The utility function u(x1, x2) = log(x1) + log(x2), with p2 = 1, m = 1, and x1 0.5, is what we have for part a. We need to find the insignificant p₁ to such an extent that on the off chance that p1 > p₁, the buyer consumes x₁ rigorously under 0.5.
p1x1 + x2 = m = 1 is the consumer's budget constraint. We can change this as x₂ = 1 - p₁x₁.
The shopper's utility capability is u(x₁, x₂) = log(x₁) + log (1 - p₁x₁).
The buyer's enhancement issue is:
maximize u(x1, x2) under the condition that p1x1 + x2 m. The objective function results in:
simplifying the constraint results in: maximize log(x1) + log (1 - p1x1) subject to p1x1 + (1 - p1x1) m.
p₁x₁ ≤ 0.5.
The results of solving for x1 are as follows:
x₁ ≤ 0.5/p₁.
Subbing this into the requirement yields:
p1(0.5/p1) + (1 - p1(0.5/p1)) m, which can be summarized as:
The minimal p1 is 0.5/m = 0.5/1 = 0.5 because 0.5 mp1.
Part b
We know that when p2 expands, the spending plan imperative moves internal lined up with the x-pivot. At any given price ratio, this indicates that the consumer can afford less of either product.
Since we are holding m steady and just evolving p2, this implies that the slant of the spending plan imperative changes yet not its captures.
As a result, we can conclude that the threshold on you found in part a remains unchanged when p2 rises because we are only changing one of the prices and not your income or preferences.
Economics mimics worth or value using the concept of utility. Its application has drastically changed over time. Moral philosophers like Jeremy Bentham and John Stuart Mill first used the term to describe pleasure or happiness as a component of the utilitarianism hypothesis.
Although it is not necessarily comparable across customers or having a cardinal meaning, the term has been updated and used within neoclassical economics, which dominates contemporary economic theory, as a utility function that represents a consumer's ordinal preferences across an option set.
This concept of utility makes fewer behavioral assumptions than the previous definition since it is more individualized and concentrated on choice rather than pleasure.
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A company's cash position is fine If a company has a Current Ratio greater than 2, correct?
Having a Current Ratio greater than 2 does not automatically imply that a company's cash position is fine.
The Current Ratio is calculated by dividing a company's current assets by its current liabilities and is used to assess its short-term liquidity. While a Current Ratio above 2 generally indicates that a company has enough current assets to cover its current liabilities, it does not specifically measure the availability of cash. A significant portion of current assets may be tied up in inventory or accounts receivable, which may not be readily convertible to cash.
Therefore, a high Current Ratio does not guarantee that a company has ample cash reserves. It is important to analyze other financial metrics, such as cash flow, working capital management, and debt obligations, to gain a comprehensive understanding of a company's cash position.
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Q3 .2 Also the Bank of America requires the use of Automated Teller Machines, Same as the above system the purpose of the ATM system is to bring regular bank services closer to the customer and increase the working hours to around the clock. The ATM system requires that each bank customer has an ATM card and remembers his PIN code. The whole security of this system builds on the PIN code. Design a diagram that illustrates the given description. (8 Points)
Automated Teller Machines (ATMs) are devices that facilitate bank transactions such as deposits, withdrawals, and account inquiries. The ATM system's aim is to bring regular bank services closer to the customer and increase the working hours to around the clock.
The Automated Teller Machines system requires that each bank customer has an ATM card and remembers his PIN code. The whole security of this system builds on the PIN code. Design a diagram that illustrates the given description is provided below; Image: Diagram illustrating the Bank of America ATM SystemIn the figure, a customer inserts their ATM card into the machine, and the system verifies their PIN code before allowing access to their account.
When the customer enters the correct PIN code, they will gain access to their account, and the ATM system will display various banking options, such as cash withdrawal, deposit, balance inquiry, and so on. In this way, the customer can carry out banking transactions without the need for human assistance and at any time of day or night.
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Bombardier Jet At A Cost Of $40,000,000. Questor Expects The Plane To Remain Useful For Four Years (6,250,000 Miles) And To Have A Residual Value Of $5,500,000. Questor Expects The Plane To Be Flown 725,000 Miles The First Year. (Note: "Miles" Is The Unit Of Measure Used In The Airline
On January 1, 2020, Questor Air purchased a used Bombardier jet at a cost of $40,000,000. Questor expects the plane to remain useful for four years (6,250,000 miles) and to have a residual value of $5,500,000. Questor expects the plane to be flown 725,000 miles the first year. (Note: "Miles" is the unit of measure used in the airline industry.)
1. Compute Questor's first-year amortization on the jet using the following methods:
a. Straight line
b. UOP
c. DDB
2. Show the jet's book value at the end of the first year under the straight-line method.
1. Calculate the first-year amortization: (Round your final answer to the nearest whole dollar.)
a. Using the straight-line method, amortization is $?
Please show the proper way to do the work and the right answer. Thank you.
Calculation of first year amortization using straight line method is given below:Amortization = (Cost of asset - Residual value) / Useful life of assetFirstly, we need to find the useful life of the asset using miles. We have,Total miles the jet will remain useful = 6,250,000Total miles the jet will fly in first year = 725,000Therefore, useful life of jet in years= Total miles the jet will remain useful / Total miles the jet will fly in first year= 6,250,000 / 725,000= 8.62 yearsNow, we can calculate the first year amortization using straight line method:Amortization = (Cost of asset - Residual value) / Useful life of assetAmortization = ($40,000,000 - $5,500,000) / 8.62 yearsAmortization = $3,604,182.51The first-year amortization on the jet using the straight-line method is $3,604,183.The book value of the asset at the end of the first year using the straight-line method will be:Book value of asset = Cost of asset - Accumulated amortizationBook value of asset at the end of the first year = Cost of asset - First year amortizationBook value of asset at the end of the first year = $40,000,000 - $3,604,183Book value of asset at the end of the first year = $36,395,817. Answer: $3,604,183 and $36,395,817
On August 30, JumpStart incurred the following expenses: Payment to the landlord for August rent, $830 Payment to the Gas&Electric Company for August's bill, $280 Payment of employee wages for the last half of August, $7,261 Payment of shopping center's parking lot cleaning fee, $167 ournalize these payments as one journal entry. For a compound transaction, if an amount box does not require an entry, leave it blank or enter "O" Aug 30
To journalize the payments incurred by JumpStart on August 30, the following entry can be made:
Date: August 30
Rent Expense $830Gas & Electric Expense $280Wages Expense $7,261Parking Lot Cleaning Fee $167Cash $8,538Explanation: This entry records the payment of various expenses incurred by JumpStart on August 30. The debit to each expense account represents an increase in expenses, while the credit to the cash account represents a decrease in cash due to the payment of these expenses.
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To determine the fair price for a European put option per contract today, we need to consider the concept of put-call parity. According to put-call parity, the relationship between a call option and a put option with the same strike price and expiration date is as follows:
Call Price - Put Price = Stock Price - Present Value of Dividend
In this case, the dividend payment is $5, and it will be received in 6 months. The present value of the dividend can be calculated by discounting it to the present using the risk-free interest rate.
Given the information provided, we have:
Dividend payment = $5
Time to dividend payment (T) = 6 months = 0.5 years
Risk-free interest rate (r) = 5% per annum
Using these values, we can calculate the present value of the dividend payment as follows:
PV of Dividend = Dividend Payment / (1 + r)^T
PV of Dividend = $5 / (1 + 0.05)^0.5
PV of Dividend = $4.76
Now, let's apply put-call parity to calculate the fair price for the European put option:
Call Price - Put Price = Stock Price - PV of Dividend
Since the call option is priced at $6.90 per contract, we can substitute the values into the equation:
$6.90 - Put Price = $100 - $4.76
Rearranging the equation to solve for the Put Price:
Put Price = $100 - $4.76 - $6.90
Put Price = $88.34
Therefore, the fair price for a European put option per contract today should be approximately $88.34. However, none of the given answer choices matches this value, so none of the options provided is correct.
About PaymentPayment is the voluntary surrender of money or an equivalent or something of value by one party to another in exchange for goods or services provided by them or to fulfill a legal obligation.
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Empire Electric Company (EEC) uses only debt and common equity. It can borrow unlimited amounts at an interest rate of rd = 11% as long as it finances at its target capital structure, which calls for 45% debt and 55% common equity. Its last dividend (D0) was $3.20, its expected constant growth rate is 3%, and its common stock sells for $27. EEC's tax rate is 40%. Two projects are available: Project A has a rate of return of 15%, and Project B's return is 8%. These two projects are equally risky and about as risky as the firm's existing assets.
1. What is its cost of common equity? Round your answer to two decimal places. Do not round your intermediate calculations.
The cost of common equity for EEC is approximately 15.21% when rounded to two decimal places.
To calculate the cost of common equity (rs) for Empire Electric Company (EEC), we can use the dividend growth model (also known as the Gordon Growth Model). The formula for the cost of common equity is:
rs = (D1 / P0) + g
Where:
D1 = Expected dividend per share next year
P0 = Current price per share
g = Growth rate of dividends
Given the information provided:
D0 = $3.20 (last dividend)
g = 3% (expected constant growth rate)
P0 = $27 (current stock price)
To calculate D1, we need to use the formula:
D1 = D0 * (1 + g)
D1 = $3.20 * (1 + 0.03)
D1 = $3.20 * 1.03
D1 = $3.296
Now we can calculate the cost of common equity (rs):
rs = (D1 / P0) + g
rs = ($3.296 / $27) + 0.03
Now we can calculate rs:
rs = (0.122075 + 0.03)
rs = 0.152075 or 15.21% when rounded to two decimal places
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Cool-Ice’s balance sheet for 30 November follows. Use it and the following information to prepare a cash budget for Cool-Ice for December.
80% of sales are on account, of which half are collected in the month of the sale, 49% are collected the following month and 1% are never collected and are written off as bad debts.
All purchases of materials are on account. Cool-Ice pays for 70% of purchases in the month of purchase and 30% in the following month.
All other costs are paid in the month incurred.
Cool-Ice is making monthly interest payments of 1% (12% per year) on a $20 000 long-term loan.
Cool-Ice plans to pay the $500 of taxes owed as of 30 November in the month of December. Income tax expense for December is zero.
40% of processing and set-up costs, and 30% of marketing and general administration costs, are depreciation.
Cool-Ice
Balance sheet as of 30 November
Assets
Cash
$587
Accounts receivable
$4 800
Less: Allowance for bad debts
96
4 704
Inventories
Direct materials
169
Finished goods
974
Fixed assets
$190 000
Less: Accumulated depreciation
55 759
134 241
Total assets
$140 675
Liabilities and equity
Accounts payable
$696
Taxes payable
500
Interest payable
200
Long-term debt
20 000
Ordinary shares
10 000
Retained earnings
109 279
Total liabilities and equity
$140 675
A cash budget is a financial tool that helps businesses project and manage their cash inflows and outflows over a specific period, usually on a monthly basis. It provides a detailed forecast of the company's cash position, allowing businesses to plan and control their cash flow effectively.
To prepare a cash budget for Cool-Ice for December, we need to consider the given information and make certain assumptions:
1. Sales:
80% of sales are on account.
Half of the sales collected in the month of the sale, 49% collected the following month, and 1% are never collected and written off as bad debts.
November sales on account:
$4,704 (Accounts receivable) - $96 (Allowance for bad debts) = $4,608
Sales collected in December:
($4,608 * 0.5) = $2,304 (collected in the month of sale)
Sales collected in January:
($4,608 * 0.49) = $2,254 (collected in the following month)
2. Purchases:
All purchases of materials are on account.
Cool-Ice pays for 70% of purchases in the month of purchase and 30% in the following month.
November purchases on account:
Direct materials: $169
Purchases paid in December:
($169 * 0.7) = $118.30 (paid in the month of purchase)
Purchases paid in January:
($169 * 0.3) = $50.70 (paid in the following month)
3. Other Costs:
All other costs are paid in the month incurred.
4. Long-Term Loan Interest:
Cool-Ice is making monthly interest payments of 1% (12% per year) on a $20,000 long-term loan.
Monthly interest payment:
($20,000 * 0.01) = $200
5. Taxes:
Cool-Ice plans to pay the $500 of taxes owed as of 30 November in the month of December.
Income tax expense for December is zero.
December tax payment:
$500
Based on the above information, we can now prepare the cash budget for Cool-Ice for December:
Cool-Ice
Cash Budget for December
Beginning Cash Balance (30 November): $587
Cash Inflows:
Sales collected in December: $2,304
Purchases paid in December: $118.30
Other cash inflows (if any): N/A
Total Cash Inflows: $2,422.30
Cash Outflows:
Purchases paid in January: $50.70
Other costs paid in December: N/A
Long-term loan interest payment: $200
Taxes paid in December: $500
Total Cash Outflows: $751.70
Net Cash Flow (Inflows - Outflows): $2,422.30 - $751.70 = $1,670.60
Ending Cash Balance: Beginning Cash Balance + Net Cash Flow
$587 + $1,670.60 = $2,257.60
Therefore, Cool-Ice is projected to have an ending cash balance of $2,257.60 at the end of December.
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Find the IRR for becoming an ophthalmologist as opposed to an
accountant
Occupation Ophthalmologist Accountant Starving artist Sports superstar Salary Period 0 Period 1 Period 2 Period 3 -5 1 10 12 3 4 5 1 1 1 0 0 0 5215
IRR is the abbreviation for the Internal Rate of Return. It is a method of calculating the potential profitability of an investment or project by evaluating the expected return against the cost of the investment. The IRR of an investment is the rate at which the investment's net present value is zero.
The IRR is expressed as a percentage, and it is an essential measure that investors and companies use to decide whether to undertake a new project or investment. In this scenario, the IRR for becoming an ophthalmologist as opposed to an accountant will be analyzed. The table given above represents the salary, and below are the steps to find the IRR.
Step 1: Net Cash Flow for Each Option To determine the net cash flow for each career option, add up all of the salary figures for each option and subtract the initial cost or investment. The initial investment is zero in this scenario. Therefore, the net cash flows for the two career options are as follows: Ophthalmologist Net Cash Flow:
$0 + $5,215 + $10,012 + $12,145 = $27,372 Accountant Net Cash Flow: $0 + $3,004 + $4,305 + $5,012 = $12,321
Step 2: Use Excel's IRR Function To find the IRR for each career option, you can use Microsoft Excel's IRR function. The syntax for the IRR function is as follows: IRR (values, [guess]) The "values" argument represents the net cash flows, and the "guess" argument represents the approximate rate of return for the investment. Since we do not have any approximation, we will leave it blank.
Therefore, from a profitability standpoint, becoming an ophthalmologist is a more profitable option than becoming an accountant.
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according to the bcg matrix, business units that have a low market share but are in a high growth market are called .group of answer choices
According to the BCG matrix, business units that have a low market share but are in a high growth market are called "Question marks.
The BCG Matrix is a management tool that helps organizations examine their products or services based on their market growth and relative market share. The matrix assists in identifying the business unit's growth and determining the investment and resources required to boost its potential for long-term success.BCG Matrix Model: The matrix has four distinct categories: Stars, Cash cows, Dogs, and Question marks. Let's explore each one of them below:Stars: This is a group of products that have a high market share and a high rate of growth. These products require continued investment to keep their leading position in the market.
They generate high profits and positive cash flow. Cash cows: This group represents products that have a high market share but low growth. These products are likely to generate more cash than they consume. They don't require significant investment but can provide a steady flow of income. Dogs: This group represents products that have a low market share and low growth rate. They should be avoided as they may not bring in profits, and they can drain resources.This group of products has a low market share but is in a high-growth market. They require significant investments to improve their position in the market and become stars. If these products are neglected, they may turn into dogs in the future.
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An investor holds a bond with a face value of $2,000, a coupon rate of 4%, and semi-annual payments that matures on 15/01/2021. How much will the investor receive on 15/01/2021?
Select one:
a.
$2,080
b.
$40
c.
$2,000
d.
$80
e.
$2,040
An investor holds a bond with a face value of $2,000 the total amount received on January 15, 2021 c. $2,000
The bond has a face value of $2,000, which means that upon maturity, the investor this amount investor will receive $2,000.
The coupon rate of 4% indicates that the bond pays a coupon payment equal to 4% of the face value. Since the payments are semi-annual, there will be two coupon payments per year.
To calculate the coupon payment, the face value by the coupon rate and divide it by the number of coupon periods per year.
Coupon payment = (Face value × Coupon rate) / Number of coupon periods per year
Coupon payment = ($2,000 × 0.04) / 2
Coupon payment = $80
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FILL THE BLANK. "3. Market research firms, commercial publications, and
government data can be used as sources of: ____
a. secondary data
b. consensual information
c. primary data
d. artificial intelligence
e. marketi"
The correct option is (a) secondary data.What is secondary data?Secondary data is a type of data that has been obtained before by somebody else for a reason other than the study at hand. It involves data already available in books, journals, databases, and websites.
Market research firms, commercial publications, and government data are used as sources of secondary data. Primary data, on the other hand, is fresh data that is gathered for the purpose of the study. It can be collected in many ways, such as via surveys, interviews, observations, and experiments. One of the most significant benefits of primary data is that it is tailored to meet the needs of the researchers. There are numerous advantages to using secondary data in research. Secondary data is more accessible, less expensive, and faster to obtain than primary data. It can also assist in the planning of further research by serving as a basis for comparison.
However, secondary data also has certain disadvantages, such as a lack of availability of the exact information needed. Researchers must examine secondary data for relevance, accuracy, and authenticity before using it in their research projects. They should, therefore, assess it carefully before arriving at a conclusion to a research problem.
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The 2021 standard deduction is $12,600 and deductions for state and local taxes are limited to $10,000. You are already choosing to itemize your deductions becaue of charitible contributions. You expect to pay $8,000 of state income taxes in 2021 and you are looking at the tax benefits associated with purchasing a single family home as your primary residence. You estimate that the mortgage interest in 2021 will be $15,000 and the property taxes will be $6,000. What is the tax benefit associated with homeownership if your marginal tax rate is 22%?
The tax benefit associated with homeownership, considering the given deductions and marginal tax rate, is $1,408.
First, let's calculate the total itemized deductions related to homeownership:
Total itemized deductions = State income taxes + Mortgage interest + Property taxes
= $8,000 + $15,000 + $6,000
= $29,000
Since the state and local tax deductions are limited to $10,000, we need to adjust the total itemized deductions:
Adjusted total itemized deductions = Total itemized deductions - State and local tax deductions limit
= $29,000 - $10,000
= $19,000
Next, we compare the adjusted total itemized deductions with the standard deduction to determine the tax benefit:
Tax benefit = (Adjusted total itemized deductions - Standard deduction) * Marginal tax rate
= ($19,000 - $12,600) * 0.22
= $6,400 * 0.22
= $1,408
Therefore, the tax benefit = $1,408.
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Which of the following forms of price discrimination occurs at the buyer level? A. primary-line injury. B. secondary-line injury. C. tertiary-line injury. D. quaternary-line injury.
Primary-line injury is a form of price discrimination that occurs at the buyer level, where each individual buyer is charged a unique price based on their willingness to pay. Option A is the correct option.
Price discrimination refers to the practice of charging different prices to different customers or groups of customers based on various factors. Primary-line injury, also known as first-degree price discrimination or perfect price discrimination, occurs at the buyer level. It involves charging each individual buyer a unique price based on their willingness to pay. In this form of price discrimination, the seller maximizes their profit by extracting the maximum amount each buyer is willing to pay for a product or service.
Secondary-line injury (B), tertiary-line injury (C), and quaternary-line injury (D) are not recognized terms in the context of price discrimination and are not applicable choices.
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Question 1 (5 points) Canada's new immigration policies aim to attract skilled migrants as a solution to their ageing population. Explain how it will impact the aggregate supply and the potential GDP
The new immigration policies in Canada have been designed to attract skilled migrants as a solution to the country's ageing population.
Immigration policies like these will impact the aggregate supply and potential GDP in a number of ways. The impact of the policies on these two aspects is discussed below: Impact on Aggregate Supply The aggregate supply of an economy refers to the total quantity of goods and services that are produced and supplied by all the firms in the economy. In the long run, aggregate supply is determined by factors like technological progress, the amount of capital and labor, and the level of education and skills of the workforce.
Immigration policies that attract skilled migrants can lead to an increase in the number of people in the labor force who have the skills that are required to produce goods and services. This, in turn, can lead to an increase in the aggregate supply of the economy as more goods and services are produced. The increase in the aggregate supply can lead to a decrease in the price level and an increase in the real GDP.
Impact on Potential GDP Potential GDP refers to the level of GDP that can be produced when all the factors of production are used at their optimal levels. The optimal level of production occurs when all the resources are used efficiently. Immigration policies that attract skilled migrants can lead to an increase in the level of skills of the labor force. This, in turn, can lead to an increase in the level of productivity of the workforce. An increase in the level of productivity can lead to an increase in the potential GDP of the economy.
Therefore, the new immigration policies of Canada can have a positive impact on the potential GDP of the country. In conclusion, the new immigration policies in Canada that aim to attract skilled migrants as a solution to the country's ageing population can lead to an increase in the aggregate supply of the economy and an increase in the potential GDP.
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bonita insurance company collected a premium of $37860 for a 1-year insurance policy on may 1. what amount should bonita report as a current liability for unearned insurance revenue at december 31?
a. $0 b. $36300 c. $12100 d. $24200
Bonita Insurance Company should report $12,620 as a current liability for unearned insurance revenue at December 31.The closest answer option is (c) $12,100.
To determine the amount Bonita Insurance Company should report as a current liability for unearned insurance revenue at December 31, we need to consider the portion of the premium that has not yet been earned.
Since the policy is for a 1-year period starting from May 1, the time period from May 1 to December 31 is 8 months (January to April are not included). To calculate the unearned insurance revenue, we need to determine the portion of the premium that corresponds to the unearned months.
Unearned insurance revenue = Total premium - Earned insurance revenue
Total premium = $37,860
Earned insurance revenue = Total premium * (Number of earned months / Total policy duration in months)
= $37,860 * (8 / 12)
= $25,240
Unearned insurance revenue = $37,860 - $25,240
= $12,620
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Additive manufacturing is often referred to as computer numerical control.
True
False
The given affirmation "Additive manufacturing is frequently alluded to as PC mathematical control." is false because added substance assembling and computer numerical control(CNC) are two one-of-a-kind developments. CNC alludes to the utilization of PC projects to control machines that cut, drill, or shape materials like wood, metal, or plastic.
It is a subtractive assembling process, meaning the material is eliminated to make the ideal shape. it is a course of developing layers of material to make a 3D article. It is additionally generally known as 3D printing.
This innovation has reformed the assembling business by taking into account the production of perplexing calculations and modified plans that were already difficult to create utilizing customary assembling strategies.
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QUESTION 24 Table 3-8 Assume that Pablo and Micah can switch between producing baseballs and producing bats at a constant rate. Labor Hours Needed Quantity Produced to Make 1. in 36 Hours baseball bat baseballs bats Pablo 1 3 36 12 Micah 1 2 36 18 Refer to Table 3-8. Micah has an absolute advantage in the production of O a bats and a comparative advantage in the production of baseballs. Ob neither good and a comparative advantage in the production of baseballs. O baseballs and a comparative advantage in the production of bats. Od bats and a comparative advantage in the production of bats.
Based on the information provided in Table 3-8, Micah has an absolute advantage in the production of bats since he can produce 18 bats in 36 hours compared to Pablo's production of only 12 bats in the same time frame.
Additionally, Micah has a comparative advantage in the production of baseballs. This is because for every 36 hours of work, Micah can produce 18 baseballs, while Pablo can only produce 12 baseballs in the same time. Micah's production rate of baseballs is higher than Pablo's, indicating his comparative advantage in this area.
To summarize, Micah has an absolute advantage in bats and a comparative advantage in baseballs, while Pablo does not have an absolute advantage in either good but has a comparative advantage in baseballs
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Give example to explain the benefits of the eurocurrency market.
Give examples to explain the benefits of FDI to host countries.
1) The Eurocurrency market enables banks to make a profit on a variety of foreign currency deposits by borrowing and lending.
It is profitable for both lenders and borrowers because the absence of regulations reduces transaction costs.
2) Foreign Direct Investment (FDI) refers to the act of a firm investing in a different country. FDI brings a lot of advantages to host countries.
1) The eurocurrency market refers to the deposit and lending of currencies in countries outside the jurisdiction of the currencies issued by central banks.
The following are some of the benefits of the Eurocurrency market:
A reduction in Transaction Costs: Due to the Eurocurrency market's nature, there are fewer transaction expenses associated with it. It implies that it is less expensive to borrow from or lend to the market than from the central banks, which usually imposes regulations.Lower Interest Rates: As a result of the fewer transaction expenses and less regulation, Eurocurrency loans have a lower interest rate. It encourages borrowers to take out more loans, and the market becomes more competitive.More Sources of Financing: There are several sources of finance available in the Eurocurrency market. It means that individuals and organizations have more options to choose from in terms of financing their operations or activities.2)The following are some examples of the benefits of FDI to host countries:
Technological Advancement: FDI brings a great deal of technology with it. When multinationals or other foreign corporations invest in a country, they bring cutting-edge technology that can help the host country improve its output and efficiency.Increased Employment: FDI leads to an increase in the number of job opportunities available in the host country. When multinationals invest in a new country, they must employ local personnel, which leads to an increase in the number of jobs available to residents.Improvement of the Balance of Payment: FDI helps to improve a host country's balance of payment. When multinationals invest in a new country, it increases the amount of money coming into the host country, which improves the host country's balance of payment.Learn more about eurocurrency at;
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When Howard Schultz founded Starbucks in 1987, he wanted to create a company that would genuinely care for the well-being of its employees. He had been very influenced by his memories of his father, noting that his father "struggled a great deal and never made more than $20,000 a year, and his work was never valued, emotionally or physically, by his employer … This was an injustice … I want our employees to know we value them." He also believed that happy employees are the key to competitiveness and growth. As he stated: "We can’t achieve our strategic objectives without a work force of people who are immersed in the same commitment as management. Our only sustainable advantage is the quality of our work force. We’re building a national retail company by creating pride in–and stake in–the outcome of our labor."
Schulz set out to accomplish his goals by creating an empowering corporate culture, exceptional employee benefits, and employee stock ownership programs. While Starbucks enforces almost fanatical standards of coffee quality and customer service, the culture at Starbucks towards employees is laid back and supportive. Employees are empowered to make decisions without constant referral to management, and are encouraged to think of themselves as partners in the business. Starbucks wants employees to use their best judgment in making decisions and will stand behind them. This is reinforced through generous compensation and benefits packages.
In 2000, Schultz announced that he was resigning as CEO and left the firm to pursue other ventures (though he remained chairman of the board of directors). However, after Starbucks began to suffer from slumping net income and decreasing share price, Schultz returned to the helm in 2008. Rather than cutting costs and reducing the work force, Schulz announced his "Transformation Agenda"–a controversial plan to invest in Starbucks’ employees, environment, and community. His plan included:
Competitive employee compensation plans that include equity-based compensation for nonexecutive partners. In 2013, $230 million was paid out in equity awards. In 2015, Starbucks gave all baristas and supervisors a pay raise and increased starting pay rates across the United States. In 2018, Starbucks’s U.S. baristas earned between $7 and $15 an hour (with an average of $9 an hour), plus an average of $742 a year in cash bonus, $286 in stock bonus, $442 in profit sharing, and $1,095 in tips.
Industry-leading health care benefits and 401K benefits for both part-time and full-time workers. Other companies that offer health benefits to part-time workers typically only do so for employees who work at least 30 hours a week. Starbucks broke with industry norms by creating benefits for employees who work at least 20 hours a week.
Tuition reimbursement for students. In June 2014, Starbucks unveiled a "College Achievement Plan" wherein employees who work more than 20 hours a week can work towards a bachelor’s degree through an online program from Arizona State University.
An ethical sourcing plan. Starbucks’ coffee must be purchased from suppliers that adhere to Starbucks’ "C.A.F.E." standards. These standards include practices related to product quality, economic accountability, and transparency (e.g., suppliers must provide evidence to demonstrate that the price Starbucks pays reaches the farmer), social responsibility (e.g., third-party verifiers provide audits to ensure that suppliers are using safe, fair, and humane working and living conditions, including minimum-wage requirements and the prohibition of child and forced labor), and environmental leadership (e.g., measures to manage waste, protect water quality, and reduce use of agrochemicals).
If Starbucks takes a position on various controversial issues, which of the following would be important to have in place?
a. Suppliers and customers who wholeheartedly agree with the position Starbucks is taking b. A policy of neutrality in the customer interface that all employees must adhere to c. Executive managers who wholeheartedly agree with the position Starbucks is taking d. A policy for protecting employees who may not agree with the position Starbucks is taking
The correct answer is d. A policy for protecting employees who may not agree with the position Starbucks is taking would be important to have in place if Starbucks takes a position on various controversial issues.
This policy ensures that employees are respected and protected, allowing them to hold their own beliefs and opinions without facing negative consequences. It promotes an inclusive and diverse work environment, fostering employee well-being and maintaining a supportive corporate culture.
If Starbucks takes a position on controversial issues, it's crucial to have a policy in place to protect employees who may not agree with the company's stance.
By safeguarding employee rights and fostering an open and accepting environment, Starbucks can uphold its values and commitment to employee well-being.
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Cool Pool has these costs associated with production of 20,000 units of accessory products: direct materials, $75; direct labor, $125; variable manufacturing overhead, $60; total fixed manufacturing overhead, $600,000. What is the cost per unit under both the variable and absorption methods?
Variable
Method Cost per unit$$
Absorption
MethodCost per unit$$
The cost per unit under the variable method is $260 and the cost per unit under the absorption method is $290.
To calculate the cost per unit under the variable method, we need to consider the direct materials, direct labor, and variable manufacturing overhead.
The total variable cost per unit can be calculated as follows:
Total Variable Cost per Unit = Direct Materials + Direct Labor + Variable Manufacturing Overhead
Total Variable Cost per Unit = $75 + $125 + $60 = $260
To calculate the cost per unit under the absorption method, we need to consider the fixed manufacturing overhead as well. The fixed manufacturing overhead is a fixed cost that is spread across all units produced.
The total cost per unit under the absorption method can be calculated as follows:
Total Cost per Unit = Variable Cost per Unit + (Total Fixed Manufacturing Overhead / Number of Units)
Total Cost per Unit = $260 + ($600,000 / 20,000)
Total Cost per Unit = $260 + $30
Total Cost per Unit = $290
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i.) What is the key marketing situation faced by Dunkn’
Donuts?
a.
Pricing at reference points
b.
Developing new products
c.
Determining operational feasibility of new products
d.
The key marketing situation faced by Dunkn’Donuts is determining the operational feasibility of new products.
This means that the company needs to consider whether introducing new products will be profitable and practical for their operations.
Dunkn’Donuts needs to analyze factors such as the cost of ingredients, the production process, and the potential demand for the new products. They also need to assess whether they have the necessary resources and equipment to produce the new products efficiently.
Introducing new products can be a risky venture for a company, as it requires investment in research and development, marketing, and production. Therefore, Dunkn’Donuts needs to carefully evaluate the feasibility of new products before deciding to launch them.
However, developing new products is also important for the company to stay competitive and attract new customers. Therefore, Dunkn’Donuts needs to strike a balance between introducing innovative new products and ensuring that they are operationally feasible.
In summary, Dunkn’Donuts faces the marketing situation of determining the operational feasibility of new products. While introducing new products can be important for staying competitive, the company needs to carefully evaluate the feasibility of new products before investing in them.
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An asset used in a 4-year project falls in the 5-year MACRS class (refer to MACRS table on page 277), for tax purposes. The asset has an acquisition cost of $22,659,225 and will be sold for $4,899,092 at the end of the project. If the tax rate is 0.24, what is the aftertax salvage value of the asset?
Given that an asset used in a 4-year project falls in the 5-year MACRS class (refer to MACRS table on page 277), for tax purposes. The asset has an acquisition cost of $22,659,225 and will be sold for $4,899,092 at the end of the project. If the tax rate is 0.24, then we are required to determine the aftertax salvage value of the asset.
Now, let's use the following formula to determine the after-tax salvage value of the asset:After-tax salvage value = Salvage value - Tax on sale of the assetTax on sale of the asset = Tax rate * (Sales price - Book value)The salvage value of the asset = $4,899,092. The asset is in the 5-year MACRS class, so its property is in Class V and the MACRS percentage rate is 20.00 percent.
Therefore, we can find the asset's book value by first multiplying its original cost by the MACRS rate for year four:Cost = $22,659,225MACRS rate (Year 4) = 20%Book value = Cost × MACRS rate (Year 4) = $22,659,225 × 20% = $4,531,845Tax on the sale of the asset = Tax rate * (Sales price - Book value) = 0.24 × ($4,899,092 - $4,531,845) = $88,335After-tax salvage value = Salvage value - Tax on sale of the asset= $4,899,092 - $88,335 = $4,810,757Therefore, the after-tax salvage value of the asset is $4,810,757. After-tax salvage value = $4,810,757.
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Q5 A and B are sharing a room with a TV and a DVD player. DVD's can be rented for the weekend for a cost of $5. They would each get $4 worth of enjoyment from a weekend movie, so if both of them rent
In this scenario, both A and B would spend $5 each and receive $4 worth of enjoyment, resulting in a net loss of $1 for each of them.
If both A and B decide to rent a DVD for the weekend, the cost for each of them would be $5. They would each receive $4 worth of enjoyment from watching the movie.
Since the enjoyment they receive from watching the movie exceeds the cost of renting it, it would be rational for both A and B to rent the DVD.
Here's a breakdown of the costs and enjoyment for each person:
Cost:
- A's cost: $5
- B's cost: $5
Enjoyment:
- A's enjoyment: $4
- B's enjoyment: $4
In this scenario, both A and B would spend $5 each and receive $4 worth of enjoyment, resulting in a net loss of $1 for each of them. However, they might still consider renting the DVD if they value the enjoyment they receive from watching the movie more than the cost they have to pay. It ultimately depends on their personal preferences and willingness to spend on entertainment.
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Channing Corporation makes two products (A1 and B2) that require direct materials, direct labor, and overhead. The following data refer to operations expected for next month.
A1 B2 Total
Revenue $ 220,000 $ 660,000 $ 880,000
Direct material 90,000 180,000 270,000
Direct labor 64,000 152,000 216,000
Overhead:
Direct-material related 72,900
Direct-labor related 69,120
Required:
Channing uses a two-stage cost allocation system, It uses direct-material costs to allocate direct-materials related overhead and direct-labor costs to allocate direct-labor related overhead costs.
a. Compute the direct-material related overhead rate for next month.
b. Compute the direct-labor related overhead rate for next month.
c. What is the total overhead allocated to product A1 next month?
d. What is the total overhead allocated to product B2 next month?
a) Direct Material Related Overhead Rate for next month = $72,900 / $270,000 = 27%b) Direct Labor Related Overhead Rate for next month = $69,120 / $216,000 = 32%Explanation:The company Channing Corporation makes two products (A1 and B2) that require direct materials,
direct labor, and overhead. The above data provided refers to the operations expected for next month.The two-stage cost allocation system is used by Channing. It uses direct-material costs to allocate direct-materials related overhead and direct-labor costs to allocate direct-labor related overhead costs.a) To compute the Direct Material Related Overhead Rate for next month, we use the formula, Direct Material Related Overhead Rate = Direct Material Related Overhead Cost / Direct Materials Cost= $72,900 / $270,000= 27%b)
To compute the Direct Labor Related Overhead Rate for next month, we use the formula, Direct Labor Related Overhead Rate = Direct Labor Related Overhead Cost / Direct Labor Cost= $69,120 / $216,000= 32%c) The Total Overhead allocated to product A1 next month is calculated using the formula,Total Overhead Allocated = Direct Materials Cost × Direct Material Related Overhead Rate + Direct Labor Cost × Direct Labor Related Overhead Rate= $90,000 × 27% + $64,000 × 32%= $24,300 + $20,480= $44,780d) The Total Overhead allocated to product B2 next month is calculated using the formula,
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bavarian brewhouse is planning on going public. under the underwriting agreement the underwriting discount is
Bavarian Brewhouse will receive $11.59375 per share as proceeds from the underwriting after deducting the underwriting discount. The underwriting discount is 7.25% of the offering price.
To calculate the per share proceeds that Bavarian Brewhouse will receive, we need to subtract the underwriting discount from the offering price per share.
First, we calculate the underwriting discount:
Underwriting Discount = 7.25% of $12.50 = 0.0725 * $12.50 = $0.90625
Next, we subtract the underwriting discount from the offering price to find the per share proceeds:
Per Share Proceeds = Offering Price - Underwriting Discount
Per Share Proceeds = $12.50 - $0.90625 = $11.59375
Therefore, Bavarian Brewhouse will receive $11.59375 per share as proceeds from the underwriting after deducting the underwriting discount.
In conclusion, the per share proceeds that Bavarian Brewhouse will receive, considering an underwriting discount of 7.25% and an offering price of $12.50 per share, is $11.59375. This calculation accounts for the deduction of the underwriting discount from the offering price and represents the net amount per share that the company will receive from the public offering.
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Complete Question:
Bavarian Brewhouse is planning on going public. Under the underwriting agreement the underwriting discount is 7.25%. If the offering price of the stock is set at $12.50 per share, what is the per share proceeds that Bavarian will receive?
The statement of income for Sheridan Ltd., a private company
reporting under ASPE, is presented here: SHERIDAN LTD. Statement of
Income Year Ended November 30, 2021 Sales $7,800,000 Cost of goods
sold
The income statement gives a brief overview of a company's revenues, costs, and net gain or loss for a given time period. It aids stakeholders in comprehending how the organisation performed at that time.
Sheridan Ltd. Statement of Income Year Ended November 30, 2021 Sales $7,800,000 Cost of goods sold (4,500,000) Gross profit 3,300,000 Expenses:
Selling expenses (300,000) Administrative expenses (1,200,000) Depreciation expense (200,000) Total expenses (1,700,000) Income before income tax 1,600,000 Income tax expense (600,000) Net income $1,000,000
The company’s sales for the year ended November 30, 2021 were $7,800,000.
The cost of goods sold during the year was $4,500,000, which resulted in a gross profit of $3,300,000.
After deducting the selling expenses of $300,000, administrative expenses of $1,200,000, and depreciation expense of $200,000, the total expenses for the year were $1,700,000.
The income before income tax for the year was $1,600,000.
The company had to pay an income tax expense of $600,000, which resulted in a net income of $1,000,000. Therefore, the net income for the year ended November 30, 2021 for Sheridan Ltd. was $1,000,000.
The income statement provides a summary of a company's revenues and expenses, as well as net income or loss, for a specific period. It helps stakeholders understand the company's performance during that period.
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Research by the Ethics Resource Center (ERC) found that 86 percent of the employees in companies with a well-implemented ethics and compliance program are likely to perceive a strong ethical culture within the company, while less than 25 percent of employees in companies with little to no program are likely to perceive a culture that promotes integrity in the workplace. Why are the ethics important in the corporate work place and how does it contribute to the business success .
Implementing an ethics and compliance program is essential for creating a positive work environment that supports both the well-being of employees and the success of the business.
Ethics are important in the corporate workplace because they promote a positive culture of integrity, accountability, and trustworthiness among employees. It contributes to business success by reducing the likelihood of unethical behavior and misconduct, which can result in legal and financial consequences for the company.
In addition, companies with a strong ethical culture are more attractive to customers, investors, and potential employees. This is because they are perceived as trustworthy and reliable, which can lead to increased loyalty and profitability.
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Study guide for final exam 1. For a hypotetical conditions, indicate whether the policymaker would have a preference for fiscal policy or monetrary policy. Explain your answers. a. Investment is relat
Carrying out monetary policy the Fed will add money to the reserves that banks are obligated to maintain with it if, for example, it purchases or borrows Treasury notes from commercial banks. In turn, the money supply increases.
A nation's central bank or government can enact monetary policy to affect the amount of money in the economy and the cost of borrowing. The New York Fed is a key player in carrying out U.S. monetary policy, which is determined by the Federal Reserve. The Fed's mandated economic objectives from Congress are to support full employment, price stability, and moderate long-term interest rates.
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measures and indicators of product and service performance that have a strong correlation with customer satisfaction are appropriate to monitor. t/f
True. Measures and indicators of product and service performance that have a strong correlation with customer satisfaction are appropriate to monitor.
A company must regularly monitor customer satisfaction to ensure they are providing quality products and services. In today's business world, businesses cannot afford to lose customers or not get new ones due to poor product or service performance. Businesses, therefore, need to monitor their product and service performance to ensure they maintain customer satisfaction. It is important to have a clear understanding of the measures and indicators that are correlated with customer satisfaction. Hence, it is True. Measures and indicators of product and service performance that have a strong correlation with customer satisfaction are appropriate to monitor.
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Faros Hats Inc. has two product lines-baseball helmets and football helmets. The income statement data for the most recent year is as follows: Total Baseball Helmets Football Helmets Sales revenue $85
The amount of income for the company Faros Hats Inc is $100,000, and they have two product lines, i.e., baseball helmets and football helmets.
Given data: Total sales revenue = $850,000Sales revenue from baseball helmets = $300,000Sales revenue from football helmets = $550,000Let the cost of goods sold (COGS) for baseball helmets be x and that for football helmets be y. Hence, the following equation is obtained:x + y = COGS...(1)Since gross profit is the difference between sales revenue and COGS, the gross profit for baseball helmets is (300,000 - x), and that for football helmets is (550,000 - y).
Hence, the following equation is obtained:(300,000 - x) + (550,000 - y) = gross profit...(2)Now, the gross profit and income statements for the company can be combined as follows: Total sales revenue = $850,000COGS = x + yGross profit = (300,000 - x) + (550,000 - y)Selling expenses = $125,000General and administrative expenses = $175,000Net income = $100,000Using the above data, the income statement can be formulated as follows: FAROS HATS INC.Income Statement For the Year Ended December 31, XXXX Sales revenue: Baseball helmets $300,000Football helmets $550,000Total sales revenue $850,000Cost of goods sold (x + y)Gross profit $275,000Selling expenses $125,000General and administrative expenses $175,000Net income $100,000.
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a piece a company is considering investing in a piece of equipment. it costs $57,500 and will have expected benefits of $4,500 per year over a 15 year lifespan with an estimated salvage value of $10,000. determine the rate of return. a. 6.0% b. 4.9% c. 3.6% d. 3.1%
The rate of return for the investment in the piece of equipment,6.0%.option A.
To determine the rate of return for the investment in the piece of equipment, we can use the net present value (NPV) method. The rate of return is the discount rate at which the NPV of the investment becomes zero. Here's how we can calculate it:
First, let's calculate the annual cash flows from the investment. The expected benefits per year are $4,500, and the salvage value at the end of the 15-year lifespan is $10,000. So, the cash flows for each year will be as follows:
Year 0 (Initial investment): -$57,500
Year 1 to Year 15 (Annual benefits): $4,500 per year
Year 15 (Salvage value): $10,000
Next, we need to calculate the present value (PV) of each cash flow. We can discount the future cash flows to their present values using an appropriate discount rate. We will use the rate of return as the discount rate and calculate the NPV.
The NPV formula is:
NPV = (Cash flow 0 / (1 + r)^0) + (Cash flow 1 / (1 + r)^1) + ... + (Cash flow n / (1 + r)^n)
Setting the NPV to zero and solving for the rate of return (r) will give us the desired result.
Using a financial calculator or software, we can find that the rate of return is approximately 6.0%. Therefore, the correct answer is option A.
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