The EU and the CSME have distinct histories, development, and laws from a legal standpoint.
The EU originated from the European Coal and Steel Community (ECSC) and evolved through various treaties, such as the Treaty of Rome and the Maastricht Treaty, to establish a comprehensive legal framework covering economic, political, and social aspects. It has a supranational character, with the European Court of Justice as its judicial body. On the other hand, the CSME emerged from the Caribbean Community (CARICOM) and is governed by the Revised Treaty of Chaguaramas. While it aims to create a single market and economy, it operates on the basis of intergovernmental cooperation, with the Caribbean Court of Justice as the final appellate court. Comparative analysis reveals differences in institutional structures, legal principles, and integration approaches between the EU and the CSME.
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Please answer the following parts:.
A. Using the AD-AS model, show the effects of a negative demand shock on output and the price level.
B. What should the Fed do to take the economy back to the original output? And, what should it do to take the economy back to the original price level?
A negative demand shock leads to a decrease in output and the price level, and the Fed should implement expansionary monetary policy to restore the original output and contractionary monetary policy to restore the original price level.
What are the effects of a negative demand shock on output and the price level according to the AD-AS model?A. A negative demand shock refers to a sudden decrease in aggregate demand in the economy. In the AD-AS model, this would cause a leftward shift of the aggregate demand curve. The effects on output and the price level are as follows:
Output: The negative demand shock leads to a decrease in aggregate demand, resulting in a lower level of real GDP. As a result, the equilibrium output decreases, and the economy operates below its potential output.
Price Level: With the decrease in aggregate demand, there is a downward pressure on prices. This leads to a decrease in the overall price level in the economy.
B. To take the economy back to the original output level, the Federal Reserve (Fed) can implement expansionary monetary policy. This involves lowering interest rates, increasing the money supply, and implementing measures to stimulate borrowing and spending. By doing so, aggregate demand will increase, leading to an increase in output and moving the economy towards the original level.
To take the economy back to the original price level, the Fed can use contractionary monetary policy. This involves increasing interest rates, reducing the money supply, and implementing measures to restrain borrowing and spending.
By reducing aggregate demand, the decrease in demand will help alleviate downward pressure on prices and move the economy towards the original price level.
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Problem One. A $1,000 unit bond has a coupon rate of 4% (interest paid yearly at $40 per year). The bond has five years left until it matures. The current market interest rate equals 5%. Compute the bond’s market value today.
Problem Two. You can use the same fact situation as problem one. The only item that has change is current market interest rate equals 3%. Compute the bond’s market value today.
Problem One: To compute the bond's market value today, we need to calculate the present value of its future cash flows.
Step 1: Calculate the present value of the bond's coupon payments.
PV of coupon payments = Coupon payment / (1 + Market interest rate)^n
PV of coupon payments = $40 / (1 + 5%)^1 + $40 / (1 + 5%)^2 + $40 / (1 + 5%)^3 + $40 / (1 + 5%)^4 + $40 / (1 + 5%)^5
PV of coupon payments = $36.36 + $34.63 + $32.98 + $31.41 + $29.90
PV of coupon payments = $165.28
Step 2: Calculate the present value of the bond's face value (maturity value).
PV of face value = Face value / (1 + Market interest rate)^n
PV of face value = $1,000 / (1 + 5%)^5
PV of face value = $783.53
Step 3: Calculate the bond's market value by summing the present values of coupon payments and face value.
Market value = PV of coupon payments + PV of face value
Market value = $165.28 + $783.53
Market value = $948.81
Therefore, the bond's market value today is $948.81.
Problem Two:
Using the same steps as in Problem One, but with a market interest rate of 3%:
PV of coupon payments = $40 / (1 + 3%)^1 + $40 / (1 + 3%)^2 + $40 / (1 + 3%)^3 + $40 / (1 + 3%)^4 + $40 / (1 + 3%)^5
PV of coupon payments = $38.83 + $37.70 + $36.63 + $35.61 + $34.63
PV of coupon payments = $183.40
PV of face value = $1,000 / (1 + 3%)^5
PV of face value = $862.37
Market value = PV of coupon payments + PV of face value
Market value = $183.40 + $862.37
Market value = $1,045.77
Therefore, the bond's market value today, with a market interest rate of 3%, is $1,045.77.
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Problem One: To compute the bond's market value today, we need to calculate the present value of its future cash flows.
Step 1: Calculate the present value of the bond's coupon payments.
PV of coupon payments = Coupon payment / (1 + Market interest rate)^n
PV of coupon payments = $40 / (1 + 5%)^1 + $40 / (1 + 5%)^2 + $40 / (1 + 5%)^3 + $40 / (1 + 5%)^4 + $40 / (1 + 5%)^5
PV of coupon payments = $36.36 + $34.63 + $32.98 + $31.41 + $29.90
PV of coupon payments = $165.28
Step 2: Calculate the present value of the bond's face value (maturity value).
PV of face value = Face value / (1 + Market interest rate)^n
PV of face value = $1,000 / (1 + 5%)^5
PV of face value = $783.53
Step 3: Calculate the bond's market value by summing the present values of coupon payments and face value.
Market value = PV of coupon payments + PV of face value
Market value = $165.28 + $783.53
Market value = $948.81
Therefore, the bond's market value today is $948.81.
Problem Two:
Using the same steps as in Problem One, but with a market interest rate of 3%:
PV of coupon payments = $40 / (1 + 3%)^1 + $40 / (1 + 3%)^2 + $40 / (1 + 3%)^3 + $40 / (1 + 3%)^4 + $40 / (1 + 3%)^5
PV of coupon payments = $38.83 + $37.70 + $36.63 + $35.61 + $34.63
PV of coupon payments = $183.40
PV of face value = $1,000 / (1 + 3%)^5
PV of face value = $862.37
Market value = PV of coupon payments + PV of face value
Market value = $183.40 + $862.37
Market value = $1,045.77
Therefore, the bond's market value today, with a market interest rate of 3%, is $1,045.77.
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Refer to the supply and demand graph Serina Williams tennis jerseys above. If the price of of the Serina Williams tennis jersey at a tennis game is $40, there is a _____ of ______ units of tennis jerseys.
a. shortage; 100 b. surplus; 50 c. surplus;100
d. shortage; 50
Referring to the supply and demand graph above, if the price of the Serina Williams tennis jersey at a tennis game is $40, there is a shortage of 50 units of tennis jerseys. Thus, the answer is option D.
When the price of the Serina Williams tennis jersey is $40, locate the point where the supply and demand curves intersect.
This point of intersection is labeled as A on the graph.
Next, draw a horizontal line to the y-axis.
You should see that the quantity demanded is greater than the quantity supplied.
This implies a shortage of 50 units of tennis jerseys.
Hence, option D is the correct answer.
Option A: Shortage of 100 units of tennis jerseys
This is not the correct answer because at the price of $40, there is a shortage of 50 units of tennis jerseys.
Option B: Surplus of 50 units of tennis jerseys
This is not the correct answer because at the price of $40, there is a shortage of 50 units of tennis jerseys.
Option C: Surplus of 100 units of tennis jerseys
This is not the correct answer because at the price of $40, there is a shortage of 50 units of tennis jerseys.
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In the country of Harvard, the Central Bank wants to be able to focus on fighting recessions and inflation, not worrying about the exchange rate. At the same time, the government wants to keep the exchange rate from changing. Suppose the economy is at potential output now. What could happen that would force the Central Bank fo Harvard to stop money from ENTERING Harvard?
HINT:
The government wants to fix the exchange rate, so they have two choices. First, they could raise interest rates whenever the exchange rate wants to fall, and lower interest rates whenever the exchange rate wants to rise. Second, they could stop money from entering whenever the exchange rate wants to rise, and stop money leaving whenever the exchange rate wants to fall. So this question is really just asking what could happen that would make Harvard's exchange rate want to rise. Think of four things that could happen, and list them here:
1)
2)
3)
4)
If the Central Bank of Harvard wants to keep the exchange rate constant, a decrease in the demand for Harvard's currency in the foreign exchange market could force it to prevent money from entering the country.
However, any capital inflows would raise the exchange rate, putting pressure on the Central Bank of Harvard to maintain the rate, which would cause an excess supply of the Harvard currency.
It would also put pressure on the Central Bank to maintain a stable money supply by raising the interest rate, which could lead to a contractionary monetary policy.The Central Bank of Harvard must conduct open market operations to prevent the money supply from rising.
Purchasing domestic assets in exchange for money reduces the supply of money. Open market sales raise the money supply by selling domestic assets for money.
In conclusion, an excess supply of Harvard currency in the foreign exchange market could put pressure on the Central Bank of Harvard to maintain the exchange rate, leading to a contractionary monetary policy and open market operations to prevent the money supply from rising.
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You purchases a house for $122,691.00. You made a down payment of 20,000 and the remainder of the purchase price was financed with a mortgage loan. The mortgage loan is a 30 year mortgage with an annual interest rate of 6.76%. Mortgage payments are made monthly. What is the monthly amount of your mortgage payment?
The monthly mortgage payment would be approximately $615.80. To calculate the monthly mortgage payment, we need to consider the principal amount, interest rate, and loan term. The principal amount is the purchase price minus the down payment, which is $122,691.00 - $20,000.00 = $102,691.00.
Next, we need to calculate the monthly interest rate by dividing the annual interest rate by 12 (months in a year). The monthly interest rate is 6.76% / 12 = 0.5633%. To determine the number of months in the loan term, we multiply the number of years by 12. In this case, it is 30 years * 12 = 360 months. Now, we can use the formula for calculating the fixed monthly mortgage payment, which is: M = P * (r * (1 + r)^n) / ((1 + r)^n - 1 Where: M = Monthly mortgage payment P = Principal amount r = Monthly interest rate n = Number of months in the loan term Plugging in the values: M = $102,691.00 * (0.005633 * (1 + 0.005633)^360) / ((1 + 0.005633)^360 - 1) Calculating this expression, the monthly mortgage payment M is approximately $615.80. The formula derives from the concept of an amortization schedule, which calculates the repayment of a loan over time. The mortgage payment is divided into two components: principal and interest. Each month, a portion of the payment goes towards reducing the principal amount borrowed, while the remainder covers the interest accrued on the outstanding balance. Over time, the interest component decreases, and the principal component increases, gradually reducing the loan balance. In this scenario, with a 30-year mortgage and a relatively high interest rate of 6.76%, the monthly mortgage payment is $615.80. It is important to note that this amount only includes the principal and interest. Other costs, such as property taxes and insurance, are not accounted for in this calculation.
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On January 1, 2021, Nantucket Ferry borrowed $14,000,000 cash from BankOne and issued a four-year, $14,000,000, 6% note. Interest was payable annually on December 31.
Prepare the journal entries for both firms to record interest at December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
1. Record the entry for Nantucket Ferry for the interest payment.
2. Record the entry for BankOne for the receipt of interest.
BankOne needs to record the receipt of interest from Nantucket Ferry. The interest revenue represents the Income earned by BankOne from the interest on the note.
The cash account is credited to reflect the increase in cash due to the interest payment received.
1. Journal entry for Nantucket Ferry for the interest payment on December 31, 2021:
Date: December 31, 2021
Account Debit Credit
-------------------------------------------------------
Interest Expense $840,000
Interest Payable $840,000
Nantucket Ferry needs to record the payment of interest expense for the year. The interest expense is calculated as the principal amount ($14,000,000) multiplied by the interest rate (6%). The interest payable account represents the outstanding interest owed to BankOne.
2. Journal entry for BankOne for the receipt of interest on December 31, 2021:
Date: December 31, 2021
Account Debit Credit
------------------------------------------------------
Cash $840,000
Interest Revenue $840,000
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You are valuing an investment that will pay you $22,000 per year for the first 6 years, $38,000 per year for the next 12 years, and $90,000 per year the following 18 years (all payments are at the end of each year). Another similar risk investment. alternative is an account with a quoted annual interest rate of 15.00% with monthly compounding of interest. What is the value in today's dollars of the set of cash flows you have been offered? $179,523.07 $216,876.37 $2,208,000.00 $256,564.75 $197,037.76
The value in today's dollars of the set of cash flows is $256,564.75.
To calculate the present value of the cash flows, we need to discount each cash flow to its present value using the appropriate interest rate. For the first 6 years, we discount the $22,000 payments using the interest rate of 15% with monthly compounding. For the next 12 years, we discount the $38,000 payments, and for the following 18 years, we discount the $90,000 payments. The present value of each cash flow is then calculated by dividing the annual payment by the interest rate and subtracting it from the numerator of the annuity formula. Finally, we sum up the present values of all cash flows to find the total present value, which amounts to $256,564.75.
In summary, by discounting each cash flow to its present value using the appropriate interest rate, we find that the value in today's dollars of the set of cash flows is $256,564.75
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Whats the main feature of Target Costing? Pick the correct answer (only one answer is correct) - A- Based on pareto 80/20 rule, target costing focuses on 20% from the produced items in the factory, that the redemption accomplished from them is 80% of the overall redemption on the factory. B- Target costing is similar to contribution costing since it only deals with direct costs. C- Target costing takes placed market prices, and cuts the products target cost from them. D- All the answers are incorrect. E- Target costing is defined as setting the selling price based on the cost and the target profit.
Target Costing is defined as the method of setting a price for a product or service based on the cost and the target profit. The main feature of Target Costing is that it takes placed market prices, and cuts the product's target cost from them.Therefore, option (C) is the correct answer.
It is a type of pricing technique that helps to determine the value of a product or service.The Target Costing method works by setting a target price based on the market price of the product. It then subtracts the desired profit margin from that target price to determine the target cost. If the target cost is higher than the current cost, then the company needs to look for ways to reduce the cost of production to achieve the desired target cost.
The focus of Target Costing is to design the product in such a way that the target cost can be achieved without compromising on quality. It is a customer-oriented pricing technique that aims to meet the needs of the customers at an affordable price while maintaining the quality of the product.
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Use the following statements to answer this question: I. A high receivables turnover is a good credit strategy that allows firms to lower working capital requirements II. Trade credit terms are financing tools to the supplier A. I and II are incorrect. B. I and II are correct. C. I is correct and II is incorrect. D. I is incorrect and II is correct.
A high receivables turnover is a good credit strategy that allows companies to reduce working capital requirements. This is a true statement.
If a company has a high receivables turnover, it implies that it is collecting payments from its consumers in a shorter period. This reduces the amount of time between paying for raw materials and receiving payment from customers, which reduces the working capital requirement. A company with a low receivables turnover, on the other hand, is unable to collect payments from customers quickly, resulting in a higher working capital requirement.
Trade credit terms are an instrument that suppliers can use to provide financing. This is a false statement. The buyer, not the seller, is given the option to obtain funding in trade credit. The supplier will not be paid immediately in this situation, and the buyer will pay for the goods and services at a later date. As a result, trade credit terms are a financing instrument for buyers, not sellers. The correct option is C: I is correct, and II is incorrect.
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Within-firm risk and beta risk
Understanding risks that affect projects and the impact of risk consideration
Yatta Net International has manufacturing, distribution, retail, and consulting divisions. Projects undertaken by the manufacturing and distribution divisions tend to be low-risk projects, because these divisions are well established and have predictable demand. The company started its retail and consulting divisions within the last year, and it is unknown if these divisions will be profitable. The company knew that opening these new divisions would be risky, but its management believes the divisions have the potential to be extremely profitable under favorable market conditions. The company is currently using its WACC to evaluate new projects for all divisions.
If Yatta Net International does not risk-adjust its discount rate for specific projects properly, which of the following is likely to occur over time? Check all that apply.
a. The firm will accept too many relatively safe projects.
b. The firm will become less valuable.
c. The firm will accept too many relatively risky projects.
If Yatta Net International does not risk-adjust its discount rate for specific projects properly, the following is likely to occur over time: a. The firm will accept too many relatively safe projects and c. The firm will accept too many relatively risky projects.
a. The firm will accept too many relatively safe projects.
c. The firm will accept too many relatively risky projects.
If Yatta Net International does not properly risk-adjust its discount rate for specific projects, it is likely to lead to an imbalance in project selection. Without appropriate risk consideration, the firm may disproportionately accept projects that are either relatively safe or relatively risky.
a. The firm will accept too many relatively safe projects: Without adequately factoring in the risk associated with certain projects, the firm may favor safer projects that have lower potential returns.
This can result in missed opportunities for higher-profit but riskier projects.
c. The firm will accept too many relatively risky projects: Conversely, without proper risk adjustment, the firm may also be inclined to accept projects that are perceived to have high potential profitability but also carry significant risks.
This can expose the firm to a higher level of risk and potential losses if these projects do not perform as expected.
b. The firm will become less valuable: While it is not directly stated in the information provided, if the firm consistently accepts a disproportionate number of either safe or risky projects without proper risk-adjustment, it can negatively impact the overall value of the firm.
This is because the firm's value is influenced by the quality and balance of its project portfolio, and an imbalance in risk exposure can affect the firm's long-term financial performance and stability.
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The Organisation for Economic Co-operation and Development (OECD) publishes data that ranks countries based on their spending on research and development (R&D) by residents as a share of GDP. Go online and find a recent ranking, then answer the following questions.
a) What is R&D, and what is its significance?
b) In a table, list four countries with high shares of expenditure on R&D and four countries with low shares. Note: show the share for each country in the table.
c) The World Bank publishes online the GDP per capita (constant base-year US$) for countries. Find and report the most recent estimates of GDP per capita of the
countries in (b) above.
d) What pattern do you find between the share of R&D spending and GDP per capita?
e) Give two possible interpretations of the pattern in (d).
a) R&D stands for research and development.
b) High Share of Expenditure on R&D .
c) The most recent estimates of GDP per capita (constant base-year US$) for the countries mentioned .
d) There is a positive correlation between the share of R&D spending and GDP per capita.
e) Two possible interpretations of the pattern are R&D drives economic growth and GDP per capita enables R&D spending .
a) R&D stands for research and development. It refers to activities conducted by individuals, organizations, or governments to create new knowledge, develop new technologies, or improve existing ones. R&D plays a crucial role in driving innovation, economic growth, and competitiveness.
It leads to the development of new products, processes, and services, which can enhance productivity, create jobs, and improve living standards. R&D is significant because it fosters technological advancements, drives scientific discoveries, and enables countries to stay at the forefront of global progress.
b) High Share of Expenditure on R&D:
South Korea: Share of expenditure on R&D: 4.81%
Israel: Share of expenditure on R&D: 4.95%
Japan: Share of expenditure on R&D: 3.26%
Sweden: Share of expenditure on R&D: 3.24%
Low Share of Expenditure on R&D:
Mexico: Share of expenditure on R&D: 0.53%
Indonesia: Share of expenditure on R&D: 0.20%
Brazil: Share of expenditure on R&D: 1.29%
South Africa: Share of expenditure on R&D: 0.77%
c) The most recent estimates of GDP per capita (constant base-year US$) for the countries mentioned above are as follows:
South Korea: GDP per capita: $31,346
Israel: GDP per capita: $43,316
Japan: GDP per capita: $39,198
Sweden: GDP per capita: $41,166
Mexico: GDP per capita: $9,885
Indonesia: GDP per capita: $4,306
Brazil: GDP per capita: $9,121
South Africa: GDP per capita: $6,354
d) There is a positive correlation between the share of R&D spending and GDP per capita. Generally, countries with higher shares of R&D expenditure tend to have higher GDP per capita. This suggests that investing in research and development contributes to economic prosperity and higher living standards.
e) Two possible interpretations of the pattern are:
R&D drives economic growth: Countries that allocate a significant share of their expenditure on R&D demonstrate a commitment to innovation and technological advancement. This investment contributes to the development of new industries, products, and services, which in turn drives economic growth and leads to higher GDP per capita.
GDP per capita enables R&D spending: Higher GDP per capita provides countries with more resources and financial capacity to allocate towards R&D. It indicates a stronger economic base that can support research and development activities, leading to further advancements and increasing the share of R&D expenditure.
R&D is a critical driver of innovation and economic growth. Countries like South Korea, Israel, Japan, and Sweden allocate a significant share of their expenditure on R&D, and they also tend to have higher GDP per capita. This positive correlation suggests that investing in R&D contributes to economic prosperity and higher living standards. On the other hand, countries with lower shares of R&D expenditure, such as Mexico, Indonesia, Brazil, and South Africa, tend to have lower GDP per capita. This pattern highlights the importance of prioritizing R&D investments to foster long-term economic development and improve the standard of living in a country.
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How do you decide which tasks to delegate to specific members
of your team? How do you assess the results?"
Delegation is a process of assigning responsibility and authority to someone else to perform specific tasks on your behalf. It involves decision-making and requires a few considerations before deciding which tasks to delegate to specific members of your team.
How to decide which tasks to delegate to specific members of your team?Here are some steps to take:
Step 1: Analyze your tasks
Take a look at the tasks that you do regularly. Identify the ones that take too much of your time, are not part of your core competencies, and can be done by others.
Step 2: Identify the skills and abilities of each team member
It's important to assess the skills and abilities of each team member to determine which tasks they are best suited for. You can delegate tasks to team members who have the right skills, experience, and training.
Step 3: Consider each team member's workload
Before delegating tasks to your team members, assess their current workload. Delegating tasks to team members who are already overwhelmed with work may lead to frustration and poor results.
Step 4: Set clear expectations and deadlines
Clearly communicate what you expect from your team members. Explain the goals and objectives of the task, the timeline, and any other relevant information.
Step 5: Monitor progress and provide feedback
Once you delegate the task, monitor the progress regularly. Provide constructive feedback to your team members to help them improve their performance.
Assessing the results of delegation is crucial to determine if you have made the right decision in delegating tasks. Here's how to do it:
Step 1: Analyze the outcome
Look at the outcome of the task to determine if it meets your expectations and goals. If the outcome is satisfactory, you can continue to delegate similar tasks in the future.
Step 2: Identify areas for improvement
Identify areas for improvement and provide constructive feedback to your team members. This feedback can help them improve their performance and avoid making the same mistakes in the future.
Step 3: Evaluate the process
Assess the delegation process to determine if it was effective. Identify any challenges or issues that need to be addressed and make the necessary changes.
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The price elasticity of demand of good X is 1.8. An increase in the price of good X will
a. Decrease revenues for the suppliers of good X
b. Increase revenues for the suppliers of good X
c. Not affect revenues for the suppliers of good X
d. Increase or decrease revenues for the suppliers of food X
The answer to this question is decrease revenues for the suppliers of good X. An increase in the price of a good will decrease the quantity demanded of that good, given that all else remains constant. Correct answer is option A
In other words, the higher the price, the fewer units of the good will be sold. The price elasticity of demand (PED) measures the degree of responsiveness of the quantity demanded of a good to a change in its price. It is measured as the percentage change in the quantity demanded of the good that results from a 1% change in its price.
The PED is calculated as follows:PED = Percentage change in quantity demanded / Percentage change in priceThe PED is said to be elastic if the percentage change in quantity demanded is greater than the percentage change in price, indicating that the quantity demanded is highly responsive to a change in the price.
The PED is said to be inelastic if the percentage change in quantity demanded is less than the percentage change in price, indicating that the quantity demanded is not very responsive to a change in the price.
The PED is said to be unit elastic if the percentage change in quantity demanded is equal to the percentage change in price, indicating that the quantity demanded is exactly proportional to a change in the price. Correct answer is option A
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Use an American company that produces or delivers a service familiar to you. Using the SCOR five step model, describe (as good as you can) an effective supply chain model for your organization. Give as much detail as possible for each step.
The SCOR (Supply Chain Operations Reference) model provides a framework for analyzing and improving supply chain performance. Let's explore an effective supply chain model for Amazon, focusing on each step of the SCOR model:
Plan:
Amazon's planning phase involves understanding customer demand, forecasting trends, and developing strategies to meet customer expectations. They utilize advanced data analytics and machine learning algorithms to analyze historical sales data, customer behavior, and market trends. This helps them forecast demand accurately and plan inventory levels and product assortment accordingly. Additionally, they collaborate with suppliers and logistics partners to align their plans and ensure efficient coordination.
Source:
In the sourcing phase, Amazon focuses on establishing strategic relationships with suppliers and optimizing sourcing processes. They work closely with a wide range of suppliers globally, negotiating favorable terms, ensuring quality standards, and maintaining a diverse supplier base. To streamline sourcing operations, Amazon employs digital platforms and supplier portals, enabling efficient communication, order placement, and tracking. Their strong supplier network and efficient sourcing processes enable them to maintain a vast product catalog and fulfill customer orders promptly.
Make:
The make phase in Amazon's supply chain primarily involves their internal operations, such as order processing, inventory management, and product customization. Amazon's fulfillment centers are strategically located worldwide, enabling them to store and process a vast inventory of products efficiently. Advanced warehouse management systems and automation technologies, including robotics and conveyor systems, help optimize inventory movement, order picking, and packing processes. Real-time tracking and visibility of inventory levels enable Amazon to fulfill orders accurately and promptly.
Deliver:
The delivery phase focuses on ensuring efficient and timely transportation of products to customers. Amazon employs a multi-modal transportation strategy, utilizing a combination of owned logistics infrastructure, partnerships with shipping carriers, and last-mile delivery services. Their logistics network includes fulfillment centers, sorting centers, delivery stations, and a fleet of vehicles, including vans, trucks, and drones. Real-time shipment tracking and customer notifications enhance visibility and provide a seamless delivery experience.
Return:
The return phase encompasses Amazon's customer-centric approach to handling returns and managing reverse logistics. They have a well-defined returns policy, offering convenience and flexibility to customers. Automated returns processes, prepaid labels, and drop-off options simplify the return process. Amazon employs data analytics to analyze return patterns and identify opportunities for process improvement and product quality enhancement. Returned items are efficiently processed, either restocked for resale or directed to appropriate disposal or refurbishment channels.
Conclusion:
Amazon has built an effective supply chain model by aligning its operations with the SCOR model's five steps. Their focus on customer demand forecasting, strategic sourcing, efficient internal operations, robust delivery network, and customer-centric returns management has contributed to their success as a leading e-commerce company. Leveraging advanced technologies and data analytics, Amazon continuously strives to optimize its supply chain, enhance customer experience, and maintain a competitive edge in the market.
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There is a road between the suburbs and downtown. The road becomes congested at rush hour. As long as fewer than 100 people use the road at rush hour, the trip takes 30 minutes. When the 101st person enters the road, everyone has to slow down and the trip now takes 31 minutes. People value their time at $6 per hour (i.e., $0.10 per minute) and so a 30 minute trip costs $3.
Instructions: Round your answers to two decimal places.
a. The private cost of one of the 100 individuals using the road is $ . The total private cost of 100 people using the road is $ . The total social cost of 100 people using the road is $ .
b. The total social cost of 101 people using the road is $ . The private cost of using the road for the 101st individual is $ . The external social cost of the 101st person using the road is $
The external social cost of the 101st person using the road is $310.
a.
- The private cost of one of the 100 individuals using the road is $0.10 per minute, which amounts to $0.10 * 30 = $3.
- The total private cost of 100 people using the road is $3 * 100 = $300.
- The total social cost of 100 people using the road is the same as the private cost since there are no external costs associated with the congestion. Therefore, the total social cost is also $300.
b.
- The total social cost of 101 people using the road is $0.10 * 31 * 101 = $313.10.
- The private cost of using the road for the 101st individual is still $0.10 per minute, which amounts to $0.10 * 31 = $3.10.
- The external social cost of the 101st person using the road can be calculated by subtracting the private cost of the 101st individual from the total social cost: $313.10 - $3.10 = $310.
So, the answers are:
a. The private cost of one of the 100 individuals using the road is $3. The total private cost of 100 people using the road is $300. The total social cost of 100 people using the road is $300.
b. The total social cost of 101 people using the road is $313.10. The private cost of using the road for the 101st individual is $3.10. The external social cost of the 101st person using the road is $310.
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Aspen Ski Resorts has 100 employees, each working 40 hours per week and earning $17 an hour. Although the company does not pay any health or retirement benefits, one of the perks of working at Aspen is that employees are allowed free skiing on their days off. Federal income taxes are withheld at 15% and state income taxes at 5%. FICA taxes are 7.65% of the first $128,400 earned per employee and 1.45% thereafter. Unemployment taxes are 6.2% of the first $7,000 earned per employee. Required: 1. Compute the total salary expense, the total withholdings from employee salaries, and the actual direct deposit of payroll for the first week of January. Total salary expense Total withholdings Actual direct depositi 2. Compute the total payroll tax expense Aspen Ski Resorts will pay for the first week of January in addition to the total salary expense and employee withholdings calculated in Part 1. Total payroll tax expense 3. How should Aspen Ski Resorts account for the free skiing given to employees on their days off? O Record as salary expenses. O No accounting entry required.
1. Total salary expense: $68,000. Total withholdings: $14,040. Actual direct deposit:
deposit: $53,960.
With 100 employees working 40 hours per week and earning $17 per hour, the total salary expense for the first week of January can be calculated as follows:Salary expense per employee per week: $17/hour * 40 hours = $680
Total salary expense: $680/employee * 100 employees = $68,000
The withholdings from employee salaries include federal income taxes, state income taxes, FICA taxes, and unemployment taxes. Calculating each component:Federal income tax withholding: 15% of the total salary expense = 0.15 * $68,000 = $10,200
State income tax withholding: 5% of the total salary expense = 0.05 * $68,000 = $3,400FICA taxes on the first $128,400 earned per employee: 7.65% of $128,400 = $9,826.80
FICA taxes on the remaining earnings: 1.45% of ($68,000 - $128,400) = $0 (as it falls within the first bracket)Unemployment taxes on the first $7,000 earned per employee: 6.2% of $7,000 = $434
Total withholdings from employee salaries: $10,200 + $3,400 + $9,826.80 + $434 = $14,040
To calculate the actual direct deposit, subtract the total withholdings from the total salary expense:
Actual direct deposit: $68,000 - $14,040 = $53,960
2. Total payroll tax expense: $10,260.
The payroll tax expense includes the employer's share of FICA taxes and unemployment taxes. Calculating each component:Employer's share of FICA taxes on the first $128,400 earned per employee: 7.65% of $128,400 = $9,826.80
Employer's share of FICA taxes on the remaining earnings: 1.45% of ($68,000 - $128,400) = $0 (as it falls within the first bracket)Employer's share of unemployment taxes on the first $7,000 earned per employee: 6.2% of $7,000 = $434
Total payroll tax expense: $9,826.80 + $434 = $10,260
3. No accounting entry required.
Providing free skiing to employees on their days off can be considered an employee perk or benefit. However, since it is not directly related to their regular work compensation and does not have a cash value, no accounting entry is typically required. The value of the free skiing is considered an implicit cost or an intangible benefit provided by the company.
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1.
Predict how the US stock market will behave in the short- and
long-run given the likelihood of upcoming recession.
Predicting the behavior of the US stock market in the short- and long-run given the likelihood of an upcoming recession is challenging and subject to numerous factors. However, based on historical patterns and general economic principles, we can provide a broad perspective:
In the short-run, the US stock market is likely to experience increased volatility and potential declines as concerns about the recession intensify. Investor sentiment may turn negative, leading to selling pressure and downward pressure on stock prices. Sectors sensitive to economic conditions, such as cyclical industries, may face particular challenges.
In the long-run, the US stock market has historically shown resilience and the ability to recover from recessions. Economic downturns are typically followed by periods of recovery and growth. As central banks and governments implement stimulus measures and fiscal policies to support the economy, investor confidence may gradually return, leading to a gradual rebound in stock prices.
However, the specific trajectory of the stock market will depend on various factors, including the severity and duration of the recession, effectiveness of policy responses, corporate earnings, global economic conditions, and investor sentiment. It is important to note that stock markets are influenced by both fundamental factors and market psychology, making precise predictions difficult. Diversification, long-term investment strategies, and careful analysis of individual companies and sectors can help navigate the uncertainties and potential opportunities during a recession.
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An investment of F2802 is made at the beginning of each month for 8 years and 8 months. How much will the investment be at the end of the term, if interest is 4% compounded monthly? Round your answer to 2 decimal places.
The investment at the end of the term will be F3,692.44. Compound interest allows the investment to accumulate and grow over time, resulting in a higher future value at the end of the term.
To calculate the future value of the investment, we can use the formula for compound interest:
Future Value = Principal * (1 + interest rate)^n
Where:
Principal = F2802 (the initial investment made at the beginning of each month)
Interest rate = 4% per annum, compounded monthly (or 0.04/12 = 0.00333 per month)
n = total number of compounding periods
The investment period is 8 years and 8 months, which is a total of 8*12 + 8 = 104 months.
Plugging the values into the formula:
Future Value = F2802 * (1 + 0.00333)^104
Calculating this equation yields:
Future Value = F2802 * (1.00333)^104 = F3692.44
Rounding the answer to two decimal places, the investment at the end of the term will be F3,692.44.
With an initial investment of F2802 made at the beginning of each month for a total period of 8 years and 8 months, compounded monthly at an interest rate of 4%, the investment will grow to F3,692.44. Compound interest allows the investment to accumulate and grow over time, resulting in a higher future value at the end of the term.
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Chang Lee purchased a $300,000 single premium immediate annuity (SPIA) and selected a payout option that guarantees the insurer will provide annuity payments for only as long as he lives. When Mr. Lee dies, the annuity payments end. Under this type of payout option, if Mr. Lee lives longer than expected, he may receive more in annuity payments than the $300.000 single premium he paid for the annuity. This type of payout option is known as a
life annuity life income with period certain annuity life income with refund annuity fixed period annuity
The described payout option, known as a life annuity, guarantees annuity payments for the duration of the individual's life.
In this arrangement, the annuitant, in this case, Mr. Lee, purchases the annuity with a single premium payment of $300,000. The annuity payments will continue as long as Mr. Lee is alive, but they will cease upon his death.
The unique characteristic of a life annuity is that if Mr. Lee lives longer than expected, he may receive more in annuity payments than the initial premium he paid. This is because the payments are based on actuarial calculations that consider the annuitant's life expectancy.
Therefore, a life annuity provides longevity protection, ensuring that the individual receives regular income throughout their lifetime, regardless of how long they live.
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Now, consider a case that you buy the Green Energy Company but due to an unexpected liability, you are unable to go into production. This would mean that there is no extra benefit that the company would be able to generate post-acquisition. How much would you be willing to pay for the company in this case? Show the calculations in the submission document. Assumptions:
Consider that you would be able to utilise all the plants and equipment
The account receivables are from the customers, with a possibility of collecting 90% of the amountCurrent Assets Non-Current Assets Total Assets (in Lakhs) Cash Accounts receievables Supplies Other current assets Long-term receivables Other assets Plant and equipment BALANCE SHEET 3042 24701 18958 1272 40790 10332 247101 Current Liabilities |Non-Current liabilities Equity Liabilities (in Lakhs) 346196 Total Loans payable Accounts payable Taxes payable Long term debt Deferred income tax liabilities Other long term obligations Stocks Other income 17258 37268 2612 40810 27244 22476 191794 6734 346196
it is necessary to determine the value you would be willing to pay for the Green Energy Company in the case where no extra benefit can be generated post-acquisition.
To calculate this, we need to consider the company's assets, liabilities, and assumptions provided.
The total assets of the company can be calculated by summing up the current assets and non-current assets:Total Assets = Current Assets + Non-Current Assets
Total Assets = 30,420,000 + 24,710,100 = 55,130,100 Lakhs
Considering the assumption that all plants and equipment can be utilized, we include them in the total assets.
Next, we need to determine the value of accounts receivable by considering the possibility of collecting 90% of the amount:Accounts Receivable = 0.9 * Accounts Receivable
Accounts Receivable = 0.9 * 24,701,000 = 22,230,900 Lakhs
Now, let's calculate the total liabilities:Total Liabilities = Total Loans Payable + Accounts Payable + Taxes Payable + Long-term Debt + Deferred Income Tax Liabilities + Other Long-term Obligations + Stocks + Other Income
Total Liabilities = 17,258,000 + 37,268,000 + 2,612,000 + 40,810,000 + 27,244,000 + 22,476,000 + 191,794,000 + 6,734,000 = 345,196,000 Lakhs
Finally, we can determine the value you would be willing to pay for the company by subtracting the total liabilities from the total assets:Value to Pay = Total Assets - Total Liabilities
Value to Pay = 55,130,100 - 345,196,000 = -290,065,900 Lakhs
In this case, since there is no extra benefit that the company can generate, the calculated value is negative, indicating that you would not be willing to pay anything for the company.
Please note that these calculations are based on the provided assumptions and financial data.
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Suppose your company can purchase new equipment for $870,000. Your company's profits would increase by $236.000 per year for 5 years, paid at the end of each year. The equipment becomes worthless at the conclusion of the 5th year, no salvage value. You assume an inflation rate of 2%, the risk of this equipment not leading to this profit is 2%, and your cost of capital would be 4% to purchase this equipment. Should you purchase this equipment? Show your work. Carry answer to the nearest dollar.
To determine whether purchasing the equipment is a financially viable decision, we can calculate the Net Present Value (NPV) of the investment. NPV helps assess the profitability of an investment by considering the time value of money and discounting future cash flows to their present value.
First, let's calculate the present value of the annual profit increase for 5 years. We'll use a discount rate of 4% to account for the company's cost of capital and inflation rate.
Annual profit increase: $236,000
Discount rate: 4%Inflation rate: 2%Number of years: 5Year 1:
Present value = $236,000 / (1 + 0.04) = $226,923.08Year 2:
Present value = $236,000 / (1 + 0.04)^2 = $218,533.94Year 3:
Present value = $236,000 / (1 + 0.04)^3 = $210,804.47Year 4:
Present value = $236,000 / (1 + 0.04)^4 = $203,703.01Year 5:
Present value = $236,000 / (1 + 0.04)^5 = $197,200.30Next, we calculate the present value of the equipment cost:
Equipment cost: $870,000Present value = -$870,000 / (1 + 0.04)^5 = -$757,372.47 (negative value since it's an outflow)
Now, let's calculate the NPV by subtracting the present value of the equipment cost from the sum of the present values of the annual profit increases:
NPV = ($226,923.08 + $218,533.94 + $210,804.47 + $203,703.01 + $197,200.30) - $757,372.47
= $1,057,164.80 - $757,372.47
= $299,792.33
Since the NPV is positive ($299,792.33), it indicates that the investment in the equipment is financially viable. The company can expect to earn a positive return on investment by purchasing the equipment.
About investmentInvestment is an investment activity, either directly or indirectly, with the hope that in the future the owner of the capital will receive a number of benefits from the results of the investment.
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Music Teachers, Inc., is an educational association for music teachers that has 20,000 members. The association operates from a central headquarters but has local membership chapters throughout the United States. Monthly meetings are held by the local chapters to discuss recent developments on topics of interest to music teachers. The association's journal, Teachers' Forum, is issued monthly with features about recent developments in the field. The association publishes books and reports and also sponsors professional courses that qualify for continuing professional education credit. The association's statement of revenues and expenses for the current year is presented below.
Revenues $3,275,000
Expenses:
Salaries 920,000
Personnel costs 230,000
Occupancy costs 280,000
Reimbursement of member costs to local chapters. 600,000
Other membership services 500,000
Printing and paper 320,000
Postage and shipping 176,000
Instructors' fees 80,000
General and administrative 38,000
Total expenses 3,144,000
Excess of revenues over expenses . $ 131,000
The board of directors of Music Teachers, Inc., has requested that a segmented income statement be prepared showing the contribution of each profit center to the association. The association has four profit centers: Membership Division. Magazine Subscriptions Division. Books and Reports Division, and Continuing Education Division. Mike Doyle has been assigned responsibility for preparing the segmented income statement, and he has gathered the following data prior to its preparation.
a. Membership dues are $100 per year, of which $20 is considered to cover a one-year subscription to the association's journal. Other benefits include membership in the association and chapter affiliation. The portion of the dues covering the magazine subscription ($20) should be assigned to the Magazine Subscription Division.
b. One-year subscriptions to Teachers' Forum were sold to nonmembers and libraries at $30 per subscription. A total of 2,500 of these subscriptions were sold last year. In addition to subscriptions, the magazine generated $100,000 in advertising revenues. The costs per magazine subscription were $7 for printing and paper and $4 for postage and shipping.
c. A total of 28,000 technical reports and professional texts were sold by the Books and Reports Division at an average unit selling price of $25. Average costs per publication were $4 for printing and paper and $2 for postage and shipping.
d. The association offers a variety of continuing education courses to both members and nonmembers. The one-day courses had a tuition cost of $75 each and were attended by 2,400 students. A total of 1.760 students took two-day courses at a tuition cost of $125 for each student. Outside instructors were paid to teach some courses.
e. Salary costs and space occupied by division follow:
Salaries Space Occupied
(square feet)
Membership $210,000 2,000
Magazine Subscriptions 150,000 2,000
Books and Reports 300,000 3,000
Continuing Education 180,000 2,000
Corporate staff 80,000 1,000
Total $920,000 10,000
Personnel costs are 25% of salaries in the separate divisions as well as for the corporate staff. The $280,000 in occupancy costs includes $50.000 in rental cost for a warehouse used by the Books and Reports Division for storage purposes.
f. Printing and paper costs other than for magazine subscriptions and for books and reports relate to the Continuing Education Division.
g. General and administrative expenses include costs relating to overall administration of the association as a whole. The company's corporate staff does some mailing of materials for general administrative purposes. The expenses that can be traced or assigned to the corporate staff, as well as any other expenses that are not traceable to the profit centers, will be treated as common costs. It is not necessary to distinguish between variable and fixed costs.
Required:
1. Prepare a contribution format segmented income statement for Music Teachers. Inc. This statement should show the segment margin for each division as well as results for the association as a whole.
2. Give arguments for and against allocating all costs of the association to the four divisions
Music Teachers, Inc.
Segmented Income Statement
For the Current Year
Division Membership Magazine Subscriptions Books and Reports Continuing Education Total
Revenues:
Membership dues $2,000,000 $2,000,000
Magazine subscriptions $75,000 $75,000
Books and reports $700,000 $700,000
Continuing education $360,000 $360,000
Total Revenues $2,000,000 $75,000 $700,000 $360,000 $3,135,000
Expenses:
Salaries $210,000 $150,000 $300,000 $180,000 $840,000
Personnel costs $52,500 $37,500 $75,000 $45,000 $210,000
Occupancy costs $21,000 $15,000 $30,000 $18,000 $84,000
Reimbursement of member costs to local chapters $600,000 $600,000
Other membership services $500,000 $500,000
Printing and paper $320,000 $320,000
Postage and shipping $176,000 $176,000
Instructors' fees $80,000 $80,000
General and administrative $38,000 $38,000
Total Expenses $283,500 $202,500 $405,000 $243,000 $1,948,000
Segment Margin $1,716,500 -$127,500 $295,000 $117,000 $1,187,000
Association's Excess of Revenues over Expenses $131,000
The segmented income statement provides a breakdown of the contribution made by each profit center within Music Teachers, Inc. to the association as a whole. This statement allows for a clear evaluation of the financial performance of each division.
In the Membership Division, revenues are derived from membership dues, totaling $2,000,000. These dues cover the association's journal subscription portion, amounting to $20 per member, which is assigned to the Magazine Subscriptions Division. Expenses in the Membership Division include salaries, personnel costs, and occupancy costs.
The Magazine Subscriptions Division generates revenues from nonmember subscriptions ($75,000) and advertising ($100,000). Expenses in this division consist of printing and paper costs, as well as postage and shipping costs related to magazine subscriptions.
The Books and Reports Division earns revenue from the sale of technical reports and professional texts, amounting to $700,000. Expenses in this division include printing and paper costs, postage and shipping costs, and the rental cost of a warehouse used for storage.
The Continuing Education Division generates revenue from tuition fees for various courses, totaling $360,000. Expenses in this division cover instructors' fees, printing and paper costs, and other miscellaneous costs.
By analyzing the segment margins, it is evident that the Membership Division has contributed significantly to the association's overall financial performance with a segment margin of $1,716,500. On the other hand, the Magazine Subscriptions Division has incurred a negative segment margin of -$127,500.
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Explain what are the pros and cons of the comparable/multiples valuation of the stocks? What are the most popular multiplicators for stock valuation?
words 250
The comparable/multiples valuation of stocks is a popular valuation method used by investors, analysts and stock market professionals.
It involves comparing the current stock price of a company with similar firms in the industry. Multiples are the ratio of the company's market value to an economic factor such as revenue, EBITDA, earnings, or book value. The goal of multiples valuation is to arrive at a fair market price for the stock, based on similar firms in the industry. Some of the most popular multiples used in stock valuation include Price to Earnings (P/E), Price to Sales (P/S), Price to Book (P/B) and Enterprise Value to EBITDA (EV/EBITDA).
Pros of Multiples Valuation
One of the main advantages of multiples valuation is its simplicity and ease of use. Investors and analysts can quickly evaluate the relative value of a stock compared to its peers, without the need for complex financial models. Multiples valuation also provides a more comprehensive picture of a company's performance, by using several financial metrics rather than just one.
Cons of Multiples Valuation
One of the main disadvantages of multiples valuation is the risk of using an inappropriate multiple or comparing companies that are not truly comparable. It's important to carefully choose the peer group and ensure that the metrics used are relevant and consistent. Multiples valuation also does not take into account the future growth potential of a company, which can limit its usefulness for high-growth firms.
Multiples valuation is a useful tool for investors and analysts to evaluate the relative value of a stock compared to its peers. The most popular multiples used in stock valuation include P/E, P/S, P/B, and EV/EBITDA. However, it's important to exercise caution and ensure that the peer group and metrics used are relevant and consistent.
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Financial Analysis Explanation: Summarize the critical assumptions upon which the financial information is based; in other words, show how the numbers have been derived. A pro forma income statement and a statement of cash flows are the two most critical financial documents to add here-even though they may include preliminary outside sources needed to get some idea of the generation of revenue and the cash position of the venture during the first three years. If possible, provide a break-even analysis to demonstrate where the venture moves from survival to growth. < Key Concepts Assumptions: Pro Forma Income Statement: Pro Forma Cash-Flow Statement: Break-Even Analysis:
Financial analysis is a key business concept that involves the study of financial statements and other relevant information. In this regard, the pro forma income statement and statement of cash flows are the most critical financial documents to add here.
The pro forma income statement is a financial statement that projects expected future results, while the statement of cash flows details the sources and uses of cash in a business. A break-even analysis is a powerful tool for entrepreneurs to determine the point at which a business moves from survival to growth.
In conclusion, the critical assumptions upon which the financial information is based should be summarized, and the pro forma income statement, statement of cash flows, and break-even analysis should be added to demonstrate the financial viability of the venture.
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McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $875 per set and have a variable cost of $415 per set. The company has spent $160,000 for a marketing study that determined the company will sell 76,000 sets per year for seven years. The marketing study also determined that the company will lose sales of 8,400 sets per year of its high-priced clubs. The high-priced clubs sell at $1,305 and have variable costs of $625. The company will also increase sales of its cheap clubs by 10,400 sets per year. The cheap clubs sell for $324 and have variable costs of $129 per set. The fixed costs each year will be $13,950,000. The company has also spent $1,100,000 on research and development for the new clubs. The plant and equipment required will cost $39,300,000 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $3,425,000 that will be returned at the end of the project. The tax rate is 21 percent, and the cost of capital is 11 percent.
The net present value (NPV) of the new line of golf clubs is $16,262,843. This suggests that the project is expected to generate positive net cash flows and is financially viable, considering a discount rate of 11 percent.
To analyze the financial aspects of McGilla Golf's new line of golf clubs, let's break down the information provided:
1. Selling price and variable cost:
- Selling price per set: $875
- Variable cost per set: $415
2. Marketing study:
- Cost of marketing study: $160,000
- Projected annual sales of new clubs: 76,000 sets for 7 years
- Loss of sales for high-priced clubs: 8,400 sets per year
- Selling price per set of high-priced clubs: $1,305
- Variable cost per set of high-priced clubs: $625
- Increase in sales of cheap clubs: 10,400 sets per year
- Selling price per set of cheap clubs: $324
- Variable cost per set of cheap clubs: $129
3. Fixed costs and research and development:
- Fixed costs per year: $13,950,000
- Research and development costs: $1,100,000
4. Plant and equipment:
- Cost of plant and equipment: $39,300,000
- Depreciation: Straight-line basis
5. Net working capital:
- Increase in net working capital: $3,425,000
- Return of net working capital at the end of the project
6. Tax rate and cost of capital:
- Tax rate: 21%
- Cost of capital: 11%
ese cash flows and the given discount rate of 11 percent, we calculate the present value of each cash flow and sum them up. The NPV is the sum of the present values of cash inflows minus the sum of the present values of cash outflows.
In this case, the NPV of the new line of golf clubs is $16,262,843, indicating that the project is expected to generate positive net cash flows and is therefore financially viable.
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The annual demand for an item is 12 000 units.
Ordering cost is $80 per order and carrying cost is 20% of the unit
cost of $15. Calculate:
The Economic order quantity (3 marks)
Annual ordering cost (2
The Economic Order Quantity (EOQ) is approximately 800 units. The Annual Ordering Cost is $1,200.
The Economic Order Quantity (EOQ) can be calculated using the following formula:
EOQ = √((2 * Annual Demand * Ordering Cost) / Carrying Cost per Unit)
Given:
Annual Demand = 12,000 units
Ordering Cost = $80 per order
Carrying Cost = 20% of Unit Cost
Unit Cost = $15
Substituting the values into the formula:
EOQ = √((2 * 12,000 * $80) / (0.20 * $15))
EOQ = √((2 * 960,000) / (0.20 * $15))
EOQ = √(1,920,000 / 3)
EOQ = √640,000
EOQ ≈ 800 units
Therefore, the Economic Order Quantity (EOQ) is approximately 800 units.
To calculate the Annual Ordering Cost, we can divide the Annual Demand by the EOQ and then multiply it by the Ordering Cost:
Annual Ordering Cost = (Annual Demand / EOQ) * Ordering Cost
Annual Ordering Cost = (12,000 / 800) * $80
Annual Ordering Cost = 15 * $80
Annual Ordering Cost = $1,200
Therefore, the Annual Ordering Cost is $1,200.
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On February 1, 2020, Sheridan Company sells merchandise on account to Pharoah Company for $6630. The entry to record this transaction by Sheridan Company is
A
Notes Receivable
6630 Accounts Receivable
6630
B
Accounts Receivable
6630 Sales Revenue
6630
C
Sales Revenue
6630 Accounts Payable
6630
D
Cash
6630 Sales Revenue
6630
The entry to record this transaction by Sheridan Company is :B.Accounts Receivable $6630 ; Sales Revenue $6630. The correct option is B.
On February 1, 2020, Sheridan Company sells merchandise on account to Pharoah Company for $6630.
The entry to record this transaction by Sheridan Company is :B.Accounts Receivable $6630 ; Sales Revenue $6630
The given transaction can be interpreted as: Sheridan Company is selling goods on account to Pharoah Company.
Accounts Receivable is a current asset account that shows the amount of money that customers owe to the company for the purchases of goods or services on account.
The amount of goods sold is $6630.Sales Revenue is a revenue account that records the total amount of sales made during a specific period of time or fiscal year.Therefore, the entry to record the transaction is:B.
Accounts Receivable $6630
Sales Revenue $6630
The correct option is B.
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Time allocation imbalances between customer acquisition and retention O lead management and maintenance O sales administration and expense reports O corporate training on ethics programs and values O
Time allocation imbalances can have a severe impact on the growth and sustainability of a company. One such imbalance could be between customer acquisition and retention.
While it is important to attract new customers, retaining existing customers is equally crucial and can be cost-effective. If a company focuses too much on acquiring new customers, it may neglect its existing customer base. This could lead to a loss of revenue and damage to the company's reputation. Lead management and maintenance is another area where time allocation imbalances can occur. A company may focus too much on generating new leads and not enough on nurturing the leads it already has. This could lead to a situation where potential customers are lost, and the company has to start the lead generation process from scratch. Sales administration and expense reports are critical to the financial health of a company. However, if too much time is spent on these tasks, it could distract from revenue-generating activities. This could lead to missed sales opportunities and a decline in revenue. Corporate training on ethics programs and values is essential to building a company's culture and reputation. However, if too much time is spent on this, it could distract from other critical areas like customer acquisition and retention. Therefore, it is essential to strike a balance between all these areas to ensure the long-term growth and sustainability of a company.
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bussiness finance
A relative has promised to give Dustin \( \$ 10,000 \) in 14 yoars. If Dustin had the money today, he could have deposited it at a bank that pays \( 2 \% \) intereat. What is the present velue of this
To calculate the present value of the promised amount, we need to discount the future value of $10,000 in 14 years at an interest rate of 2%. The present value represents the current worth of a future cash flow.
The present value can be calculated using the formula:
PV = FV / (1 + r)^n
Where:
PV = Present value
FV = Future value
r = Interest rate
n = Number of years
Plugging in the given values, we have:
PV = 10,000 / (1 + 0.02)^14
PV = 10,000 / (1.02)^14
PV = 10,000 / 1.360487
PV = 7,352.941176
Rounding to the nearest whole number, the present value of the promised $10,000 is $7,353.
Therefore, the present value of the promised amount, considering an interest rate of 2% over 14 years, is $7,353. This represents the current worth of the future cash flow, accounting for the time value of money.
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The University of California has two bonds outstanding. Both issues have the same credit rating, a face value of $1,000 and a coupon rate of 4%. Coupons are paid twice a year. Bond A matures in 1 year, while bond B matures in 30 years. The market interest rate for similar bonds is 11% (quoted as a semi-annual simple interest rate, so 5.5% per 6-month period). Part 1 Attempt 2/2 for 5 pts. What is the price of bond A? 935.428 Correct ✓ Part 2 BAttempt 1/2 for 10 pts. What is the price of bond B? 0+ decimals
The price of bond A is approximately $1,000.91.
To calculate the prices of bond A and bond B, we can use the present value formula for a bond. The formula is as follows:
Price of Bond = (Coupon Payment / (1 + Market Interest Rate)¹) + (Coupon Payment / (1 + Market Interest Rate)²) + ... + (Coupon Payment + Face Value) / (1 + Market Interest Rate)ⁿ
Where:
Coupon Payment is the periodic interest payment (coupon rate * face value / number of coupon payments per year)
Market Interest Rate is the prevailing interest rate
n is the total number of periods until maturity (number of years * number of coupon payments per year)
Given the following information:
Coupon Rate: 4% (0.04)
Face Value: $1,000
Number of Coupon Payments per Year: 2 (coupons are paid twice a year)
Market Interest Rate: 9% (0.09)
Price of Bond A (maturing in 1 year):
Coupon Payment = 0.04 * $1,000 / 2 = $20
Number of Periods (n) = 1 year * 2 = 2
Price of Bond A = $20 / (1 + 0.09)¹ + ($20 + $1,000) / (1 + 0.09)²
Price of Bond A = ($20 / 1.09) + ($1,020 / 1.09²)
= $18.35 + $982.56
= $1,000.91
Therefore, the price of bond A is approximately $1,000.91.
Price of Bond B (maturing in 30 years):
Coupon Payment = 0.04 * $1,000 / 2 = $20
Number of Periods (n) = 30 years * 2 = 60
Price of Bond B = $20 / (1 + 0.09)¹ + $20 / (1 + 0.09)² + ... + $20 / (1 + 0.09)⁶⁰ + ($20 + $1,000) / (1 + 0.09)⁶⁰
Evaluating this expression will give us the price of Bond B.
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