(a) Let H = amount allocated to home loans, P = amount allocated to personal loans, A = amount allocated to automobile loans.
Maximize 0.04H + 0.13P + 0.1A
Subject to:
H + P + A = 1,000,000 (amount of new funds)
H ≥ 0.4(H + P + A) (at least 40% of new funds allocated to home loans)
P ≤ 0.6A (amount allocated to personal loans cannot exceed 60% of the amount allocated to automobile loans)
(b) Solving the linear programming model, we get:
Home loans: $400,000
Personal loans: $300,000
Automobile loans: $300,000
Total annual return: $43,000
Annual percentage return: 4.3%
(c) If the interest rate on home loans increases to 9%, the optimal solution will change as the bank will want to allocate more funds to home loans to maximize the return. The amount allocated to each type of loan will depend on the new interest rates and cannot be determined without further information.
(d) Increasing the total amount of new funds available by $10,000 will not change the optimal solution, as it does not affect the relative rates of return of the three types of loans.
(e) If the requirement that at least 40% of the new funds must be allocated to home loans is relaxed by 1%, the optimal solution will change as the bank will want to allocate fewer funds to home loans to maximize the return.
The annual return will decrease by $4,000 and the annual percentage return will decrease to 4%. Specifically, the new optimal allocation will be:
Home loans: $390,000
Personal loans: $360,000
Automobile loans: $250,000
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which of the following is true about pay for time not worked? multiple choice the employer receives a tangible production value in return. workers must stay with an employer for 10 years to receive paid vacation. there is a legal minimum of 18 days of vacation in the united states. sick leave programs provide only partial salary replacement. the amount of sick leave is often based on length of service.
Sick leave programs provide only partial salary replacement is true for pay for time not worked Therefore the correct option is C .
Pay for time not worked is a benefit that employers offer to employees in order to retain their loyalty, increase morale and productivity. This includes vacation and sick leave, in addition to other forms of paid time off such as bereavement or jury duty.
Pay for time not worked does not require the employer to receive a tangible production value in return, however there are some legal minimums in place such as the 18 days of vacation mandated by the U.S. government.
Hence the correct option is C
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keesha company borrows $160,000 cash on november 1 of the current year by signing a 120-day, 9%, $160,000 note. 1. on what date does this note mature? 2.
Answer:
Keesha Company will owe $4,800 in interest on this note at the maturity date, March 1st of the following year.
Explanation:
1. To determine the maturity date of Keesha Company's $160,000 note, we need to add 120 days to the date it was borrowed, which is November 1st of the current year.
November has 30 days, so the first 30 days will bring us to December 1st. We still have 90 days to add. December has 31 days, so after 31 more days, we'll be at January 1st of the following year with 59 days remaining. Adding the remaining 59 days to January brings us to March 1st.
So, the maturity date for this note is March 1st of the following year.
2. To calculate the interest on the note, use the formula:
Interest = Principal × Rate × Time
The principal is $160,000, the rate is 9% (0.09), and the time is 120 days or approximately 4 months (120 days / 30 days per month).
Interest = $160,000 × 0.09 × (4/12)
Interest = $160,000 × 0.09 × (1/3)
Interest = $160,000 × 0.03
Interest = $4,800
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identify a true statement about personal appeal tactic used to influence others. True or False
Personal appeal tactics are mostly used with peers and outsiders. The correct statement is A).
Personal appeal tactics are a type of influence technique that relies on building a personal connection with the target of the influence attempt. This can involve using flattery, charm, or other interpersonal skills to win over the other person.
Personal appeal tactics are often most effective when used with peers and outsiders, rather than with managers or family members. This is because personal appeal tactics rely on building a sense of trust and rapport with the other person, which can be more difficult to achieve in a hierarchical or familial relationship.
In a workplace setting, personal appeal tactics may be used to build relationships with colleagues, clients, or customers. For example, a salesperson may use personal appeal tactics to build rapport with a potential customer, in order to increase the likelihood of making a sale.
Overall, personal appeal tactics can be a powerful tool for building relationships and influencing others, particularly in situations where there is not already a pre-existing relationship or power dynamic in place.
The correct statement is A)
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Complete question is:
Identify a true statement about personal appeal tactic used to influence others.
A) It is mostly used with peers and outsiders.
B) It is mostly used with managers.
C) It is mostly used with family.
The following information was taken from the financial records of Good Inc. End of Year Beginning of Year Change Cash $48,500 $32.750 $15.750 Accounts receivable (net) 110,570 98,678 11.901 Inventories 97,350 94.755 2,595 Prepaid expenses 12,250 15,500 -3,250 Accounts payable (creditors) 86,500 81,578 4,922
Salaries payable 8.950 10,115 -1,165 Additional Information: Net Income reported on the income statement for the current year was $155,600 Depreciation expense recorded on buildings and equipment was $3,500 for the year, Required: Using the indirect method, prepare the Cash Flows from Operating Activities section of the Statement of Cash Flows. NOTE: DO NOT use commas or dollar signs in your answers (e.g. 2750, NOT $2,750). NOTE: DO NOT use commas or dollar signs in your answers (e.g. 2750, NOT $2,750).
Using the indirect method, the Cash Flows from Operating Activities section of the Statement of Cash Flows is $151,611.
To prepare the Cash Flows from Operating Activities section of the Statement of Cash Flows using the indirect method, follow these steps:1. Start with the net income for the year: $155,600.
2. Adjust for non-cash expenses:
Add depreciation expense: $3,500.
3. Adjust for changes in working capital accounts:
Increase in accounts receivable: -$11,901.
Increase in inventories: -$2,595.
Decrease in prepaid expenses: +$3,250.
Increase in accounts payable: +$4,922.
Decrease in salaries payable: -$1,165.
4. Calculate the net cash provided by operating activities:
$155,600 (net income) + $3,500 (depreciation) - $11,901 (increase in accounts receivable) - $2,595 (increase in inventories) + $3,250 (decrease in prepaid expenses) + $4,922 (increase in accounts payable) - $1,165 (decrease in salaries payable) = $151,611.
So, the Cash Flows from Operating Activities section of the Statement of Cash Flows using the indirect method is $151,611.
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If there is a positive correlation between X and Y then in the regression equation, Y=bX+a, O a. 60 O b. a 0 O d. a>0
If there is a positive correlation between X and Y, it means that as X increases, Y also tends to increase. In the regression equation, Y=bX+a, the value of ""b"" represents the slope of the regression line, and the value of ""a"" represents the intercept.
If the correlation between X and Y is positive, it implies that the slope of the regression line will also be positive. This means that for every one-unit increase in X, the predicted value of Y will increase by ""b"" units. Hence, we can say that ""b"" will be greater than zero.
The intercept ""a"" represents the value of Y when X is equal to zero. It can be positive, negative, or zero, depending on the data. However, the sign of ""a"" does not depend on the correlation between X and Y.
Therefore, the correct answer to the given question is (d) a > 0.
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true or false: you can use the present value formula to check your work by reversing the future value formula.
Future value (FV) is the value of an asset now based on an anticipated rate of increase in the future.
The future value is important to investors and financial planners because they use it to estimate how much an investment made now will be worth in the future. Knowing the future worth enables investors to choose wisely based on their anticipated needs. But external economic factors that reduce an asset's value, like inflation, might diminish the asset's future value. Future value and current value might be contrasted. Using future value computation, investors may predict possible returns from different investments with varying degrees of accuracy. The future value equation is utilized to evaluate various scenarios.
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businesses must respond to customers more quickly and appropriately than they did prior to social computing. True or False
Businesses must respond to customers more quickly and appropriately than they did prior to social Small business computing. This statement is True.
A small business, as defined by the SBA, is one that has annual revenue caps of up to $41.5 million and employs up to 1,500 people.
Examples of tiny businesses include selling artwork, shooting pictures, producing independent films, managing dance facilities, and many more. The most profitable ones involve handcrafted items, online art classes, and photography and videography. A tiny business is typically a privately held corporation, partnership, or sole proprietorship with fewer employees and smaller annual revenue than a corporation or regular-sized business.
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Total 30 points Bullets are acceptable but be thorough! 1. Describe the relationship between the likelihood of a risk event occurring and the cost of fasting thera event is a project proces through its life cycle Points The rok is a pomblry 2 2. Idently and briefly describe the four way to respond to identified inks. 3 Points 3 What is a ror" and why is it important when planning contingencies? 4 Points 4. Why a schedule not a schedulescurs have been asse? Ports What are the impacts of resource-contained in 6 Point 100
1. Relationship between likelihood of risk and cost:it is important to identify, assess, and manage the risks throughout the project process to reduce the likelihood of risk events occurring and minimize the cost of facing them.
2.Four ways to respond to identified risks:Risk avoidance,Risk acceptance,Risk mitigation,Risk transfer
3. Risk owner and importance in contingency planning:The risk owner is responsible for developing and implementing contingency plans to mitigate the impact of the risk event and reduce its likelihood of occurring.
4.Importance of schedule assessment:It also helps to identify potential risks and issues that may cause delays or cost overruns, allowing the project team to take corrective actions before they occur.
5.Impacts of resource constraints: if there are not enough personnel available to complete a task on time, it may cause delays in the project timeline and increase the cost of the project. Therefore, it is important to manage resource constraints carefully throughout the project process to ensure that the project goals are achieved within the available resources.
1.Relationship between likelihood of risk and cost:
The likelihood of a risk event occurring refers to the probability of the risk event happening during the project process.
The cost of facing the risk event refers to the financial, time, and other consequences that may arise if the risk event occurs.
There is a direct relationship between the likelihood of a risk event and the cost of facing it. The higher the likelihood of the risk event occurring, the higher the cost of facing it, and vice versa.
Therefore, it is important to identify, assess, and manage the risks throughout the project process to reduce the likelihood of risk events occurring and minimize the cost of facing them.
2;Four ways to respond to identified risks:
Risk avoidance: This involves changing the project plan to eliminate the risk or prevent it from happening.
Risk acceptance: This involves accepting the risk and its consequences and making no changes to the project plan to address it.
Risk mitigation: This involves taking actions to reduce the likelihood and/or impact of the risk event if it occurs.
Risk transfer: This involves transferring the risk and its consequences to a third party, such as an insurance company or subcontractor.
3:Risk owner and importance in contingency planning:
A risk owner is the person or group responsible for managing a specific risk event throughout the project process.
When planning contingencies, it is important to identify the risk owner for each risk event to ensure that they are aware of the potential risk and are prepared to manage it if it occurs.
The risk owner is responsible for developing and implementing contingency plans to mitigate the impact of the risk event and reduce its likelihood of occurring.
4:Importance of schedule assessment:
A schedule assessment is a process of evaluating the project schedule to identify potential risks and issues that may affect the project timeline.
A schedule assessment is important because it helps to ensure that the project timeline is feasible and realistic based on the available resources and constraints.
5:Impacts of resource constraints:
Resource constraints refer to limitations on the availability of resources, such as time, budget, and personnel, that may affect the project process.
Resource constraints can have significant impacts on the project timeline, budget, and quality of deliverables.
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where could you recieve training and certification to enter the drama music and dance field of work
If you're interested in pursuing a career in drama, music, or dance, there are a variety of educational institutions and programs that offer training and certification in these fields.
For drama, you might consider attending a theatre school or a conservatory program. Some of the top schools for drama include the Yale School of Drama, the Juilliard School, and the Royal Academy of Dramatic Art in London. Many universities also offer theatre programs, including the Tisch School of the Arts at New York University and the School of Theater, Film, and Television at UCLA.
For music, you could attend a music conservatory or university program. Some of the top schools for music include the Juilliard School, the New England Conservatory of Music, and the Curtis Institute of Music. Many universities also offer music programs, including the Berklee College of Music and the University of North Texas College of Music.
For dance, you might consider attending a dance conservatory or a university dance program. Some of the top schools for dance include the Juilliard School, the School of American Ballet, and the Royal Ballet School in London. Many universities also offer dance programs, including the Tisch School of the Arts at New York University and the School of Dance at the University of North Carolina.
Certification requirements may vary depending on the field and location, but many programs offer certifications or degrees upon completion of their programs. It's important to research different programs and institutions to find the one that's the best fit for your interests and career goals.
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What are four possible standards of comparison used to analyze financial statement ratios? Which of these is generally considered to be the most useful? Which one is least likely to provide a good basis for comparison?
There are four possible standards of comparison used to analyze financial statement ratios:
1. Industry average: The industry average is a benchmark that compares a company's financial ratios with those of its industry peers.
2. Historical comparison: Historical comparison involves comparing a company's current financial ratios with its previous performance.
3. Budget or forecast: The budget or forecast standard compares a company's actual performance with its projected performance.
4. Benchmarks or Standards: Benchmarks or standards comparison involves comparing a company's financial ratios with specific benchmarks or standards established by industry or regulatory organizations
Among the four standards of comparison, industry averages are generally considered the most useful because they provide a relevant benchmark for assessing a company's financial performance relative to its peers. Industry averages provide a more meaningful comparison because they take into account the unique characteristics of a particular industry.
On the other hand, budget or forecast comparison is least likely to provide a good basis for comparison because projections are based on estimates that may not accurately reflect the actual performance.
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jasmine is the landlord for several rental homes in boiling spring lakes. when she receives the security deposit from one of her tenants, how long must it be held in a trust account?
Jasmine, as a landlord of rental homes in Boiling Spring Lakes, must hold the security deposit in a trust account for the entire duration of the tenant's lease. This ensures the funds are available for any potential deductions or refunds upon the tenant's move-out.
According to North Carolina law, when a landlord like Jasmine receives a security deposit for a rental property in Boiling Spring Lakes, it must be held in a trust account for the duration of the tenant's lease.
The security deposit must be returned to the tenant within 30 days after they move out, provided there is no damage or unpaid rent owed. So, the security deposit must be held in a trust account until the end of the tenant's lease and up to 30 days after their departure.
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_______ is defined as the series of sequential actions by a salesperson that leads toward the customer taking a desired action and ends with a follow-up to ensure purchase satisfaction.
Sales process is defined as the series of sequential actions by a salesperson that leads toward the customer taking a desired action and ends with a follow-up to ensure purchase satisfaction.
The sales process is a series of steps or stages that a salesperson follows to engage and persuade a potential customer to take a specific action, such as making a purchase. The sales process typically includes steps such as prospecting, qualifying, presenting, handling objections, closing the sale, and following up with the customer after the purchase to ensure satisfaction and encourage repeat business.
The goal of a sales process is to create a structured approach to selling that helps salespeople achieve their objectives in a consistent and efficient manner.
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One hedge fund strategy that involves simultaneously holding short and long positions in common stock is most likely O a. volatility O b. distressed/restructuring O c. quantitative directional O d. leveraged opportunistic Which of the following statement is correct regarding the use of beta and alpha drivers in portfolio construction? O a. To use beta drivers to gain broad market risk exposures and allocate most of the capital to the alternative assets with the greatest alpha. O b. To use beta drivers to gain broad market risk exposures and allocate most of the capital to the mutual funds with the greatest beta exposures. O c. To extract active returns from beta drivers and allocate most of the capital to the alternative assets with the greatest alpha. O d. To extract active returns from beta drivers and allocate most of the capital to the mutual funds with the greatest beta exposures.
Quantitative directional is a hedge fund strategy that involves using mathematical models and statistical analysis to identify undervalued and overvalued securities. This strategy involves taking both long and short positions in common stock in order to profit from market inefficiencies.
Beta drivers are factors that explain the movement of an asset's returns in relation to the broader market, while alpha drivers are factors that contribute to the active returns of an asset beyond the market's returns. By using both beta and alpha drivers in portfolio construction, an investor can create a diversified portfolio with a mix of broad market risk exposures and active returns.
Allocating most of the capital to the alternative assets with the greatest alpha helps to maximize the potential for generating active returns.
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the 17th national bank of tuscaloosa offers a 3-year line of credit in the amount of$11,000 APR with quarterly compounding. At the end of 1 year, how much interest have you paid and what is the banks effective annual rate? O $2,595 , 11.94% $2.257, 11.94% $2.985 , 10.38% $2.985 , 11.94% ( $2.595 , 10.38%
At the end of 1 year, you have paid $2,595 in interest, and the bank's effective annual rate is 11.94%.
The amount of interest paid after 1 year can be calculated using the formula:
Interest = Principal x (1 + (APR/n))ⁿ - Principal
Where Principal = $11,000, APR = annual percentage rate = 11.94%, and n = number of compounding periods in a year = 4 (since it is compounded quarterly).
Plugging in the values, we get:
Interest = $11,000 x (1 + (0.1194/4))⁴ - $11,000
= $11,000 x (1.02985)⁴ - $11,000
= $11,000 x 1.130666 - $11,000
= $2,596.33
Therefore, the amount of interest paid after 1 year is $2,596.33.
To calculate the effective annual rate (EAR), we can use the formula:
EAR = (1 + (APR/n))ⁿ⁻¹
Plugging in the values, we get:
EAR = (1 + (0.1194/4))⁴⁻¹
= 0.123601 or 12.36%
Therefore, the bank's effective annual rate is 12.36%.
The closest answer choice to this is: $2,595, 11.94%.
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PROBLEM 6 Sweet Company adopted the policy of leasing as the primary method of selling products. The entity's main product is a small cargo vessel. Sweet Company constructed such a cargo vessel for Bitter Company at a cost of Php 8,500,000 The terms of the lease provided for annual advance payments of Php 2,500,000 to be paid over 10 years with the ownership transferring to Bitter Company at the end of the lease period. It is estimated that the cargo vessel will have a residual value of Php 1,600,000 at that date. The lease payments began at the beginning of year 2020. Sweet Company incurred initial direct costs of Php 500,000 in financing the lease agreement with Bitter Company. The sale price of the cargo vessel is Php 14.875,000. Financing in the construction was at a 14% rate. The present value of an annuity due at 14% for 10 periods is 5.95.
Sweet Company constructed a cargo vessel for Bitter Company and leased it to them with annual advance payments of Php 2,500,000 to be paid over 10 years. The ownership will transfer to Bitter Company at the end of the lease period, and the residual value of the cargo vessel is estimated to be Php 1,600,000 at that time. The lease payments began in the year 2020, and Sweet Company incurred initial direct costs of Php 500,000 in financing the lease agreement.
To calculate the lease payment, we need to determine the present value of the lease payments. Using the present value of an annuity due at 14% for 10 periods of 5.95, we can calculate the present value of the lease payments to be Php 12,237,500.
To calculate the financing cost, we can use the formula FV = PV x (1 + r)n, where FV is the future value, PV is the present value, r is the interest rate, and n is the number of periods. Using the sale price of the cargo vessel of Php 14.875,000, and the financing rate of 14%, we can calculate the financing cost to be Php 6,195,000.
To determine the profit on the lease, we can subtract the initial direct costs and financing costs from the sale price and present value of the lease payments. The profit on the lease for Sweet Company would be Php 5,142,500.
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Caspian Sea Drinks is considering buying the J-Mix 2000. It will allow them to make and sell more product. The machine cost $1.10 million and create incremental cash flows of $815,789.00 each year for the next five years. The cost of capital is 9.10%. What is the net present value of the J-Mix 2000?
Answer format: Currency: Round to: 2 decimal places.
The net present value of the J-Mix 2000 is $2,064918.51.
To calculate the net present value (NPV) of the J-Mix 2000, we need to discount the incremental cash flows for each year and subtract the initial cost of the machine.
1. Identify the cash flows, cost of capital, and the number of years:
- Initial cost: $1,100,000
- Incremental cash flow: $815,789 per year
- Cost of capital: 9.1%
- Years: 5
2. Calculate the present value (PV) of each year's cash flow using the formula:
[tex]PV = Cash\ Flow / (1 + Cost\ of\ Capital)^{Year}[/tex]
3. Sum up the PVs of each year's cash flow and subtract the initial cost of the machine to find the NPV:
Year 1: $815,789 / (1 + 0.091)¹ = $747,744.27
Year 2: $815,789 / (1 + 0.091)² = $685,375.13
Year 3: $815,789 / (1 + 0.091)³ = $628,208.18
Year 4: $815,789 / (1 + 0.091)⁴ = $575,809.52
Year 5: $815,789 / (1 + 0.091)⁵ = $527,781.41
Total PV of cash flows = $747,744.27 + $685,375.13 + $628,208.18 + $575,809.52 + $527,781.41 = $3,164,918.51
NPV = Total PV of cash flows - Initial cost = $3,162,617.16 - $1,100,000 = $2,064918.51
The Net Present Value of the J-Mix 2000 is $2,064918.51 (rounded to 2 decimal places).
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Perez Company incurs annual fixed costs of $54,925. Variable costs for Perez's product are $26.00 per unit, and the sales price is $40.00 per unit. Perez desires to earn an annual profit of $59,000. Required Use the per unit contribution margin approach to determine the sales volume in units and dollars required to earn the desired profit. (Do not round intermediate calculations. Round your final answers to the nearest whole number.) Sales in dollars Sales volume in units
First, we need to calculate the per-unit contribution margin. Perez Company needs to sell 8,139 units at a sales volume of $325,560 to earn a profit of $59,000.
Per unit contribution margin = Sales price - Variable cost
Per unit contribution margin = $40.00 - $26.00
Per unit contribution margin = $14.00
Next, we can use the formula to determine the sales volume in units and dollars required to earn the desired profit:
Profit = (Sales volume in units x Per unit contribution margin) - Annual fixed costs
$59,000 = (x x $14.00) - $54,925
$59,000 + $54,925 = $14.00x
$113,925 = $14.00x
x = 8,138.93
So the sales volume in units required to earn the desired profit is 8,139 units (rounded to the nearest whole number).
To calculate the sales in dollars, we can multiply the sales volume in units by the sales price:
Sales in dollars = Sales volume in units x Sales price
Sales in dollars = 8,139 x $40.00
Sales in dollars = $325,560
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question content area top part 1 budget committee is a whatif technique that asks what a result will be if a predicted amount is not achieved or if an underlying assumption changes. question content area bottom part 1 true false
The given statement "budget committee is a what-if technique that asks what a result will be if a predicted amount is not achieved or if an underlying assumption changes" is false because it incorrectly associates budget committees with a specific what-if technique.
A budget committee is a group of individuals responsible for creating and managing a financial plan for an organization or entity. The committee usually consists of key stakeholders and financial experts who collaborate to allocate resources effectively and make informed decisions based on the organization's objectives and goals.
What-if analysis, also known as sensitivity analysis, is a technique used in various fields, including finance, to assess the potential impact of changes in certain variables or assumptions on the outcomes. This helps in understanding risks and making better decisions by considering different scenarios and their potential consequences.
A budget committee is not a what-if technique itself. Instead, it is a group of individuals who may use what-if analysis techniques to analyze and manage financial plans. The what-if analysis is a tool that the budget committee can utilize to assess potential outcomes, but it is not the committee itself.
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Using the following cash flows, calculate IRR if I=10% 0---(100) 1--50 2---50 3--30. multiple choice O 15.65 O 10.33 O 5.69 O 1.98
According to the cash flow: 0---(100); 1--50; 2---50; 3--30, and I=10%, the IRR will be 15,65.
The IRR (Internal Rate of Return) is the discount rate that makes the net present value of all cash flows equal to zero. To calculate IRR using the given cash flows, we can use the IRR function in Excel or a financial calculator.
Here is how to determine the Internal Rate of Return (IRR) with the given cash flows and an initial discount rate (I) of 10%:
1. List the cash flows:
Year 0: -100
Year 1: 50
Year 2: 50
Year 3: 30
2. Use the initial discount rate (I) to calculate the net present value (NPV):
NPV = Σ [Cash flow / (1 + I)^n], where n is the year.
3. Calculate NPV:
NPV = (-100 / (1 + 0.1)^0) + (50 / (1 + 0.1)^1) + (50 / (1 + 0.1)^2) + (30 / (1 + 0.1)^3)
4. Adjust the discount rate and recalculate NPV until it equals zero or is very close to zero.
Using the IRR function, we get the answer as 15.65%. Therefore, the correct option for the multiple-choice question is O 15.65.
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The ___ at a level of high degree or confidence that all the activities that need to be performed to produce the deliverable can be defined, the types and quantities of resources can be determined, and the associated activity durations and costs can be reasonably estimated.
Planning is a critical phase in any project where the project manager and team work together to define project goals, objectives, and requirements, and to develop a roadmap for achieving those goals.
During this phase, the team identifies all the activities that need to be performed to produce the desired deliverables, estimates the types and quantities of resources required to complete the work, and determines the associated activity durations and costs.
With a high degree of confidence in the planning phase, the team can proceed with the project knowing that they have a solid plan in place and a clear understanding of what needs to be done to achieve success. Proper planning also helps to reduce the risk of cost overruns, schedule delays, and other project-related issues that could negatively impact project success.
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A company is considering two alternative methods of producing a new product. The relevant data concerning the alternatives appear below: Alternative Alternative I II Initial investment $64,000 $120,000 Annual receipts $50,000 $60,000 Annual disbursements $20,000 $12,000 Annual depreciation $16,000 $20,000 Expected life 4 yrs 6 yrs Salvage value 0 0 At the end of the useful life of whatever equipment is chosen the product will be discontinued. The company's tax rate is 50 percent and the discount rate is 10 percent. a. Calculate the net present value of each alternative. b. Calculate the benefit cost ratio for each alternative. c. Calculate the internal rate of return for each alternative. d. If the company is not under capital rationing which alternative should be chosen? Why? e. Again assuming no capital rationing, suppose the company plans to produce the product indefinitely rather than quit when the equipment wears out. Which alternative should the company select? Why? f. If the company is experiencing severe capital rationing, and plans to terminate production when the equipment wears out, would any of your answers above change?
a). The NPV of Alternative I is -$8,337.12 and the NPV of Alternative II is $14,271.13.
b). The BCR of Alternative I is 0.2188 and the BCR of Alternative II is 0.2333.
c). The IRR is approximately 7.6%, and for Alternative II, the IRR is approximately 13.9%.
What is NPV?
a) To calculate the net present value (NPV) of each alternative, we need to first calculate the annual cash flows for each alternative. The annual cash flow for Alternative I is:
Annual Cash Flow I = Annual Receipts - Annual Disbursements - Annual Depreciation = $50,000 - $20,000 - $16,000 = $14,000
Similarly, the annual cash flow for Alternative II is:
Annual Cash Flow II = Annual Receipts - Annual Disbursements - Annual Depreciation = $60,000 - $12,000 - $20,000 = $28,000
Using the formula for NPV, we can calculate the NPV of each alternative as:
NPV I = -$64,000 + ($14,000/1.1) + ($14,000/(1.1)²) + ($14,000/(1.1)³) + ($14,000/[tex](1.1)^{4}[/tex]) = -$8,337.12
NPV II = -$120,000 + ($28,000/1.1) + ($28,000/(1.1)²) + ($28,000/(1.1)³) + ($28,000/[tex](1.1)^{4}[/tex]) + ($28,000/[tex](1.1)^{5}[/tex]) = $14,271.13
Therefore, the NPV of Alternative I is -$8,337.12 and the NPV of Alternative II is $14,271.13.
What is BCR?
b) The benefit-cost ratio (BCR) is calculated by dividing the total discounted benefits by the total discounted costs. In this case, the total discounted benefits are the present value of the annual cash flows, and the total discounted costs are the initial investment. Therefore, the BCR for Alternative I is:
BCR I = (Present Value of Annual Cash Flows I) / (Initial Investment I) = ($14,000/0.1) / $64,000 = 0.2188
Similarly, the BCR for Alternative II is:
BCR II = (Present Value of Annual Cash Flows II) / (Initial Investment II) = ($28,000/0.1) / $120,000 = 0.2333
Therefore, the BCR of Alternative I is 0.2188 and the BCR of Alternative II is 0.2333.
What is IRR?
c) The internal rate of return (IRR) is the discount rate at which the present value of the cash inflows equals the present value of the cash outflows. In other words, it is the discount rate that makes the NPV of the project equal to zero. We can calculate the IRR using trial and error or a financial calculator. For Alternative I, the IRR is approximately 7.6%, and for Alternative II, the IRR is approximately 13.9%.
d) If the company is not under capital rationing and wants to maximize the NPV of the project, it should choose Alternative II because it has a higher NPV than Alternative I.
e) If the company plans to produce the product indefinitely, it should choose the alternative with the higher BCR, which is Alternative II. This is because the BCR measures the present value of the benefits per dollar of initial investment, and Alternative II has a higher BCR than Alternative I.
f) If the company is experiencing severe capital rationing and plans to terminate production when the equipment wears out, it may choose Alternative I because it has a shorter expected life and requires a lower initial investment. Alternatively, the company may choose to delay the project until more capital is available to invest in Alternative II, which has a higher NPV and BCR.
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which of the following is a difference between quality control and quality assurance? quality control happens at the project level while quality assurance happens at the process level quality assurance happens at the project level while quality control happens at the process level quality control happens in the office while quality assurance happens in the field quality control happens in the field while quality assurance happens in the office
Quality control is focused on identifying and correcting defects or problems in the products or services produced by a project. It involves inspecting, testing, and evaluating the outputs of a project to ensure they meet the required quality standards. Quality control is typically carried out by project team members, who may be assigned specific tasks or areas of responsibility within the project. The main goal of quality control is to identify and resolve issues before they reach the end user or customer.
On the other hand, quality assurance is a broader concept that focuses on the processes and systems that are in place to produce high-quality products or services consistently. Quality assurance aims to prevent defects or problems from occurring in the first place, by establishing and maintaining appropriate standards, procedures, and guidelines throughout an organization. This involves regular monitoring and continuous improvement of the organization's processes to ensure they are effective in achieving the desired level of quality.
In summary, quality control is concerned with identifying and correcting defects at the project level, while quality assurance is focused on preventing defects by improving processes at the organizational level.
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Assume the following information for Thomas Company:Deluxe Chair:Contribution margin per chair $80Machine hours to produce 1 chair 2 hoursExecutive Chair:Contribution margin per chair $90Machine hours to produce 1 chair 4 hoursMachine hours is the constraint resource.The contribution margin per machine hour is:O $40 for deluxe chair; $22.50 for executive chairO $20 for deluxe chair; $30 for executive chairO $20 for deluxe chair; $40 for executive chairO $30 for deluxe chair: $45.50 for executive chair
The contribution margin per machine hour for the Deluxe Chair is $40 and the Executive Chair is $22.50.
To calculate the contribution margin per machine hour, we need to find the contribution margin per chair and divide it by the machine hours required to produce one chair for each type of chair.
For the Deluxe Chair:
Contribution margin per machine hour = Contribution margin per chair / Machine hours per chair
Contribution margin per machine hour = $80 / 2 hours
Contribution margin per machine hour = $40
For the Executive Chair:
Contribution margin per machine hour = Contribution margin per chair / Machine hours per chair
Contribution margin per machine hour = $90 / 4 hours
Contribution margin per machine hour = $22.50
Therefore, the contribution margin per machine hour for the Deluxe Chair is $40, and the Executive Chair is $22.50.
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You may at this question more time for credit A cookie company wants to expand its retail operations Based on a preliminary study, 10 stores we feasible in various parts of the country. The cash flow teach store is expected to be $150 per year for five consecutive years. Each store requires an immediate investment of $400 to set up operations. Assuming a required rate of return 9% what is the NPV of each store?
NPV will be $2,527.04 it is a financial metric used to evaluate the profitability of an investment by calculating the difference between the present value of cash inflows and the present value of cash outflows over a period of time.
To calculate the NPV of each store, we need to determine the present value of the expected cash flows and subtract the initial investment. Using the formula for present value of an annuity, we have:
PV = C × [(1 - (1 + r)⁻ⁿ) / r]
Where PV is the present value, C is the cash flow, r is the required rate of return, and n is the number of periods.
In this case, C = $150 per year for 5 years = $750, r = 9%, n = 5.
PV = $750 × [(1 - (1 + 0.09)⁻⁵) / 0.09]
PV = $2,927.04
Therefore, the NPV of each store is:
NPV = PV - Initial Investment
NPV = $2,927.04 - $400
NPV = $2,527.04
So the NPV of each store is $2,527.04.
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_____________, fill in the blank, happens when there is not enough staff to handle the customers.
Understaffing happens when there is not enough staff to handle the customers.
Understaffing occurs when the number of employees available to perform work is inadequate to meet the demands of customers.
It can happen due to various reasons such as cost-cutting measures, seasonal fluctuations in business, unexpected absences of employees, or poor workforce planning. Understaffing can lead to a range of negative consequences for both employees and customers.
For employees, understaffing can result in increased stress, burnout, and decreased job satisfaction due to heavy workloads, longer working hours, and increased pressure to perform. For customers, understaffing can lead to longer wait times, delays in service, decreased service quality, and lower customer satisfaction.
Additionally, understaffing can harm a business's reputation, as dissatisfied customers are more likely to share their negative experiences with others. Therefore, it is important for businesses to ensure adequate staffing levels to maintain quality service, employee well-being, and customer satisfaction.
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your efforts have been successful! the government has decided to grant tax subsidies to fishing rod companies in genovia. these companies now get tax breaks from the government. which of the following would be reasonable actions to take now that you have the subsidy? select the two best options from the choices below and click submit. lower the prices of your products to undercut foreign competition. increase demand for fishing rods by lowering your supply. lower the prices of your products to undercut local competition. capitalize on the advantage by using cheaper, lower quality raw materials to further lower production costs. maintain current prices to gain higher profit per unit.
The following would be reasonable actions to take now that you have the subsidy:
a. capitalize on the advantage by using cheaper, lower quality raw materials to further lower production costs.
b. maintain current prices to gain higher profit per unit.
What is a Tax Subsidy?
it's a government gift to individuals, typically in the form of a selective tax cut.
Tax incentives reduce a company's debt; subsidies provide the company money directly. Subsidies are very different from tax incentives in this regard. Subsidies are a mechanism for the government to lower the cost of conducting business, much like tax incentives.
With subsidies, the government can persuade the free market to supply a service that it otherwise wouldn't. The government can make it simpler for some sectors to operate by offering tax exemptions, financial incentives, and other types of aid.
Many subsidies degrade biodiversity unintentionally. Some examples of subsidies are: Direct financial transfers
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Question 4 0/1 pts A future project has an uncertain finish time and the finish time follows a normal distribution. The project's expected finish time is 40 weeks, and the project variance is 8 weeks. If the project deadline is set to be 41 weeks, then what is the probability that the project would need more than the given deadline to complete? Input should be either 1 or 2, with 1 represents "more than 50%" and 2 represents "equal or less than 50%". red 1 wer 2
The probability that the project would need more than the given deadline to complete is less than 50%. The correct answer is 2.
To calculate the probability, we need to standardize the normal distribution by calculating the z-score, which is the difference between the deadline and the expected finish time, divided by the square root of the project variance.
The z-score is calculated as follows:
z = (41 - 40) / √(8) = 0.354
Next, we look up the probability associated with a z-score of 0.354, which is approximately 0.638.
Since this is the probability that the project will be completed before the deadline, the probability that the project will need more than the given deadline to complete is 1 - 0.638 = 0.362 or 36.2%.
Therefore, the answer is 2, which represents that the probability of the project needing more than the given deadline to complete is equal or less than 50%.
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a corporation sold 15,500 shares of its $10 par value common stock at a cash price of $12 per share. the entry to record this transaction would include:
The entry to record the sale of 15,500 shares of $10 par value common stock at a cash price of $12 per share would include the following: Credit: Paid-in Capital in Excess of Par Value $31,000
Debit Cash for $186,000 (15,500 shares x $12 per share)
Credit Common Stock for $155,000 (15,500 shares x $10 par value per share)
Credit Paid-in Capital in Excess of Par Value for $31,000 (the difference between the cash received and the par value of the stock issued, which is $186,000 - $155,000 = $31,000)
When a corporation sells its common stock, the entry to record this transaction would include: 1. A debit to Cash for the total cash received: 15,500 shares * $12 per share = $186,000 2. A credit to Common Stock for the total par value: 15,500 shares * $10 par value = $155,000 3. A credit to Paid-in Capital in Excess of Par Value for the excess amount: $186,000 (cash received) - $155,000 (common stock) = $31,000 So, the entry would be: Debit: Cash - $186,000 Credit: Common Stock - $155,000 Credit: Paid-in Capital in Excess of Par Value - $31,000
The journal entry would therefore be:
Debit: Cash $186,000
Credit: Common Stock $155,000
Credit: Paid-in Capital in Excess of Par Value $31,000
This entry records the receipt of cash in exchange for the issuance of common stock and reflects the par value of the stock issued as well as the additional amount received over the par value.
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suppose a homeowner has an existing mortgage loan with these terms: remaining balance of $150,000, interest rate of 8 percent, and remaining term of 10 years (monthly payments). this loan can be replaced by a loan at an interest rate of 6 percent, at a cost of 8 percent of the outstanding loan amount. should the homeowner refinance? what difference would it make if the homeowner expects to be in the home for only 5 more years rather than 10?
The homeowner should refinance as they would save money in both cases. If the homeowner plans to keep the home for the full 10 years, the savings would be significant, while if they only plan to keep it for 5 more years, the savings would be less significant.
To determine whether the homeowner should refinance, we need to compare the total cost of the current loan with the total cost of the new loan, including any fees.
For the current loan, the monthly payment can be calculated using the formula:
P = r(PV)/(1 - (1+r)⁻ⁿ)
where P is the monthly payment, r is the monthly interest rate (8%/12), PV is the present value of the loan ($150,000), and n is the remaining number of payments (10 years x 12 months/year = 120 months).
P = 1918.14
The total cost of the current loan is therefore:
Total cost = P x n = 1918.14 x 120 = $230,177.64
For the new loan, the remaining balance on the current loan would need to be paid off, plus an additional 8% fee of $12,000 (8% of $150,000). So the new loan amount would be:
New loan amount = $150,000 + $12,000 = $162,000
The monthly payment on the new loan can be calculated using the same formula as before, but with a new interest rate of 6%/12:
P = r(PV)/(1 - (1+r)⁻ⁿ) = 965.61
The new loan term would be 10 years, but we need to consider the additional cost of the 8% fee. If the homeowner plans to keep the home for the full 10 years, the total cost of the new loan would be:
Total cost = P x n + fee = 965.61 x 120 + $12,000 = $135,673.20
The homeowner would save money by refinancing, since the total cost of the new loan is less than the total cost of the current loan.
However, if the homeowner only plans to keep the home for 5 more years, the new loan term would be:
n = 5 years x 12 months/year = 60 months
The total cost of the new loan, in this case, would be:
Total cost = P x n + fee = 965.61 x 60 + $12,000 = $68,796.60
In this case, the homeowner would still save money by refinancing, but the difference in total cost between the old and new loan would be less significant.
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It would be wise for the homeowner to refinance their loan, as they would realize a considerable amount of savings over the 10 year loan and the 8% cost of refinancing is a reasonable price to pay for the lower interest rate.
The homeowner should refinance their loan in light of the current situation. They would save a significant amount of interest during the 10 year loan because the new loan would be at 6% instead.
Additionally, the refinancing fee is just 8% of the total amount of the outstanding loan, which is a fair price to pay for the lower interest rate.
Refinancing would still be advantageous even if the homeowner only planned to stay in the house for five more years because they would avoid paying interest on the total loan balance for the entire ten-year term.
Furthermore, the 8% refinancing fee will be irrelevant if they sell the house or refinance the loan again in five years because they would have already realized the savings from the lower interest rate.
Complete Question:
Suppose a homeowner has an existing mortgage loan with these terms: Remaining balance of $150,000, interest rate of 8 percent, and remaining term of 10 years (monthly payments). This loan can be replaced by a loan at an interest rate of 6 percent, at a cost of 8 percent of the outstanding loan amount. Should the homeowner refinance? What difference would it make if the homeowner expects to be in the home for only five more years rather than ten?
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Question 4 1.5 pts Assume you have formed a portfolio of stocks by investing $200 in stock X, $300 in stock Y, and $500 in stock Z. If the annual expected returns for stock X, Y, and Z are 9%, 2.6%, and -4.6% respectively. What will be your portfolio annual expected return? (write this number as a decimal and not as a percentage, e.g. 0.11 not 11%. Round your answer to three decimal places. For example 1.23450 or 1.23463 will be rounded to 1.235 while 1.23448 will be rounded to 1.234. Note: returns can be negative or zero)
The portfolio's annual expected return is 0.0028 or 0.28% (rounded to three decimal places).
How to determine the portfolio's annual expected returnTo find the portfolio's annual expected return, we need to calculate the weighted average of the returns for each stock, where the weights are the amounts invested in each stock.
Weighted average return = (amount invested in X / total amount invested) * return X + (amount invested in Y / total amount invested) * return Y + (amount invested in Z / total amount invested) * return Z
Plugging in the values, we get:
Weighted average return = (200 / 1000) * 0.09 + (300 / 1000) * 0.026 + (500 / 1000) * (-0.046)
Weighted average return = 0.018 + 0.0078 - 0.023
Weighted average return = 0.0028
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