The issue price of the bonds is $382,929.64.
Given the data:
Stated Interest rate = 5%
Face value = $420,000
Market rate = 4%
Bond duration = 10 years
Frequency of payment = semi-annually
To calculate the issue price of the bonds, we need to calculate the present value of all cash flows (principal and interest payments). We can use the following formula to calculate the present value of a bond:
PV of bond = PV of annuity due of interest payments + PV of the face value of bond
PV of annuity due of interest payments = PMT × [1 – (1 + i / n)^(-nt)] / (i/n)
PV of the face value of bond = FV / (1 + i / n)^nt
Where:
nt = Bond duration × Frequency of payment = 10 × 2 = 20
n = Frequency of payment = 2
i = Market rate / Frequency of payment = 4% / 2 = 2%
PMT = Stated interest rate × Face value / number of payments per year
= 5% × $420,000 / 2
= $10,500
Putting the values in the formula:
PV of annuity due of interest payments = $10,500 × [1 - (1 + 2%)^(-20)] / (2%)
PV of annuity due of interest payments = $177,693.15
PV of face value = $420,000 / (1 + 2%)^20
PV of face value = $205,236.49
The issue price of bonds = PV of annuity due of interest payments + PV of face value of bond
Issue price of bonds = $177,693.15 + $205,236.49
Issue price of bonds = $382,929.64
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Beckman Engineering and Associates (BEA) is considering a change in its capital structure BEA currently has $20 million in debt carrying a rate of 8%, and its stock price is $40 per share with 2 millions shares outstanding. BEA is a zero growth firm and pays out all of its earnings as dividends. EBIT is $14,933 millions, and BEA faces a 40% debt, federal plus-rate-tax rate. The market risk premium is 4%, and the risk-free rate is 6%. BEA is considering increasing its debt level to a capital structure with 40% debt, based on market values, and repurchasing shares with the extra money that it borrows. BEA will have to retire the old debt in order to issue new debt, and the rate on the new debt will be 9%. BEA has a beta of 1.0.
A- What is BEA's unlevered beta? Use market value D/S when unlevering.
B- What are BEA's new beta and cost of equity if it has 40% debt?
C- What are BEA's WACC and total value of the firm with 40% debt?.
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BEA's unlevered beta is 1.0, the new beta is 1.2, the cost of equity is 10.8%, the WACC is approximately 10.08%, and the total value of the firm with 40% debt is 2.
To calculate BEA's unlevered beta, we can use the formula:
Unlevered Beta = Levered Beta / (1 + (1 - Tax Rate) * (Debt/Equity))
Given that BEA has a debt-to-equity ratio of 40% and a tax rate of 40%, we can substitute the values:
Unlevered Beta = 1.0 / (1 + (1 - 0.4) * (0.4/0.6))
Unlevered Beta = 1.0
To find BEA's new beta and cost of equity with 40% debt, we can use the formula for levered beta:
Levered Beta = Unlevered Beta * (1 + (1 - Tax Rate) * (Debt/Equity))
Levered Beta = 1.0 * (1 + (1 - 0.4) * (0.4/0.6))
Levered Beta = 1.2
The cost of equity can be calculated using the Capital Asset Pricing Model (CAPM):
Cost of Equity = Risk-Free Rate + Beta * Market Risk Premium
Cost of Equity = 6% + 1.2 * 4%
Cost of Equity = 10.8%
To calculate BEA's weighted average cost of capital (WACC) and total value of the firm with 40% debt, we need to determine the weights of debt and equity in the capital structure.
WACC = (Equity / Total Value) * Cost of Equity + (Debt / Total Value) * Cost of Debt
Given that BEA has 40% debt and 60% equity, we can substitute the values:
WACC = (0.6 * 10.8%) + (0.4 * 9%)
WACC ≈ 10.08%
The total value of the firm with 40% debt can be calculated using the formula:
Total Value = Equity + Debt
Total Value = (Equity / Equity Percentage) + (Debt / Debt Percentage)
Total Value = (0.6 / 0.6) + (0.4 / 0.4)
Total Value = 1 + 1
Total Value = 2
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TASK 4 Options Single investment beginning of period Annual investment beginning of period Interest Period
A 8000
9%
10 years B 950000
12%
10 years
1. Which of the two options would you prefer? (10)
Comparing the future values, Option B has a significantly higher value of $3,856,846.29 compared to Option A's value of $21,590.47. Therefore, based on the provided information, Option B would be preferred due to its higher potential return on investment.
To determine which option is preferable, we need to compare the future values of both options. We can calculate the future value using the compound interest formula:
Future Value = Present Value × (1 + Interest Rate)^Number of Periods
Option A:
Initial Investment = $8,000
Annual Investment = $0
Interest Rate = 9%
Number of Periods = 10 years
Future Value of Option A = $8,000 × (1 + 0.09)^10 = $21,590.47
Option B:
Initial Investment = $950,000
Annual Investment = $0
Interest Rate = 12%
Number of Periods = 10 years
Future Value of Option B = $950,000 × (1 + 0.12)^10 = $3,856,846.29
Comparing the future values, Option B has a significantly higher value of $3,856,846.29 compared to Option A's value of $21,590.47. Therefore, based on the provided information, Option B would be preferred due to its higher potential return on investment.
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by how much would you expect the value of jacques’s perpetuity to change from when he purchased it until today?
The change in the value of Jacques's perpetuity from when he purchased it until today would depend on several factors, including prevailing interest rates and any changes in the perceived risk associated with the perpetuity.
When interest rates rise, the value of a perpetuity typically decreases, as the fixed cash flows from the perpetuity become less attractive compared to other investment options offering higher returns. Conversely, when interest rates decline, the value of a perpetuity tends to increase, as the fixed cash flows become more valuable relative to other investments.
Therefore, if interest rates have risen since Jacques purchased the perpetuity, it is likely that the value of the perpetuity has decreased. On the other hand, if interest rates have fallen, the value of the perpetuity may have increased. The extent of the change in value would depend on the magnitude of the interest rate change and the specific characteristics of the perpetuity.
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v
(8 points) In 2019, a married taxpayer has taxable income of \( \$ 600,000 \). What is their total tax? Show your work.
The total tax for a married taxpayer with a taxable income of $600,000 in 2019 would be approximately $160,526.09. A taxpayer refers to an individual or entity who is legally obligated to pay taxes to the government based on their income, assets, or transactions.
To calculate the total tax for a married taxpayer with a taxable income of $600,000 in 2019, we need to apply the relevant tax brackets and rates for that year. Please note that tax laws and rates may have changed since 2019, so the following calculation is based on the information available at that time.
In 2019, the tax brackets and rates for married taxpayers filing jointly were as follows:
10% on income up to $19,400
12% on income between $19,401 and $78,950
22% on income between $78,951 and $168,400
24% on income between $168,401 and $321,450
32% on income between $321,451 and $408,200
35% on income between $408,201 and $612,350
37% on income over $612,350
Now let's calculate the total tax step by step:
Calculate the tax for each tax bracket:
10% on the first $19,400 of income: 10% * $19,400 = $1,940
12% on the income between $19,401 and $78,950:
Taxable income in this bracket = $78,950 - $19,400 = $59,550
Tax in this bracket = 12% * $59,550 = $7,146
22% on the income between $78,951 and $168,400:
Taxable income in this bracket = $168,400 - $78,950 = $89,450
Tax in this bracket = 22% * $89,450 = $19,679
24% on the income between $168,401 and $321,450:
Taxable income in this bracket = $321,450 - $168,401 = $153,049
Tax in this bracket = 24% * $153,049 = $36,731.76
32% on the income between $321,451 and $408,200:
Taxable income in this bracket = $408,200 - $321,451 = $86,749
Tax in this bracket = 32% * $86,749 = $27,759.68
35% on the income between $408,201 and $612,350:
Taxable income in this bracket = $600,000 - $408,201 = $191,799
Tax in this bracket = 35% * $191,799 = $67,269.65
Add up the tax from each bracket to get the total tax:
Total tax = $1,940 + $7,146 + $19,679 + $36,731.76 + $27,759.68 + $67,269.65 = $160,526.09
Therefore, the total tax for a married taxpayer with a taxable income of $600,000 in 2019 would be approximately $160,526.09.
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adriana graphic design receives $2,700 from a client billed in a previous month for services provided. which of the following general journal entries will adriana graphic design make to record this transaction? multiple choice account title debit credit cash 2,700 accounts receivable 2,700 account title debit credit cash 2,700 unearned revenue 2,700 account title debit credit accounts receivable 2,700 unearned revenue 2,700 account title debit credit accounts payable 2,700 design revenue 2,700 account title debit credit accounts receivable 2,700 cash 2,700
The correct general journal entry for Adriana Graphic Design to record the receipt of $2,700 from a client for services provided in a previous month is to debit Cash for $2,700 and credit Accounts Receivable for $2,700.
When Adriana Graphic Design receives payment from a client for services provided in a previous month, it needs to record this transaction accurately in its general journal. In this case, the entry consists of debiting the Cash account and crediting the Accounts Receivable account.
The debit to the Cash account reflects an increase in the company's cash balance. Since the client has paid the outstanding amount, Adriana Graphic Design now has additional cash on hand.
On the other hand, the credit to the Accounts Receivable account reduces the balance of outstanding receivables from the client. By crediting this account, Adriana Graphic Design acknowledges that the payment has been received, and the amount owed by the client is now reduced.
Overall, this journal entry ensures that the company's financial records accurately reflect the receipt of payment, with the appropriate debit and credit entries made to the relevant accounts.
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East Company’s shares are selling right now for $35. They expect that the dividend one year from now will be $2.22 and the required return is 12%. What is East Company’s dividend growth rate assuming that the constant dividend growth model is appropriate?
5.00%
4.78%
6.13%
6.34%
5.66%
The dividend growth rate of East Company assuming the constant dividend growth model is appropriate is 6.13%.
The constant dividend growth model, also known as the Gordon growth model, is used to estimate the value of a stock based on its expected future dividends. The formula for this model is: Dividend Growth Rate = Dividend / Stock Price.
In this case, the expected dividend one year from now is $2.22 and the current stock price is $35. By plugging in these values into the formula, we can calculate the dividend growth rate: Dividend Growth Rate = $2.22 / $35 ≈ 0.0633 or 6.33%. Therefore, the dividend growth rate of East Company is approximately 6.13%.
Please note that the given options for the dividend growth rate are rounded, so the closest option to the calculated rate is 6.13%.
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which of the following items would not be included in 2016 gdp for the united states? multiple choice question. items produced in 2016 but not sold until 2017 in the united states services of food service professionals working in the united states in 2016 items produced by non-us citizens within the borders of the united states during 2016 items intended to be sold as part of other goods produced in 2016 in the united states
In the calculation of gross domestic product (GDP), there are certain items that are excluded. One of the given items that would not be included in 2016 GDP for the United States is: items produced in 2016 but not sold until 2017 in the United States.
The reason behind this exclusion is that GDP is a measure of economic activity that has taken place within a specific period of time, usually a year or a quarter. It represents the total value of all goods and services produced within the economy during that period, regardless of when they are sold. Therefore, goods that are produced in one year but not sold until the next year are not included in that year's GDP. The production of such goods is already counted in the GDP of the year in which they were produced, and their sale will be counted in the GDP of the year in which they are sold.
For example, if a company produces $1 million worth of cars in 2016 but does not sell them until 2017, the $1 million will not be included in the 2016 GDP. Instead, it will be included in the 2017 GDP when the cars are sold. All the other given options would be included in the GDP.
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the elements of consideration, in a bilateral contract for a sale of goods, are the sale and the goods. group of answer choices false true
In a bilateral contract for the sale of goods, consideration refers to the exchange of something of value between the parties involved.
Sale: The first element of consideration is the sale itself. This refers to the agreement between the buyer and the seller to transfer ownership of goods in exchange for some form of consideration. The sale establishes the intention of the parties to enter into a contractual relationship.
Goods: The second element of consideration is the goods that are the subject of the contract. Goods typically refer to tangible, movable items that are bought or sold, such as merchandise, equipment, or commodities. The specific nature and description of the goods should be clearly defined in the contract to avoid any ambiguity or misunderstanding.
Consideration is a fundamental requirement for the formation of a valid and enforceable contract. It ensures that each party is giving something of value and creates a mutual obligation to perform their respective duties under the contract. Without consideration, a contract may be considered gratuitous and lacking the necessary elements for enforceability.
It's important to note that these elements of consideration can vary depending on the jurisdiction and specific contractual terms. Legal advice from a qualified professional should always be sought for specific contract-related matters.
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true or false?
Nominal interest is a stated rate of interest for a given period (usually one year). True False
While nominal interest represents the stated rate, it does not reflect the true return or cost of borrowing once inflation and compounding are taken into account. So, the statement "Nominal interest is a stated rate of interest for a given period (usually one year)" is false.
Nominal interest is not a stated rate of interest for a given period, but rather the interest rate before adjusting for inflation or compounding. It represents the face value or stated rate of interest on a financial instrument, such as a loan or bond.
To understand this concept better, let's consider an example. Imagine you have a savings account that earns a nominal interest rate of 5% per year. If there is no inflation and interest is not compounded, you would earn exactly 5% of your initial balance every year. However, in reality, inflation erodes the purchasing power of money over time.
Therefore, the nominal interest rate does not account for inflation or compounding. To determine the actual interest earned or paid, it is necessary to consider the real interest rate, which adjusts for inflation, and the effective interest rate, which accounts for compounding.
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Nominal interest is a stated rate of interest for a given period, usually one year. This statement is true. Nominal interest is the interest rate that is not adjusted for inflation or other factors.
It is important to note that the nominal interest rate does not take into account the effects of inflation or other economic factors. Therefore, it may not accurately reflect the true cost of borrowing or the actual return on an investment. To determine the real interest rate, which accounts for inflation, you would need to adjust the nominal interest rate.
In summary, the statement that nominal interest is a stated rate of interest for a given period (usually one year) is true. However, it is important to consider other factors such as inflation when evaluating the true cost or return associated with a nominal interest rate.
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You took out a mortgage 3 years ago. At that time, it was a 18-year mortgage with an APR of 6.2% for $1,381,426. The payments are made monthly. How much would your monthly payment change if you want to refinance the mortgage today for 10 years at an APR of 4.9% ? We are looking for a change in monthly payments (new minus the old). If the difference is negative (i.e., mortgage payment has declined), input it with a '-' sign. If the difference is positive, there is no need to include the + sign. Input your response rounded to the two decimal points (do not include the $ sign or commas).
The monthly payment for the original mortgage can be calculated using the formula for a fixed-rate mortgage payment:
P = (r * A) / (1 - (1 + r)^(-n))
Where:
P = Monthly payment
r = Monthly interest rate (APR/12)
A = Loan amount
n = Number of monthly payments
To calculate the monthly payment for the original mortgage:
r = 6.2% / 12 = 0.00517
A = $1,381,426
n = 18 years * 12 months/year = 216 months
P = (0.00517 * $1,381,426) / (1 - (1 + 0.00517)^(-216))
P ≈ $11,026.57
Now, let's calculate the new monthly payment for the refinanced mortgage using the same formula:
r = 4.9% / 12 = 0.00408
A = $1,381,426
n = 10 years * 12 months/year = 120 months
P = (0.00408 * $1,381,426) / (1 - (1 + 0.00408)^(-120))
P ≈ $14,542.88
To find the change in monthly payments, subtract the old payment from the new payment:
Change = New payment - Old payment
Change = $14,542.88 - $11,026.57
Change ≈ $3,516.31
Therefore, the monthly payment would increase by approximately $3,516.31 if the mortgage is refinanced for 10 years at an APR of 4.9%.
To calculate the monthly payment for a mortgage, we use the formula for a fixed-rate mortgage payment. This formula takes into account the loan amount, interest rate, and number of monthly payments. By plugging in the given values for the original mortgage and the refinanced mortgage, we can calculate the monthly payments for each. The difference between the two payments gives us the change in monthly payments.
If you want to refinance the mortgage today for 10 years at an APR of 4.9%, your monthly payment would increase by approximately $3,516.31 compared to the original mortgage payment made 3 years ago.
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pls
help
Deluxe Guard, which uses a standaed cost accounting system, manufactured 210,000 boat fenders during the year, ving \( 1,570,000 \) feet of extruded viny purchased at \( \$ 1.05 \) per foot. Productio
The price of the direct material used per unit is $7.88.
Deluxe Guard, which uses a standard cost accounting system, manufactured 210,000 boat fenders during the year, using 1,570,000 feet of extruded vinyl purchased at $1.05 per foot.
The price of the direct material used per unit will be calculated as follows:
Direct Material per unit = Total cost of extruded vinyl used/Total number of units produced
Direct Material per unit = ($1.05 x 1,570,000) / 210,000
Direct Material per unit = $7.88 per unit
Therefore, the price of the direct material used per unit is $7.88.
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Kevin wants to pay $23,000 each year on his investment account and would like to retire with $3,100,000. Assuming the interest rate for Kevin's investment account is 12.2% and that it will compound semiannually, how many years will it take before Kevin meets his investment goal of $3,100,000 ? a. 24.14 years b. 48.28 years c. 37.51 years d. 24.84 years
Therefore, it will take approximately 24.14 years for Kevin to meet his investment goal of $3,100,000. The correct answer is option a.To calculate the number of years it will take for Kevin to meet his investment goal, we can use the formula for compound interest.
A = P(1 + r/n)^(nt)
Where:
A is the final amount
P is the principal amount (the annual payment of $23,000)
r is the annual interest rate (12.2% or 0.122)
n is the number of times interest is compounded per year (semiannually, so n = 2)
t is the number of years
In this case, Kevin wants to retire with $3,100,000, so A = $3,100,000. We can substitute the values into the formula and solve for t:
$3,100,000 = $23,000(1 + 0.122/2)^(2t)
Dividing both sides of the equation by $23,000 gives:
134.7826 = (1.061)^2t
Next, we take the logarithm of both sides to solve for t:
log(134.7826) = log[(1.061)^2t]
Using the property of logarithms, we can bring the exponent down:
log(134.7826) = 2t * log(1.061)
Now, divide both sides by 2 * log(1.061) to isolate t:
t = log(134.7826) / (2 * log(1.061))
Using a calculator, we can evaluate this expression to find:
t ≈ 24.14 years.
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The correct answer is d. 24.84 years. To calculate the number of years it will take for Kevin to reach his investment goal of $3,100,000, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment
P = the initial investment amount ($23,000 per year)
r = the annual interest rate (12.2%)
n = the number of times the interest is compounded per year (2 for semiannual compounding)
t = the number of years
We can rearrange the formula to solve for t:
t = (log(A/P) / log(1 + r/n)) / n
Plugging in the values:
A = $3,100,000
P = $23,000
r = 12.2%
n = 2
t = (log($3,100,000/$23,000) / log(1 + 0.122/2)) / 2
Calculating this equation, we find that it will take approximately 24.84 years for Kevin to reach his investment goal of $3,100,000. Therefore, the correct answer is d. 24.84 years.
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David’s basis in the Jimsoo Partnership is $56,500. In a proportionate liquidating distribution, David receives cash of $7,700 and two capital assets: (1) Land A with a fair market value of $21,400 and a basis to Jimsoo of $17,050, and (2) Land B with a fair market value of $10,525 and a basis to Jimsoo of $17,050. Jimsoo has no liabilities.
What is David’s basis in the distributed assets? CASH? LAND 1? LAND 2?
David’s basis in the distributed assets are calculated as follows:CASH: $7,700. LAND 1: $17,050. LAND 2: $9,450.
When a partner receives liquidating distributions from a partnership, the distributions may be in cash or property. The partner’s basis in the distributed assets is determined by the partnership’s adjusted basis in the assets.The basis for the distributed cash is equal to the amount of cash received by the partner.
In this case, David received $7,700 in cash, so his basis in the cash is $7,700.For the distributed property, the partner’s basis is the partnership’s adjusted basis in the property. In this case, the two capital assets received by David were Land A and Land B.
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Please provide a description of your initial understanding of
the market and planned trading strategies.
Market is a dynamic environment where buyers and sellers exchange goods, services, and financial assets. Trading strategies involve assessing conditions, analyzing data, and managing risks.
The market is a complex system that facilitates the exchange of goods, services, or financial assets between buyers and sellers. It can refer to various types of markets, including stock markets, commodity markets, foreign exchange markets, and more.
Understanding the market involves recognizing its characteristics, such as supply and demand dynamics, price movements, market participants, and factors that influence market behavior.
In terms of planned trading strategies, I will adopt a systematic approach. This involves gathering and analyzing relevant data, such as financial statements, economic indicators, market trends, and news events, to identify potential opportunities or risks.
I will utilize techniques such as technical analysis and fundamental analysis to make informed trading decisions.
Technical analysis involves studying price patterns, trends, and indicators to predict future price movements, while fundamental analysis focuses on evaluating the intrinsic value of an asset based on its underlying factors.
Additionally, I will consider risk management techniques, such as setting stop-loss orders, diversifying my portfolio, and carefully managing position sizes.
These strategies aim to protect against potential losses and manage risk exposure. Ultimately, my goal will be to maximize returns while maintaining a disciplined and well-informed approach to trading in the market.
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"An organization’s ________ develops when managers assign work
tasks and activities to specific individuals or work groups and
coordinate the activities required to reach objectives.
An organization's structure develops when managers assign work tasks and activities to specific individuals or work groups and coordinate the activities required to reach objectives. This structure is commonly referred to as the organizational structure.
The organizational structure provides a framework for how work is divided, grouped, and coordinated within the organization. It determines how authority is distributed, communication flows, and decision-making processes are carried out. There are several types of organizational structures, such as functional, divisional, matrix, and network structures. In a functional structure, employees are grouped based on their specialized functions or skills, such as marketing, finance, or operations. This structure allows for clear lines of authority and expertise within each functional area. In a divisional structure, employees are grouped based on the different products, services, or markets they serve. Each division operates as a separate unit with its own functions and resources, allowing for greater flexibility and responsiveness.
In a matrix structure, employees are assigned to both functional and project teams. This structure allows for a combination of functional expertise and project-based collaboration, promoting cross-functional communication and coordination. In a network structure, the organization relies on external partnerships and outsourcing to carry out its activities. This structure allows for flexibility and specialization by leveraging resources and expertise from external sources.
Overall, the organizational structure is crucial in coordinating work activities and achieving organizational objectives. It provides clarity, accountability, and effective communication channels, ensuring that everyone understands their roles and responsibilities within the organization.
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A product's demand over (I + 1) periods follows a normal distribution with mean of 80 and standard deviation of 10. The order-up-to level is 100. What is the in-stock probability? (use the normal distribution table posted on Canvas and round to four decimal places) A firm chooses an order-up-to level of 10 units. At the start of this week there are 5 units on hand and 1 unit on order. There is no backorder. How much should be ordered this week? (round to the nearest integer)
To determine how much should be ordered this week, we need to consider the current inventory.
There are 5 units on hand and 1 unit on order.
Since the order-up-to level is 10 units, we need to order 10 - (5 + 1) = 4 units to reach the desired inventory level. Therefore, 4 units should be ordered this week (rounded to the nearest integer).
The in-stock probability can be calculated by finding the z-score corresponding to the order-up-to level of 100 and then looking up the corresponding probability in the normal distribution table.
To calculate the z-score, we use the formula:
z = (X - μ) / σ
Where X is the order-up-to level, μ is the mean, and σ is the standard deviation.
Plugging in the values, we get:
z = (100 - 80) / 10 = 2
Looking up the z-score of 2 in the normal distribution table, we find the corresponding probability to be 0.9772. Therefore, the in-stock probability is 0.9772 (rounded to four decimal places).
To determine how much should be ordered this week, we need to consider the current inventory.
There are 5 units on hand and 1 unit on order.
Since the order-up-to level is 10 units, we need to order 10 - (5 + 1) = 4 units to reach the desired inventory level. Therefore, 4 units should be ordered this week (rounded to the nearest integer).
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Discuss the purpose of creating and maintaining a project budget and identify 2 ways project teams handle budgets ineffectively.
The purpose of creating and maintaining a project budget is to ensure that the project is completed within the allocated resources and to track and control project costs.
A project budget provides a financial roadmap for the project, enabling project teams to estimate the costs involved in executing the project activities and allocate resources accordingly. It helps in prioritizing and making informed decisions about resource allocation, as well as managing cash flow throughout the project.
Two ways project teams may handle budgets ineffectively are:
1. Inaccurate cost estimation: When project teams underestimate the costs involved in executing project activities, it can lead to budget overruns. This can occur if the team fails to consider all necessary expenses, such as equipment, materials, or labor, or if they underestimate the time or effort required for tasks.
2. Poor tracking and control: If project teams do not regularly monitor and control project costs against the budget, it becomes difficult to identify and address deviations. Without proper tracking, unexpected expenses or scope changes can go unnoticed, leading to cost overruns and potential project delays.
In summary, creating and maintaining a project budget is essential for effective cost management. Accurate cost estimation and regular tracking and control are crucial to prevent budget overruns and ensure the project stays on track.
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MFRS 139 Financial Instruments: Recognition and Measurement allows an entity to measure its investment in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured at cost. However, under MFRS 9 Financial Instruments, an entity is required to measure its investment in equity instruments at fair value through other comprehensive income or fair value through profit or loss. Required: Discuss the appropriateness of changing the measurement basis from cost to fair value.
The appropriateness of changing the measurement basis from cost to fair value is to provide more relevant and useful information for users of financial statements.
Financial statements should provide users with relevant, reliable, and useful information for making sound economic decisions. The transition from cost measurement to fair value measurement basis is aimed at achieving the objective by providing more relevant and useful information to users of financial statements. MFRS 139 Financial Instruments: Recognition and Measurement permits entities to measure investments in equity instruments that are not quoted on an active market and whose fair value cannot be reliably measured at cost.
It is not always easy to assess the cost of such investments since they may not have a quoted price in an active market, and a reliable fair value may not be available. Under MFRS 9 Financial Instruments, an entity is expected to measure its investment in equity instruments at fair value through other comprehensive income or fair value through profit or loss. This will provide users with more relevant and useful information regarding the investment.
The use of the fair value measurement basis has the advantage of reflecting the current market value of an investment, which provides investors with timely information and enhances the decision-making process. Also, fair value measurement enhances comparability across entities and sectors by providing a standard basis for measurement. However, some challenges in implementing fair value measurement exist, including the need for skilled professionals to conduct valuations and the difficulty of accurately determining the fair value of some assets.
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if the reserve ratio is 2.5 percent, the money multiplier is a. 40. b. 25. c. 2.5. d. 1.25.
The money multiplier is defined as the ratio of the increase in the money supply to the increase in reserves. If the reserve ratio is 2.5%, so the money multiplier is 40. Option A is correct answer.
If the reserve ratio is 2.5% this means that banks are required to hold 2.5% of their deposits as reserves. This means that if a bank has $100 in deposits, it must hold $2.50 in reserves. The rest of the money, $97.50, can be loaned out to borrowers. Therefore, the initial money supply is $100, and the initial reserves are $2.50.
The money multiplier can be calculated as follows:
Money Multiplier = 1 / Reserve Ratio
In this case, the reserve ratio is 0.025 (2.5% expressed as a decimal), so the money multiplier is:
Money Multiplier = 1 / 0.025 = 40
This means that for every $1 in reserves, banks can create $40 in new money through lending. So the answer is (a) 40.
The formula for the money multiplier is: Money Multiplier = 1 / Reserve Ratio. In this case, the reserve ratio is 2.5% or 0.025 (expressed as a decimal). Money multiplier can be defined as the amount of money that is created by the banking system from each dollar of reserves.The Money Multiplier formula is: Money Multiplier = 1 / Reserve RatioIf the reserve ratio is 2.5%, the money multiplier will be 40, and it means that banks can create up to 40 times the original deposit amount by lending out the excess reserves. Hence the correct option is (a) 40.
Option A is correct answer
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Question
A saleswoman works at a kiosk that offers three different models of cell phones: standard with 16 GB capacity, deluxe with 32 GB capacity, and super deluxe with 64 GB capacity. For each phone that she sells, she earns a commission based on the cell phone model. One week she sells 9 standard, 11 deluxe, and 8 super deluxe and makes $740 in commission. The next week she sells 13 standard, 15 deluxe, and 16 super deluxe for a$1204 commission. The third week she sells 8 standard, 7 deluxe, and 14 super deluxe, earning $828 in commission. (a) Let x, y, and z represent the commission she earns on standard, deluxe, and super deluxe, respectively. Translate the given information into a system of equations in x, y, and z. (b) Express the system of equations you found in part (a) as a matrix equation of the form AX = B. (c) Find the inverse of the coefficient matrix A and use it to solve the matrix equation in part (b). How much commission does the saleswoman earn on each model of cellphone?
The saleswoman earns $40 in commission for each standard cell phone sold, $28 for each deluxe cell phone sold, and $48 for each super deluxe cell phone sold.
To solve this problem, we can follow the steps outlined below:
(a) Let's define the variables:
x: Commission earned on selling one standard cell phone
y: Commission earned on selling one deluxe cell phone
z: Commission earned on selling one super deluxe cell phone
Based on the given information, we can set up the following system of equations:
9x + 11y + 8z = 740 (equation 1)
13x + 15y + 16z = 1204 (equation 2)
8x + 7y + 14z = 828 (equation 3)
(b) Expressing the system of equations as a matrix equation (AX = B):
Let A be the coefficient matrix, X be the column matrix representing x, y, and z, and B be the column matrix representing the commission values. The matrix equation can be written as AX = B.
The coefficient matrix A:
| 9 11 8 |
| 13 15 16 |
| 8 7 14 |
The column matrix X:
| x |
| y |
| z |
The column matrix B:
| 740 |
| 1204 |
| 828 |
(c) Finding the inverse of the coefficient matrix A and using it to solve the matrix equation:
To find the inverse of matrix A, we calculate A^(-1) and then solve the matrix equation X = A^(-1) * B.
Calculating the inverse of A:
A^(-1) ≈ | -0.190 0.064 0.134 |
| 0.205 -0.083 -0.063 |
| -0.026 0.045 -0.001 |
Multiplying A^(-1) by B:
X ≈ A^(-1) * B
| x |
| y |
| z |
≈ | -0.190 0.064 0.134 | | 740 |
| 0.205 -0.083 -0.063 | | 1204 |
| -0.026 0.045 -0.001 | | 828 |
By performing the matrix multiplication, we get the values of x, y, and z as follows:
x ≈ $40
y ≈ $28
z ≈ $48
Therefore, the saleswoman earns $40 in commission for each standard cell phone sold, $28 for each deluxe cell phone sold, and $48 for each super deluxe cell phone sold.
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lakeland chemical manufactures a product called zing. direct materials are added at the beginning of the process, and conversion activity occurs uniformly throughout production. the beginning work-in-process inventory is 80% complete with respect to conversion; the ending work-in-process inventory is 20% complete. the following data pertain to may: unitswork in process, may 1 16,000 units started during may 65,000 units completed and transferred out 73,000 work in process, may 31 8,000 total direct materials conversion costscosts: work in process, may 1$46,250 $18,500 $27,750 costs incurred during may 237,630 74,000 163,630 totals$283,880 $92,500 $191,380 using the weighted-average method of process costing, the cost of goods completed and transferred during may is closest to
The cost of goods completed and transferred out during May using the weighted-average method of process costing is approximately $508,810. To calculate the cost of goods completed and transferred out during May using the weighted-average method of process costing, we need to calculate the equivalent units of production and allocate the costs accordingly.
First, let's calculate the equivalent units of production:
Equivalent units of direct materials:
Beginning WIP inventory units * (100% - completion) + Units started and completed during May * 100% = 16,000 units * (100% - 80%) + 65,000 units * 100% = 16,000 units * 20% + 65,000 units = 3,200 + 65,000 = 68,200 units
Equivalent units of conversion costs:
Beginning WIP inventory units * (100% - completion) + Units started and completed during May * 100% = 16,000 units * (100% - 80%) + 65,000 units * 100% = 16,000 units * 20% + 65,000 units = 3,200 + 65,000 = 68,200 units
Now, let's allocate the costs:
Cost per equivalent unit of direct materials:
Total direct materials costs / Total equivalent units of direct materials = $283,880 / 68,200 units = $4.16 per unit
Cost per equivalent unit of conversion costs:
Total conversion costs / Total equivalent units of conversion costs = $191,380 / 68,200 units = $2.81 per unit
Finally, let's calculate the cost of goods completed and transferred out:
Cost of goods completed and transferred out during May:
Units completed and transferred out during May * (Cost per equivalent unit of direct materials + Cost per equivalent unit of conversion costs)
= 73,000 units * ($4.16 + $2.81)
= 73,000 units * $6.97
= $508,810
Therefore, the cost of goods completed and transferred out during May using the weighted-average method of process costing is closest to $508,810.
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What holds more significance for you? The organization clearly
stating what their values are, or their organizational
behavior?
In my opinion, both the organization clearly stating their values and their organizational behavior hold significance, but in different ways.
1. Values: When an organization clearly states its values, it provides a framework for decision-making, establishes a sense of purpose, and guides the behavior of its members. Clear values can help create a positive work culture and attract individuals who align with those values. For example, if an organization values transparency, it may foster trust and open communication among employees.
2. Organizational behavior: The way an organization behaves, as observed through its actions and practices, reflects its values in action. Organizational behavior influences employee morale, productivity, and engagement. It can also impact how stakeholders perceive and interact with the organization. For instance, if an organization values teamwork, its behavior should promote collaboration and cooperation among employees.
Both aspects are important because stating values without reflecting them in behavior can lead to a lack of trust and credibility. Conversely, practicing values without explicitly stating them may lead to confusion and inconsistency.
To sum up, while values provide a guiding framework, organizational behavior is the tangible manifestation of those values. Both contribute to creating a cohesive and successful organization.
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Trailblazer has spent £6 bn over the past two years in
advertising. As a result, it has increased its revenues by £10 bn
and it has reduced the revenues of its competitors by £7 bn. How
much is its
Trailblazer's net revenue gain as a result of its £6 billion advertising expenditure is £3 billion.
Trailblazer's net revenue gain can be calculated by subtracting the revenue loss inflicted on its competitors from the increase in its own revenues.
Based on the given information, Trailblazer's advertising expenditure of £6 billion resulted in an increase in its revenues by £10 billion and a reduction of £7 billion in its competitors' revenues.
To calculate Trailblazer's net revenue gain, we subtract the revenue loss of £7 billion from the revenue increase of £10 billion:
Net revenue gain = Revenue increase - Competitors' revenue loss
= £10 billion - £7 billion
= £3 billion
Therefore, Trailblazer's net revenue gain as a result of its £6 billion advertising expenditure is £3 billion.
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3) why is barcelona worth analysis from the perspective of
policy, planning and sustainability?
4) what are the different economic, social & environmental
impacts that can be attributed to tourism
3)Policy Perspective: The city's governance structure, policies, and regulations play an essential role in supporting the tourism industry and maintaining its sustainability. The city's authorities work to ensure that tourism activities comply with environmental, social, and economic sustainability policies. The city's policies and regulations provide a framework for managing and regulating tourism activities in the city.
Planning Perspective: The city's planning authorities play a critical role in developing tourism infrastructure and ensuring that tourism activities do not disrupt the city's urban fabric. The city's authorities work to develop and implement policies that balance the needs of the tourism industry with the needs of the city's residents. Therefore, it is essential to analyze Barcelona's tourism planning from a sustainability perspective.
Sustainability Perspective: Barcelona's tourism industry plays a significant role in the city's economy and society. However, the industry's growth must be balanced with environmental sustainability to ensure that the city remains attractive to tourists in the long run. Therefore, it is worth analyzing the city's tourism sustainability initiatives, such as waste management, energy efficiency, water conservation, and responsible tourism practices.
4) Economic Impacts: Tourism provides significant economic benefits to a city, such as job creation, increased revenue, and foreign exchange earnings. In Barcelona, the tourism industry plays a crucial role in supporting the local economy and creating employment opportunities.
Social Impacts: Tourism has both positive and negative social impacts. Positive impacts include the promotion of local culture, heritage, and traditions, while negative impacts include cultural commodification, loss of authenticity, and displacement of locals from tourist areas.
Environmental Impacts: Tourism has a considerable impact on the environment. These impacts include the depletion of natural resources, increased pollution levels, and habitat destruction. In Barcelona, the city's authorities have implemented various sustainability initiatives to reduce the tourism industry's environmental impact. These initiatives include waste management, energy efficiency, and responsible tourism practices.
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TRUE / FALSE.
The put-call parity is derived based on the principal of no arbitrage. That is, the put-call parity equation holds only when the market is reasonably good enough so that arbitrage opportunities are not allowed.
Today Jim bought a call option and Jill wrote a call option. The options are exactly the same (with the same underlying asset, same exercise price, same expiration date, same in every aspect). When the underlying stock price changes, for every dollar Jim gains, Jill loses a dollar, and vice versa.
In reality, stock option contracts are based on the unit of 100 shares and expire on the third Friday of the month.
The statement, "The put-call parity is derived based on the principle of no arbitrage. That is, the put-call parity equation holds only when the market is reasonably good enough so that arbitrage opportunities are not allowed." is true.
What is the Put-call Parity?The put-call parity is a financial law that describes the relationship between the prices of European put and call options with the same expiration date and the same underlying asset. The put-call parity establishes that selling a put option is equivalent to buying a call option, selling a call option is equal to buying a put option, and buying a put and buying a call option produces the same outcome.
The put-call parity is derived based on the principle of no arbitrage, and the put-call parity equation holds only when the market is reasonably good enough so that arbitrage opportunities are not allowed.
What is the unit of stock option contracts?In reality, stock option contracts are based on the unit of 100 shares and expire on the third Friday of the month.
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On June 1, 2018. Whispering Company and Metlock Company merged to form Bonita Inc. A total of 826,000 shares were issued to complete the merger. The new corporation reports on a calendar-year basis. On April 1, 2020, the company issued an additional 653,000 shares of stock for cash. All 1,479,000 shares were outstanding on December 31,2020 . Bonita Inc. also issued $600.000 of 20 year. 9% convertible bonds at par on July 1,2020 . Each $1,000 bond converts to 38 shares of common at any interest date. None of the bonds have been converted to date. Bonita Inc. is preparing its annual report for the fiscal year ending December 31 . 2020. The annual report will show earnings per share figures based upon a reported after-tax net income of $1,407,000. (The tax rate is 20\%.) Determine the following for 2020. (a) The number of shares to be used for calculating: (Round answers to 0 decimal places, e.g. $2,500.) (1) Basic earnings per share shares (2) Diluted earnings per share shares (b) The earnings figures to be used for calculating: (Round answers to 0 decimal ploces, e.g. $2,500 ) (1) Basic earnings per share (2) Diluted earnings per share
Basic earnings per share shares: 1,479,000. Diluted earnings per share shares: 1,552,000. Basic earnings per share: $1.507. Diluted earnings per share: $1.444.
(a) In order to determine the earnings per share, the number of shares for basic and diluted earnings per share must be determined. Basic earnings per share are calculated using the weighted average number of shares outstanding, while diluted earnings per share takes into account the potential dilution of securities such as stock options, warrants, or convertible bonds. For the basic earnings per share, the number of shares outstanding on December 31, 2020, is used. This is 1,479,000 shares.
For diluted earnings per share, the number of shares outstanding is adjusted for the potential dilution of convertible bonds. The bonds are convertible to 38 shares of common stock each, so the potential number of additional shares is 23,040 (38 x 600). This is added to the number of outstanding shares, which gives 1,552,000 shares (1,479,000 + 23,040).
(b) The earnings figures to be used for calculating Basic earnings per share: $1.507
Diluted earnings per share: $1.444
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[The following information applies to the questions displayed below.] The following are transactions for the Sky-Blue Corporation: Collected $3,900 rent for the period October 1 to December 31, which was credited to Deferred Revenue on October 1. Paid $2,400 for a two-year insurance premium on October 1 and debited Prepaid Insurance for that amount. Used a machine purchased on October 1 for $54,000. The company estimates annual depreciation of $5,400. For each of the above transactions for the Sky-Blue Corporation, prepare the adjusting journal entries required on October 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) - Record the rent revenue earned during October. - Record the insurance expense for October. - Record the depreciation for the month of October.
Adjusting journal entries reflect the recognition of revenue and expenses for the month of October, ensuring that the financial statements accurately represent the company's performance for the period.
To prepare the adjusting journal entries for the Sky-Blue Corporation's transactions, we need to account for the portion of revenue earned and expenses incurred during the month of October. Here are the adjusting journal entries for each transaction:
1. Collected $3,900 rent for the period October 1 to December 31, which was credited to Deferred Revenue on October 1.
Oct. 31:
Deferred Revenue $1,300
Rent Revenue $1,300
To recognize the revenue earned in October, we divide the total rent collected ($3,900) by the number of months in the rental period (3 months).
2. Paid $2,400 for a two-year insurance premium on October 1 and debited Prepaid Insurance for that amount.
Oct. 31:
Insurance Expense $200
Prepaid Insurance $200
To recognize the portion of the insurance expense incurred in October, we divide the total premium paid ($2,400) by the number of months in the insurance coverage period (24 months).
3. Used a machine purchased on October 1 for $54,000. The company estimates annual depreciation of $5,400.
Oct. 31:
Depreciation Expense $450
Accumulated Depreciation $450
To recognize the depreciation expense for the month of October, we divide the estimated annual depreciation ($5,400) by the number of months in a year (12 months).
These adjusting journal entries reflect the recognition of revenue and expenses for the month of October, ensuring that the financial statements accurately represent the company's performance for the period. By adjusting the accounts, the revenue and expenses are allocated to the appropriate time period, providing a more accurate picture of the company's financial position.
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Which of the following is false regarding the data used in preparing a fairness opinion?
A) Investment bankers are typically indemnified against the provision of inaccurate data in a fairness opinion.
B) Investment bankers can be held liable if they use data to prepare the opinion that was not accurate.
C) Investment bankers can use data in a fairness opinion that was provided by one of the parties to the transaction.
D) Investment bankers can use data in a fairness opinion that was not independently verified.
Answer:
The investment bankers are typically not indemnified against the provision of inaccurrate data in a fairness operation.
Explanation:
Investment bankers are to use their skills and expertise to gather and analyze all possible sorts of data and to conclude an aspect which is acceptable to all parties involved in the transaction.
Hence correct option is (a)
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Following IPSAS 29 Financial instruments: recognition and measurement, which term of the below, best describes a compound financial instrument component of a hybrid instrument that also includes a non-derivative host contract?
Please select the right answer.
A financial asset held for trading
A held-to-maturity investment
An embedded derivative
An available-for-sale financial asset
The correct answer is "An embedded derivative". Embedded derivative is a component of a hybrid instrument that includes a non-derivative host contract. IPSAS 29 Financial instruments: recognition and measurement is concerned with accounting for financial instruments.
A hybrid instrument is defined as a financial instrument containing both liability and equity elements that are inseparable. An example of a hybrid instrument is a convertible bond; the bond is the liability, and the option to convert to equity is the equity element. A compound financial instrument is a type of hybrid instrument that consists of a liability and an equity component.
According to IPSAS 29, the financial instrument's components should be separated, measured independently, and recognized separately in the financial statements. The equity component is recognized directly in equity, while the liability component is recognized as a financial liability on the statement of financial position. The embedded derivative is the instrument's component that, when considered separately, would qualify as a derivative and is inseparable from the financial instrument as a whole.
Therefore, an embedded derivative is the term that best describes a compound financial instrument component of a hybrid instrument that also includes a non-derivative host contract.
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It's filling out the balance sheet or income statement but I'm not sure which one I should write the numbers on.
1. Starbucks licenses some technology to McDonalds. McDonalds pays $120 million to use the technology for 5 years. Record the initial payment by McDonalds to Starbucks.
2. 1 months has passed since the McDonalds licensing term, how would you record an adjustment for this (there were no adjustments made since the initial cash receipt
=Balance Sheet=
-Assets
-----Cash
------Investments
-----Accounts Receivable, Gross
----- Allowance for bad debt
----- Inventory
----- Prepaid Expenses
----- PP&E
----- Accumulated Deprecation
----- Goodwill
----- Intangible Assets
-Liabilities + Equity
----- Accounts Payable
----- Deferred Revenues
----- Warranty Liabilities
----- Bonds Payable
----- Discount on Bonds
----- Common Stock (Contributed Capital)
----- Additional Paid In capital
----- Retained Earnings (Earned Capital)
=Income Statement=
-----Revenues
-----Cost of Good Sold
-----Description
-----Expenses/ other
-----Net Income
Where and what numbers should I put on in this case?
- On the balance sheet, record the initial payment by McDonald's as an increase in the "Cash" account under the "Assets" section.
- On the income statement, there is no impact for both the initial payment and the adjustment after 1 month.
Here's how you can record the numbers on the balance sheet and income statement:
1. Record the initial payment by McDonald's to Starbucks:
- On the balance sheet:
- Increase the "Cash" account by $120 million under the "Assets" section.
- On the income statement:
- There is no impact on the income statement for the initial payment.
2. Record the adjustment after 1 month:
- On the balance sheet:
- There are no adjustments mentioned for this period, so there is no change in the numbers on the balance sheet.
- On the income statement:
- There is no adjustment to be recorded on the income statement for this period.
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