When the market interest rate decreases, the bond price increases.
This is because when the market interest rate decreases, the bond's fixed interest payments become more attractive to investors compared to other investments, causing demand for the bond to increase. As a result, the bond price increases to match the higher demand, and the bond's yield to maturity decreases. The current yield of the bond also decreases because it is based on the bond's fixed coupon rate, which remains the same even as the bond price increases.
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what is the npv at a discount rate of zero percent? (do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. what is the npv at a discount rate of 10 percent? (do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
The NPV is 40 at a discount rate of 0 percent, 17.98 at a discount rate of 8 percent, -2.26 at a discount rate of 16 percent, and -24.28 at a discount rate of 28 percent.
To calculate the net present value (NPV) of the given cash flows, we need to discount each cash flow to its present value and then add all the present values. The formula for calculating the present value is:
PV = CF / (1 + r)n
Where,
CF = Cash flow at period n
r = Discount rate or required rate of return
n = Time period
Using this formula, we can calculate the present value of each cash flow at different discount rates and then sum them up to find the NPV.
At a discount rate of 0 percent:
The present value of each cash flow is the same as the cash flow itself. Therefore, the NPV is:
NPV = [tex]-$50 + $20 + $30 + $40[/tex]
NPV = [tex]$40[/tex]
At a discount rate of 8 percent:
Using the above formula, we can calculate the present value of each cash flow at a discount rate of 8 percent:
[tex]PV(-50) = -50 / (1 + 0.08)^1 = -$46.30[/tex]
[tex]PV(20) = 20 / (1 + 0.08)^2 = $16.81[/tex]
[tex]PV(30) = 30 / (1 + 0.08)^3 = $21.33[/tex]
[tex]PV(40) = 40 / (1 + 0.08)^4 = $26.14[/tex]
Adding up the present values, we get:
NPV = -[tex]46.30 + $16.81 + $21.33 + $26.14[/tex]
NPV = [tex]$17.98[/tex]
At a discount rate of 16 percent:
Using the same formula, we can calculate the present value at a discount rate of 16 percent:
[tex]PV(-50) = -50 / (1 + 0.16)^1 = -$43.10[/tex]
[tex]PV(20) = 20 / (1 + 0.16)^2 = $11.19[/tex]
[tex]PV(30) = 30 / (1 + 0.16)^3 = $13.54[/tex]
[tex]PV(40) = 40 / (1 + 0.16)^4 = $16.11[/tex]
Adding up the present values, we get:
NPV = -[tex]43.10 + $11.19 + $13.54 + $16.11[/tex]
NPV = -[tex]$2.26[/tex]
At a discount rate of 28 percent:
Using the same formula, we can calculate the present value at a discount rate of 28 percent:
[tex]PV(-50) = -50 / (1 + 0.28)^1 = -$39.06[/tex]
[tex]PV(20) = 20 / (1 + 0.28)^2 = $4.42[/tex]
[tex]PV(30) = 30 / (1 + 0.28)^3 = $5.25[/tex]
[tex]PV(40) = 40 / (1 + 0.28)^4 = $5.11[/tex]
Adding up the present values, we get:
NPV = [tex]-$39.06 + $4.42 + $5.25 + $5.11[/tex]
NPV = -[tex]$24.28[/tex]
Therefore, the NPV is [tex]$40[/tex] at a discount rate of 0 percent, [tex]$17.98[/tex]at a discount rate of 8 percent, -[tex]$2.26[/tex]at a discount rate of 16 percent, and [tex]-$24.28[/tex] at a discount rate of 28 percent.
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year 1 2 3 4 free cash flow $12 million $18 million $22 million $35 million covington is expected to generate the above free cash flows over the next four years, after which they are expected to grow at a rate of 2.8% per year. if the weighted average cost of capital is 12% and covington has cash of $80 million, debt of $60 million, and 30 million shares outstanding, what is covington's expected terminal enterprise value?
On the basis of mentioned Covington's expected terminal enterprise value is calculated out to be $16.23 per share.
To calculate Covington's expected terminal enterprise value, we first need to calculate the terminal free cash flow at the end of year 4.
Using the perpetuity formula, we can find the present value of the expected cash flows beyond year 4:
PV = FCF / (r - g)
where PV is the present value, FCF is the free cash flow in year 5, r is the weighted average cost of capital(WACC) , and g is the growth rate.
FCF5 = FCF4 x (1 + g) = $35 million x 1.028 = $35.98 million
Plugging in the values, we get:
PV = $35.98 million / (0.12 - 0.028) = $405.96 million
Next, we need to calculate the total enterprise value at the end of year 4:
TEV4 = PV of year 1-4 free cash flows + PV of year 5 terminal value
TEV4 = ($12 million / 1.12) + ($18 million / 1.12²) + ($22 million / 1.12³) + ($35 million / 1.12⁴) + $405.96 million
TEV4 = $9.77 million + $13.31 million + $15.29 million + $23.36 million + $405.96 million
TEV4 = $467.69 million
Finally, we can calculate the expected terminal enterprise value by adding Covington's cash and subtracting its debt, then dividing by the number of outstanding shares:
Expected terminal enterprise value = (TEV4 + cash - debt) / shares outstanding
Expected terminal enterprise value = ($467.69 million + $80 million - $60 million) / 30 million
Expected terminal enterprise value = $16.23 per share
Therefore, Covington's expected terminal enterprise value is $16.23 per share.
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purchasing-power parity theory does not hold at all times because question 22 options: many goods are not easily transported and the same goods produced in different countries may be imperfect substitutes. the same goods produced in different countries are perfect substitutes for each other. consumer preferences are different across countries. prices are different across countries.
The purchasing-power parity (PPP) theory does not hold at all times because many goods are not easily transported, and the same goods produced in different countries may be imperfect substitutes. Additionally, consumer preferences are different across countries, and prices are different across countries.
1. Many goods are not easily transported: PPP assumes that goods can be transported without any cost or barriers. However, in reality, there are transportation costs, import tariffs, and other trade restrictions that make it difficult for goods to be transported across borders. This limits the ability of prices to equalize across countries, causing the PPP theory to break down.2. Imperfect substitutes: Goods produced in different countries might have differences in quality, features, or branding, making them imperfect substitutes. This means that consumers might prefer a specific version of a product, making it difficult for the law of one price to hold across countries. This, in turn, affects the validity of the PPP theory.
3. Consumer preferences: People in different countries have different tastes and preferences, which can influence the demand for goods and their prices. Cultural, historical, or personal factors can cause variations in the preferences of consumers, leading to deviations from PPP.4. Price differences: Prices can differ across countries due to various factors, such as differences in production costs, taxes, or local market conditions. These price differences can cause the PPP theory to not hold in some cases.
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suppose the daily demand for yogurt is 36 with a standard deviation of 3, the cost to place an order is 3, the cost to hold a unit in inventory is $ 0.05 per day, the lead time is 5 days and the desired customer service level is 95%. what is the eoq (round to the nearest integer)? answer:
EOQ for yogurt: 600 units (rounded). Formula: sqrt(2DS/H) where D=9000, S=3, H=0.05.
The Financial Request Amount (EOQ) equation is utilized to decide the ideal request amount that limits the complete stock expense. The equation is as per the following:
EOQ = [tex]\sqrt{(2DS/H)[/tex]
Where D is the yearly interest, S is the expense to put in a request, and H is the expense to hold one unit in stock for one year.To compute D, we want to separate the day to day interest by the quantity of working days in a year. Expecting there are 250 working days in a year, D = 36 * 250 = 9,000.
The lead time is 5 days, and that implies that we want to arrange sufficient stock to cover interest for those 5 days too. In this way, the absolute interest during lead time (DLT) will be DLT = 36 * 5 = 180.To compute the security stock, we really want to know the standard deviation of interest during lead time (σL). Expecting request follows an ordinary dispersion, we can utilize the accompanying equation to work out the security stock:
SS = Z * σL
Where Z is the z-score comparing to the ideal client assistance level. For a 95% client support level, Z = 1.65.
Involving the equation for standard deviation of lead time interest, we get:
σL = sqrt[tex]\sqrt{(DLT * σ^2)[/tex] = [tex]\sqrt{(180 * 3^2)[/tex] = 27
Along these lines, SS = 1.65 * 27 = 44.55, which we gather together to 45.
The complete request amount (Q) is then, at that point:
Q = D + SS = 9,000 + 45 = 9,045
At last, we can ascertain the EOQ by connecting the qualities we have determined:
EOQ = [tex]\sqrt{(2 * 9,000 * 3/0.05)[/tex]= 600
Consequently, the EOQ for yogurt is 600 units (adjusted to the closest whole number).
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which view of fdi states that there are benefits and costs to fdi and that countries attempt to maximize the benefits and minimize the national costs of fdi?
The Balance of Benefits and Costs View of FDI states that there are both advantages and disadvantages associated with FDI.
Countries should strive to maximize the benefits while minimizing the national costs. The benefits of FDI include improved access to technology, increased foreign exchange earnings, jobs creation, better infrastructure and opportunities for regional development.
On the other hand, potential costs include pressures on domestic industry due to foreign competition, displacement of local workers in favor of cheaper foreign labor, negative environmental impacts and a loss of economic sovereignty.
For this reason, governments must carefully consider the pros and cons of accepting or rejecting foreign investments prior to making any decisions.
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which of the following, if any, is a deduction for agi? a. state and local sales taxes. b. interest on home mortgage. c. charitable contributions. d. unreimbursed moving expenses of an employee (who is in the military).
Deduction for agi is unreimbursed moving expenses of an employee (who is in the military). so, the correct answer is D).
Deductions for AGI are expenses that can be deducted from a taxpayer's gross income, reducing their taxable income. The four options provided are all potential deductions, but only one of them, unreimbursed moving expenses of an employee (who is in the military), is a deduction for AGI.
This means that the deduction can be taken regardless of whether or not the taxpayer itemizes their deductions. State and local sales taxes, interest on home mortgage, and charitable contributions are all deductions that can be taken, but they are considered itemized deductions and are subject to certain limitations and qualifications.
Overall, understanding the types of deductions available can help taxpayers reduce their taxable income and potentially lower their tax bill. So, the correct answer is D).
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a consultant found that an area's economic base was heavily diversified with a mix of different types of
The area's economic base is heavily diversified, which means it has a mix of different types of industries and sectors contributing to its overall economic health.
This diversification can provide stability and growth opportunities for the area.
When an area's economic base is heavily diversified, it means that there are many different types of industries and sectors operating within the area, which can be beneficial in several ways.
Firstly, a diverse economy is less vulnerable to downturns in any one particular industry. For example, if an area is heavily reliant on a single industry, such as mining or manufacturing, a decline in that industry can lead to a significant economic downturn for the entire area.
On the other hand, if an area has a mix of different industries and sectors, a downturn in one industry may not have as severe an impact on the overall economy.
Additionally, a diverse economy can provide growth opportunities for the area. By having a mix of industries and sectors, the area can attract a broader range of businesses and investors, leading to increased economic activity and job creation.
Furthermore, a diverse economy can encourage innovation and entrepreneurship, as individuals and businesses have access to a wide range of resources and opportunities.
Overall, a heavily diversified economic base can provide stability, growth opportunities, and increased resilience to economic shocks for an area. It can also promote innovation and entrepreneurship, which can lead to long-term economic success.
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how long does it take a firm to go from the short run to the long run? question 20 options: two years six months one year it depends on the nature of the firm.
It depends on the nature of the firm that how long it takes a firm to go from the short run to the long run. So the option D is correct.
In the short run, the firm experiences increasing costs due to the limited availability of resources and capital. The firm must increase its production to reach the long run, where it is able to achieve economies of scale and lower costs.
The amount of time it takes to reach the long run depends on the firm's ability to raise capital, find the right resources, and make the necessary investments. It also depends on the industry, market, and competitive conditions. Generally, it can take anywhere from a few months to several years to reach the long-run. So the option D is correct.
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The complete question is:
How long does it take a firm to go from the short run to the long run?
A. two years
B. six months
C. one year
D. it depends on the nature of the firm.
to improve sales and increase customer interest, a grocery store reduces the prices of its gourmet cheese products, sending out an email advertisement to its shoppers. this is an example of
"To improve sales and increase customer interest, a grocery store reduces the prices of its gourmet cheese products, sending out an email advertisement to a shoppers. This is an example of a promotional discount".
The grocery store's decision to reduce the prices of its gourmet cheese products and promote it through an email advertisement is an example of a promotional discount strategy aimed at increasing sales and customer interest.
Promotional discounts are a popular marketing strategy used by businesses to attract new customers and retain existing ones. By offering discounts or reduced prices on products, businesses can increase customer interest, drive sales, and boost revenue. In this scenario, the grocery store is using a promotional discount strategy by reducing the prices of its gourmet cheese products and sending out an email advertisement to shoppers.
This can incentivize customers to purchase the products, increase their satisfaction with the store, and potentially lead to repeat business. Overall, promotional discounts can be an effective tool for businesses looking to improve sales and attract and retain customers.
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which of the following is a source of cash flows? group of answer choices increase in marketable securities increase in accounts payable decrease in notes payable repurchase of stock
Payables have grown in number. When the accounts payable rise as a result of the cash payable not being paid, the cash flow increases and becomes a source of it. Other approaches would all either result in higher outflow or lower cash flow.
"Cash flows" are frequently used to refer to payments that are projected for the future, so unknown, and require cash flow forecasting. Time t, nominal quantity N, currency CCY, and account A all go into determining a cash flow; therefore, CF = CF symbolically. In its strictest sense, a cash flow refers to a payment, particularly one made from one central bank account to another. Cash flows might be real or imagined movements of money. To refer to payments made into or out of a business, project, or financial asset, the term "cash flow" is, nevertheless, widely used in a more general sense.
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your report discusses trends in net profits over a period of four years. to visually display these trends, you should use a
When the report clearly and accurately discusses trends in net profits over a period of four years. To visually display these trends, you should use a line chart or a graph.
To visually display trends in net profits over a period of four years, you should use a line chart or a graph. A line chart would allow you to plot the net profits over time on a continuous scale, showing the direction and magnitude of changes in the profits. You could also use a bar chart to compare the net profits of different years side by side. A line graph is a type of chart used to display trends or patterns over time.
It consists of a series of data points connected by straight line segments, with the horizontal x-axis representing time and the vertical y-axis representing the value of the data. This type of graph is useful for showing changes in data over time and can help identify patterns and trends in the data.
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The complete question is:
Your report discusses trends in net profits over a period of four years. To visually display these trends, you should use a _______.
a semiannual corporate bond has a face value of $1,000, a yield to maturity of 7.2 percent, and a coupon rate of 7.5 percent. the bond matures 10 years from today. this bond:
Every six months, the bond will make a $75.00 interest payment. The corporate bond now has a 7.34 percent yield. As a result, choice A is accurate.
To calculate the semiannual interest payments of $75.00, we first need to calculate the semiannual coupon payment. The bond has a face value of $1,000 and a coupon rate of 7.5 percent, so the semiannual coupon payment is:
Coupon payment = (Coupon rate x Face value) / Number of payments per year Coupon payment = (7.5% x $1,000) / 2 Coupon payment = $75
The yield to maturity quantifies the value of the bond at the conclusion of its bond period as opposed to the current yield, which calculates the bond's present value. In other words, the expected returns on a bond after all payments have been made on time throughout the duration of the bond.
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Complete question is:
A semiannual corporate bond has a face value of $1,000, a yield to maturity of 7.2 percent, and a coupon rate of 7.5 percent. The bond matures 10 years from today. This bond:
Select one:
A. pays interest payments of $75.00 every six months.
B. has a current yield of 7.34 percent.
C. is currently quoted at a price of 101.02.
D. sells at par value.
if the price of the good increases by 8% next year, how many more or fewer people will buy it (i.e., what is the percent change in quantity demanded)?
If the price of the good increases by 8% next year, then 6.67% fewer people will buy it (i.e., the percent change in quantity demanded).
When the price of the good increases by 8%, the quantity demanded will decrease. This relationship between price and quantity demanded is known as the Law of Demand.
It states that the quantity demanded of a good decreases as its price increases and vice versa. In order to find the percent change in quantity demanded, we can use the price elasticity of demand formula. The formula is as follows:% change in quantity demanded = % change in price/price elasticity of demand given that the price of the good increases by 8%. Therefore,% change in price = 8%Now, we need to find the price elasticity of demand. If the price elasticity of demand is greater than 1, it means that the good is elastic, and a small change in price leads to a large change in the quantity demanded. If the price elasticity of demand is less than 1, it means that the good is inelastic and a change in price has a small effect on the quantity demanded. If the price elasticity of demand is equal to 1, it means that the good has unitary elasticity.
Let us assume that the price elasticity of demand is -1.2 (since the price is increasing, the price elasticity of demand is negative). Then,% change in quantity demanded = 8% / -1.2= -6.67%
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a 4-year project has an annual operating cash flow of $53,500. at the beginning of the project, $4,450 in net working capital was required, which will be recovered at the end of the project. the firm also spent $22,800 on equipment to start the project. this equipment will have a book value of $4,820 at the end of the project, but can be sold for $5,790. the tax rate is 21 percent. what is the year 4 cash flow?
The year 4 cash flow is $63,459.
Initial Investment = $22,800
Residual Value = $4,820
Useful Life = 4 years
Annual Depreciation = (Initial Investment - Residual Value) / Useful Life
Annual Depreciation = ($22,800 - $4,820)/4
Annual Depreciation = $17,980/4
Annual Depreciation = $4,495
Initial Investment in NWC = $4,450
Salvage Value = $5,790
After-tax Salvage Value = Salvage Value - (Salvage Value - Book Value) × Tax Rate
After-tax Salvage Value = $5,790 - ($5,790 - $4,450) × 0.21
After-tax Salvage Value = $5,790 - $1,340 × 0.21
After-tax Salvage Value = $5,790 - $281.4
After-tax Salvage Value = $5,509
Annual Operating Cash Flow = $53,500
Year 4:
Net Cash Flows = Operating Cash Flow + NWC recovered + After-tax Salvage Value
Net Cash Flows = $53,500 + $4,450 + $5,509
Net Cash Flows = $63,459
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g based on the pecking order theory, would firms prefer to borrow short-term or long-term debt? group of answer choices short-term long-term
Based on the pecking order theory, firms prefer to borrow option (a) short-term debt
According to the pecking order theory, firms prefer to finance their investments in the following order of preference: first, with internal funds, second, with debt, and finally, with equity. In terms of debt financing, the theory suggests that firms prefer to issue short-term debt before long-term debt. This is because short-term debt is generally less expensive and less risky for firms than long-term debt.
Short-term debt can be easily rolled over or refinanced, whereas long-term debt is more difficult and costly to renegotiate. Additionally, long-term debt exposes firms to interest rate and inflation risks, which can be mitigated by using short-term debt. Therefore, firms tend to use short-term debt as a first choice, followed by long-term debt only when necessary.
Therefore, the correct option is (a) short-term
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what aspects of the four key risk questions listed below (the correct ones) can the risk analyst contribute to? which aspects are generally off-limits to risk analysts? explain. is benefit/cost >
The risk analyst can contribute to all aspects of the four key risk questions listed below. However, the specifics of certain aspects may be off-limits to them.
The risk analyst is responsible for examining potential hazards and identifying what could go wrong. They use this information to develop and implement risk management strategies to reduce the likelihood of negative consequences occurring. To answer the first question, risk analysts will contribute by identifying potential hazards or threats that could arise. They will analyze the situation to identify the factors that could contribute to the issue and work with other experts to develop a comprehensive understanding of the risks involved.
In response to the second question, the risk analyst will contribute by assessing the likelihood of each identified risk occurring. This assessment is based on the data they have gathered and any previous experience they may have had.To answer the third question, " the risk analyst will contribute by assessing the potential impact of each identified risk. They will determine the potential consequences of each risk and work with other experts to develop a plan to mitigate those risks. Finally, to answer the fourth question, the risk analyst will contribute by developing a plan of action to manage the identified risks. This plan may include a combination of risk reduction, risk avoidance, and risk transfer strategies.
Certain aspects of risk management may be off-limits to risk analysts, depending on their role within an organization. For example, risk analysts may not be involved in making final decisions about the level of risk that an organization is willing to accept. This decision is typically made by upper management or other executives. In addition, risk analysts may not be involved in developing or implementing risk management strategies without the input of other experts. Other experts, such as legal or financial professionals, may need to be consulted before any risk management strategies are put into place.Benefit/cost is not directly related to the four key risk questions and is not addressed in the question, so it is not relevant to this answer.
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suppose that the minimum wage has increased from the current level to $25 per hour. employment of people previously earning less than $25 per hour will . the availability of on-the-job training for low-skilled workers will .
The impact of an increase in the minimum wage to $25 per hour on the employment of people previously earning less than $25 per hour and the availability of on-the-job training for low-skilled workers will depend on a variety of factors, including the specific labor market conditions and the elasticity of demand for labor.
In general, when the minimum wage is increased, it is expected that some employers will respond by reducing their demand for low-skilled workers, as the cost of labor has increased. This could lead to a decrease in employment opportunities for people who were previously earning less than $25 per hour. However, the magnitude of this effect will depend on how elastic the demand for labor is in the affected industries, as well as the availability of substitutes for low-skilled labor (such as automation or outsourcing).
On the other hand, an increase in the minimum wage could also lead to an increase in the availability of on-the-job training for low-skilled workers. This is because when the cost of labor increases, employers may have a greater incentive to invest in their workers' skills and productivity, in order to maximize the return on their labor costs. This could lead to more opportunities for low-skilled workers to receive training and develop new skills, which could ultimately lead to higher wages and greater job security in the long run.
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what type of alliance is this case? why do you think renault did not acquire nissan in the first place but instead chose to form an alliance with nissan? -
This case involves a strategic alliance between Renault and Nissan. Renault chose not to acquire Nissan initially because alliancing allowed them to combine resources and expertise while maintaining separate corporate identities.
The type of alliance in this case is a cross-shareholding alliance. Renault did not acquire Nissan in the first place but instead chose to form an alliance with Nissan due to several reasons, including economic challenges and the potential benefits of a partnership. What is an alliance? An alliance is a form of cooperation between two or more parties for mutual benefit. A cross-shareholding alliance is one in which two companies each purchase shares in the other company. It is a way of gaining a certain degree of control over another company, establishing business relations with it, and sharing technologies and resources with it. Why did Renault not acquire Nissan? Renault did not acquire Nissan in the first place but instead chose to ally with Nissan due to several reasons: Economic challenges: Renault was facing financial difficulties at the time and could not afford to purchase Nissan. Allying allowed Renault to access Nissan's strong position in the Japanese market and gain access to its financial resources. Geographical expansion: Renault was looking to expand its geographical reach, and a partnership with Nissan provided access to the Asian market. Technological collaboration: Nissan had innovative technology that Renault did not possess, and an alliance provided access to that technology. Cultural similarity: Renault and Nissan shared a common culture, which made it easier for them to work together. Synergy: An alliance provided Renault with the opportunity to create synergy between the two companies by sharing resources, technology, and knowledge.
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golden manufacturing company started operations by acquiring $150,000 cash from the issue of common stock. on january 1, year 1, the company purchased equipment that cost $120,000 cash, had an expected useful life of six years, and had an estimated salvage value of $4,000. golden manufacturing earned $72,000 and $83,000 of cash revenue during year 1 and year 2, respectively. golden manufacturing uses double-declining-balance depreciation. required: a. record the transactions in a horizontal statements model.
The purchase of equipment can be recorded using a horizontal statements model to show the effect on assets and equities. Accumulated depreciation is $40,000 (Assets), Net income is $32,000(2018), $43,000(2019), and Cash, end of year is $78,000(2019), $138,000(2018).
a. The purchase of equipment can be recorded in a horizontal statements model as follows(image attached):
b-1. The income statements for 2018 and 2019 can be prepared in a vertical statements format as follows (image attached):
b-2. The balance sheets for 2018 and 2019 can be prepared in a vertical statements format as follows(image attached):
b-3. The statements of cash flows for 2018 and 2019 can be prepared in a vertical statements format as follows(image attached):
The income statements for 2018 and 2019 show the company's revenues, expenses, and net income for each year. The balance sheets for 2018 and 2019 show the company's assets, liabilities, and equity at the end of each year. The statements of cash flows for 2018 and 2019 show the company's cash inflows and outflows for each year, including cash flows from operating, investing, and financing activities.
Overall, the horizontal statements model shows the purchase of equipment, while the vertical statements format shows the income statements, balance sheets, and statements of cash flows for the years 2018 and 2019. These financial statements provide a snapshot of Golden Manufacturing Company's financial position and performance, including its revenues, expenses, net income, assets, liabilities, and cash flows.
The complete question is
Golden Manufacturing Company started operations by acquiring $150,000 cash from the issue of common stock. On January 1, 2018, the company purchased equipment that cost $120,000 cash, had an expected useful life of six years, and had an estimated salvage value of $4,000. Golden Manufacturing earned $72,000 and $83,000 of cash revenue during 2018 and 2019, respectively. Golden Manufacturing uses double-declining-balance depreciation.
Required
Record the purchase in a horizontal statements model.
b-1.Prepare an income statements for 2018 and 2019. Use a vertical statements format.
b-2.Prepare a balance sheets for 2018 and 2019. Use a vertical statements format.
b-3. Prepare a statements of cash flows for 2018 and 2019. Use a vertical statements format.
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managing volunteers is not like managing professional first responders because: a. volunteers have varying motivations and may have time limitations. b. volunteers have to bring their own equipment. c. volunteers do not belong to unions. d. volunteers do not require supervision.
Since volunteers can both help and hinder disaster reaction, managing them is unlike managing professional first responders.
In the wake of disasters, it's not unusual for a sizable group of people—from trained professionals to untrained but well-intentioned volunteers—to congregate on the disaster site to give assistance to victims or other responders. Volunteers present a paradox to professional responders at the site because they can be both a help and a hindrance in crisis response. Findings from focus groups and in-depth structured interviews show that US&R task forces assess the volunteers based on their perceived legitimacy, usefulness, and any possible responsibility or hazard during the crisis response.
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the appropriate risk-free rate to use in calculating the cost of equity for a firm is: select answer from the options below a long-term treasury rate. a short-term treasury rate. an equal mix of short-term and long-term treasury rates. none of these are correct.
The appropriate risk-free rate to use in calculating the cost of equity for a firm is option (a) a long-term treasury rate
The appropriate risk-free rate to use in calculating the cost of equity for a firm is a long-term treasury rate. This is because the cost of equity represents the return that investors require to invest in the firm's stock, and the long-term treasury rate is generally considered to be the best approximation of the risk-free rate of return, as it is not subject to significant fluctuations in the short term.
Short-term treasury rates may be affected by changes in the Federal Reserve's monetary policy and may not reflect the long-term risk-free rate. An equal mix of short-term and long-term treasury rates is also not appropriate, as it would not provide an accurate estimate of the risk-free rate.
Therefore, the correct option is (a) a long-term treasury rate
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to construct a riskless portfolio using two risky stocks, one would need to find two stocks with a correlation coefficient of
Therefore, to construct a riskless portfolio using two risky stocks, one would need to find two stocks with a correlation coefficient of -1 or 1.
The correlation coefficient is a statistical measure that indicates the extent to which two or more variables are connected. It is represented by the symbol "r" in statistics. When r = 1 or -1, the correlation coefficient is at its maximum.The correlation coefficient of -1 or 1 represents a perfect correlation. This is due to the fact that if two stocks are perfectly correlated, their prices will always move in lockstep, regardless of what is happening in the market. As a result, if you pair them together in a portfolio, the losses in one stock will be offset by the gains in the other stock, resulting in a riskless portfolio.
As a result, if one of the stocks loses money, the other stock will compensate for it, resulting in a net profit of zero. As a result, a portfolio with two stocks with a correlation coefficient of -1 or 1 is considered riskless.Therefore, to construct a riskless portfolio using two risky stocks, one would need to find two stocks with a correlation coefficient of -1 or 1.
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ten years ago, sonya purchased 4,000 shares in salmon corporation for $40,000. in the current year, sonya receives a nontaxable stock dividend of 40 shares of salmon preferred. values at the time of the dividend are $8,000 for the preferred stock and $72,000 for the common. based on this information, sonya's basis is:
Sonya's adjusted basis in Salmon Corporation after the stock dividend is $4,800.
To calculate Sonya's basis in Salmon Corporation, we need to take into account the original cost of her investment, any subsequent purchases or sales, and any adjustments resulting from stock dividends.
In this case, Sonya purchased 4,000 shares in Salmon Corporation for $40,000 ten years ago. This means that her initial basis in the stock was $40,000 / 4,000 shares = $10 per share.
Now, Sonya has received a stock dividend of 40 shares of Salmon preferred stock, which is nontaxable. We need to adjust her basis to reflect the value of the new stock received.
At the time of the dividend, the preferred stock was valued at $8,000, which means that each share was worth $8,000 / 40 shares = $200. The common stock was valued at $72,000, which means that each share was worth $72,000 / 4,000 shares = $18.
To adjust Sonya's basis, we need to add the value of the preferred stock dividend to her original basis and multiply it by the ratio of the common stock value to the preferred stock value:
Adjusted basis = (Original basis + Value of preferred stock dividend) x (Common stock value / Preferred stock value)
Adjusted basis = ($10 per share x 4,000 shares + $200 per share x 40 shares) x ($18 per share / $200 per share)
Adjusted basis = ($40,000 + $8,000) x 0.09
Adjusted basis = $4,800
Therefore, Sonya's adjusted basis in Salmon Corporation after the stock dividend is $4,800.
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there is an election being held to fill 2 seats on the board of directors of a firm in which you hold stock. there are a total of 420 shares outstanding. if the election is conducted under cumulative voting and you own 120 shares, how many more shares must you buy to be assured of earning a seat on the board?
Under cumulative voting with 2 seats being filled and 420 shares outstanding, if you own 120 shares, you would need to buy an additional 90 shares to be assured of earning a seat on the board
Under cumulative voting, each shareholder is entitled to a number of votes equal to the number of shares they own multiplied by the number of seats being filled. In this case, with 2 seats being filled and 120 shares owned, you would have 240 votes.
To be assured of earning a seat on the board, you would need to have more than half of the total votes cast. The total number of votes that can be cast is 420 shares * 2 seats = 840 votes. Half of this is 420 votes.
Since you currently have 240 votes, you would need to acquire an additional 180 votes to be assured of earning a seat on the board. Since each share gives you 2 votes, you would need to acquire an additional 90 shares (180 / 2) to reach this threshold.
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standard hours 5 labor-hours per unitstandard rate $12 per labor-hourpartial production data for the most recent month are shown below:budget actualproduction (units) 850 960direct labor hours 4,250 ?an analysis of results for the month included the following variances:direct labor rate variance $4,104 favorabledirect labor efficiency variance $5,760 favorablewhat was the actual rate paid per labor-hour? (choose the closest answer.)a. $12.95 per labor-hourb. $11.22 per labor-hourc. $11.05 per labor-hourd. $10.91 per labor-houre. none of the above
The actual rate paid per labor-hour in the given situation is B) $11.22 per labor-hour.
Standard hours refer to the number of labor hours required to produce one unit of the product. In this case, the standard hours are 5 labor-hours per unit. The standard rate refers to the amount of money paid per labor-hour. In this case, the standard rate is $12 per labor-hour.
The partial production data shows that during the most recent month, the budgeted production was 850 units, but the actual production was 960 units. It also shows that the budgeted direct labor hours were 4,250, but the actual direct labor hours are unknown.
The analysis of results for the month shows that the direct labor rate variance is $4,104 favorable and the direct labor efficiency variance is $5,760 favorable. The direct labor rate variance measures the difference between the actual rate paid per labor-hour and the standard rate, multiplied by the actual hours worked.
A favorable variance means that the actual rate paid per labor-hour was less than the standard rate. The direct labor efficiency variance measures the difference between the actual hours worked and the standard hours, multiplied by the standard rate. A favorable variance means that fewer hours were worked than expected to produce the actual output.
To find the actual rate paid per labor-hour, we can use the direct labor rate variance formula: Direct labor rate variance = (Actual rate - Standard rate) x Actual hours. We know that the direct labor rate variance is $4,104 favorable, and the standard rate is $12 per labor-hour.
We can rearrange the formula to solve for the actual rate: Actual rate = (Direct labor rate variance / Actual hours) + Standard rate. Substituting the values, we get: Actual rate = ($4,104 / Actual hours) + $12.
We can also use the direct labor efficiency variance formula to find the actual hours worked: Direct labor efficiency variance = (Actual hours - Standard hours) x Standard rate. We know that the direct labor efficiency variance is $5,760 favorable, and the standard hours are 5 labor-hours per unit.
We can rearrange the formula to solve for actual hours: Actual hours = (Direct labor efficiency variance / Standard rate) + Standard hours. Substituting the values, we get: Actual hours = ($5,760 / $12) + 5 = 480 + 5 = 485.
Now that we know the actual hours worked, we can substitute the value in the formula we derived earlier to find the actual rate paid per labor-hour: Actual rate = ($4,104 / 485) + $12 = $8.47 + $12 = $20.47. However, this answer is not among the options provided, so we need to round it to the closest option. The closest option is $11.22 per labor-hour (option b).
In conclusion, the actual rate paid per labor-hour is $11.22 per labor-hour (option b). The analysis shows that the actual rate was lower than the standard rate, resulting in a favorable direct labor rate variance. Additionally, fewer hours were worked than expected, resulting in a favorable direct labor efficiency variance.
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marketing research conducted using focus groups for the purpose of defining research issues and suggesting hypotheses is called
Formulative research is marketing research that uses focus groups to identify research questions and propose hypotheses.
Exploratory studies, often referred to as formulative research, are useful when research tries to become familiar with a phenomenon or to obtain new insight into it in order to articulate a more precise problem or to build a hypothesis.
One of the best-known and most widely used techniques for market research is focus groups. They let researchers to collect data on anything from goods and services to beliefs and perceptions in order to disclose actual customer attitudes and opinions. They are used to acquire qualitative data and in-depth insights.
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signature sweets, inc. has 8 percent semiannual bonds outstanding with 15 years to maturity. the latest quote on these bonds is 109.16. what is the yield to maturity?
The yield to maturity is 6.12%.
To calculate the yield to maturity, we can use the bond pricing formula, which states that the bond price is equal to the present value of its future cash flows. We know the current price of the bond ($1091.60), the semi-annual coupon rate (8% / 2 = 4%), the number of periods (15 years x 2 = 30), and the face value ($1000).
Using a financial calculator or Excel, we can solve for the yield to maturity, which is the discount rate that makes the present value of the bond's cash flows equal to its current price. Alternatively, we can use trial and error or a bond yield table to find the closest yield to maturity to the quoted price.
In this case, the yield to maturity is 6.12%, which is close to the quoted price of 109.16. This means that investors are willing to pay a premium for the bond because its coupon rate is higher than the prevailing interest rate in the market.
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on october 1, 2024, sonoma company leased equipment from napa incorporated in lease payable in five equal annual payments of $500,000, beginning october 1, 2025. similar transactions have carried an 11% interest rate. the right-of-use asset would be recorded at:
The right-of-use asset would be recorded as the sum of the lease liability plus any lease incentives provided by the lessor plus any prepayments less any initial direct costs.
In this case, the lease payable is $500,000 per year for five years starting October 1, 2025 with an 11% interest rate. Therefore, the lease liability could be calculated as:
PV of annuity due = PMT x [(1 - (1 + r)⁻ⁿ) / r] x (1 + r)
where:
PV of annuity due = present value of the lease payments
PMT = payment amount per period
r = interest rate per period
n = number of periods
In this case, PMT is $500,000, r is 11%, and n is 5. Therefore:
PV of annuity due = $500,000 x [(1 - (1 + 0.11)⁻⁵) / 0.11] x (1 + 0.11)
= $1,992,673
The right-of-use asset would then be calculated as the sum of the lease liability plus any lease incentives provided by the lessor plus any prepayments less any initial direct costs.
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a distribution of income is highly skewed. which measure of central tendency are you likely to employ for the purpose of characterizing income?
When the distribution of income is highly skewed, it is appropriate to use the median as the measure of central tendency for characterizing income.
When a distribution of income is highly skewed, the use of the mean as a measure of central tendency may not be appropriate since it is sensitive to extreme values or outliers. Instead, a more appropriate measure of central tendency is the median.
The median is the value that splits the distribution into two equal parts, where half of the observations are below it and half are above it. Unlike the mean, it is not affected by outliers or extreme values since it only considers the position of the observations in the distribution rather than their actual values. Therefore, in skewed distributions, the median provides a more representative measure of the typical value of the variable of interest.
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adam smith believed that the individual pursuit of self-interest select one: a. should usually be discouraged. b. is impossible in a perfectly competitive market. c. always leads to an efficient outcome. d. often promotes the broader interests of society.
Adam smith believed that the individual pursuit of self-interest often promotes the broader interests of society. Option d is the correct option.
Adam Smith, often referred to as the “Father of Economics”, developed the concept of the “invisible hand” in his 1776 book, An Inquiry into the Nature and Causes of the Wealth of Nations. He argued that when individuals pursue their own self-interest in the marketplace, they unintentionally promote the interests of society as a whole.
Smith argued that the pursuit of self-interest would lead to individuals producing goods and services that are in demand by society. This, in turn, would create competitive markets where consumers could get the highest quality goods at the lowest cost. Furthermore, Smith reasoned that competition would encourage producers to become more efficient, which would lead to better products and lower prices for consumers.
Additionally, Smith argued that the pursuit of self-interest would lead to specialization and the division of labor. By specializing in a particular skill, individuals would become more productive, leading to greater economic growth. This economic growth would benefit all members of society, not just the individual who is pursuing their own self-interest. Option d is the correct option.
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The complete question is:
Adam smith believed that the individual pursuit of self-interest select one:
a. should usually be discouraged.
b. is impossible in a perfectly competitive market.
c. always leads to an efficient outcome.
d. often promotes the broader interests of society.