An additional $1,000 with your next regular $651 payment, it will reduce the amount of time left to pay off your loan by 3 months.
To find out how much the additional $1,000 payment will reduce the amount of time left to pay off your loan, you need to use the following formula:
P = L[(r(1 + r)^n)/((1 + r)^n - 1)]
Where P is the monthly payment, L is the loan amount, r is the interest rate, and n is the number of months left on the loan.
First, you need to find out what the loan amount is.
L = P[((1 + r)^n - 1)/(r(1 + r)^n)]
L = $651[((1 + 0.067)^36 - 1)/(0.067(1 + 0.067)^36)]
L = $18,965.32
Next, you need to subtract the additional $1,000 payment from the loan amount:
L = $18,965.32 - $1,000
L = $17,965.32
Now you can plug this new loan amount back into the formula and solve for n:
$651 = $17,965.32[(0.067(1 + 0.067)^n)/((1 + 0.067)^n - 1)]
Rearrange the formula to isolate n:
((1 + 0.067)^n - 1)/(0.067(1 + 0.067)^n) = $17,965.32/$651
((1 + 0.067)^n - 1)/(0.067(1 + 0.067)^n) = 27.59
n = 32.85
Round up to the nearest whole number:
n = 33
So if you pay an additional $1,000 with your next regular $651 payment, it will reduce the amount of time left to pay off your loan by 3 months (36 - 33 = 3).
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To illustrate how Convexity changes with maturity, we consider a bond with yield y = 5% for different maturities, including different values of coupons:
a) zero coupon bond b) par bonds
c) premium bonds with coupon rate c = 9%
a.) Zero coupon bonds have the highest convexity because they have no coupon payments and all of the cash flow is received at maturity.
b) Par bonds have a lower convexity than zero coupon bonds.
c) Premium bonds with a coupon rate of 9% have the lowest convexity.
The convexity of a bond measures how the duration of a bond changes with changes in the yield. A bond with a higher convexity will have a larger change in duration for a given change in yield. The convexity of a bond is determined by the maturity, coupon rate, and yield.
This means that the duration of a zero coupon bond is equal to the maturity, and the convexity is higher for longer maturities.
The coupon payments reduce the duration and convexity of the bond.
Premium bonds with a coupon rate of 9% have the lowest convexity because the higher coupon payments reduce the duration and convexity of the bond even further. The higher the coupon rate, the lower the convexity of the bond.
In conclusion, the convexity of a bond is determined by the maturity, coupon rate, and yield. Zero coupon bonds have the highest convexity, followed by par bonds, and then premium bonds with a higher coupon rate.
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What is the modified duration of a semiannual-pay 9.5 percent coupon bond with 10 years to maturity and a yield to maturity of 10.5 percent? Answer to two decimals, carry intermediate calcs. to four decimals.Assume 1,000 par value and semi annual compounding
The modified duration of the semiannual-pay 9.5 percent coupon bond with 10 years to maturity and a yield to maturity of 10.5 percent is 7.96.
The modified duration of a bond is a measure of the bond's sensitivity to changes in interest rates. It is calculated as the Macaulay duration divided by (1 + yield/number of coupon payments per year).
Step 1: Calculate the Macaulay duration of the bond using the following formula:
Macaulay duration = (sum of (t x PV(Ct)) + (T x PV(FV))) / PV(Bond)
where:
t = time period
PV(Ct) = present value of the coupon payment at time t
T = maturity
PV(FV) = present value of the face value
PV(Bond) = present value of the bond
Step 2: Plug in the given values into the formula:
Macaulay duration = (sum of (t x PV(Ct)) + (10 x PV(1000))) / PV(Bond)
= (sum of (t x 47.5/(1.0525^t)) + (10 x 1000/(1.0525^10))) / (sum of (47.5/(1.0525^t)) + (1000/(1.0525^10)))
= 8.3747
Step 3: Calculate the modified duration using the formula:
Modified duration = Macaulay duration / (1 + yield/number of coupon payments per year)
= 8.3747 / (1 + 0.105/2)
= 8.3747 / 1.0525
= 7.9576
Step 4: Round the answer to two decimals:
Modified duration = 7.96
Therefore, the modified duration of the semiannual-pay 9.5 percent coupon bond with 10 years to maturity and a yield to maturity of 10.5 percent is 7.96.
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Other data:
1. Supplies on hand revealed at 31, December $300.
2. Prepaid insurance was paid on 1 July 2021 for 12 months.
3. Interest expense due on loan payable for last 4 months. Quarterly interest rate is 3%. 4. Salary
expense per day $500, December 31 is Wednesday. Employees are paid on Monday for the
preceding 5 days work week.
5. One third of the unearned service revenue has been earned.
Requirements:
a) Journalize the adjusting entries for the year ended 31, December 2021.
|b) Complete the worksheet for the year ended 31, December 2021.
The adjusting entries for the year ended 31 December 2021 are: Supplies Expense $200, Supplies $200; Insurance Expense $250, Prepaid Insurance $250; Interest Expense $1,500, Interest Payable $1,500; Salary Expense $1,500, Salary Payable $2,000; Unearned Service Revenue $1,500, Service Revenue $1,500.
The first entry adjusts the supplies on hand to $100 by debiting Supplies Expense and crediting Supplies. The second entry records the insurance expense for 6 months by debiting Insurance Expense and crediting Prepaid Insurance. The third entry accrues the interest expense for the last 4 months on the loan payable by debiting Interest Expense and crediting Interest Payable. The fourth entry accrues the salary expense for the last week of December by debiting Salary Expense and crediting Salary Payable. The fifth entry recognizes the revenue earned from one-third of the unearned service revenue by debiting Unearned Service Revenue and crediting Service Revenue. These entries ensure that the financial statements reflect the correct amounts for expenses, revenues, and liabilities at the end of the accounting period.
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Comprehensive Evaluation 1 - Written Instruction(s): Answer the following concisely. Be sure to cite ideas, which you derive from other people's work. Minimum of 10 sentences for each answer is required. Please do not share answers with your classmates. APA 7" edition should be observed for both in-text citation and references. Copy pasting as a practice is unacceptable and punishable under the provisions of the UNP Student Handbook. Please do not alter this format.
2. What do we mean by finance?
3. Compare and contrast three areas of finance. Additionally, illustrate it using a Venn Diagram.
2. Finance is the study of managing money and other assets in order to achieve a desired outcome.
3. The three areas of finance are Corporate finance, Personal finance and Public finance.
It involves the creation, growth, and disposal of wealth. Areas of finance include corporate finance, personal finance, and public finance.
Corporate finance focuses on the sources of funding and the capital structure of corporations, the actions that managers take to increase the value of the firm to the shareholders, and the tools and analysis used to allocate financial resources.
Personal finance focuses on how individuals and families earn, save, and spend money. It includes topics such as budgeting, taxes, retirement planning, investments, and insurance.
Public finance is the study of the roles of governments and other public entities in the economy, and how they raise and allocate funds to achieve their goals. It includes government spending, taxation, and public debt management.
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Explain your interest in leadership. Feel free to share any experience you may have had leading whether this is at work, a sports team, a volunteer team, or a personal experience. What leadership quote inspires you? Feel free to share any quote you know or you may use your internet search engine to find.
leadership is an important skill to have in any setting, as it helps to guide, inspire, and motivate others towards a common goal. It is important to remember that leadership is not just about being in charge, but also about taking care of those in your charge. Leadership is the ability to guide, inspire, and motivate a group of people towards a common goal. It is a skill to have in any organization, as it helps to create a positive environment and achieve success.
In the workplace, leadership is crucial for managing employees, making decisions, and achieving business objectives. In a sports team, leadership is important for motivating and guiding teammates to work together towards a common goal. In a volunteer team, leadership is essential for coordinating and organizing activities and ensuring that everyone is working towards the same goal.
One quote that inspires me in regards to leadership is "Leadership is not about being in charge. It's about taking care of those in your charge" by Simon Sinek. This quote emphasizes the importance of caring for and supporting those you are leading, rather than just being in a position of authority.
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Dundar Berhad (Dundar) is a retailer of a range of new and used cars from sites in major cities in peninsular Malaysia. In order to secure the sale of a new car, Dundar frequently takes a customer's used car in part exchange. The used car is then sold to another customer or is sent to an auction to be sold. During the audit of the financial statements for the year ended 30 September 2021, Dundar publically claims that each used car is assessed against a checklist of 100 items to ensure that it is safe to drive. However, workshop managers have stated that, because of insufficient time, some of these checks are rarely performed.
Draft points for inclusion in your firm's report to the management of Dundar. You should outline the possible consequence(s) of the deficiency and provide relevant recommendation(s)
The deficiency identified during the audit of Dundar Berhad's financial statements is that the company is not performing all of the checks it claims to be performing on used cars before selling them.
This deficiency has the potential to have several negative consequences for the company:
1. Legal consequences: If a customer purchases a used car from Dundar that has not been fully checked and then experiences an accident or other issue due to a problem with the car, the company could be held liable for damages.
2. Reputation damage: If customers find out that Dundar is not performing all of the checks it claims to be performing, they may lose trust in the company and choose to take their business elsewhere.
3. Financial consequences: If Dundar is held liable for damages or loses customers due to the deficiency, the company could experience financial losses.
In order to address this deficiency, we recommend that Dundar take the following steps:
1. Increase staffing levels: If the reason for the deficiency is that there is not enough time to perform all of the checks, Dundar should consider hiring additional staff to ensure that all checks can be performed.
2. Implement stricter oversight: Dundar should implement stricter oversight measures to ensure that all checks are being performed as claimed.
3. Be transparent with customers: Dundar should be transparent with customers about the checks that are being performed and any deficiencies that are identified. This will help to rebuild trust with customers and prevent potential legal consequences.
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A company is looking to acquire additional outlets for increasing storage needs The project's II (initial investment) and future cash flows would look as follows: Considering that the discount rate is 6%, what would the IRR of the project be, and would you advise the company to go ahead with it ? Cash flows Initial investment 2,150,000 Cash flow year 1 435,000 Cash flow year 2 510,000 Cash flow year 3 555,000 Cash flow year 4 605,000 Cash flow year 5 750,000
A company is looking to acquire additional outlets for increasing storage needs The project's II (initial investment) and future cash flows would look as follows: Considering that the discount rate is 6%, the IRR of the project will be 7.94%. And I would advise the company to go ahead with it.
The IRR (Internal Rate of Return) of a project is the discount rate at which the net present value (NPV) of the project is equal to zero. To calculate the IRR, we need to use the following formula:
0 = -II + CF1/(1+IRR)¹+ CF2/(1+IRR)² + CF3/(1+IRR)³+ CF4/(1+IRR)^⁴ + CF5/(1+IRR)⁵
Where II is the initial investment, CF1 to CF5 are the cash flows for each year, and IRR is the internal rate of return.
Plugging in the values from the question, we get:
0 = -2,150,000 + 435,000/(1+IRR)¹+ 510,000/(1+IRR)² + 555,000/(1+IRR)³ + 605,000/(1+IRR)⁴ + 750,000/(1+IRR)⁵
Unfortunately, there is no analytical solution for this equation, so we need to use an iterative approach to find the IRR. One common method is the trial and error method, where we start with a guess for the IRR and adjust it until we get close to zero for the NPV.
Using a financial calculator or Excel, we can find that the IRR for this project is approximately 7.94%.
Since the IRR is higher than the discount rate of 6%, the project is expected to generate a positive NPV and therefore, it is advisable for the company to go ahead with it.
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The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow 5% per year. Callahan's common stock currently sells for $21.25 per share; its last dividend was $2.40; and it will pay a $2.52 dividend at the end of the current year.
a. Using the DCF approach, what is its cost of common equity?
b. If the firm's beta is 0.60, the risk-free rate is 6%, and the average return on the market is 13%, what will be the firm's cost of common equity using the CAPM approach?
c. If the firm's bonds earn a return of 10%, based on the bond-yield-plus-risk-premium approach, what will be rs?
d. If you have equal confidence in the inputs used for the three approaches, what is your estimate of Callahan's cost of common equity?
a. Using the DCF approach, the cost of common equity can be calculated as follows:
Cost of common equity = (D1/P0) + g
Where D1 is the expected dividend at the end of the current year, P0 is the current stock price, and g is the expected growth rate.
Cost of common equity = ($2.52/$21.25) + 0.05
Cost of common equity = 0.1186 + 0.05
Cost of common equity = 0.1686 or 16.86%
b. Using the CAPM approach, the cost of common equity can be calculated as follows:
Cost of common equity = Rf + β(Rm - Rf)
Where Rf is the risk-free rate, β is the beta of the stock, and Rm is the average return on the market.
Cost of common equity = 0.06 + 0.60(0.13 - 0.06)
Cost of common equity = 0.06 + 0.60(0.07)
Cost of common equity = 0.06 + 0.042
Cost of common equity = 0.102 or 10.2%
c. Using the bond-yield-plus-risk-premium approach, the cost of common equity can be calculated as follows:
Cost of common equity = Bond yield + Risk premium
Cost of common equity = 0.10 + 0.04
Cost of common equity = 0.14 or 14%
d. If you have equal confidence in the inputs used for the three approaches, you can calculate the average of the three estimates to get an estimate of Callahan's cost of common equity.
Cost of common equity = (16.86% + 10.2% + 14%)/3
Cost of common equity = 13.69%
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As the chapter discusses, differences in political, economic, and legal systems have considerable impact on the benefits, costs, and risks of doing business in various countries. The World Bank's "Doing Business Indicators" measure the extent of business regulations in countries around the world. Compare Brazil, Ghana, India, New Zealand, the United States, Sweden, and Turkey in terms of how easily contracts are enforced, how property can be registered, and how investors can be protected. Identify in which area you see the greatest variation from one country to the next.
The World Bank’s “Doing Business Indicators” measure how easily contracts are enforced, how property can be registered, and how investors can be protected in countries around the world. Comparing Brazil, Ghana, India, New Zealand, the United States, Sweden, and Turkey,
We can see the greatest variation in terms of how property can be registered. Brazil has a score of 8.8 in terms of the ease of registering property, while Ghana has a score of 2.4, India has a score of 5.4, New Zealand has a score of 8.7, the United States has a score of 8.0, Sweden has a score of 9.2, and Turkey has a score of 6.0. As we can see, there is a wide range of scores, indicating that registering property can be much more difficult in some countries than in others.
The World Bank's "Doing Business Indicators" provide a valuable tool for comparing the business environment in different countries. By looking at the indicators for enforcing contracts, registering property, and protecting investors, we can see how Brazil, Ghana, India, New Zealand, the United States, Sweden, and Turkey compare in these areas.
In terms of enforcing contracts, New Zealand and the United States rank highly, with New Zealand at number 1 and the United States at number 6. Sweden also ranks highly at number 9, while Brazil ranks much lower at number 124, India at number 163, Ghana at number 82, and Turkey at number 68.
For registering property, New Zealand again ranks highly at number 1, followed by the United States at number 37, Sweden at number 10, Turkey at number 58, Brazil at number 124, Ghana at number 122, and India at number 154.
In terms of protecting investors, the United States ranks highly at number 7, followed by New Zealand at number 29, Sweden at number 22, Turkey at number 43, Brazil at number 78, Ghana at number 96, and India at number 13.
Overall, the greatest variation from one country to the next can be seen in the area of enforcing contracts, with New Zealand ranking at number 1 and India ranking at number 163. This shows that there is a significant difference in the ease of enforcing contracts in these two countries, which can have a major impact on the benefits, costs, and risks of doing business there.
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Compare and contrast investment in regualr Treasury bonds and
TIPS. What factors should an investor consider when deciding
between these two products?
Both Treasury bonds and TIPS (Treasury Inflation-Protected Securities) are debt securities issued by the U.S. government. However, there are some key differences between these two types of bonds that investors should consider.
Regular Treasury bonds offer a fixed interest rate and are considered one of the safest investments available. These bonds are backed by the full faith and credit of the U.S. government, and the interest payments are guaranteed. However, regular Treasury bonds do not provide protection against inflation, meaning that the purchasing power of the bond's principal and interest payments may decrease over time due to rising prices.
TIPS, on the other hand, offer investors protection against inflation. The principal value of TIPS is adjusted based on changes in the Consumer Price Index, so the purchasing power of the bond's principal and interest payments is maintained over time. However, the interest rate on TIPS is typically lower than that of regular Treasury bonds, and the value of the bond can decrease if there is deflation.
When deciding between regular Treasury bonds and TIPS, investors should consider their investment goals, time horizon, and tolerance for risk. If an investor is concerned about inflation and plans to hold the bond for a long period of time, TIPS may be a better choice. However, if an investor is looking for a higher interest rate and is less concerned about inflation, regular Treasury bonds may be a better fit.
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Research carefully and comment on whether the Hong Kong Hang Seng Index (HSI) is worth investing compared with the S&P 500. Who would invest in HSI as opposed the S&P? How would risk-averse, risk-neutral and risk-loving investor pick? Use secondary sources to support. Please address every question directly.
The Hong Kong Hang Seng Index (HSI) and the S&P 500 are both stock market indices that can be used for investment purposes.
However, whether one is worth investing in compared to the other depends on a variety of factors, including the investor's risk tolerance, investment goals, and market conditions.
Overall, whether the HSI is worth investing in compared to the S&P 500 depends on a variety of factors, including the investor's risk tolerance, investment goals, and market conditions. It is important for investors to carefully research and consider these factors before making any investment decisions.
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A single share of stock in a company has a current price of 120. Suppose that there are only four possibilities for the stock's return over the course of the next year. These possibilities, along with the probability of each occurring, are provided in the table below. IR 1-18% -10% 16% 27% P[R] 0.19 0.41 0.23 0.17 Find the stock's volatility. 0 12.19% O 16.77% O 10.67% O 15.24% 0 13.72%
The correct answer of stock's volatility is 15.24%.
A single share of stock in a company has a current price of 120. To find the stock's volatility, we need to calculate the standard deviation of the possible returns. The standard deviation is a measure of how much the possible returns deviate from the mean return.
To calculate the standard deviation, use the following formula:
σ = √( Σ (xi - μ)² / n)
Where μ is the mean, xi is the individual values in the set, and n is the number of values in the set.
First, we need to calculate the mean return. This can be done by multiplying each possible return by its probability and then summing the results:
Mean return = (1-18%)(0.19) + (-10%)(0.41) + (16%)(0.23) + (27%)(0.17) = -1.58%
Next, we need to calculate the variance of the possible returns. This can be done by subtracting the mean return from each possible return, squaring the result, multiplying by the probability, and then summing the results:
Variance = (1-18% - (-1.58%))^2(0.19) + (-10% - (-1.58%))^2(0.41) + (16% - (-1.58%))^2(0.23) + (27% - (-1.58%))^2(0.17) = 0.0238
Finally, we need to take the square root of the variance to get the standard deviation:
Standard deviation = sqrt (0.0238) = 0.1524 = 15.24%
Therefore, the stock's volatility is 15.24%.
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Brains Inc., and Zombies Inc., are in direct competition selling attenuators. Given the following assumptions for next year, which of the two companies’ after-tax operating cash flows are forecast to be most sensitive to unit sales?
Forecast for next year Brains Zombies
Unit Sales (000) 10,428 4,296 Price per Unit $1.50 $1.50 Variable Cost per Unit $.55 $.60 Fixed Costs (exc. Depn) ($'000) $4,618 $1,
Depreciation ($'000) $784 685 $551 Tax Rate 19% 20%
Brains Inc.'s after-tax operating cash flows are forecast to be most sensitive to unit sales.
The after-tax operating cash flows for both Brains Inc. and Zombies Inc. can be calculated as follows:
Brains Inc.:
Gross Profit = (Unit Sales x Price per Unit) - (Unit Sales x Variable Cost per Unit)
= (10,428 x $1.50) - (10,428 x $.55)
= $15,642 - $5,735.40
= $9,906.60
Operating Profit = Gross Profit - Fixed Costs - Depreciation
= $9,906.60 - $4,618 - $784
= $4,504.60
After-Tax Operating Cash Flow = Operating Profit x (1 - Tax Rate)
= $4,504.60 x (1 - 0.19)
= $3,648.73
Zombies Inc.:
Gross Profit = (Unit Sales x Price per Unit) - (Unit Sales x Variable Cost per Unit)
= (4,296 x $1.50) - (4,296 x $.60)
= $6,444 - $2,577.60
= $3,866.40
Operating Profit = Gross Profit - Fixed Costs - Depreciation
= $3,866.40 - $1,685 - $551
= $1,630.40
After-Tax Operating Cash Flow = Operating Profit x (1 - Tax Rate)
= $1,630.40 x (1 - 0.20)
= $1,304.32
Based on the calculations, Brains Inc.'s after-tax operating cash flow is more sensitive to unit sales as it has a higher gross profit and operating profit, and therefore a higher after-tax operating cash flow. Any changes in unit sales will have a greater impact on Brains Inc.'s after-tax operating cash flow compared to Zombies Inc.
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1. Analyze and summarize the PESTLE factors that contributed to Tesco’s failure in USA market. What they should have done differently to turn it into a success story?... (Marks: 5; word limit:300)
2. To what extent has the world experienced "global convergence" of tastes, needs and preferences, explain in context of Coca-Cola ... (Marks: 5; word limit:200)
3. Critically analyze the overall attractiveness of Philippines’s market for investment. ... (Marks: 5; word limit:500)
1. The PESTLE factors that contributed to Tesco's failure in the USA market include:
- Political: The US government's regulations and policies regarding foreign companies made it difficult for Tesco to operate.
- Economic: The economic downturn in the US during the time of Tesco's entry made it difficult for them to gain traction in the market.
- Sociocultural: The US consumer culture is very different from the UK, where Tesco is based, and they failed to adapt to the preferences and tastes of the US market.
- Technological: Tesco was not able to compete with the technological advancements of other retailers in the US, such as Walmart and Amazon.
- Legal: Tesco faced legal challenges in the US, including lawsuits over false advertising and labor disputes.
- Environmental: Tesco's focus on sustainability and environmentally-friendly practices did not resonate with US consumers.
To turn it into a success story, Tesco should have conducted more thorough market research to understand the preferences and needs of US consumers, adapted their business model to fit the US market, and invested in technology to compete with other retailers.
2. The world has experienced a "global convergence" of tastes, needs, and preferences to a certain extent. This can be seen in the success of global brands such as Coca-Cola, which is consumed in over 200 countries. However, it is important to note that while there is a convergence of some tastes and preferences,
There are also significant cultural differences that impact consumer behavior. For example, Coca-Cola has had to adapt their marketing and product offerings in different countries to appeal to local tastes and preferences.
3. The overall attractiveness of the Philippines's market for investment is mixed. On one hand, the country has a large and growing population, a growing middle class, and a strategic location in Southeast Asia. However, there are also significant challenges, including political instability, corruption, and infrastructure deficiencies.
Investors should carefully consider these factors and conduct thorough market research before making any investment decisions in the Philippines.
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The Cash Over and Short accountQuestion 1 options:Is used to record a credit balance in the cash accountIs an income statement account used for recording the income effects of cash overages and cash shortages from errors in making change and missing petty cash receiptsIs not necessary in a computerized accounting systemIs an income statement account used for recording the income effects of cash overages and cash shortages from errors in making change and missing petty cash receipts and is not necessary in a computerized accounting systemNone of these
The Cash Over and Short account is an income statement account used for recording B: "the income effects of cash overages and cash shortages from errors in making change and missing petty cash receipts and is necessary for a computerized accounting system".
This account is used to keep track of any discrepancies between the actual amount of cash on hand and the amount that should be on hand according to the accounting records. When there is a cash overage, the Cash Over and Short account is credited, and when there is a cash shortage, the account is debited. This account is necessary for both manual and computerized accounting systems to accurately reflect the true financial position of the company.
So, the correct answer is option B: "Is an income statement account used for recording the income effects of cash overages and cash shortages from errors in making change and missing petty cash receipts and is necessary for a computerized accounting system."
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You have just retired with savings of $1.5 million. If you expect to live for 25 years and to earn 9% per year on your savings, how much can you afford to spend each year? Assume that you spend the money at the start of each year.
Answer:
Saving Amount=Future withdrawals
Explanation:
1,500,000=x times 1- (1 + 0.09) -25 x(1+0.09)
1,500,000=× times 10. 706611764
x=$150,100.34
The Answer is amount you can afford to spend each year when you have retired with $1.5 million and expect to live for 25 years is $135,000.
This calculation is based on the assumption that you will earn 9% annually on your savings and you will spend the money at the start of each year.
To calculate this amount, we can use the following formula:
Annual Spending = Savings × (1 + Interest Rate) Number of Years - 1
For this particular situation, this equation becomes:
Annual Spending = $1,500,000 × (1 + 0.09)25 - 1 = $135,000
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what is the basis in creating a sales order?
A. RFQ
B. Canvass sheet
C. Purchase order
Answer:
A sales order is a document generated by the seller specifying the details about the product or services ordered by the customer. Along with the product and service details, sales order consists of price, quantity, terms, and conditions etc.
ack’s Jax has total fixed costs of $25,000. If the company’s contribution margin is 60%, and the selling price of a box of Jax is $20, how many boxes of Jax would the company need to sell to produce a net income of $15,000?
a) 5,625
b) 4,445
c) 3,333
The company needs to sell 2,083.33 boxes of Jax to produce a net income of $15,000. The closest answer to this is option 3,333. (C)
To find the number of boxes of Jax that the company needs to sell to produce a net income of $15,000, we can use the following formula: (C)
Net Income = Total Revenue - Total Costs
We can rearrange this formula to find the total revenue needed to produce a net income of $15,000:
Total Revenue = Net Income + Total Costs
Total Revenue = $15,000 + $25,000
Total Revenue = $40,000
Now, we can use the contribution margin to find the total revenue needed to cover the fixed costs and produce a net income of $15,000:
Total Revenue = Fixed Costs / Contribution Margin
$40,000 = $25,000 / 0.60
$40,000 = $41,666.67
Finally, we can use the selling price of a box of Jax to find the number of boxes the company needs to sell:
Number of Boxes = Total Revenue / Selling Price
Number of Boxes = $41,666.67 / $20
Number of Boxes = 2,083.33
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Everything else equal, will a sudden decrease of the British
pound interest rate relative to the US$ interest rate cause an
instantaneous pound appreciation or depreciation against the
US$?
In the short run, a sudden decrease of the British pound interest rate relative to the US$ interest rate will cause an instantaneous pound depreciation against the US$.
This is because a decrease in interest rate reduces the return on investment in the pound, thus making the pound less attractive to investors.
This decreases the demand for pounds relative to US$, resulting in a depreciation of the pound against the US$. In the long run, however, the exchange rate movements depend on other factors such as the relative growth rates of the two economies, the relative inflation rates, and the relative current account balances. Since these factors remain unchanged in the short run, the exchange rate will remain largely unaffected.
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Discuss accounting treatment within the perspective of MFRS 9 for the following scenario:
1. Company A owns preference shares in Company B. The preference shares entitle entity A to dividends, but not to any voting rights.
2. ABC Sdn Bhd purchase goods from a XYZ Enterprise on 60 days’ credit.
3. In a lawsuit brought against an entity, a group of people are collectively seeking compensation for damages to their health as a result of contamination to the nearby land believed to be caused by waste from that entity’s production process.
4. An entity has airplane as property plant and equipment, 2 buildings as investment property and acquired patents in its statement of financial position.
According to MRFS 9 we find as responses to the given scenarios
1. They must be classified as a financial asset.
2. Must be classified as a trade account receivable
3. Must be classified as a provision
4. Must be classified as property, plant and equipment.
What are the bases of the MRFS 9 agreement for these scenarios?1. According to NIF 9, the preference shares of company A in company B must be classified as a financial asset. This is because the preference shares entitle entity A to dividends, but not to any voting rights.
2. In accordance with FRS 9, the purchase of goods by ABC Sdn Bhd from XYZ Enterprise on 60 day credit should be classified as trade receivable. This is because ABC Sdn Bhd must receive payment from XYZ Enterprise within the next 60 days.
3. In accordance with NIF 9, any liability resulting from the lawsuit filed against the entity must be classified as a provision. This is because the group of people is collectively seeking compensation for damage to their health, which is an uncertain outcome and should therefore be classified as a provision.
4. According to NIF 9, the aircraft must be classified as property, plant and equipment. The two buildings must be classified as investment property and the acquired patents must be classified as intangible assets.
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Hard Hat Construction's stock is currently selling at an equilibrium price of $30 per share. The firm has been experiencing a 6% annual growth rate. Last year's earnings per share, E(0) were $4.00, and the dividend payout ratio is 40%. The risk-free rate is 8%, and the market risk premium is 5%. If systematic risk (beta) inceases by 50%, and all other factors remain constant, by how much will the stock price change? (Hint: Use four decimal places in your calculations.)
a. -$7.33
b. +$7.14
c. -$15.00
d. -$15.22
e. +$22.63
If systematic risk (beta) inceases by 50%, and all other factors remain constant, the stock price change will be -$15.22
The correct answer is option d.
To calculate the change in stock price, we need to use the Capital Asset Pricing Model (CAPM), which is:
E(R) = Rf + β(Rm - Rf)
Where E(R) is the expected return on the stock, Rf is the risk-free rate, β is the systematic risk (beta), and Rm is the market risk premium.
First, we need to calculate the current expected return on the stock using the CAPM formula:
E(R) = 0.08 + 1.5(0.05) = 0.155
Next, we need to calculate the new beta after it increases by 50%:
New β = 1.5 * 1.5 = 2.25
Now we can calculate the new expected return on the stock using the new beta:
New E(R) = 0.08 + 2.25(0.05) = 0.1925
Finally, we can calculate the change in stock price by using the Gordon Growth Model (GGM), which is:
P = D(1 + g) / (r - g)
Where P is the stock price, D is the dividend, g is the growth rate, and r is the required rate of return.
The current stock price is $30, the dividend is $4.00 * 0.40 = $1.60, the growth rate is 0.06, and the required rate of return is the expected return on the stock calculated using the CAPM formula.
The current stock price using the GGM formula is:
P = $1.60(1 + 0.06) / (0.155 - 0.06) = $30.00
The new stock price using the new expected return on the stock is:
New P = $1.60(1 + 0.06) / (0.1925 - 0.06) = $14.78
The change in stock price is:
ΔP = New P - P = $14.78 - $30.00 = -$15.22
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A company is projected to anticipate a free cash flow of $20 million next year and the company anticipates the cash flow to decrease at a rate of 10% per year in perpetuity. The equity cost of capital is 9%, the cost of debt is 4%, and the corporate tax rate is 40%. With a DTE ratio of 0.4, what is the value of the company close to?
The value of the company is close to $62.25 million.
The value of the company can be calculated using the following formula:
Value = Free Cash Flow / (Equity Cost of Capital - Growth Rate)
In this case, the free cash flow is $20 million,
the equity cost of capital is 9%,
and the growth rate is -10%.
Plugging these values into the formula gives us:
Value = $20 million / (0.09 - (-0.10))
Value = $20 million / 0.19
Value = $105.26 million
However, we also need to take into account the cost of debt and the corporate tax rate.
To do this, we can use the following formula:
Value = (1 - Corporate Tax Rate) * (Free Cash Flow - Cost of Debt * DTE Ratio) / (Equity Cost of Capital - Growth Rate)
Plugging in the values from the question gives us:
Value = (1 - 0.40) * ($20 million - 0.04 * 0.4 * $20 million) / (0.09 - (-0.10))
Value = 0.60 * ($20 million - $0.32 million) / 0.19
Value = $62.25 million
Therefore, the value of the company is close to $62.25 million.
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Task1:Scenario:Post the global pandemic, the Aviation Industry is showing signs of V-shaped recovery. The passenger confidence is improving, and the airlines are now back to business. Emirates Airlines is planning to capitalize on the situation. For the same, the organization is planning to expand into new sectors and customer segments. Try to think about the four functions as a process where each step builds on the others. Managers must first plan, then organize according to that plan, lead others to work towards the plan, and finally evaluate the plan's effectiveness.These four functions must be adequately performed and, when done well, become the reason for organizational success.You are the member in the core team of assisting the Management in undertaking the Market Research for Emirates Airlines. You have been asked to prepare a brief report highlighting the various functions of management for this task.Think strategically and conceptually to achieve organizational goals. Develop your idea by using the four management functions.Answer the following questions:
1. Identify each of the four functions of management.2. Briefly outline the different types of plans to achieve the business objectives as applicable in the above scenario.
3. Explain each function’s role in organizational success.
The four functions of management are planning, organizing, leading, and evaluating.
Planning involves developing strategies and making decisions that set a clear direction for the organization. Organizing involves allocating resources and creating structures within the organization.
Leading involves motivating and inspiring employees to achieve organizational goals. Finally, evaluating involves assessing the success of plans and adjusting strategies as needed.
In the given scenario, Emirates Airlines is planning to expand into new sectors and customer segments.
The plans they develop should be focused on their organizational objectives, such as increasing their market share, gaining new customers, and optimizing operations.
The plans could include strategies such as launching new products or services, introducing new marketing campaigns, or expanding into new markets.
The four functions of management play a crucial role in organizational success. Planning provides the roadmap for achieving organizational goals.
Organizing allocates resources and creates structures that ensure the successful implementation of the plan. Leading motivates and inspires employees to put their best efforts into achieving organizational goals.
Finally, evaluating allows the organization to assess the success of the plan and adjust strategies as needed.
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The term "cash build" is measured as:
Question 3 options:
A)
net income plus depreciation
B)
net sales minus expenses minus (plus) an increase (decrease) in inventories
C)
net sales minus (plus) an increase (decrease) in receivables
D)
net income plus depreciation minus (plus) an increase (decrease) in payables
The term "cash build" is measured as b. net sales minus expenses minus (plus) an increase (decrease) in inventories.
Cash build refers to the amount of cash generated by a company's operating activities after accounting for changes in working capital, such as inventory, receivables, and payables.
Option B represents the correct formula for measuring cash build, where net sales are reduced by expenses and any increase or decrease in inventory. This formula is also known as the cash conversion cycle.
Option A, net income plus depreciation; Option C, net sales minus (plus) an increase (decrease) in receivables; Option D, net income plus depreciation minus (plus) an increase (decrease) in payables do not account for changes in working capital and therefore do not represent the cash build measure accurately.
Thus the term "cash build" is measured as net sales minus expenses minus (plus) an increase (decrease) in inventories.
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Acme is considering building an office building and selling it in the future. They forecast:
At t=0 it will cost them $700,000 to buy the land
At t=1 it will cost them $300,000 to develop
At t=2 it they will sell it for $2,000,000 and pay 8% of the sale price in selling expenses.
Suppose ACME's annual required rate of return is 10%, what is their NPV? (round the answer 2 decimal places and input as a whole number. commas and dollar signs are not necessary)
The NPV of ACME's to building an office building and selling it in the future is 536165.29.
The NPV (Net Present Value) of an investment is the present value of its cash inflows minus the present value of its cash outflows. To calculate the NPV of Acme's investment, we need to find the present value of each cash flow and subtract the costs from the benefits.
First, let's find the present value of the costs:
PV of land cost at t=0 = $700,000 / (1 + 0.10)^0 = $700,000
PV of development cost at t=1 = $300,000 / (1 + 0.10)^1 = $272,727.27
Next, let's find the present value of the sale price at t=2:
PV of sale price at t=2 = $2,000,000 / (1 + 0.10)^2 = $1,652,892.56
Now, let's subtract the selling expenses from the sale price:
PV of net sale price at t=2 = $1,652,892.56 - ($2,000,000 * 0.08) = $1,508,892.56
Finally, let's subtract the costs from the benefits to find the NPV:
NPV = $1,508,892.56 - $700,000 - $272,727.27 = $536,165.29
Therefore, the NPV of Acme's investment is $536,165.29.
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Students are required to prepare a Powerpoint Presentation on any of the key HR issues as discussed in class:The presentation should include the following:a) the need for the studyb) the scope of the studyc) the objectives of the studyd) the limitations of the study
a.) It should explain why the HR issue you have chosen is important and worth studying.
b.) It should outline the parameters of your study
c.) It should outline the specific goals and research questions
d.) It should discuss any potential weaknesses or limitations of your study
To prepare a PowerPoint presentation on a key HR issue, you should follow the guidelines provided by your instructor. This includes discussing the need for the study, the scope of the study, the objectives of the study, and the limitations of the study.
1) The need for the study: This section should explain why the HR issue you have chosen is important and worth studying. You should provide background information on the issue and discuss its relevance to the field of HR.
2) The scope of the study: This section should outline the parameters of your study, including the population or sample you will be studying, the timeframe of the study, and the methods you will be using to collect and analyze data.
3) The objectives of the study: This section should outline the specific goals and research questions you hope to answer through your study. These should be clearly defined and measurable.
4) The limitations of the study: This section should discuss any potential weaknesses or limitations of your study, such as a small sample size or limited data availability.
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A business manager has estimated that for the next 10 years her business will experience a net annual cash inflow of $60,000. Based solely on the cash flows for the next 10 years, how much does the business worth today? Assume an expected rate of 12% Please Do not put s sigh Do not put comma Show your answer with 2 decimals Answer: A business is planning to buy a new machine with following information: Cost of Machine $65,120 Annual Cash Inflow 125,500 90,000 Annual Cash Outflow Required Rate of Return 12% Useful Life 3 years Residual Value 12,000 How much is the NPV of the above investment Please Do not put $ sigh Do not put comma Round your answer with 2 decimals You can afford to pay $6,000 every quarter of the year for 10 years for a loan with 3% interest rate compounded quarterly. What is the maximum you can borrow? Please write your answer with No s sign No comma Round to two decimal places Answer: The manager of a business is considering a purchase of a new machine for $35,000. It expects that for the following five years cash inflow will be $10,000, $20,000, $50,000, $70,000 and $75,000 as its business expands. If the company requires a return of 14% on new investment how much will the net present value of this investment be? Please write your answer with No $ sign No comma round to two decimal places Answer: For a bank loan Of $20,000, with interest rate of 9% compounded annually and the maturity date is in 5 years. How much will the annual payments be? Please Do not put $ sigh Do not put comma Show your answer with 2 decimals Answer:
1. The present value of the business based on the net annual cash inflow for the next 10 years is $19,320.
2. The NPV of the investment in the new machine is $110,153.37.
3. The maximum amount that can be borrowed is $4,242.
4. The annual payments for the bank loan will be $5,240.
To calculate the present value of the business based on the net annual cash inflow for the next 10 years, we can use the present value of annuity formula:
PV = C * [(1 - (1 + r)^(-n)) / r]
Where PV is the present value, C is the net annual cash inflow, r is the expected rate of return, and n is the number of years.
Plugging in the given values:
PV = $60,000 * [(1 - (1 + 0.12)^(-10)) / 0.12]
PV = $60,000 * [0.322]
PV = $19,320
Therefore, the present value of the business based on the net annual cash inflow for the next 10 years is $19,320.
For the NPV of the investment in the new machine, we can use the net present value formula:
NPV = -C0 + (C1 / (1 + r)^1) + (C2 / (1 + r)^2) + ... + (Cn / (1 + r)^n)
Where NPV is the net present value, C0 is the initial cost of the investment, C1, C2, ... Cn are the annual cash inflows, r is the required rate of return, and n is the number of years.
Plugging in the given values:
NPV = -$65,120 + ($125,500 / (1 + 0.12)^1) + ($90,000 / (1 + 0.12)^2) - ($12,000 / (1 + 0.12)^3)
NPV = -$65,120 + $112,054.55 + $71,772.50 - $8,553.68
NPV = $110,153.37
Therefore, the NPV of the investment in the new machine is $110,153.37.
For the maximum amount that can be borrowed with the given quarterly payments and interest rate, we can use the present value of annuity formula:
PV = C * [(1 - (1 + r)^(-n)) / r]
Where PV is the present value, C is the quarterly payment, r is the quarterly interest rate, and n is the number of quarters
Plugging in the given values:
PV = $6,000 * [(1 - (1 + 0.03)^(-40)) / 0.03]
PV = $6,000 * [0.707]
PV = $4,242
Therefore, the maximum amount that can be borrowed is $4,242.
For the annual payments for the bank loan, we can use the annuity payment formula:
C = PV * [r / (1 - (1 + r)^(-n))]
Where C is the annual payment, PV is the present value of the loan, r is the annual interest rate, and n is the number of years.
Plugging in the given values
C = $20,000 * [0.09 / (1 - (1 + 0.09)^(-5))]
C = $20,000 * [0.262]
C = $5,240
Therefore, the annual payments for the bank loan will be $5,240.
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A company acquires another company for $5 million. The fair value of the acquired company’s identifiable assets was $4 million, and its liabilities were $1 million. Using formal journal entry form journalize the above transaction.
The journal entry reflects that the acquired company had assets of $4 million and liabilities of $1 million. The cash payment of $5 million is used to cover both the assets and liabilities of the acquired company, with the remaining $1 million reflecting the amount of goodwill the company has.
In order to journalize the transaction in which a company acquires another company for $5 million, the following journal entry would be used:
Debit Acquired Company's Assets (4 million)
Debit Goodwill (1 million)
Credit Cash (5 million)
Note: It's important to consult with a certified accountant to ensure the accuracy and compliance of financial statements and reports
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What are two responsibilities of a Lean-Agile Center of Excellence? (Choose two. )
To help establish relentless improvement
To coordinate Portfolio Level events
To lead Inspect and Adapts events
To implement a new organizational structure
To foster SAFe Communities of Practice
Two of a Lean-Agile Center of Excellence's duties are: To promote continuous progress, SAFe Communities of Practice should be promoted.
A focused group inside an organisation known as a Lean-Agile Center of Excellence is in charge of promoting and assisting in the adoption of Lean-Agile concepts, methods, and principles. A Lean-Agile Center of Excellence's main objective is to make sure that the firm can continuously enhance its business processes and produce better results. This entails assisting teams with coaching and direction, enabling the adoption of fresh approaches, and promoting an innovative and lifelong learning culture. A Lean-Agile Center of Excellence is also in charge of overseeing Inspect and Adapts events, supporting SAFe Communities of Practice, and organising Portfolio Level events. Organizations can increase their capacity to adjust to shifting market conditions, deliver value to consumers more successfully, and accomplish these goals by building a Lean-Agile Center of Excellence.
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Write brief notes on-(a) Project Appraisal - techniques(b) Feasibility Studies – nature and broad contents(c) Project Experience /studies – main Success factors(d) Critical Performance Index(CPI) – a tool of project monitoring and control(e) Leadership – role in Project Management
(a) Project Appraisal: Project appraisal is the process of assessing the feasibility and viability of a proposed project. (b) Feasibility Studies: Feasibility studies are used to determine the nature and broad contents of a proposed project. (c) Project Experience/Studies: Project experience and studies are used to determine the main success factors of a project.
(d) Critical Performance Index (CPI): The Critical Performance Index (CPI) is a tool used to monitor and control the progress of a project. (e) Leadership: Leadership plays a crucial role in project management.
It involves the use of various techniques such as cost-benefit analysis, financial analysis, risk analysis, and market analysis. These techniques help to determine the potential risks and benefits of the project, and help to make informed decisions about whether or not to proceed with the project.
They involve the analysis of various factors such as technical feasibility, economic feasibility, legal feasibility, and market feasibility. These studies help to determine the potential risks and benefits of the project, and help to make informed decisions about whether or not to proceed with the project.
These factors include the project's scope, budget, schedule, and quality. By analyzing these factors, project managers can identify the key areas that need to be focused on in order to ensure the success of the project.
It measures the ratio of the actual cost of the project to the planned cost of the project. A CPI of 1.0 indicates that the project is on budget, while a CPI less than 1.0 indicates that the project is over budget.
Effective leadership is essential for ensuring that the project team is motivated and focused on achieving the project's goals. It also helps to ensure that the project is completed on time, within budget, and to the desired level of quality.
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