a) From the given credentials the AW is positive, the modernization project is economically attractive based on the initial estimates. b) if the net annual savings change by the following percentages from the initial estimate the AW will be $6,535.37 c) a decrease in net annual savings would cause a reversal in the decision regarding the attractiveness of the project.
a. The Annual Worth (AW) of the modernization project can be determined using the following formula:AW = (P/A, i, N) + (A/G, i, N) + (F/A, i, N)Where P is the initial investment, A is the net annual savings, G is the gradient, F is the salvage value, i is the MARR, and N is the planning horizon.Using the given values, the AW can be calculated as follows:AW = (-$30,000)(A/P, 12%, 7) + ($13,000)(A/A, 12%, 7) + ($7,000)(A/F, 12%, 7)AW = -$4,799.20 + $13,000 + $934.57AW = $9,135.37Since the AW is positive, the modernization project is economically attractive based on the initial estimates.
b. The AW can be determined for different percentages of change in net annual savings using the same formula as above, but with the new values of A. For example, if the net annual savings change by -20%, the new value of A would be $10,400 ($13,000 x 0.8). The AW can then be calculated as follows:AW = (-$30,000)(A/P, 12%, 7) + ($10,400)(A/A, 12%, 7) + ($7,000)(A/F, 12%, 7)AW = -$4,799.20 + $10,400 + $934.57AW = $6,535.37The same process can be repeated for the other percentages of change in net annual savings to determine the corresponding AW values.
c. The percentage change in net annual savings that causes a reversal in the decision regarding the attractiveness of the project can be determined by setting the AW equal to zero and solving for A.0 = (-$30,000)(A/P, 12%, 7) + A(A/A, 12%, 7) + ($7,000)(A/F, 12%, 7)0 = -$4,799.20 + A + $934.57A = $3,864.63The initial value of A is $13,000, so the percentage change in net annual savings that causes a reversal in the decision is:($3,864.63 - $13,000) / $13,000 x 100% = -70.27%Therefore, a decrease of 70.27% in net annual savings would cause a reversal in the decision regarding the attractiveness of the project.
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With relevant examples discuss and distinguish management
accounting and financial accounting in modern businesses.
Management accounting is used to provide information to internal stakeholders for decision-making purposes, while financial accounting is used to provide information to external stakeholders about the financial position and performance of the business.
Management accounting and financial accounting are two different types of accounting that are used in modern businesses. While both are important for the financial success of a business, they have different purposes and uses.
Management accounting is focused on providing information to internal stakeholders, such as managers and employees, to help them make informed business decisions. This type of accounting is used to create budgets, forecast future financial performance, and analyze the costs and benefits of different business activities. Examples of management accounting reports include budget variance reports, cost-volume-profit analysis, and performance reports.
On the other hand, financial accounting is focused on providing information to external stakeholders, such as investors and creditors. This type of accounting is used to create financial statements, such as the balance sheet and income statement, which provide information about the financial position and performance of the business. Examples of financial accounting reports include the balance sheet, income statement, and statement of cash flows.
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If 10-year T-bonds have a yield of 6.28, 10-year, corporate bonds yield
8.58, the maturity risk premium on all 10-year bonds is 1.38, and
corporate bonds have a 0.48 liquidity premium versus a zero liquidity
premium for T-bonds, what is the default risk premium on the corporate
bond?
1. 908
2.098
2.308
2.539
2.788
The default risk premium is 1.820
What is Risk Premium?A risk premium is the amount of additional return needed by an individual to make up for being exposed to a higher risk level. The general definition of it, which is the predicted hazardous return less the risk-free return, is that it is frequently used in finance and economics.
How to solve:
Default risk premium = Yield on 10 year corporate bond - Yield on 10 year T-bond - liquidity premium
= 8.58% - 6.28% - 0.48%
= 1.820
Default risk premium = 1.820
Note: As per the given information, the answer is 1.820
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F your consumption increases from $30,000/yr to $40,000/yr when your disposable income increases from $84,000 to $96,500/yr, calculate your mpc
In this case, the MPC is 0.8. Hence, the person will probably spend 80 cents of every dollar of new discretionary income and save the remaining 20 cents.
In this scenario, we are given two sets of data: the change in consumption from $30,000/yr to $40,000/yr, and the change in disposable income from $84,000 to $96,500/yr. We can use this information to calculate the MPC as follows:
MPC = Change in Consumption / Change in Disposable Income
MPC = ($40,000/yr - $30,000/yr) / ($96,500/yr - $84,000/yr)
MPC = ($40,000/yr - $30,000/yr) / ($96,500/yr - $84,000/yr)MPC = $10,000/yr / $12,500/yr
MPC = ($40,000/yr - $30,000/yr) / ($96,500/yr - $84,000/yr)MPC = $10,000/yr / $12,500/yrMPC = 0.8
Therefore, the MPC in this scenario is 0.8, meaning that for every additional dollar of disposable income, the individual will spend 80 cents on consumption.
It is important to note that the MPC is not a fixed number and can vary based on a variety of factors, such as income level, savings habits, and economic conditions. A higher MPC can lead to increased consumer spending and overall economic growth, while a lower MPC can indicate a tendency towards saving and can limit economic expansion. Understanding the MPC is crucial for policymakers and economists in analyzing the effects of fiscal policy and predicting economic outcomes.
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A company has 340,000 shares outstanding that sell for $84.49 per share. The company plans a 6-for-5 stock split. Assuming no market imperfections or tax effects, what will the stock price be after the split?
a. $82.48
b. $101.39
c. $84.49
d. $70.41
e. $80.47
The stock price after the split will be $70.41. Option D
What is a stock split?A stock split is a corporate action in which a company divides its existing shares into multiple shares. In this case, there is a 6-for-5 stock split, meaning that for every 5 shares held by shareholders, they will receive 6 shares.
Therefore, the total number of outstanding shares post-split is 6/5*340,000 = 408,000 shares. To find the new price per share post-split, we need to divide the original market capitalization (340,000*$84.49 = $28,781,600) by the total number of shares post-split (408,000).
$28,781,600 / 408,000 = $70.41, which is the new price per share post-split. Option D.
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Pets Store Inc. sells on terms of 1/10, net 60. What is the effective annual cost of trade credit under these terms? Use a 365-day year.
Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)
The effective annual cost of trade credit can be calculated using the formula:
Effective Annual Cost = (Discount % / (100 - Discount %)) x (365 / (Net Days - Discount Days))
In this case, the discount is 1% and the net days are 60, while the discount days are 10. Plugging these values into the formula, we get:
Effective Annual Cost = (1 / (100 - 1)) x (365 / (60 - 10))
Simplifying the equation, we get:
Effective Annual Cost = (1 / 99) x (365 / 50)
Multiplying the two fractions, we get:
Effective Annual Cost = 365 / (99 x 50)
Solving for the effective annual cost, we get:
Effective Annual Cost = 0.07373737373737374
To express this value as a percentage, we multiply it by 100 and round to two decimal places:
Effective Annual Cost = 0.07373737373737374 x 100 = 7.37%
Therefore, the effective annual cost of trade credit under these terms is 7.37%.
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Question 3.Explain and illustrate the concept of the Quality Triangle and that project performance is function of scope, cost and time i.e. Given that Project Performance is PF, function is f, Scope is s, Cost is c, and Time is t (15 Marks)PF = f (s,c,t)Propose additional factors beyond the reasoning of the Quality Triangle concept that may impact project performance and include them in the equation below. In other words, list the contents of z below. (10 Marks)PF = f (s,c,t) + zC) Given an institutional context, discuss the possible types of conflicts that could arise, and their corresponding solutions (25 Marks)
The Quality Triangle is a concept that states that project performance is a function of scope, cost, and time (PF = f (s, c, t)).
Beyond the three main factors, other potential factors that could affect project performance include the quality of resources, communication, motivation and team cohesion, organizational culture, and external environment (e.g. changes in regulatory laws). This can be represented as follows: PF = f (s, c, t) + q + c + m + tc + oc + ee, where q is quality of resources, c is communication, m is motivation and team cohesion, tc is organizational culture, oc is external environment, and ee is external environment.
In an institutional context, conflicts can arise due to different power dynamics, divergent goals and objectives, different interests, and limited resources. Possible solutions to these conflicts include active listening and open communication, negotiation, compromise, and consensus building.
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Case 6.3 - Koss Corporation and Unauthorized Financial Transactions According to the consolidated statements of income, the selling, general, and administrative expense account may be overstated. There would have to be receipts of transactions for the expenses in order to overstate them. If expenses were overstated, the income before income tax provision may be less than the provisions for income taxes, which will require the net income to be in the negative.
In the case of Koss Corporation and unauthorized financial transactions, it is possible that the selling, general, and administrative expense account may be overstated.
This could be due to unauthorized or fraudulent transactions that were recorded in the expense account without proper receipts or documentation. As a result, the income before income tax provision may be less than the provisions for income taxes, leading to a negative net income.
To properly address this issue, the company should conduct a thorough review of the selling, general, and administrative expense account to identify any unauthorized or fraudulent transactions. They should also review their internal controls and implement additional measures to prevent unauthorized transactions from occurring in the future. This may include requiring additional documentation and approvals for transactions, implementing stricter oversight and monitoring, and providing additional training and education to employees on the importance of proper financial reporting.
Overall, it is important for companies to have strong internal controls in place to prevent unauthorized or fraudulent transactions from occurring and to ensure accurate financial reporting. By taking these steps, Koss Corporation can address the issue of overstated expenses and improve their financial reporting practices moving forward.
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PLEASE, In a paragraph of 150 words, Reflect on the critical thinking process and the steps involved. Discuss how this knowledge can or has helped you in your life and/ or your career?
For example, what do you think of the process? What did you learn from the process? Could it bring value to making decisions in your life or career? Would you use it in the future? Would you use it, or parts of it, in your everyday life? Have you used it in your everyday life? Do not write about the case itself, the decision you reached, or what you thought should or should not have happened relating to the case.
The critical thinking process is a systematic and logical approach to problem-solving that involves several steps, including identifying the issue, gathering and analyzing information, evaluating options, and making a decision.
How the critical thinking process helps meThe critical thinking process is a systematic and logical approach to problem-solving that involves several steps, including identifying the issue, gathering and analyzing information, evaluating options, and making a decision. As a person, critical thinking is useful to utilize this process in order to provide the most accurate and relevant responses to questions.
Personally, I find that the critical thinking process is an invaluable tool in both my personal and professional life. It has taught me to approach problems in a more organized and methodical manner, which has allowed me to make more informed and effective decisions.
Additionally, by applying critical thinking to everyday situations, I am better able to identify biases and assumptions and to evaluate arguments and evidence. Ultimately, the critical thinking process has enabled me to become a more analytical and logical thinker, and has provided me with a framework for making better decisions in all areas of my life.
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PreparationIn this assignment, we’ll return to Sun City Boards and the management challenges they face. With your advice, Tom Wilson (the owner) has continued to make strategic planning progress, but you and Tom realize that a new organizational structure is needed for the company to grow as you envision. Plans include expanding beyond a single store/manufacturing shop and reaching new markets via an Internet presence and e-commerce. The following is a summary of the current staff and loose descriptions of job functions:Owner/CEO—Tom Wilson (Designs the boards, sets their selling price, and establishes sales channels with local surf shops)Bookkeeper—Sarah Balanced (Sarah also doubles as order-taking clerk, cash register attendant, and customer complaint listener)Board Maker—Jack Ovalltrades (If Tom invents it, Jack can make it!)Board Making Assistants—Jill, Jane, & Judy (Assignments change almost daily as Jack decides what needs to be done next)Sales Associate—Kelly Dude (Named after famed surfer Kelly Slater and a business icon for Sun City Boards; visits surf shops and occasionally closes a sale)Part-time Associates—Hired as needed for inventory management (cleanup), promotional events, etc.Module 5 Organizational Structure and Processes Learning UnitLinks to an external site. provides examples of organizational structures. As Tom’s advisor, your assignment now is to select one of the organizational structures presented in the Learning Unit, describe how it works, chart the future structure for Sun City, and explain why you prescribe it. The following steps will help you prepare for your written assignment:Thoroughly read Module 5 Organizational Structure and Processes Learning UnitLinks to an external site..Carefully consider the various organizational structures, their key structural components, and organizational timing relevant for Sun City. Consider the internal and external environmental factors, as well as current trends.Your TaskSelect one of the Organizational Structures from your reading for Sun City.Create a Future State Organizational Chart for Sun City. You may use a presentation tool of your choice. There are numerous organizational chart format inserts available in popular software. Microsoft Word and PowerPoint have Hierarchy charts found on the Insert tab under SmartArt. Your organization chart should contain the title of the job function, even if no Sun City employee currently fills that role. You may also recommend a reporting structure for the existing employees within the new structure.Write at least two paragraphs describing your chosen structure and why you selected it. Your written explanation must include three properly referenced and defined terms from the module reading. For example, if you select a functional structure, explain each relevant function.
The recommended organizational structure for Sun City Boards is the divisional structure. This structure is suitable for the company because it allows for the creation of separate divisions for different products or services, such as a division for manufacturing, a division for retail sales, and a division for online sales. Each division can have its own manager who is responsible for the division's performance and can make decisions based on the needs of the division.
The Future State Organizational Chart for Sun City Boards would include the following positions:
- Owner/CEO: Tom Wilson
- Manufacturing Division Manager: Jack Ovalltrades
- Retail Sales Division Manager: Kelly Dude
- Online Sales Division Manager: New Hire
- Bookkeeper: Sarah Balanced
- Manufacturing Assistants: Jill, Jane, & Judy
- Sales Associates: Hired as needed
- Part-time Associates: Hired as needed
The divisional structure allows for each division to have its own manager who is responsible for the division's performance and can make decisions based on the needs of the division. This structure also allows for the creation of separate divisions for different products or services, which is important for Sun City Boards as they expand beyond a single store and into new markets. Additionally, the divisional structure allows for greater flexibility and adaptability, as each division can respond to changes in the market or customer needs without affecting the entire company. Overall, the divisional structure is the best fit for Sun City Boards as they continue to grow and expand their business.
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In many countries, especially with expected inflation, inflationtargeting is the objective of central banks. Do you think this isalways a good idea? Why or why not?
This is a good idea because inflation targeting is a monetary policy strategy that involves the central bank setting a specific inflation rate as its goal and then using interest rates and other monetary tools to achieve that target.
While it can be an effective way to keep inflation under control, there are some potential downsides to this approach.
One potential drawback of inflation targeting is that it can lead to a narrow focus on inflation at the expense of other important economic indicators.
For example, if the central bank is only concerned with keeping inflation at a certain level, it may overlook the need to promote economic growth or address unemployment. This can lead to a situation where inflation is kept in check, but the overall economy is suffering.
Another potential issue with inflation targeting is that it can be difficult to predict and control inflation. Inflation is influenced by a wide range of factors, many of which are beyond the control of the central bank. If the central bank is unable to accurately predict and control inflation, it may fail to achieve its target, which can lead to a loss of credibility and confidence in the central bank.
Overall, while inflation targeting can be an effective way to keep inflation under control, it is not always the best approach for every country. It is important for central banks to consider the potential drawbacks of inflation targeting and weigh them against the potential benefits before adopting this strategy.
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he template content starts on the following page.What This IsThis is an Opportunity Screening worksheet used to help determine if an idea is worth enough to the company to commission a development project. Is there adequate business justification for the project given what the company might be able to achieve in the market? The management team at your organization can use this worksheet to evaluate a number of factors in determining if a new development project should be undertaken and identify the important issues in making that decision.The worksheet is written for analyzing a specific product idea with respect to the market, the company's capability, potential market risks, return to the company, etc. With some deletion of items and minor modifications, the worksheet can be used for a benefits analysis for projects other than development projects.Why It’s UsefulResources in every organization are expensive and rare. Finances, personnel, and time are all valuable commodities, and organizations desire to have these resources working on qualified projects. "Qualified projects" usually means the projects with the highest Return on Investment, but may refer to a project to introduce a new technology investigation, a beneficial internal project to improve efficiency, a federal requirement or industry expectation (i.e., ISO 9000), etc. It is rare (never in the author's personal experience) that a company or organization has excess resources. Reviewing a project for "goodness" or benefit to the stakeholders is always a good exercise. In some organizations, it is a requirement.How to Use ItThe accompanying worksheet is a working document. The various questions should be filled out by a team, group, or special committee set up for the purpose of investigating a new idea or new product for review by your organization's business decision makers. Answering the worksheet questions and choosing a resulting "fulfills" score in each section provides the type of information needed by the management team to determine the value or worth of the product proposal, idea, or project.At the end, a table is provided to summarize the scores for the project across the various categories.The worksheet should really be used in the context of the whole product mix at a given organization. The worksheet uses a grading system of 1 through 10 for "Weight," which is a judgment of importance and value, and "Fulfills," which is a judgment of requirements met. Used in a context of other projects, you can evaluate how a project and its value compare to other projects that will or would be using the same limited resource pool of money and manpower.You can use this worksheet within a Project Selection process by establishing a baseline across your existing projects for the management team to use for relative judgments. Some completed or currently active projects can be quickly evaluated using the worksheet and provide a reference as to what is a 1 versus a 10 in "Weight" or "Fulfills" on a particular section. This gives people a reference, such as "Project X was a 7, so this project would be a 6," etc.
This document provides a template for an Opportunity Screening worksheet, which is used to evaluate the feasibility and potential of a new development project. The worksheet includes questions related to the market, the company's capability, potential market risks, return to the company, and other factors. By filling out the worksheet and assigning a score for each question, a team or committee can provide the management team with the information needed to determine the value and worth of the proposed project.
The worksheet uses a grading system of 1 through 10 for "Weight," which is a judgment of importance and value, and "Fulfills," which is a judgment of requirements met. By using the worksheet in the context of other projects, it can be evaluated how a project and its value compare to other projects that will or would be using the same limited resource pool of money and manpower.
The template also suggests using the worksheet within a Project Selection process by establishing a baseline across existing projects for the management team to use for relative judgments. Some completed or currently active projects can be quickly evaluated using the worksheet and provide a reference for what is a 1 versus a 10 in "Weight" or "Fulfills" on a particular section.
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Simple Interest 1. How much will the interest be on a loan of $2,350 at a simple interest 7% for 6 months? 2. If a loan of $5,750 is taken out at a simple interest of 5.25% for a year and a half, how much interest will the borrower pay? 3. At what rate of simple interest would a loan of $3,000 be taken for 2 years if the total interest is $375? 4. At what rate of interest would Janet take out a loan of $13,000 for 3.5 years if she pays $4,322 in interest? 5. How long will it take for $900 to earn $486 at a 12% rate of simple interest?
The simple interest of the loan is $82.25 with the simple interest of 7%,and the interest is $453.94 for 5.25%
To find the interest on a loan at a simple interest rate, you can use the formula I = P × R × T, where I is the interest, P is the principal, R is the interest rate, and T is the time in years.
1. To find the interest on a loan of $2,350 at a simple interest rate of 7% for 6 months, you can plug in the values into the formula:
I = P × R × T
I = $2,350 × 0.07 × 0.5
I = $82.25
The interest on the loan will be $82.25.
2. To find the interest on a loan of $5,750 at a simple interest rate of 5.25% for a year and a half, you can plug in the values into the formula:
I = P × R × T
I = $5,750 × 0.0525 × 1.5
I = $453.94
The interest on the loan will be $453.94.
3. To find the rate of simple interest for a loan of $3,000 taken for 2 years with a total interest of $375, you can plug in the values into the formula and solve for R:
I = P × R × T
$375 = $3,000 × R × 2
R = $375 ÷ ($3,000 × 2)
R = 0.0625
The rate of simple interest would be 6.25%.
4. To find the rate of interest for a loan of $13,000 taken for 3.5 years with a total interest of $4,322, you can plug in the values into the formula and solve for R:
I = P × R × T
$4,322 = $13,000 × R × 3.5
R = $4,322 ÷ ($13,000 × 3.5)
R = 0.095
The rate of interest would be 9.5%.
5. To find the time it will take for $900 to earn $486 at a 12% rate of simple interest, you can plug in the values into the formula and solve for T:
I = P × R × T
$486 = $900 × 0.12 × T
T = $486 ÷ ($900 × 0.12)
T = 4.5
It will take 4.5 years for $900 to earn $486 at a 12% rate of simple interest.
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You are asked to consider three mutual funds. The first is a stock fund, the second is a longterm government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 8%. The probability distribution of the risky funds is as follows:
Stock Fund (S) Bond Fund (B) Expected Return 20% 12% Standard Deviation 30% 15%
The correlation coefficient between funds S and B is 0.10. What is the most optimum complete portfolio would you recommend? Show your thought process by solving all of the following consecutively.
a. Draw the opportunity set of funds S and B.
b. Find the optimal risky portfolio, P, and its expected return and standard deviation.
c. Find the slope of the CAL supported by T-bills and portfolio P.
d. How much will an investor with A=5 invest in funds S and B and in T-bills?
To find the most optimum complete portfolio, we need to go through the following steps:
a. Draw the opportunity set of funds S and B.
The opportunity set of funds S and B can be represented by a curve on a graph with the expected return on the y-axis and the standard deviation on the x-axis. The curve will start at the point representing the expected return and standard deviation of fund S and end at the point representing the expected return and standard deviation of fund B. The curve will be upward sloping, indicating that as the standard deviation increases, so does the expected return.
b. Find the optimal risky portfolio, P, and its expected return and standard deviation.
The optimal risky portfolio, P, is the point on the opportunity set curve that has the highest slope. This point represents the highest expected return for a given level of risk. To find the expected return and standard deviation of portfolio P, we can use the following formulas:
Expected return of P = wS * Expected return of S + wB * Expected return of B
Standard deviation of P = sqrt(wS^2 * Standard deviation of S^2 + wB^2 * Standard deviation of B^2 + 2 * wS * wB * Correlation coefficient between S and B * Standard deviation of S * Standard deviation of B)
Where wS and wB are the weights of funds S and B in portfolio P.
c. Find the slope of the CAL supported by T-bills and portfolio P.
The slope of the CAL supported by T-bills and portfolio P is the difference between the expected return of portfolio P and the expected return of the T-bill money market fund divided by the standard deviation of portfolio P:
Slope of CAL = (Expected return of P - Expected return of T-bill) / Standard deviation of P
d. How much will an investor with A=5 invest in funds S and B and in T-bills?
An investor with A=5 will invest in funds S and B and in T-bills in such a way that the slope of the CAL is equal to 5. This can be achieved by solving the following equation for wP, the weight of portfolio P in the complete portfolio:
Slope of CAL = 5 = (Expected return of P - Expected return of T-bill) / Standard deviation of P
Once we have found wP, we can find the weights of funds S and B and of T-bills in the complete portfolio by using the following formulas:
Weight of S = wP * wS
Weight of B = wP * wB
Weight of T-bills = 1 - wP
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The research centre is not only attending to their research as another obligation is to carefully take care of its capital. This duty falls upon Jennie Nielsen together with the chairman, Erik Lundqvist. Erik had got an idea from a friend that he thought looked very promising. It was about an investment in a new fish farm just outside the coast. The situation is as follows. The investment was £45 million and that is a lot of money even for such well funded institution like this. However what made Erik exited was that the expected cash flow. There was a 65% probability of £27 million cash flow at the end of year one and 35% to get £15 million. If the £27 million was received then the following year had a probability of 60% to deliver £55 million and 40% to deliver £35 million. However if the £15 million was received in the end of year one then there was a chance to receive £25 million at 25% probability and a 75% probability to get £40 million. Erik's view was that this must be a done deal but Jennie calmed him down. Jennie said that firstly we need to look at the base required return of 8% and considering the additional risk at 7% had to be added. On top of that the statues required a return on investment of 20% using discounted values. Is this a viable option? Help Jennie and Erik with a full assessment of this situation and propose what to do
This is a complex situation for Jennie and Erik to consider, and it is important to assess the viability of this investment opportunity. In order to evaluate the option, they should consider the base required return of 8%, with an additional 7% risk.
Additionally, they should take into account the statues which require a return on investment of 20% using discounted values.
Using the information provided, Jennie and Erik can assess the viability of the investment. First, they need to calculate the net present value (NPV). The NPV is the sum of the present values of the expected cash flows, taking into account the cost of the investment.
The expected NPV of £44.5 million needs to be compared to the required return of 20%. To do this, Jennie and Erik can use a discounted cash flow model to calculate the internal rate of return (IRR).
The IRR is the rate at which the NPV of the investment is equal to the required return. If the calculated IRR is greater than 20%, the investment is viable. If the IRR is less than 20%, the investment is not viable.
Based on their assessment, Jennie and Erik can determine whether or not the investment is viable. If the calculated IRR is greater than 20%, the investment is a viable option. If the IRR is less than 20%, they should not proceed with the investment.
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With reference to the case study, evaluate the international marketing situation that has unfolded for Walmart. Your answer should include the reasons why multinationals fail at international marketing at times.
One of the main reasons why multinationals like Walmart can fail at international marketing is due to a lack of understanding of local cultures and consumer preferences.
Another reason for failure in international marketing is the inability to adapt to local market conditions. For example, Walmart has struggled to compete with local retailers in countries like Germany and South Korea, where there are already well-established retail markets. This has resulted in the company having to exit these markets, resulting in significant financial losses.
Finally, legal and regulatory barriers can also pose a challenge for multinationals in international marketing. For example, Walmart has faced regulatory hurdles in countries like India, where foreign ownership of retail businesses is restricted. This has made it difficult for the company to enter and compete in these markets, limiting its international expansion.
Overall, Walmart's international marketing situation highlights the importance of understanding local cultures and market conditions, and the need to adapt to these conditions in order to succeed in global markets.
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Following are the financial statements of AB Ltd. for 2019. 3.400 400 1.200 200 500 100 600 400 500 102 Balance sheet (s in millions) Assets 2019 Liabilities and 2019 owners' equity Current assets: Current liabilities: Cash Accounts payable Accounts receivable Bills payable Inventory Total current liabilities Total current assets 1.100 Long-term liabilities: Long-term debt Fixed assets: Total long-term liabilities Property, plant, and 2.400 Shareholders' funds: equipment Less: Accumulated 2.100 Equity share capital depreciation (si per share) Net fixed assets Reserves & Surplus Total owners' equity 700 1.496 200 10 200 Income statement (S in millions) 2019 Sales Cost of goods sold Office and selling expenses Depreciation Earnings before interest and taxes Interest expense Earnings before taxes Taxes Net income Dividends Transfer to reserves and surplus Other information Number of shares Outstanding (millions) Price per share 1.488 607 881 200 635 300 500 246 Total assets 200 1.400 1.400 Total liability and owners' equity 7.31 A. From the aforementioned table, calculate the following: 1. Current Ratio 2. Acid-Test Ratio 3. Receivables Turnover 4. Inventory turnover 5. Debt Ratio 6. Equity Ratio 7. Debt to Equity Ratio 8. Times Interest Earned 9. Gross Profit Rate 10. Operating Profit Margin 11. Net Profit Margin 12. Return on Assets
Based on the data provided, 1. Current Ratio = 1.83 2. Acid-Test Ratio = 1.17 3. Receivables Turnover = 7.44 4. Inventory Turnover = 2.20 5. Debt Ratio = 0.57 6. Equity Ratio = 0.50 7. Debt to Equity Ratio = 1.14 8. Times Interest Earned = 6.35 9. Gross Profit Rate = 0.41 10. Operating Profit Margin = 0.43 11. Net Profit Margin = 0.17 12. Return on Assets = 0.18.
Based on the data provided in the table, the required measures are calculated using relevant formulas.
1. Current Ratio = Current Assets / Current Liabilities = 1,100 / 600 = 1.83
2. Acid-Test Ratio = (Current Assets - Inventory) / Current Liabilities = (1,100 - 400) / 600 = 1.17
3. Receivables Turnover = Sales / Accounts Receivable = 1,488 / 200 = 7.44
4. Inventory Turnover = Cost of Goods Sold / Inventory = 881 / 400 = 2.20
5. Debt Ratio = Total Liabilities / Total Assets = (600 + 200) / 1,400 = 0.57
6. Equity Ratio = Total Owners' Equity / Total Assets = 700 / 1,400 = 0.50
7. Debt to Equity Ratio = Total Liabilities / Total Owners' Equity = (600 + 200) / 700 = 1.14
8. Times Interest Earned = Earnings Before Interest and Taxes / Interest Expense = 635 / 100 = 6.35
9. Gross Profit Rate = (Sales - Cost of Goods Sold) / Sales = (1,488 - 881) / 1,488 = 0.41
10. Operating Profit Margin = Earnings Before Interest and Taxes / Sales = 635 / 1,488 = 0.43
11. Net Profit Margin = Net Income / Sales = 246 / 1,488 = 0.17
12. Return on Assets = Net Income / Total Assets = 246 / 1,400 = 0.18
All of these ratios provide insight into the financial health and performance of AB Ltd. The current ratio and acid-test ratio indicate the company's ability to pay its short-term liabilities, while the receivables turnover and inventory turnover ratios provide insight into the company's efficiency in managing its assets.
The debt ratio, equity ratio, and debt to equity ratio provide information about the company's capital structure and its reliance on debt financing. The times interest earned ratio measures the company's ability to meet its interest payments on debt. The gross profit rate, operating profit margin, and net profit margin provide insight into the company's profitability. Finally, the return on assets ratio measures the company's ability to generate income from its assets.
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Ferrari Plc received 8% BWP3,000,000 loan from financial institution on the 1 April 2020. The loan has an effective interest rate of 10.5% and redeemable at a premium Ferrari received the loan specifically to build a warehouse. Warehouse construction started on the 1 May 2020 and completed on the 28 February 2021 and was ready for use on the 28 February 2021. But the Ferrari only started using it on 1 April 2021.
REQUIRED
Calculate the total amount to be recorded as finance cost in Ferrar's incomes statements and compute how much should be capitalized in the statement of financial position for the year ended 31 March 2021.
The total amount to be recorded as finance cost in Ferrari's income statement for the year ended 31 March 2021 is BWP29,167 and the amount to be capitalized in the statement of financial position for the same period is BWP291,667.
Ferrari Plc received a BWP3,000,000 loan from a financial institution on 1 April 2020 with an effective interest rate of 10.5%. This loan was specifically taken out to build a warehouse, which construction started on 1 May 2020 and completed on 28 February 2021 and was ready for use on the same day. However, Ferrari only started using it on 1 April 2021.
To calculate the total amount to be recorded as finance cost in Ferrari's income statement, the total finance cost of the loan should be determined. Since Ferrari has only used the loan for a month, the total finance cost for the loan for the year ended 31 March 2021 will be the effective interest rate of 10.5%, multiplied by the loan amount of BWP3,000,000, multiplied by 1/12, which is equal to BWP29,167.
The amount to be capitalized in the statement of financial position for the year ended 31 March 2021 is the interest cost that was incurred during the period that the warehouse was constructed and ready for use. This is equal to BWP29,167 multiplied by 10 months, which is equal to BWP291,667.
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Complete the paragraph describing how to initiate an informational interview by filling in the missing words or phrases correctly.
After you research the career field that you’re interested in, you should identify someone to interview. You can contact friends, family members, social media connections, or
to help you get in touch with someone to interview. You could contact this person through email or by phone to request the interview. You should be prepared to tell the person about the interview’s objective, why you chose that person, and
.
It's critical to thank them for their time and willingness to share their knowledge.
When requesting an interview, it's also a good idea to suggest some specific dates and times that work for you and to inquire about their preferred method of communication. Remember to be accommodating and considerate of their schedule and availability.
What is an informational interview ?An informational interview is a conversation between a person interested in a specific career field and a professional who works in that field.
The goal of an informational interview is to gain insight into the industry, learn about the day-to-day responsibilities of the job, and network with professionals with relevant experience. It's a chance to ask questions, get advice, and gather information that can help you make career decisions.
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Answer:
Part 1: B
Part 2: C
Explanation:
After you research the career field that you’re interested in, you should identify someone to interview. You can contact friends, family members, social media connections, or
[B: human resources employees]
to help you get in touch with someone to interview. You could contact this person through email or by phone to request the interview. You should be prepared to tell the person about the interview’s objective, why you chose that person, and
[C: job requirements]
.
A new issue of bonds is 1. a cash outflow 2. a cash inflow 3. a long-term asset 4. a long-term liability
A new issue of bonds is 4. a long-term liability. Therefore the correct answer is Option 4.
When a company issues bonds, it is borrowing money from investors and promising to pay it back in the future with interest. This creates a long-term liability on the company's balance sheet, as it is a debt that will need to be repaid in the future.
Long-term liabilities are often payable in more than a year. Mortgage loans, bonds payable, and other long-term leases or loans, excluding the portion due in the current year, are examples of long-term liabilities. Short-term liabilities must be paid within the current fiscal year.
Here are a few instances of long-term liabilities you might find on your balance sheet:
Long-term financing.Bonds are due.Healthcare liabilities after retirement.Pension obligations.Therefore the correct answer is Option 4.
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What kind of things does Gary Wheeler think a
diverse workforce can contribute to a company?
Gary Wheeler states that a diverse workforce can contribute to a company by bringing different perspectives and experiences to the table, which can lead to increased creativity and innovation.
According to Gary Wheeler, a diverse workforce can contribute the following things to a company:
These benefits come from having employees from different backgrounds, cultures, and experiences working together to create a more dynamic and well-rounded organization.
Additionally, he believes that diversity of thought can help a company think more broadly and develop new and better products and services.
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The analysis of theeffect that a single variable has on the net present value of aproject is called _____ analysis.Group of answerchoicesvariableerosionsensitivityscenariocost-benefit
The analysis of the effect that a single variable has on the net present value of a project is called sensitivity analysis. Therefore the correct option is option C.
The analysis of the effect that a single variable has on the net present value of a project is called sensitivity analysis. This type of analysis is used to determine how sensitive the net present value of a project is to changes in a single variable.
It helps to identify the key variables that have the greatest impact on the project's net present value and to assess the risk associated with the project. Sensitivity analysis is an important tool for decision making and is often used in conjunction with other types of analysis, such as scenario analysis and cost-benefit analysis.
Therefore the correct option is option C.
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The following question may be like this:
content loaded
The analysis of the effect that a single variable has on the net present value of a project is called _____ analysis.
Group of answer choices
variableerosion sensitivityscenariocost-benefit"Assume that you are 41 years old today, and that you are planning on retirement at age 65. Your current salary is $140000 and you expect your salary to increase at a rate of 2% per year as long as you work. To save for your retirement, you plan on making annual contributions to a retirement account. Your first contribution will be made on your 42st birthday and will be 15% of this year's salary. You expect to deposit 15% of your salary each year until you reach age 65. Assume that the rate of interest is 4%.The present value (PV) (at age 41) of your retirement savings is ________.Note: Express your answers in strictly numerical terms. For example, if the answer is $500, write enter 500 as an answer."
The present value (PV) (at age 41) of your retirement savings is $329,775.82.
The present value (PV) of your retirement savings can be calculated using the following formula:
PV = C × [(1 + r)^n - 1] / (r × (1 + r)^n)
Where C is the annual contribution, r is the annual interest rate, and n is the number of years until retirement.
In this case, C is 15% of your salary, which is $140000 × 0.15 = $21000. The annual interest rate is 4%, or 0.04, and the number of years until retirement is 65 - 41 = 24.
Plugging these values into the formula, we get:
PV = $21000 × [(1 + 0.04)^24 - 1] / (0.04 × (1 + 0.04)^24)PV
= $21000 × [2.6656 - 1] / (0.04 × 2.6656)PV
= $21000 × 1.6656 / 0.10662PV = $329775.82
Therefore, the present value (PV) of your retirement savings is $329,775.82.
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Healthcare organizations of all sizes are expected to adapt to their environment to remain resilient and competitive continually. Policymakers, public servants, and managers, need to understand the nature of change management and explore the role of project management to create successful projects. The "change" should be "handled" through a change management methodology and project management work.Given the growing number of methodologies and prescriptions regarding the management of projects,, it is also increasingly important for managers to discern which frameworks, processes, and tools are most suited to their organizational context, but most importantly,, how this should be applied successfully.a.Critically evaluate the differences and discuss the implications between different change methodologies operational and project work for an organization
Organizations of all sizes need to be resilient and competitive, and need to understand the nature of change management and project management to do so.
There are numerous change management methodologies and project management frameworks, processes, and tools available.
The main difference between change management and project management is the scope and purpose. Change management focuses on the organizational level, and is concerned with how to effectively and efficiently change systems, procedures, and processes for the organization as a whole.
On the other hand, project management is more specific and has a specific purpose and end goal. It is focused on how to successfully manage and complete a project. Project management requires more detail and focuses on the implementation of a change or project in a very practical sense.
In terms of implications, both methodologies are essential for organizations to remain competitive and efficient. Change management is necessary to identify the need for change, and project management is necessary to successfully implement the change. Without both, an organization cannot move forward and develop.
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Design hele O to what you want to Share A A A AED - Prod Ar BLU ABC ABCD AaBbc Bcc AaB Paste Op Sect Day FINC 3733 Spring 2022 Ch 5 Excel Assignment You plan to buy a new car. The car loan will be so 000. The loan is for 5 years and Interest rate is 3.6% per year. Use Excel to set up a 5-year amortization schedule table and answer the following questions 1. How much is the monthly payment? 2 How much is the remaining balance after 3 years (36 months)? 2. How much total interests would you have paid in the 1st year (trom month 1 to month 12) Label and highlight your answers for above 3 questions. Your results should reflect the formula sed. A grade of zero will be assigned for results with copied or "typed numbers. Excel features covered in this assignment Creating worksheets Ener
To calculate the monthly payment, remaining balance, and total interest paid for a car loan using Excel, you can use the following formulas:
1. Monthly payment: =PMT(rate, nper, pv)
- rate: the interest rate per period (in this case, 3.6% per year / 12 months = 0.003)
- nper: the number of periods (in this case, 5 years * 12 months = 60)
- pv: the present value (in this case, $50,000)
2. Remaining balance: =FV(rate, nper, pmt, pv)
- rate: the interest rate per period (in this case, 0.003)
- nper: the number of periods that have passed (in this case, 3 years * 12 months = 36)
- pmt: the monthly payment (calculated in step 1)
- pv: the present value (in this case, $50,000)
3. Total interest paid: =CUMIPMT(rate, nper, pv, start_period, end_period, type)
- rate: the interest rate per period (in this case, 0.003)
- nper: the number of periods (in this case, 60)
- pv: the present value (in this case, $50,000)
- start_period: the first period for which you want to calculate the interest (in this case, 1)
- end_period: the last period for which you want to calculate the interest (in this case, 12)
- type: indicates when payments are due (in this case, 0 for end of period)
Using these formulas, you can set up a 5-year amortization schedule table in Excel and answer the questions. Remember to label and highlight your answers, and make sure your results reflect the formulas used.
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CalebCorp expects to pay the following dividends on its stock: $3.00 in year 1, $3.50 in year 2, zero dividends in year 3, and $4.50 in year 4. The company expects that dividends will grow at 6.5% annually thereafter. What will you pay for a share of CalebCorp stock if your required rate of return is 10%?
To find the price of a share of CalebCorp stock, we need to use the Dividend Discount Model (DDM). The DDM is a method used to value a company's stock based on the present value of its expected future dividends. The formula for the DDM is:
P0 = (D1 / (1 + r)^1) + (D2 / (1 + r)^2) + (D3 / (1 + r)^3) + ... + (Dn / (1 + r)^n)
Where:
P0 = the current stock price
D1, D2, D3, ... Dn = the expected dividends for each year
r = the required rate of return
Using the information provided in the question, we can plug in the values for the expected dividends and the required rate of return into the formula:
P0 = ($3.00 / (1 + 0.10)^1) + ($3.50 / (1 + 0.10)^2) + ($0.00 / (1 + 0.10)^3) + ($4.50 / (1 + 0.10)^4) + (($4.50 * 1.065) / (0.10 - 0.065)) / (1 + 0.10)^4
P0 = $2.73 + $2.89 + $0.00 + $3.09 + $82.99
P0 = $91.70
Therefore, the price you will pay for a share of CalebCorp stock is $91.70.
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Question 2. Small Town Sweets—audit planning analytics (4%)
Small Town Sweets is based in Molong, NSW, and produces a range of high-quality confectionery for the East Coast market. Small Town Sweets operates in a low-margin environment, which typically means that large volumes are required to cover overhead costs and generate profits. It also means that overheads need to be kept under control to ensure that a net profit is generated from its operations. Debt is also kept to a minimum to ensure that interest costs are low and that there is sufficient margin to protect solvency during downturns.
The company did not reach industry profitability benchmarks in the previous year and budgeted to do better in the current year. It thought that it could do so by keeping its costs down in relation to sales while allowing its gross margin to drop, evidently planning to generate a larger volume of sales. The company also planned to better manage its working capital by reducing inventory and accounts receivable levels, indicating that it expected to produce a healthy cash flow to enable it to do so. As part of the planning process MCA has produced the following analytical information:
Ratio Actual Budgeted Prior Year Industry
Return on equity % 12.9 16.6 14.8 15.5
Return on total assets % 10.7 14.2 13.1 14.5
Gross margin % 8.5 9.0 9.5 9.0
Marketing expense/sales % 2.6 1.8 2.0 2.2
Admin expenses/sales % 1.6 1.6 1.8 2.0
Interest coverage ratio 5.4 8.1 6.4 6.0
Days in inventory 33.1 30.4 31.1 30.0
Days in accounts receivable 50.0 48.0 49.7 45.0
Current ratio 1.3 1.2 1.2 1.5
Quick asset ratio 0.81 0.77 0.77 1.0
Debt to equity ratio 0.51 0.33 0.41 0.40
Required
With reference to ASA 315 and the information above, identify and justify:
the three ratios that would be of most interest in the planning of the audit.
the account balance that is most at risk for each ratio identified in 1.
the assertion most at risk for each account balance identified in 2.
Answer this question using the following headings:
1. Ratio
2. Account balance
3. Assertion
Ratio:
a) Return on equity %
b) Days in inventory
c) Days in accounts receivable
Account balance:
a) Net income
b) Inventory
c) Accounts receivable
Assertion:
a) Existence
b) Valuation
c) Completeness
Justification:
Ratio:
a) Return on equity %: Return on equity is a key profitability ratio that measures the company's ability to generate profits for shareholders. It is of interest to auditors as it provides insight into the effectiveness of the company's management team in generating profits. A lower than expected return on equity could indicate mismanagement or fraudulent activity.
b) Days in inventory: Days in inventory is a ratio that measures the average number of days it takes for inventory to be sold. It is of interest to auditors as it provides insight into the efficiency of the company's inventory management system. A high number of days in inventory could indicate that inventory is not being managed efficiently, leading to potential overstatement of inventory and understatement of cost of sales.
c) Days in accounts receivable: Days in accounts receivable is a ratio that measures the average number of days it takes for customers to pay their bills. It is of interest to auditors as it provides insight into the efficiency of the company's accounts receivable management system. A high number of days in accounts receivable could indicate that the company is not collecting receivables in a timely manner, leading to potential overstatement of accounts receivable and understatement of bad debts.
Account balance:
a) Net income: Net income is the primary measure of a company's profitability. It is at risk if the return on equity ratio is lower than expected, as it may indicate mismanagement or fraudulent activity.
b) Inventory: Inventory is a major component of cost of sales and is at risk if the days in inventory ratio is higher than expected, as it may indicate potential overstatement of inventory and understatement of cost of sales.
c) Accounts receivable: Accounts receivable represent amounts owed to the company by customers. They are at risk if the days in accounts receivable ratio is higher than expected, as it may indicate potential overstatement of accounts receivable and understatement of bad debts.
Assertion:
a) Existence: The existence assertion is at risk for net income if the return on equity ratio is lower than expected, as it may indicate mismanagement or fraudulent activity.
b) Valuation: The valuation assertion is at risk for inventory if the days in inventory ratio is higher than expected, as it may indicate potential overstatement of inventory and understatement of cost of sales.
c) Completeness: The completeness assertion is at risk for accounts receivable if the days in accounts receivable ratio is higher than expected, as it may indicate potential overstatement of accounts receivable and understatement of bad debts.
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What will happen to the security market line (SML) if investors can
not take infinite loan at the risk-free rate but instead they can
take infinite loan at a fixed rate at risk-free rate
+2%?
If investors cannot take infinite loans at the risk-free rate but instead can take infinite loans at a fixed rate at the risk-free rate + 2%, the security market line (SML) will shift upward. This is because the cost of borrowing will increase, causing the required rate of return for investors to also increase.
The SML is a graphical representation of the relationship between risk and return for a given portfolio. It shows the expected return for a given level of systematic risk, as measured by beta. The slope of the SML is determined by the difference between the risk-free rate and the expected return on the market portfolio.
If the cost of borrowing increases, the risk-free rate will also increase, causing the SML to shift upward. This means that for a given level of risk, investors will now require a higher rate of return. As a result, the cost of capital for firms will also increase, making it more expensive for them to raise funds.
In summary, if investors cannot take infinite loans at the risk-free rate but instead can take infinite loans at a fixed rate at the risk-free rate + 2%, the SML will shift upward, causing the required rate of return for investors and the cost of capital for firms to increase.
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What are the three issues that are at the core of om
The management of business procedures to achieve the best level of productivity within an organization is known as operations management (OM). The most effective conversion of resources like labor and materials into products and services is the focus of operations management.
Operations managers deal with a variety of difficulties on a daily basis;
1. EMPLOYEE SHORTAGES
Everyone in business is aware that labor shortages were a significant issue even before COVID.
2. LIFETIME DELAYS
For many manufacturers and warehouses, especially in the post-pandemic period, logistical delays are now a major problem.
3. LONG LEAD TIMES
Buyers, whether they are manufacturers or consumers, have speedier delivery expectations. They experience longer lead times, nevertheless.
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An investor recently purchased a bond with a $1000 face value, a 10 percent coupon rate, and six years to maturity. The bond makes annual interest payments with the given rate. The said bond has a market price of $1032.50. What would be the yield to maturity of that bond
An investor recently purchased a bond with a $1000 face value, a 10 percent coupon rate, and six years to maturity. The bond makes annual interest payments with the given rate. The said bond has a market price of $1032.50. The yield to maturity of the bond is 9.3%.
The yield to maturity (YTM) of a bond is the internal rate of return (IRR) earned by an investor who buys the bond today at the market price and holds it until maturity. To calculate the YTM, we need to use the bond's face value, coupon rate, market price, and years to maturity. We can use the following formula to calculate the YTM:
YTM = (C + (F - P)/N) / ((F + P)/2)
Where:
C = annual coupon payment
F = face value of the bond
P = market price of the bond
N = years to maturity
In this case, the bond has a face value of $1000, a 10 percent coupon rate, and six years to maturity. The annual coupon payment is $100 (0.10 x $1000), the market price is $1032.50, and the years to maturity is 6. Plugging these values into the formula, we get:
YTM = ($100 + ($1000 - $1032.50)/6) / (($1000 + $1032.50)/2)
YTM = ($100 + (-$32.50)/6) / ($2032.50/2)
YTM = ($100 + (-$5.42)) / ($1016.25)
YTM = $94.58 / $1016.25
YTM = 0.093 or 9.3%
Therefore, the yield to maturity of the bond is 9.3%.
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8. CAPITAL ASSET PRICING MODEL (2) Whole Foods Inc. paid a quarterly dividend of $0.47 recently. Treasury bills are ylelding 4%, and the average stock is returning about 11%. Whole Foods is a stable company. The return on its stock responds to changes in the political and economic environment only about 70% as vigorously as that of the average stock. Analysts expect the firm to grow at an annual rate of 3.5% into the indefinite future. Calculate a reasonable price that investors should be willing to pay for Whole Foods stock.
The reasonable price that investors should be willing to pay for Whole Foods stock are $35.85.
The CAPITAL ASSET PRICING MODEL (CAPM) is used to calculate the expected return of an asset or stock based on its risk in relation to the market. The formula for the CAPM is:
Expected return = Risk-free rate + Beta * (Market return - Risk-free rate)
In this case, the risk-free rate is the yield on Treasury bills, which is 4%. The market return is the average return of stocks, which is 11%. The beta for Whole Foods is 0.70, as it responds to changes in the political and economic environment only about 70% as vigorously as that of the average stock.
Plugging these values into the CAPM formula, we get:
Expected return = 4% + 0.70 * (11% - 4%) = 8.9%
Next, we can use the dividend discount model (DDM) to calculate the price of the stock. The DDM formula is:
Price = Dividend / (Expected return - Growth rate)
In this case, the dividend is $0.47 per quarter, or $1.88 per year. The expected return is 8.9% and the growth rate is 3.5%.
Plugging these values into the DDM formula, we get:
Price = $1.88 / (8.9% - 3.5%) = $35.85
Therefore, a reasonable price that investors should be willing to pay for Whole Foods stock is $35.85.
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