right-of-use asset and interest expense on the lease liability over the lease term.
The depreciation expense will be calculated based on the cost of the right-of-use asset, which is RM38.5 million, and the estimated useful life of the ocean liner, which is five years. The interest expense will be calculated based on the lease liability and the implicit interest rate in the lease.
At the end of the lease term, the lessee will derecognize the right-of-use asset and the lease liability. If the unguaranteed residual value of the ocean liner is different from the estimated amount, the lessee will recognize a gain or loss in the income statement.
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