If Alaska Company issues 5,000 shares of $8 par common stock for $170,000, Paid-In Capital in Excess of Par will be credited for $130,000. So, option d. is correct.
The question is about the journal entries when Alaska Company issues 5,000 shares of $8 par common stock for $170,000.
Step 1: Calculate the total par value of the common stock.
5,000 shares x $8 par value = $40,000
Step 2: Calculate the paid-in capital in excess of par.
Total cash received ($170,000) - Total par value ($40,000) = $130,000
Now let's analyze the given options:
a. Paid-In Capital in Excess of Par will be credited for $40,000 - Incorrect, as we calculated it to be $130,000.
b. Common Stock will be credited for $170,000 - Incorrect, the credit to common stock should be the total par value ($40,000).
c. Cash will be debited for $130,000 - Incorrect, the debit to cash should be the total cash received ($170,000).
d. Paid-In Capital in Excess of Par will be credited for $130,000 - Correct, as per our calculations.
So, option d. is correct.
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The demand curve slopes downward due to: (may have multiple answers)a. Income effectb. substitution effectc. diminishing marginal returns effectd. elasticity of demande. Steven Manley effectf. Income effectg. substitution effect
The demand curve slopes downward due to the income effect and the substitution effect.
The income effect occurs,
When the price of a good decreases, which increases the purchasing power of consumers' income, allowing them to purchase more of the good.
As a result, the quantity demanded of the good increases, leading to a downward slope in the demand curve.
The substitution effect occurs when the price of a good decreases, making it relatively cheaper compared to other goods.
This incentivizes consumers to switch from other goods to the cheaper good.
Leading to an increase in the quantity demanded of the cheaper good and a downward slope in the demand curve.
The diminishing marginal returns effect refers to the decrease in marginal utility as a consumer consumes more of a good.
Which can lead to a decrease in the quantity demanded of the good as its price increases.
However, this effect does not directly contribute to the downward slope of the demand curve.
The elasticity of demand is a measure of the responsiveness of the quantity demanded of a good to changes in its price.
While it can affect the steepness of the demand curve, it does not directly contribute to the downward slope of the demand curve.
There is no such thing as the "Steven Manley effect," so it does not contribute to the downward slope of the demand curve.
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n the late 1990s, starbucks hired the environmental defense fund to help it determine how best to reduce the amount of paper waste it was generating because of customers demanding two cups to hold the hot coffee. the environmental defense fund determined that the best way to eliminate the need for the second cup was to provide customers with a paper sleeve that went around the outside of a cup. this innovation reduced the amount of paper cups being used by starbucks by 50 percent, saved the company tens of thousands of dollars by reducing the amount of cups they needed, and improving their environmental image. this is an example of:
This innovation reduced the amount of paper cups being used by Starbucks by 50 percent, saved the company tens of thousands of dollars by reducing the amount of cups they needed, and improving their environmental image. This is an example of Eco-Consumerism.
What is Green Consumerism?
Eco-Consumerism is also known as Green Consumerism. When a consumer wants or selects products that are less detrimental to the environment, this is known as green consumerism. It is a social practice that encourages the adoption of green (or eco-friendly) products.
It is founded on three design-driven tenets: eradicating waste and pollution, distributing goods and resources at their best value, and regenerating the natural world. breaks the link between economic activity and the use of limited resources.
Green consumerism is a comprehensive and ethical management strategy that meets, recognizes, satisfies, and foresees the needs of the stakeholders in upholding the environment's natural health without jeopardizing human health.
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The Condorcet paradox illustrates Arrow’s impossibility theorem by showing that pairwise majority voting
a. is inconsistent with the principle of unanimity.
b. leads to social preferences that are not transitive.
c. violates the independence of irrelevant alternatives.
d. makes one person in effect a dictator.
The Condorcet paradox illustrates Arrow's impossibility theorem by showing that pairwise majority voting leads to social preferences that are not transitive (option b).
Arrow's impossibility theorem states that no voting system can simultaneously meet a set of fairness criteria in making a collective decision. The Condorcet paradox demonstrates one such scenario where the collective preferences of a group are not transitive, even if the individual preferences of its members are.
In the Condorcet paradox, the pairwise majority voting is a method where options are compared and voted on in pairs. However, it can lead to a situation where no clear winner emerges. For example, assume there are three candidates A, B, and C, and three voters with the following preferences:
Voter 1 prefers A > B > C, Voter 2 prefers B > C > A, and Voter 3 prefers C > A > B.
Using pairwise majority voting, A would beat B, B would beat C, and C would beat A, forming a cycle without a clear majority winner.
This lack of transitivity in social preferences violates one of Arrow's fairness criteria, specifically the criterion of collective rationality. The Condorcet paradox highlights a major challenge in aggregating individual preferences into a consistent and fair collective preference, thus illustrating the limitations of the pairwise majority voting system and its inability to satisfy all of Arrow's criteria simultaneously.
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The aggregate production function creates an estimated framework to determine how much of an economies! growth is related to changes in physical capital (K), labor (L), human capital (H), natural resources (N) or changes in technology (A). In other words, the aggregate production function provides estimates on a nation's RGDP and allows us to manipulate certain variables to show their impacts on a nation's economic activity, 1. First, briefly define an aggregate production function (keep it simple) and second, plot the function with its typical shape. Be sure to label both axes. Label this function Fo and discuss its shape Be as specific as possible. 2. Using function Fo, show how mass migration (an increase in L) affects the graph in part 5.1, care- fully distinguishing the new situation from the old. If you have a new production function, label it F and briefly explain the change. 3. Using function Fo, suppose that a nation invests in new capital, increasing the total capital stock in the nation. Show this change on your graph in part 5.1, carefully distinguishing the new situation from the old 4. Discuss what it means if a production function Fo is homogeneous of degree 1. What does it mean if it is homogeneous of degree 2? Please make sure to use the right terminology, but you are not required to show the answer mathematically. Instead, focus on the intuition behind a homogeneous production function. Extra credit: Elaborate why it is useful to know the degree of homogeneity.
Homogeneity of a production function is useful because it tells us how output changes in response to changes in inputs.
An aggregate production function is a theoretical model that shows how inputs of physical capital, labor, human capital, natural resources, and technology combine to produce output in an economy.
It is typically represented by the equation Y = F (K, L, H, N, A), where
Y is the output, K is physical capital, L is labor, H is human capital, N is natural resources, and A is technology.The function provides estimates of a nation's real GDP and shows how changes in these inputs affect economic activity. The graph of the function shows output on the y-axis and total input on the x-axis.
The typical shape of the aggregate production function is a curve that starts out steep and then flattens out as more inputs are added. This is because as more inputs are added, the marginal product of each additional input decreases.
The curve eventually becomes horizontal at a point called the "steady state," where the economy is producing its maximum output given its inputs.
Homogeneity of a production function is useful because it tells us how output changes in response to changes in inputs. If a function is homogeneous of degree 1, increasing all inputs by a certain percentage will result in the same percentage increase in output.
If a function is homogeneous of degree 2, increasing all inputs by a certain percentage will result in a greater percentage increase in output. This information is important for businesses and policymakers when making decisions about how to allocate resources to maximize output.
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the hot dog processing factory that oscar works at recently instituted a total quality management program to better include workers in the planning process. this was most likely done in response to workers' complaints about:
The implementation of a Total Quality Management (TQM) program in a hot dog processing factory may have been done in response to workers' complaints about issues related to quality control, communication, or job satisfaction.
Quality control is a critical aspect of any food processing operation, and workers may have complained about the quality of the hot dogs being produced or the lack of consistent quality control procedures. TQM programs emphasize the importance of involving employees in the quality control process, which can help to identify and address issues more effectively. Communication may have also been an issue for workers, particularly if they felt that their ideas and concerns were not being heard or valued. TQM programs aim to improve communication and collaboration among employees and management, which can help to foster a more positive and productive work environment. Finally, job satisfaction is another common concern for workers in many industries, and TQM programs can help to improve job satisfaction by providing opportunities for employees to contribute to the planning process and make meaningful contributions to the success of the company.
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Alternative beta can be accessed through an investment ina.Actively managed equity mutual fundb.130/30 exchange traded fundc.ETF that invests in euro futuresd.Convertible bond that has been hedged with respect to extensive beta exposures
Alternative beta can be accessed through various investment options, including actively managed equity mutual funds, 130/30 exchange traded funds (ETFs), ETFs that invest in euro futures, and convertible bonds that have been hedged with respect to extensive beta exposures.
Alternative beta can be accessed through an investment in a 130/30 exchange traded fund (ETF). This type of ETF allows investors to gain exposure to alternative beta by employing a strategy that involves long positions in the top-performing stocks and short positions in the underperforming stocks, resulting in a diversified portfolio with potentially enhanced returns.
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a particular common stock has an annual cash dividend of $4 per share and is predicted to have a market value of $60 per share 5 years from now. assuming a discount rate of 10%, a fair market price for the stock today is:
The fair market price for the stock today, assuming a discount rate of 10%, is $188.40 per share.
To calculate the fair market price for the stock today, we can use the dividend discount model, which assumes that the fair value of a stock is equal to the present value of all future dividends and the future sale price.
First, we need to calculate the present value of the future sale price of the stock using the discount rate of 10% and the time period of 5 years. We can use the formula for the present value of a future single amount:
Present value = Future value / [tex](1 + r)^n[/tex]
where r is the discount rate and n is the number of years.
Present value of future sale price = 60 / [tex](1 + 0.10)^5[/tex]
= 60 / 1.61051
= 37.24
Next, we need to calculate the present value of all future dividends over the next 5 years. We can use the formula for the present value of an annuity:
Present value = Payment x (1 - 1 /[tex](1 + r)^n) / r[/tex]
where Payment is the annual dividend payment, r is the discount rate, and n is the number of years.
Present value of future dividends = 4 x (1 - 1 / [tex](1 + 0.10)^5)[/tex] / 0.10
= 4 x 3.79079 / 0.10
= 151.16
Finally, we can add the present value of the future sale price and the present value of future dividends to get the fair market price for the stock today:
Fair market price = Present value of future sale price + Present value of future dividends
= 37.24 + 151.16
= 188.40.
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true or false: using scrum ensures that adding more resources to a project proportionally increases the value delivered
False. While adding more resources to a project may increase productivity, it does not necessarily mean that the value delivered will proportionally increase. This is because in Scrum, value is not solely determined by output or productivity, but also by meeting the needs of the customer and delivering a high-quality product.
Scrum emphasizes on continuous improvement and delivering value incrementally through iterative sprints. The goal is to deliver a potentially shippable product increment at the end of each sprint, which meets the acceptance criteria and adds value to the customer. Adding more resources may improve productivity, but it also comes with risks such as increased communication overhead and potential disruption to the team's dynamic.
Furthermore, Scrum values transparency, inspection, and adaptation. The Scrum team should regularly inspect and adapt their processes to identify areas for improvement and maximize the value delivered. This means that simply adding more resources without evaluating the impact on the team's processes and value delivery may not be effective in achieving the project goals.
In summary, using Scrum does not guarantee that adding more resources will proportionally increase the value delivered. It is essential to focus on delivering value incrementally, regularly inspecting and adapting processes, and considering the impact of any changes on the team's dynamics and overall project goals.
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1) Indicate why or why not you agree or disagree with thefollowing statement: "An investor should be compensated foraccepting unsystematic risk."2) Which risk can an investor expect to be rewarded for taking on?
1) I disagree with the statement that an investor should be compensated for accepting unsystematic risk. This is because unsystematic risk, also known as specific or diversifiable risk, can be reduced or eliminated through proper diversification of an investment portfolio.
By holding a mix of various investments, the impact of the poor performance of a single investment can be minimized.
Therefore, it is not necessary for an investor to be compensated for a risk that can be managed through diversification.
2) An investor can expect to be rewarded for taking on systematic risk, also known as market or non-diversifiable risk. Systematic risk affects the entire market and cannot be eliminated through diversification.
Factors such as economic conditions, interest rates, and political events contribute to systematic risk. Since this type of risk is inherent to investing in the market, investors should be compensated for accepting it in the form of higher potential returns.
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during the year, hamlet incorporated paid $25,000 to have bond certificates printed and engraved, paid $120,000 in legal fees, paid $17,000 to a cpa for registration information, and paid $210,000 to an underwriter as a commission. what is the amount of bond issue costs
The bond issue costs include all the expenses incurred in issuing the bonds, such as legal fees, printing and engraving of bond certificates, registration fees, and underwriting fees. the amount of bond issue costs incurred by Hamlet Incorporated during the year is $372,000.
Therefore, to calculate the total bond issue costs, we need to add up all these expenses.
The total bond issue cost is the cost incurred by a company to issue bonds. It includes all the expenses related to the issuance of bonds, such as legal fees, printing and engraving of bond certificates, registration fees, and underwriting fees.
The total bond issue cost is an important component of the cost of debt for a company, as it increases the overall cost of borrowing. The higher the total bond issue cost, the higher the cost of debt for the company.
To calculate the total bond issue cost, you need to add up all the expenses incurred in the issuance of bonds
Total bond issue costs = Printing and engraving costs + Legal fees + CPA fees + Underwriting commission
Total bond issue costs = $25,000 + $120,000 + $17,000 + $210,000
Total bond issue costs = $372,000
Therefore, the amount of bond issue costs incurred by Hamlet Incorporated during the year is $372,000.
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A company has the following Statement of Comprehensive income (Income statement) Sales Variable Costs Fixed Costs EBIT Interest EBT Tax Net Income $5,420,000 $2,000,000 $500,000 $2,920,000 $1,500,000 $1,420,000 $600,000 $820,000. a) Calculate the degree of operating leverage (DOL) b) Calculate the degree of financial leverage (DFL) c) Calculate the degree of combined leverage (DCL) d) If sales increased by 18% how much would EBIT change? e) if sales increased by 18% how much would EPS change?
a) The degree of operating leverage (DOL) can be calculated using the formula: DOL = (% change in EBIT) / (% change in sales).
Current EBIT = Sales - Variable Costs - Fixed Costs = $5,420,000 - $2,000,000 - $500,000 = $2,920,000
EBIT at 1% increase in sales = $5,420,000 x 1.01 - $2,000,000 - $500,000 = $3,020,200
DOL = (EBIT at 1% increase in sales - Current EBIT) / (Current EBIT / % change in sales)
DOL = ($3,020,200 - $2,920,000) / ($2,920,000 / 0.01)
DOL = 0.0342
b) The degree of financial leverage (DFL) can be calculated using the formula: DFL = EBIT / (EBIT - Interest).
DFL = $2,920,000 / ($2,920,000 - $1,500,000)
DFL = 2.28
c) The degree of combined leverage (DCL) can be calculated using the formula: DCL = DOL x DFL.
DCL = 0.0342 x 2.28
DCL = 0.078
d) If sales increased by 18%, the new sales figure would be:
New sales = $5,420,000 x 1.18 = $6,401,600
New EBIT = Current EBIT + (DOL x % change in sales x Current EBIT)
New EBIT = $2,920,000 + (0.0342 x 0.18 x $2,920,000)
New EBIT = $3,458,112
e). New net income = New EBT x (1 - Tax rate)
New net income = $1,756,000 x (1 - 0.3)
New net income = $1,229,200
Operating leverage is a measure of how sensitive a company's operating income is to changes in revenue. It refers to the degree to which a company's fixed costs affect its profits. Fixed costs are expenses that remain constant, regardless of the level of production or sales, such as rent, salaries, and insurance. As revenue increases, the impact of fixed costs on profits decreases, resulting in higher profits. Conversely, as revenue decreases, the impact of fixed costs on profits increases, resulting in lower profits. Therefore, companies with high fixed costs relative to variable costs have a higher operating leverage.
Operating leverage can be calculated by dividing a company's contribution margin (revenue minus variable costs) by its operating income. A high operating leverage can be beneficial to a company during times of growth, as it can lead to higher profits. However, during times of economic downturn or decreased demand, high operating leverage can also result in significant losses.
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A project that provides annual cash flows of $15,400 for nine
years costs $67,000 today. Is this a good project if the required
return is 8 percent? What if it’s 20 percent? At what discount rate
would you be indifferent between accepting the project and rejecting it?
Using a financial calculator or Excel, we can solve for r and get a discount rate of approximately 14.65%. If the required return is 14.65%, we would be indifferent between accepting or rejecting the project.
How to determine whether this project is a good investment?
We need to calculate its net present value (NPV) at different discount rates.
At a discount rate of 8%, we can use the NPV formula:
NPV = -Initial cost + (Cash flows / (1 + Discount rate)^Periods)
NPV = -$67,000 + ($15,400 / (1 + 0.08)¹) + ($15,400 / (1 + 0.08)²) + ... + ($15,400 / (1 + 0.08)⁹)
NPV = $7,115.06
Since the NPV is positive, this project is a good investment at an 8% required return.
At a discount rate of 20%, the NPV calculation is:
NPV = -$67,000 + ($15,400 / (1 + 0.20)¹) + ($15,400 / (1 + 0.20)²) + ... + ($15,400 / (1 + 0.20)⁹)
NPV = -$11,598.04
Since the NPV is negative, this project is not a good investment at a 20% required return.
To determine the discount rate at which we would be indifferent between accepting or rejecting the project, we can set the NPV to zero and solve for the discount rate:
0 = -$67,000 + ($15,400 / (1 + r)¹) + ($15,400 / (1 + r)²) + ... + ($15,400 / (1 + r)⁹)
Using a financial calculator or Excel, we can solve for r and get a discount rate of approximately 14.65%. Therefore, if the required return is 14.65%, we would be indifferent between accepting or rejecting the project.
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Efficient production I, from Ch. 13 and the Hayek reading] Firm 1
uses inputs x; y, and z to produce output good 1 with the production
function q1 = f(x1; y1; z1). Firms 2 and 3 produce output good 2
with the production functions q2 = g(x2; y2) and q2 = h(y3; z3)
respectively. To be explicit, firm 1 uses all three inputs to produce
output good 1, while firm 2 uses inputs x and y, and firm 3 uses
inputs y and z, and both of them produce output good 2. The
1
total amounts of the three inputs that is available is (xâ—¦; yâ—¦; zâ—¦). We
assume throughout that production functions are strictly increasing
and strictly concave, and that the solutions to the maximization
problems are strictly positive. The set of efficient production levels
can be found by varying q2â—¦ in the problem
maxx1;y1;z1;x2;y2;y3;z3 q1 =f(x1; y1; z1) s.t.
g(x2; y2) + h(y3; z3) ≥ q2◦;
x1 + x2 + x3 ≤ x◦
y1 + y2 ≤ y◦
z1 + z3 ≤ z◦:
1. Give the Lagrangean function for this problem.
2. Give the FOCs for the Lagrangean.
3. Interpret the multiplier for the constraint that g(x2; y2)+h(y3; z3) ≥
q2â—¦.
4. Give prices p1 and p2 for output goods 1 and 2 and wx; wy; wz
for the three input goods at which the three firms, if acting competitively (i.e. taking the prices as given and maximizing profits)
would choose the efficient levels of inputs and outputs that you
characterized in the FOCs.
5. What would happen to the multiplier for the constraint x1 +x2 +
x3 ≤ x◦ if the amount of x◦ available for production decreased?
Explain.
6. How do prices carry information about the scare resources x, y,
and z to the producers? Relate your answer to the previous part
of this question
Prices carry information about the scarce resources x, y, and z to the producers by signaling the relative scarcity of these resources
The Lagrangean function for this problem is:
[tex]L(x1, y1, z1, x2, y2, y3, z3, q2, \lambda1, \lambda2, \lambda3, \mu1, \mu2) = \\f(x1, y1, z1) + \lambda1(x1 + x2 + x3 - xa-i) + \mu1(y1 + y2 - ya-i) + \mu2(z1 + z3 - za-i) - \lambda2(g(x2, y2) + h(y3, z3) - q2a-i) - \lambda3q2[/tex]
The FOCs for the Lagrangean are:
[tex]\partialL/\partialx1 = \partialf/\partialx1 + \lambda1 = 0\\\partialL/\partialy1 = \partialf/\partialy1 + \mu1 = 0\\\partialL/\partialz1 = \partialf/\partialz1 + \mu2 = 0\\\partialL/\partialx2 = \lambda1 -\lambda2\partialg/\partialx2 = 0\\\partialL/\partialy2 = \mu1 - \lambda2\partialg/\partialy2 + \lambda3 = 0\\\partialL/\partialy3 = \mu2 - \lambda2\partialh/\partialy3 = 0\\\partialL/\partialz3 = \mu2 - \lambda2\partialh/\partialz3 = 0\\\partialL/\partialq2 = -\lambda2 - \lambda3 = 0\\[/tex]
The multiplier for the constraint [tex]g(x2, y2) + h(y3, z3) \geq q2a-i[/tex] represents the shadow price of the good 2 output constraint. It reflects the marginal value of increasing the production of good 2 by one unit. In other words, it indicates how much the objective function (i.e., the production of good 1) would increase if an additional unit of good 2 were produced.
Let p1, p2, wx, wy, and wz be the prices of output good 1, output good 2, input good x, input good y, and input good z, respectively. To find the efficient levels of inputs and outputs, we need to set the marginal cost of each input equal to its price and the marginal revenue of each output equal to its price. This leads to the following system of equations:
[tex]\partialf/\partialxi = pi/wi\\\partialg/\partialxi = pi/wi\\\partialh/\partialzi = pi/wi\\\partialq1/\partialq1 = p1\\\partialq2/\partialq2 = p2[/tex]
Solving this system of equations will give us the efficient levels of inputs and outputs.
If the amount of [tex]xa-i[/tex] available for production decreases, the multiplier for the constraint [tex]x1 + x2 + x3 \leq xa-i[/tex] will increase. This is because the constraint becomes more binding, and reducing the production of any input by one unit will have a larger impact on the objective function.
As a result, the shadow price (i.e., the multiplier) of the input constraint will increase, reflecting the increased scarcity of the input.
Prices carry information about the scarce resources x, y, and z to the producers by signaling the relative scarcity of these resources. When the price of an input increases, it indicates that the resource is relatively more scarce, and producers will adjust their input usage accordingly, using less of the relatively more expensive input
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which best describes why banks aren't allowed to loan out all of their deposits at once? responses if banks loaned out all of their deposits, the money supply would grow much too slowly. if banks loaned out all of their deposits, the money supply would grow much too slowly. if banks loaned out all of their deposits, there wouldn't be enough money left to provide new customers with loans. if banks loaned out all of their deposits, there wouldn't be enough money left to provide new customers with loans. if banks loaned out all of their deposits, the government would be unable to calculate the bank's tax burden. if banks loaned out all of their deposits, the government would be unable to calculate the bank's tax burden. if banks loaned out all of their deposits, it would be impossible to meet customers' demands for withdrawals.
Banks are not allowed to loan out all of their deposits at once because they need to maintain a certain level of reserves to meet customer's demands for withdrawals.
If banks were to loan out all of their deposits, they would not have enough money left to provide new customers with loans, which is a primary source of income for banks.
Additionally, if the money supply were to grow too quickly, it could lead to inflation and other economic problems. Therefore, banks are required to keep a portion of their deposits in reserve to ensure they have enough money to meet customer demands and provide new loans. This is regulated by the government, which calculates the bank's tax burden based on their reserves and other factors.
Overall, maintaining a balance between lending and reserves is crucial for banks to provide loans and maintain financial stability.
The best description of why banks aren't allowed to loan out all of their deposits at once is that it would be impossible to meet customers' demands for withdrawals. '
If banks loaned out all of their deposits, there wouldn't be enough money left in the bank to fulfill withdrawal requests from customers.
This could lead to a loss of trust in the banking system and potential bank runs, causing instability in the financial sector. To maintain stability and ensure customer trust, banks must hold a portion of their deposits in reserve to meet withdrawal demands and maintain liquidity.
This practice allows banks to provide loans to new customers while still being able to meet the withdrawal needs of their existing customers.
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what is the difference between reserves and excess reserves in terms of banking? excess reserves refer to the amount that the banks have beyond loan reserves. reserves are the funds banks keep on hand to meet reserve requirements established by the fed. excess reserves refer to the reserves that the banks have beyond the legally required reserve amounts. reserves are the funds banks keep on hand to meet federal reserve requirements. reserves refer to the cash that banks have on hand to satisfy the demands of their employees and the reserve requirements of their competitors. excess reserves refer to the amount of reserves banks have in excess of the profits they earn. excess reserves refer to the amount that the banks have beyond what they owe to their competitors. reserves are the funds banks keep on hand to meet reserve requirements established by the fed.
In banking, reserves refer to the cash that banks have on hand to satisfy the demands of their employees
And the reserve requirements established by the Federal Reserve. These reserves are the funds that banks keep on hand to meet federal reserve requirements. On the other hand, excess reserves refer to the reserves that banks have beyond the legally required reserve amounts.
This means that excess reserves refer to the amount that banks have beyond what they owe to their competitors. It is important to note that excess reserves refer to the amount that banks have beyond loan reserves and the assets they earn.
Therefore, excess reserves are the amount that banks have in excess of what they need to meet their obligations and requirements.
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raising the required reserve ratio the simple deposit multiplier which will the economy money supply
Raising the required reserve ratio will decrease the simple deposit multiplier, which will decrease the economy's money supply.
The simple deposit multiplier is the ratio of the amount of money.
That can be created by the banking system through loans to the amount of reserves held by banks.
It is calculated as 1/required reserve ratio. For example, if the required reserve ratio is 10%, the simple deposit multiplier is 1/0.1, or 10.
When the required reserve ratio is increased.
Banks are required to hold a larger portion of their deposits in reserve and can lend out a smaller portion.
This means that the simple deposit multiplier decreases, as the ratio of loans that can be made to reserves held by banks becomes smaller.
As a result, the banking system is able to create less money through loans, and the economy's money supply decreases.
When the required reserve ratio is decreased.
Banks are required to hold a smaller portion of their deposits in reserve and can lend out a larger portion.
This means that the simple deposit multiplier increases.
As the ratio of loans that can be made to reserves held by banks becomes larger.
As a result, the banking system is able to create more money through loans, and the economy's money supply increases.
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The above question is incomplete, the complete question is:
Raising the required reserve ratio __________ the simple deposit multiplier which will __________ the economy's money supply.
Project A requires a $405,000 initial investment for new machinery with a five-year life and a salvage value of $43,500. Project Als expected to yield annual income of $25,100 per year and net cash flow of $101,250 per year for the next five years. Compute Project A's accounting rate of return. Numerator: Annual income Answer is not complete. Accounting Rate of Return Denominator: Accounting Rate of Return Average investment = Accounting rate of return 0 25,100
Project A's accounting rate of return is approximately 11.19%.
To compute Project A's accounting rate of return, we will use the following formula:
Accounting Rate of Return (ARR) = (Annual Income / Average Investment) x 100
First, we need to calculate the average investment.
The average investment is the sum of the initial investment and the salvage value divided by 2:
Average Investment = (Initial Investment + Salvage Value) / 2
Average Investment = ($405,000 + $43,500) / 2
Average Investment = $224,250
Next, we will use the given annual income and the calculated average investment to compute the ARR:
ARR = (Annual Income / Average Investment) x 100
ARR = ($25,100 / $224,250) x 100
ARR ≈ 11.19%
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One disadvantage of the Herfindahl-Hirschmann Index is that the index:
A) is difficult to compute.
B) fails to reflect low barriers to entry.
C) fails to reflect the effect of mergers in the industry
One disadvantage of the Herfindahl-Hirschmann Index is that the index C) fails to reflect the effect of mergers in the industry.
The Herfindahl-Hirschman Index (HHI) is a measure of market concentration that is widely used in antitrust analysis. However, one of the disadvantages of the HHI is that it fails to reflect the effect of mergers in the industry. This is because the HHI is based on the market shares of the firms in the industry, and does not take into account the fact that mergers can change the number of firms in the industry. Therefore, the HHI can underestimate the level of market concentration after a merger, which can lead to anticompetitive behavior.
Despite this limitation, the HHI is still a useful tool for antitrust analysis. It provides a simple and objective measure of market concentration that can be used to identify potentially anticompetitive behavior in a market. However, it should be used in conjunction with other measures and factors, such as barriers to entry,
Option C is correct answer.
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the __________ step in value-based pricing is determining the costs that can be incurred.
The third step in value-based pricing is determining the costs that can be incurred.
Value-based pricing refers to a method of setting prices that are primarily based on the perceived worth of a good or service by the consumer. Customers are the emphasis of value-based pricing, which bases prices on what consumers think a product is worth.
Value-based pricing is distinct from cost-plus pricing, which computes prices after accounting for manufacturing costs. Businesses that provide distinctive or extraordinarily useful products or services are better positioned to benefit from the value-based pricing strategy than those that primarily market commodities.
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1. Ms. Chambers, a U.S. arbitrageur, is looking for arbitrage opportunities. The one-year interest rate offered in the U.S. is 3%, while the one-year interest rate offered in Bolivia is 12%. The spot rate is 7.20 BOL/USD, that is, Bolivian Pesos 7.20 per USD. Ms. Chambers is offered a one-year forward contract at 7.80 BOL/USD. Assume you have USD 500,000. . Is arbitrage possible?a. If arbitrage is possible, design the appropriate covered arbitrage strategy.b. If arbitrage is possible, calculate the profits for the arbitrage strategy.
The profits for the arbitrage strategy are USD 18,557.14
To determine whether an arbitrage opportunity exists, we need to compare the expected return on investment in the US versus Bolivia.
If Ms. Chambers invests USD 500,000 in the US at 3%, she would have USD 515,000 after one year.
If she converts the USD to Bolivian pesos at the spot rate of 7.20 BOL/USD, she would have BOL 3,708,000. If she invests the BOL in Bolivia at 12%, she would have BOL 4,154,560 after one year.
If she enters into a one-year forward contract to exchange USD for BOL at a rate of 7.80 BOL/USD, she can lock in a future exchange rate and eliminate exchange rate risk.
Therefore, we can see that there is an arbitrage opportunity since Ms. Chambers can earn a higher return by investing in Bolivia than in the US.
To design the appropriate covered arbitrage strategy, Ms. Chambers should take the following steps:
Borrow USD 500,000 at 3% for one year.Convert the USD to BOL at the spot rate of 7.20 BOL/USD, giving her BOL 3,708,000.Invest the BOL in Bolivia at 12%, giving her BOL 4,154,560 after one year.Enter into a one-year forward contract to exchange BOL 4,154,560 for USD at a rate of 7.80 BOL/USD.After one year, receive USD 533,557.14 from the forward contract.Repay the USD 500,000 loan with interest of USD 15,000.The remaining profit is USD 18,557.14.Therefore, the profits for the arbitrage strategy are USD 18,557.14.
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controls can help managers determine if their strategy is achieving the desired results. what is a major reason why managers would not implement all of the controls that are available? select an answer and submit. for keyboard navigation, use the up/down arrow keys to select an answer. a having too many controls would eliminate the need for managers. b employees don't want their performance measured. c controls are only necessary for the company's primary products. d the costs of some controls outweigh their benefits.
The major reason why managers would not implement all of the controls that are available is that D: the costs of some controls outweigh their benefits.
Managers may not implement all of the controls that are available due to the costs of some controls outweighing their benefits. Controls can be costly in terms of money, time, and effort to implement and maintain. Additionally, too many controls can be overwhelming and eliminate the need for managers. Furthermore, some employees may resist performance measurements and perceive them as intrusive or invasive.
Thus, managers must balance the costs and benefits of controls while ensuring that they effectively monitor and measure their strategy's progress.
Option D is answer.
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a job shop is an example of a(n): group of answer choices repetitive process. continuous process. line process. intermittent process. specialized process.
Answer:
A job shop is an example of an intermittent process.
In a job shop, customized products are produced in small batches or one at a time to meet specific customer requirements. Job shops typically use multi-purpose machines and skills-based workers who can adapt to the changing needs of different projects.
Intermittent processes are characterized by low-volume, high-variety production that requires frequent changes in equipment, materials, and labor. Unlike line processes, where products move through a set sequence of operations, job shops offer more flexibility and versatility to produce a wide range of unique products tailored for individual customers.
the amount of money borrowed.
Ex. I just moved to a new bank and started off with $100. the $100 is the principal or the money I start off with.
In finance, the principal refers to the amount of money borrowed, invested, or saved, excluding any interest or earnings that accumulate over time.
When someone takes out a loan or a mortgage, for example, the principal is the initial amount borrowed, and the borrower will be required to repay this amount plus any interest that has accrued. Similarly, when someone invests in a bond or a CD, the principal is the amount they invest, and they will earn interest on this amount over time. The principal is also relevant in calculating the payments and interest rates associated with loans, mortgages, and other financial instruments.
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Texas Instruments has $18 million of outstanding equity and $8million of bank debt. The bank debt costs 5% per year. Theestimated equity beta is 2. If the market risk premium is 7.2% and the risk-free rate is 3%, compute the weighted average cost of capital if the firmʹs tax rate is 30%. (Answer in percent: For 0.05324 answer, 5.324)
The weighted average cost of capital for Texas Instruments is 13.38%.
How to calculate WACCTo calculate the weighted average cost of capital (WACC) for Texas Instruments, we need to find the cost of equity and the cost of debt and then weight them by their proportion in the company's capital structure.
First, let's find the cost of debt:
Cost of debt = Bank debt interest rate x (1 - Tax rate)
Cost of debt = 5% x (1 - 0.3)
Cost of debt = 3.5%
Next, let's find the cost of equity:
Cost of equity = Risk-free rate + Equity beta x Market risk premium
Cost of equity = 3% + 2 x 7.2%
Cost of equity = 17.4%
Now, we can calculate the WACC:
WACC = (Proportion of equity x Cost of equity) + (Proportion of debt x Cost of debt)
WACC = (18 / 26 x 17.4%) + (8 / 26 x 3.5%)
WACC = 13.38%
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do you think that the decision to drop the point of purchase at railway stations and airports from the conclusive research was appropriate? justify your answer.
Dropping the point of purchase at railway stations and airports from the conclusive research is appropriate, as it minimizes potential biases and provides a more accurate representation of general consumer behavior.
The decision of drop the point of purchase at railway stations and airportsThe decision to drop the point of purchase at railway stations and airports from the conclusive research appears appropriate, considering a few factors.
Firstly, railway stations and airports are typically high-traffic areas, and including them could skew the results due to the transient nature of the population frequenting these locations.
Secondly, customers at these points of purchase might prioritize convenience and speed over other factors, which could impact the overall evaluation of the research. This focus on convenience might not accurately represent the general population's preferences and could lead to biased conclusions.
Lastly, by excluding railway stations and airports from the research, it allows for a more accurate assessment of consumer behavior in other, more stable retail environments.
This provides a clearer understanding of the factors influencing purchase decisions in everyday situations, which may be more relevant for the majority of businesses.
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Question 8 of 15 View Police Current Attempt in Progress Appliance Resellers Ltd. (ARL) ses pently used and refurbished appliances. The company provides the month and that included in the cost of the place time under the warranties vary from replacing defective parts to providing customers with appliances trains cannot be made. Durin 2020. the imated cost related to the three month www539.600 of which 525.700 had been incurred before year end ($18.000 replacement Appliances and 57.100 for parte For an additional charge of 5120, ARL ofers extended warranty coverage for the anonse amount is expected to cover the costs associated with the extended warrantie Dure 2020. ARL vodema watan The costs incurred during the year for repairs and replacement under these plans touted to $15200 Based on perence the company estimates that its total warranty costs over the three year coverage period will be $45600, which it expects will occarely over the warranty period 1) Prepare journal entries to record the warranty transactions for 2020. debitanter followed by centres Credit account titles are automatically indented when the amount is entered Deer Indent manually. If no entre require select "No entry for the account title and enter for the amounts Account and explanation Debit Credit (To record estimated cost related to 3 months warranties.) /1 To record cost incurred related to 3 month warranties) (TO record sale of Jy extended warranties) (To record cost incurred related to year extended warranties (To record service revenue.)
Journal Entries to record the transactions are:
1) Record the estimated cost related to 3-month warranties:
Debit: Warranty Expense - $39,600
Credit: Warranty Liability - $39,600
(To record estimated cost related to 3-month warranties.)
2) Record the cost incurred related to 3-month warranties:
Debit: Warranty Liability - $25,700
Credit: Inventory (replacement appliances) - $18,000
Credit: Inventory (parts) - $7,700
(To record cost incurred related to 3-month warranties.)
3) Record the sale of 1-year extended warranties:
Debit: Cash - $1,120
Credit: Unearned Warranty Revenue - $1,120
(To record sale of 1-year extended warranties.)
4) Record the cost incurred related to 1-year extended warranties:
Debit: Warranty Expense - $15,200
Credit: Warranty Liability - $15,200
(To record cost incurred related to 1-year extended warranties.)
5) Record the service revenue:
Debit: Unearned Warranty Revenue - $1,120
Credit: Warranty Service Revenue - $1,120
(To record service revenue.)
These are the journal entries to record the warranty transactions for 2020.
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Assets Cash $10,000 Accounts Receivable: $25,000 $40,000 Inventory: $200,000 Fixed Assets; $275,000 Total Liabilities & Equity $ 4,000 Accounts Payable $ 6,000 Notes Payable: $100,000 Long-term debt $165,000 Equity $275,000 Total a. How much working capital does the firm have? b. How much net working capital; does the firm have? c. What are the current ratio and the total debt to total asset ratio? d. What working capital financial approach is being followed?
The working capital financial approach refers to how a company manages its current assets and liabilities to ensure that it has enough liquidity to meet its short-term obligations. Working capital is $129,000.
Working capital is the difference between current assets and current liabilities. In this case, the current assets are:
Cash: $10,000
Accounts Receivable: $25,000
Inventory: $200,000
And the current liabilities are:
Accounts Payable: $6,000
Notes Payable: $100,000
Therefore, the working capital of the firm is:
$10,000 + $25,000 + $200,000 - $6,000 - $100,000 = $129,000
b. Net working capital is calculated by subtracting current liabilities from current assets. In this case, the net working capital is:
$10,000 + $25,000 + $200,000 - $6,000 - $100,000 = $129,000
c. The current ratio is calculated by dividing current assets by current liabilities. In this case, the current ratio is:
($10,000 + $25,000 + $200,000) / $6,000 = 35
The total debt to total asset ratio is calculated by dividing total debt by total assets. In this case, the total debt to total asset ratio is:
($6,000 + $100,000 + $165,000) / ($10,000 + $25,000 + $200,000 + $275,000) = 0.483
d. The working capital financial approach being followed is a conservative approach, as the firm has more current assets than current liabilities, indicating that it has a cushion to meet its short-term obligations.
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When, according to Orlando, is downsizing morally acceptable?
According to Orlando, downsizing is morally acceptable when it is necessary for the survival of the company and when it minimizes harm to employees and stakeholders.
Orlando posits that downsizing becomes morally acceptable under certain conditions. First, it must be a last resort to save the company from failure, after considering and exhausting other options such as cost-cutting measures, restructuring, or seeking outside financial assistance. Second, the company should make every effort to minimize harm to employees and stakeholders, providing them with fair compensation, adequate notice, and assistance in finding new employment. Additionally, the decision-makers should engage in transparent communication, treat employees with respect, and ensure that the burden of downsizing is shared fairly among all levels of the organization. When these conditions are met, downsizing can be considered morally acceptable, as it strives to protect the greater good of the company and its stakeholders.
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You need to accumulate $106,313 for your son's education. Youhave decided to place equal year-end deposits in a savings accountfor the next 6 years. The savings account pays 13.92 percent peryear, compounded annually. How much will each annual payment be?
Round the answer to two decimal places.
Each annual payment that needs to be made to accumulate $106,313 for your son's education is $17,104.02.
To calculate the annual payment that needs to be made to accumulate $106,313 for 6 years at a 13.92% annual interest rate, compounded annually, we can use the formula for future value of an annuity:
FV = Pmt x [(1 + r)^n - 1] / r
Where:
FV = Future value of the annuity
Pmt = Annual payment
r = Annual interest rate
n = Number of periods (in this case, 6 years)
Substituting the given values, we get:
$106,313 = Pmt x [(1 + 0.1392)^6 - 1] / 0.1392
Simplifying the equation, we get:
Pmt = $106,313 / [(1.1392^6 - 1) / 0.1392]
Pmt = $106,313 / 6.2162
Pmt = $17,104.02 (rounded to two decimal places)
Therefore, we have calculated that each annual payment that needs to be made to accumulate $106,313 for your son's education is $17,104.02.
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A way to assess the effects of planned action with a way to view continuous improvement by integrating organizational learning into the planning process is: the Deming Cycle to use Directional planning mission vision cycle the MBO process the use of Hybrid planning
The Deming Cycle is a means of assessing the impact of planned conditioning with a means of nonstop enhancement by incorporating organizational literacy into the planning process. This is optionA.
The Deming Cycle is a model of nonstop quality enhancement that consists of a logical sequence of four crucial way plan, do, study, and act.
When working on repetitious systems, the Deming Cycle is an inestimable tool for continually covering and perfecting your processes. insure client satisfaction, a process that's as provident and profitable as possible and the provocation of the workers involved in the overall process.
Question
One way to assess the impact of planned conditioning, as well as one way to continually ameliorate by incorporating organizational literacy into the planning process, is to
a) Deming cycle
b) Use the charge vision cycle of direction planning
c) MBO process
d) Use of mongrel planning
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