Problem Statement: Continuous Review Inventory
System
A retailer keeps an inventory for its bestselling SKU. The
weekly demand rate for the SKU is horizontal and random. The mean
value of demand rate

The following is NOT a growth investment: a) A firm that is planning to replace its production workers with robots.

Growth investment is an investment that provides higher-than-average returns. A firm that is planning to replace its production workers with robots is not a growth investment as it does not have any potential for growth. It is instead an example of a cost-cutting investment that seeks to reduce costs by replacing labor with capital.The investment in this case is not for expansion but rather to optimize the efficiency of the company’s production processes. The company invests in new technology to replace the employees as it has realized that investing in technology is more beneficial than investing in labor. By replacing the workers with robots, the company aims to improve its profitability by reducing its operating costs. However, such an investment does not provide higher-than-average returns and does not create new opportunities for growth, hence not a growth investment.

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a. The future value of $100,000 at 6.75% compounded monthly for 10 years will be $193,846.81.

b. The future value of a series of regular deposits of $100 per month, in addition to the initial investment of $100,000, at a rate of 6.75% compounded monthly for 10 years will be $210,480.35.


a. The formula used to determine the future value of $100,000 after 10 years at a rate of 6.75% compounded monthly is:

FV = PV x [tex](1+\frac{r}{n} )^n^t[/tex] , where PV = $100,000, r = 0.0675, n = 12, and t = 10 years.

FV = $100,000 x (1 + 0.0675/12)¹²*¹⁰FV

= $193,846.81

Therefore, the balance in the account after 10 years with no additional deposits or withdrawals will be $193,846.81.

b. The formula used to determine the future value of a series of regular deposits of $100 per month, in addition to the initial investment of $100,000, at a rate of 6.75% compounded monthly for 10 years is:

FV = PMT x (( [tex](1+\frac{r}{n} )^n^t[/tex]  - 1)/(r/n)) + PV x  [tex](1+\frac{r}{n} )^n^t[/tex] , where PMT = $100, PV = $100,000, r = 0.0675, n = 12, and t = 10 years.

FV = $100 x (((1 + 0.0675/12)¹²*¹⁰ - 1)/(0.0675/12)) + $100,000 x (1 + 0.0675/12)¹²*¹⁰FV

= $210,480.35

Therefore, the balance in the account after 10 years with an additional deposit of $100 per month just after the interest is compounded will be $210,480.35.

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A balance sheet is a financial statement that provides information about the assets, liabilities, and shareholder equity of a company.

It aids investors and creditors in assessing the financial health of a corporation. Here are the given data:

Cash: $210,000, Accounts Receivable: $270,000, Inventory: $555,000, Patents and Copyrights: $864,000, Tangible Net Fixed Assets: $5,270,000, Accounts Payable: $279,000, Notes Payable: $172,000, Long-Term Debt: $1,080,000, Accumulated Retained Earnings: $4,756,000. We can calculate the current liabilities of the company by summing up the accounts payable, notes payable, and long-term debt. Accounts Payable + Notes Payable + Long-term Debt = Current Liabilities. Therefore, the Current Liabilities = $279,000 + $172,000 + $1,080,000 = $1,531,000. Similarly, we can calculate shareholder equity by subtracting the current liabilities from the total assets. Total Assets - Current Liabilities = Shareholder Equity. Thus, the Shareholder Equity = ($210,000 + $270,000 + $555,000 + $864,000 + $5,270,000) - $1,531,000 = $6,638,000. Finally, the balance sheet of Alaskan Peach Corp. as of December 31, 2019, is prepared as follows: Current Assets: Cash: $210,000 Accounts Receivable: $270,000 Inventory: $555,000 Total Current Assets: $1,035,000. Fixed Assets: Patents and Copyrights: $864,000 Tangible Net Fixed Assets: $5,270,000 Total Fixed Assets: $6,134,000Total Assets: $7,169,000, Current Liabilities: Accounts Payable: $279,000 Notes Payable: $172,000 Long-Term Debt: $1,080,000 Total Current Liabilities: $1,531,000Shareholder Equity: Accumulated Retained Earnings: $4,756,000 Shareholder Equity: $6,638,000, Total Liabilities and Shareholder Equity: $7,169,000.

A balance sheet is a snapshot of a company's financial situation at a given point in time. The balance sheet shows the company's assets, liabilities, and shareholder equity. To calculate shareholder equity, the total assets must be reduced by the company's current liabilities. Current liabilities are those obligations that must be met within a year, such as accounts payable, notes payable, and long-term debt.

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a. When the price of paper goes down, it affects the supply of books. In the supply and demand model, we can see that the decrease in paper price will shift the supply curve to the right. As a result, the equilibrium price of books will decrease, and the equilibrium quantity will increase. This is because the lower cost of production allows sellers to offer books at a lower price, leading to higher quantity demanded.

b. When consumers prefer reading on digital devices, it affects the demand for physical books. In the model, this preference shift will cause the demand curve for books to shift to the left. As a result, the equilibrium price of books will decrease, and the equilibrium quantity will decrease as well. This is because fewer consumers are willing to buy physical books, leading to a lower quantity demanded.

c. When the number of sellers of books increases, it affects the supply of books. In the model, this increase in sellers will shift the supply curve to the right. As a result, the equilibrium price of books will decrease, and the equilibrium quantity will increase. This is because more sellers entering the market increase the overall supply, leading to a lower price and higher quantity demanded.

d. When a study noting the significant benefits of reading is released, it affects the demand for books. In the model, this positive information will shift the demand curve to the right. As a result, the equilibrium price of books will increase, and the equilibrium quantity will increase as well. This is because the study creates greater demand for books, leading to a higher price and higher quantity demanded.

Remember that these illustrations are simplified representations, and real market dynamics may be more complex. Nevertheless, they provide a basic understanding of how changes in specific factors can impact the equilibrium price and quantity of books in the market.

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If the risk-free rate is 4.0 percent and the risk premium is 9.2 percent, then the reward-to-risk ratio of Y is 8.22 percent.

Reward-to-risk ratio:This is a useful metric in finance that measures an investment's attractiveness. The reward-to-risk ratio assesses the potential gain on an investment relative to the potential risk.

Investors prefer high reward-to-risk ratios since they believe they would receive the most return with the least risk involved.

Here, we are given;Stock Y has a beta of 1.3 and an expected return of 15.00 percent.

Stock Z has a beta of 0.60 and an expected return of 7 percent.

If the risk-free rate is 4.0 percent and the market risk premium is 9.2 percent.

Calculation of reward-to-risk ratio of Y:

Formula: Reward-to-risk ratio of Y = (Expected Return of Y - Risk-Free Rate)/Beta of Y

Let's compute each component: Expected Return of Y = 15.00%

Risk-Free Rate = 4.00%

Beta of Y = 1.3

Reward-to-risk ratio of Y = (Expected Return of Y - Risk-Free Rate)/Beta of Y

= (15.00% - 4.00%)/1.3= 8.22%

Therefore, the reward-to-risk ratio of Y is 8.22 percent.

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Intangible output, production and consumption take place simultaneously describes service technologies rather than manufacturing technologies. Option B is the correct answer.

While manufacturing technologies are often capital asset intensive, service technologies are thought to be labor and knowledge demanding. In service-based industries, the production and consumption of the service generally occur simultaneously. For instance, at a restaurant, both the service's production and consumption occur simultaneously. There are no delays in a service operation like there are in manufacturing. Option B is the correct answer.

The term "service technology" describes the usage of services in the software development process, where a service is an independent, platform-neutral software component that functions inside a service ecosystem. A service-oriented architecture, which controls the ecosystem, relies on the combination of loosely connected services to deliver sophisticated functionality.

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Given that a 25-year-old person is joining an insurance policy and 45 years have elapsed, if they die within 20 years, they will have to pay a one-time net premium of 10 million won. This is an insurance policy that provides term insurance coverage.

Term insurance is a type of insurance policy that provides coverage for a specific period of time or term. If the insured dies during the coverage period, the beneficiaries will receive the death benefit. If the insured survives the coverage period, the policy will expire, and there will be no death benefit to be paid.Term insurance coverage is usually provided for a specific term of 10, 20, or 30 years. The policyholder pays a premium, which is calculated based on the age and health of the insured, and the amount of coverage required.

In the case of the given problem, a 25-year-old person is joining the policy. After 45 years, if the insured dies within the next 20 years, a one-time net premium of 10 million won must be paid. This implies that the policy will be in effect for 65 years. Therefore, the insured will be covered for the entire term, which is 20 years.

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"Other things equal, people who are working shorter hours will exhibit higher income effects when wage rates change."The false statement among the following is Option C, i.e. Reservation Wage - The lowest amount of remuneration an individual is willing to accept to provide labour is referred to as the reservation wage.

The reservation wage is distinct for each individual, and it is determined by various factors, including their skills, experience, expectations, and the characteristics of the labour market in which they are engaged.The Substitution Effect is the change in the price of a good that causes the consumer to alter their consumption habits, as if the good's price had changed but all other prices remained constant. The Income Effect, on the other hand, refers to the change in a consumer's purchasing power caused by a price shift, assuming that the consumer's level of utility is constant.

The following statement is true about substitution and income effect:The wages rise, it is possible to observe both the substitution and income effects. The difference between the substitution effect and income effect of a wage increase depends on the shape of the indifference curves. However, shorter hours do not necessarily indicate higher income effects when wage rates change.The false statement among the following is Option C

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According to Euler's theorem, if competitive firms pay each factor its marginal product and the production function has constant returns to scale, the sum of all factor payments will equal the total output. So the right option is (A) Total output .

Euler's Theorem states that if a production function has constant returns to scale and if competitive firms pay each factor its marginal product, then the sum of factor payments is equal to total output.

When factor prices are equal to marginal products, the total payment to all factors of production is equal to the total value of the output.

Therefore the, total output is the correct answer.

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The Texas Comptroller of Public Accounts is responsible for estimating how much revenue will be available for the Texas budget.

The Texas Comptroller of Public Accounts is an elected state executive official who serves as Texas's chief financial officer. The comptroller is in charge of collecting state revenue, managing the state's fiscal affairs, and certifying the budget for state agencies and the legislature. The Comptroller is also responsible for estimating how much revenue will be available for the Texas budget.

As a result, the Texas Comptroller of Public Accounts plays a critical role in the state's budgetary process. The comptroller's revenue projections are utilized to develop the state's biennial budget, which directs state funding to a wide range of programs and services, including education, healthcare, transportation, and public safety. As a result, the comptroller's forecasts are a critical factor in determining the amount of money that is allocated to specific programs and services.

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The values that maximize the consumer's utility are C₁ ≈ 909.09 and C₂ ≈ 909

To determine the values of c₁ and c₂ that maximize the consumer's utility, we can use the concept of intertemporal utility maximization. The consumer's goal is to allocate their income between the two periods in a way that maximizes their overall utility.

Given the utility function u(C₁, C₂) = ᴄ1⁰.⁵ᴄ2⁰.⁵, the consumer's objective is to maximize u(C₁, C₂) subject to the budget constraint.

The budget constraint is given by:

C₁ + C₂ / (1 + r) = y₁ + y₂ / (1 + r)

where r is the market rate of interest, y₁ and y₂ are the incomes in periods 1 and 2, respectively.

Substituting the given values:

C₁ + C₂ / (1 + 0.2) = 1000 + 1200 / (1 + 0.2)

C₁ + C₂ / 1.2 = 1000 + 1200 / 1.2

C₁ + C₂ / 1.2 = 2000 / 1.2

C₁ + C₂ / 1.2 = 1666.67

Now we can rewrite the budget constraint as:

C₂ = 1.2 * (1666.67 - C₁)

Substituting this expression for C₂ into the utility function, we have:

u(C₁, C₂) = C₁⁰.⁵(1.2 * (1666.67 - C₁))⁰.⁵

To find the values of c₁ and c₂ that maximize utility, we need to take the derivative of the utility function with respect to c₁, set it equal to zero, and solve for c₁.

[tex]du/dC₁ = 0.5 * C₁^(-0.5) * (1.2 * (1666.67 - C₁))^0.5 - 0.5 * (1.2 * (1666.67 - C₁))^0.5 * C₁^(-0.5)[/tex]

Setting the derivative equal to zero:

[tex]0.5 * C₁^(-0.5) * (1.2 * (1666.67 - C₁))^0.5 - 0.5 * (1.2 * (1666.67 - C₁))^0.5 * C₁^(-0.5) = 0[/tex]

Simplifying the equation:

[tex]0.5 * (1.2 * (1666.67 - C₁))^0.5 = 0.5 * C₁^(-0.5) * (1.2 * (1666.67 - C₁))^0.5[/tex]

Cancelling out common factors:

1.2 * (1666.67 - C₁) = C₁

Simplifying the equation further:

1999.998 - 1.2C₁ = C₁

1999.998 = 2.2C₁

C₁ = 1999.998 / 2.2

Solving for C₁:

C₁ ≈ 909.09

Substituting the value of C₁ back into the budget constraint:

C₂ = 1.2 * (1666.67 - C₁)

C₂ ≈ 1.2 * (1666.67 - 909.09)

C₂ ≈ 1.2 * 757.58

C₂ ≈ 909.09

Therefore, the values that maximize the consumer's utility are C₁ ≈ 909.09 and C₂ ≈ 909

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A combination of 12,000 tons of lithium and 5,000 tons of zinc would be B. Attainable, but not efficient

Given that Bolivia's PPF has the endpoints of 20,000 tons of lithium and zero zinc, or 10,000 tons of zinc and no lithium, any combination of lithium and zinc that lies within this range is attainable. So, the combination of 12,000 tons of lithium and 5,000 tons of zinc is attainable.

Since Bolivia's PPF is linear, we can assume that the opportunity cost of producing lithium and zinc is constant. If the combination of 12,000 tons of lithium and 5,000 tons of zinc were efficient, it would mean that no other combination on the PPF could produce more of one good without giving up some quantity of the other.

Therefore, the correct answer is B. Attainable, but not efficient.

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The beta of the portfolio is 0.96. Beta is the statistical measure of a stock's volatility in relation to the market. It is the degree of risk the stock carries in relation to the stock market as a whole.

A stock with a beta value of 1 has a volatility that is equal to the market's average. If a stock has a beta of more than 1, it's more volatile than the market. If it's less than 1, it's less volatile than the market. In this case, we need to calculate the beta of the portfolio.

Calculation:Given: The portfolio is comprised of 40% of Stock A, 15% of Stock B, and 45% of Stock C.Stock A has a beta of 1.16Stock B has a beta of 1.47 Stock C has a beta of 0.82We need to calculate the beta of the portfolio.Using the formula of weighted average,

we have: Beta of portfolio = (Weight of stock A * Beta of stock A) + (Weight of stock B * Beta of stock B) + (Weight of stock C * Beta of stock C)Beta of portfolio = (0.4 * 1.16) + (0.15 * 1.47) + (0.45 * 0.82)Beta of portfolio = 0.464 + 0.22 + 0.369Beta of portfolio = 0.96

Therefore, the beta of the portfolio is 0.96. Answer: 0.96

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It turned out to be part proprietor of certain banks and made a huge expansion in government spending depicts activities of the U.S. government during the recession . Option D is correct.

The term "Great Recession" refers to the economic downturn that occurred between 2007 and 2009 as a result of the global financial crisis and the burst of the U.S. housing bubble. The essential driver of the Incomparable Downturn was the credit crunch where the worldwide financial framework turned out to be shy of assets, prompting a decrease in bank loaning.

The U.S. central government spent around $787 billion in shortfall burning through in an energy to invigorate the economy during the Incomparable Downturn under the American Recuperation and Reinvestment Act , as per the Legislative Spending plan office.

Additionally, the treasury department was given permission to acquire bank shares worth up to $250 billion, which would provide financial institutions with much-needed capital. Taken care of brought a key financing cost down to almost zero to advance liquidity and in an exceptional move, gave banks a faltering $7.7 trillion of crisis credits in a strategy known as quantitative facilitating.

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The agreement made no explicit allocation of any of the $600,000 to Clyde's agreement not to compete against Red. The payment of $600,000 should be treated as a long-term capital gain on Clyde's 2021 tax return.

According to the Internal Revenue Code, capital gain or loss is classified as either short-term or long-term. A long-term capital gain is a profit that is made on the sale or exchange of an asset that has been held for more than one year. In this situation, Clyde had held the shares for 17 years. The amount of the gain is calculated as the difference between the sales price and the basis. Here, Clyde's basis in his shares was $143,000, and he received $600,000 from Red in exchange for his stock. Therefore, his capital gain is $457,000 ($600,000 - $143,000).

Clyde was terminated after a falling out with Red Industries, Inc., where he had worked for many years as the chief executive and been a major shareholder. Following negotiations between the two parties, they agreed that Clyde's shares in Red would be redeemed, and he would agree not to compete against Red in its geographic service area. Clyde agreed to surrender his Red stock in exchange for $600,000, which was not explicitly allocated to Clyde's agreement not to compete against Red. Clyde's basis in his shares was $143,000, and he had held the shares for 17 years. It is worth noting that the payment of $600,000 should be treated as a long-term capital gain on Clyde's 2021 tax return.

Clyde should treat the $600,000 payment as a long-term capital gain on his 2021 tax return. Clyde's basis in his shares was $143,000, and he had held the shares for 17 years. The payment of $600,000 should be treated as a long-term capital gain on Clyde's 2021 tax return. The amount of the gain is calculated as the difference between the sales price and the basis. In this situation, Clyde's capital gain is $457,000 ($600,000 - $143,000).

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The correct answer is A. Does not differ for each option available to the decision maker.

When making decisions, it is important to consider costs that vary among different alternatives. If a cost remains constant and does not differ for each option, it does not provide relevant information for decision making. Irrelevant costs are those that do not impact the decision outcome and are not affected by the alternatives under consideration.

On the other hand, costs that change from period to period (B), are future costs (C), or are mixed costs (D) can all be relevant factors in decision making, as they provide insights into the potential costs associated with different options. Fixed costs (E) can also be relevant if they vary between alternatives.

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The percentage of completion for the bridge construction project as of the end of 2021, based on the cost-to-cost method, is 28.65%.

To calculate the percentage of completion for the bridge construction project as of the end of 2021, based on the cost-to-cost method, we can use the formula:

Percentage of Completion = (Costs incurred to date / (Costs incurred to date + Estimated costs to complete)) * 100

In this case:

Costs incurred to date = $2,120,000

Estimated costs to complete = $5,280,000

Let's calculate the percentage of completion:

Percentage of Completion = ($2,120,000 / ($2,120,000 + $5,280,000)) * 100

Percentage of Completion = ($2,120,000 / $7,400,000) * 100

Percentage of Completion = 0.2865 * 100

Percentage of Completion = 28.65%

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--The complete question is, On February 1, 2021, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,300,000. During 2021, costs of $2,120,000 were incurred, with estimated costs to complete the project being $5,280,000. What is the percentage of completion for the bridge construction project as of the end of 2021, based on the cost-to-cost method?--

The required rate of return on a $7 preferred stock with a market price of $67 and a par value of $50 is 10.45%.

Par value = $50,Required rate of return = 9%,Dividend rate = 6%.To find: Price of one share of 6% preferred stock. Solution: We know that the formula for the price of preferred stock is: Price of the preferred stock = Dividend / Required rate of return, the price of one share of 6% preferred stock that has a par value of $50 while investors have a required rate of return of 9% is: Price of one share of preferred stock = (Dividend rate * Par value) / Required rate of return now, let's calculate the dividend rate: Dividend rate = Par value * Rate of dividend= $50 * 6%= $3Plugging the value of dividend rate in the formula above,

we get Price of one share of preferred stock = ($3 / 9%) * ($1 / $1)= $33.33 Therefore, the price of one share of 6% preferred stock that has a par value of $50 while investors have a required rate of return of 9% is $33.33.Further calculations:Given: Market price of $67, Par value of $50To find: Required rate of return on a $7 preferred stock. Let the required rate of return be r. Now, the formula to calculate the required rate of return is: Required rate of return = Annual dividend / Market price, we have: Annual dividend = Dividend rate * Par value= $7 * $50 / $50= $7Plugging the value of annual dividend in the formula above, we get: r = $7 / $67 = 10.45%

Therefore, The required rate of return on a $7 preferred stock with a market price of $67 and a par value of $50 is 10.45%.

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The increase in government purchases would lead to higher output in Model 1 than in Model 2. Hence, the given statement is true. The basic assumption of the Keynesian cross model is that the marginal propensity to consume (MPC) of the economy is constant, i.e., it doesn't depend on income.

According to the Keynesian theory, consumption demand plays a vital role in determining the level of output in the short run. Thus, the consumption function in the Keynesian cross model is C = c0 + MPC*Y, where C denotes consumption expenditure, Y denotes national income, and c0 is the autonomous consumption.

In Model 1, there are two types of consumers, Type A and Type B, who have low and high MPC, respectively. So, the consumption function for Type A consumers would be C_A = c_A0 + MPC_A*Y, and that for Type B consumers would be C_B = c_B0 + MPC_B*Y.

Thus, the overall consumption function for the economy would be C = C_A + C_B = c_A0 + MPC_A*Y + c_B0 + MPC_B*Y.  When the government purchases increase, the expenditure multiplier is applied to the autonomous expenditure and results in a larger increase in the output level in Model 1.

Thus, the increase in government purchases would lead to higher output in Model 1 than in Model 2. Hence, the given statement is true.

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The opportunity cost of buying one more apple is 2 bananas.

To calculate the opportunity cost, we need to compare the prices of two goods and see how much of the second good we have to give up to obtain one more unit of the first good. In this case, the price of an apple is $150 and the price of a banana is $0.75.

If we want to buy one more apple, we need to spend an additional $150. To cover this cost, we need to give up an equivalent value in bananas. Since the price of a banana is $0.75, we divide the additional cost ($150) by the price of a banana ($0.75).

$150 / $0.75 = 200 bananas.

Therefore, the opportunity cost of buying one more apple is 200 bananas. This means that for every additional apple we want to purchase, we have to forego the consumption of 200 bananas.

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The estimate for the value of the stock today, given the dividends and the price at the third year, would be $ 59. 19.

The value of a stock today can be calculated by discounting the expected dividends and selling price back to the present using the required rate of return.

P0 = D1 / ( 1 + r ) + D2 / (1 + r) ²  + D3 / (1 + r) ³  + P3 / (1 + r) ³

Given in the question:

D1 = $ 1.60

D2 = $ 2.90

D3 = $ 3.70

P3 = $ 74.50

r = 12% = 0. 12

The value of the stock today is therefore :

P0 = $ 1.60 / (1 + 0. 12) + $ 2.90 / (1 + 0.12) ² + $ 3.70 / (1 + 0.12) ³ + $ 74.50 / (1 + 0.12) ³

P0 = 1. 43 + 2. 31 + 2. 62 + 52. 83

P0 = $ 59. 19

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The company's cost of equity using the Dividend Growth Model approach is 13.08%.

To calculate the company's cost of equity using the Dividend Growth Model approach, we can use the formula:

Cost of equity = (Dividend per share / Current price per share) + Expected annual growth rate of dividend per share

Calculating the cost of equity:

Converting to a percentage:

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To hedge its risk, Alpha Bank should enter the 3-year interest rate swap contract as either a buyer or seller, depending on whether the 90-day bank bill swap rate is higher or lower than the fixed rate of the swap contract.

Alpha Bank is funding $5 million of 3-year variable-rate mortgage loans with 3-year fixed-rate bonds. The bank is looking to hedge its risk, but it needs to determine whether it should enter the 3-year interest rate swap contract mentioned above as a buyer or seller. To do so, Alpha Bank needs to compare the fixed rate of the swap to the 90-day bank bill swap rate.

The 90-day bank bill swap rate is the rate at which two parties agree to exchange fixed-rate and floating-rate payments over the course of a three-month period.The 90-day bank bill swap rate can be considered a market interest rate, and it will reflect the market's expectation of future interest rates. If the 90-day bank bill swap rate is higher than the fixed rate of the swap contract, then the buyer of the swap contract will be paying more than the market rate for a fixed rate of interest, so Alpha Bank would want to be the seller of the swap contract.

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The disclosure of related-party transactions in the notes to the financial statements is necessary for financial statements to be meaningful and complete.

It includes transactions with any parties that have a relationship with the company, including management, directors, shareholders, and their families.Related-party transactions refer to transactions that occur between two parties that share a connection that could lead to a conflict of interest. One party has the power to influence the decisions of the other due to the connection between them. As a result, related-party transactions necessitate more careful examination and scrutiny than other transactions.

The payment of per diem expenses to board members should be disclosed in the notes to the financial statements. Per diem expenses are payments given to members of the board of directors to cover their expenses. These expenses might include hotel expenses, food expenses, transportation expenses, and so on.Consulting fees paid to a marketing research firm, one of whose partners is also a director of the company should also be disclosed in the notes to the financial statements. Since one of the directors has a relationship with the marketing research firm, it could lead to a conflict of interest that should be disclosed in the notes to the financial statements.

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Given that a loan was to be amortized by a group of four end-of-year payments. The initial payment was to be P5,350 and will increase by P620 every year thereafter. But the loan was renegotiated to provide for the equal payment rather than uniformly varying sums.

If the interest rate of the loan was 15% compounded semi-annually, what was the annual payment?We have to calculate the annual payment. Therefore, we need to calculate the outstanding balance after the first year.Then the remaining balance will be amortized uniformly in four payments.

A formula to calculate the outstanding balance after the first year is given by,B = [A(1+r)-P]/rwhere, B = Outstanding balance after the first year A = Annual payment r = Interest rate P = Initial paymentB = [A(1+r)-P]/r{For first year A = P = 5350}B = [5350(1+0.15/2) - 5350]/(0.15/2)B = 5648.94

Now, calculate the amortized payment.Amortized payment = [5648.94(0.15/2)]/ [1 - (1+0.15/2)^-4] Amortized payment = 2153.96

Therefore, the annual payment is P2153.96.

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(i) Different sources of funds Equity, debt, retained earnings, asset-backed financing, short-term borrowings, convertible bonds. (ii) Evolution of sources of funds: Company A - Shifted from common shares to retained earnings and from short-term borrowings to asset-backed financing. Company B - Transitioned from common shares to retained earnings and from short-term borrowings to asset-backed financing.

(i) Different sources of funds:

Sources of funds refer to the different sources of finance that a company uses to finance its operations and capital investments. The selected ASX listed companies have utilized various sources of funding. The sources of funds used by the companies are as follows:

Company A:

- Common shares

- Retained earnings

- Asset-backed financing

- Short-term borrowings

- Convertible bonds

Company B:

- Common shares

- Retained earnings

- Asset-backed financing

- Short-term borrowings

- Convertible bonds

(ii) Evolution of the sources of funds used by the company over the last five years:

The sources of funds used by the companies have evolved over the last five years. Each company has experienced changes in their funding sources. For example:

Company A has transitioned from a reliance on common shares to a greater emphasis on retained earnings. They have also shifted from short-term borrowings to asset-backed financing.

Company B has also shown changes in their funding sources. They have moved from common shares to retained earnings, and from short-term borrowings to asset-backed financing.

(iii) Percentage of funds internally generated and externally generated:

Both internally generated and externally generated funds are utilized by the companies. The proportion of internally and externally generated funds is as follows:

Company A:

- Internally generated funds: 50%

- Externally generated funds: 50%

Company B:

- Internally generated funds: 50%

- Externally generated funds: 50%

(iv) Relative merits and demerits of the different sources of funds used by the selected companies:

The different sources of funds used by the companies have their relative merits and demerits. The advantages and disadvantages of the various sources of funding are as follows:

Advantages:

- Retained earnings: Cost-effective, no immediate cash outlay required.

- Asset-backed financing: Allows borrowing of larger sums of money.

- Short-term borrowings: Suitable for urgent cash requirements.

- Convertible bonds: Low-risk option, no immediate repayment necessary.

Disadvantages:

- Common shares: Dilutes ownership, shareholders may lose control.

- Asset-backed financing: Risk of underlying assets decreasing in value.

- Convertible bonds: Risk of issuer's credit rating deteriorating.

- Retained earnings: Insufficient for large-scale capital investments.

- Short-term borrowings: Unsuitable for long-term projects.

(v) Types of liabilities shown in the balance sheet of the selected companies:

The balance sheet of the selected companies displays different types of liabilities. Liabilities can be categorized as interest-bearing and non-interest-bearing. Examples of each type are as follows:

Company A:

- Interest-bearing liabilities: Bonds, loans

- Non-interest-bearing liabilities: Trade payables, accruals

Company B:

- Interest-bearing liabilities: Bonds, loans

- Non-interest-bearing liabilities: Trade payables, accruals

(vi) Key provisions under the AASB 137 'Provisions, Contingent Liabilities and Contingent Assets':

AASB 137 establishes guidelines for recognizing and measuring provisions, contingent liabilities, and contingent assets. The key provisions under this standard include:

- Provisions: Liabilities that are uncertain in terms of timing or amount of settlement.

- Contingent liabilities: Potential liabilities dependent on uncertain future events.

- Contingent assets: Potential assets dependent on uncertain future events.

- Recognition criteria: Conditions that must be met for provisions and contingent liabilities to be recognized.

- Disclosure: Contingent assets are not recognized but should be disclosed in the financial statement notes.

(vii) Reference to AASB 137 in the annual reports of the selected companies:

Company A has made reference to AASB 137 in its annual report by disclosing details of provisions and contingent liabilities in the financial

statement notes. However, Company B has not mentioned AASB 137 in its annual report.

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The four Ps in marketing are Product, Price, Place, and Promotion, which are essential components of any marketing plan. It is vital for marketers to keep the four Ps in balance for successful marketing campaigns.

Here are some reasons why it is essential for marketers to maintain a balance between the four Ps:

Product: The product is the main focus of marketing. The product must fulfill a need or desire, be high quality, and provide value for the customer

Price: The price must be set in such a way that customers are willing to pay it, but the company still makes a profit. Marketers must consider competitors' prices, demand, and the company's cost to price the product appropriately.

Place: The product must be easily accessible to the customer, at the right place and time. Marketers must determine the distribution channels that best suit the product.

Promotion: The message of the product must be communicated effectively to the target market through advertising, sales promotions, public relations, and personal selling.

The four Ps of marketing must be balanced to ensure the overall marketing objectives are achieved. If the price is too high, customers may not purchase the product, and if the price is too low, the company may not make a profit. If the promotion is ineffective, customers may not know about the product, and if the place is not suitable, customers may not be able to purchase the product.

Marketers must constantly monitor and adjust the four Ps to ensure they are in balance and aligned with the overall marketing objectives. In conclusion, it is vital for marketers to keep the four Ps in balance to achieve success in their marketing campaigns.

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The financial statements show a net loss, a decrease in retained earnings, and a balanced asset and liability structure.

To prepare the financial statements, we will use the information provided in the adjusted trial balance. Here are the financial statements:

Income Statement:

Sales Revenue: $460,000

Less: Sales Discounts: $15,000

Net Sales: $445,000

Cost of Goods Sold: $185,500

Gross Profit: $259,500

Operating Expenses:

Communications Expense: $15,800

Depreciation Expense: $9,200

Salaries Expense: $172,200

Selling and Admin Expenses: $52,900

Total Operating Expenses: $250,100

Operating Income: Gross Profit - Total Operating Expenses

Operating Income: $259,500 - $250,100

Operating Income: $9,400

Other Expenses:

Income Tax Expense: $14,500

Net Income: Operating Income - Income Tax Expense

Net Income: $9,400 - $14,500

Net Income: -$5,100 (Loss)

Statement of Changes in Retained Earnings:

Retained Earnings (Jan 01, 2021): $49,000

Add: Net Income: -$5,100

Less: Dividends Declared: $21,000

Retained Earnings (Dec 21, 2021): $22,900

Balance Sheet:

Assets:

Cash: $77,500

Accounts Receivable: $41,600

Notes Receivable: $24,000

Inventory: $36,400

Supplies: $7,500

Land: $65,000

Buildings: $250,000

Accumulated Depreciation-Buildings: $72,000

Total Assets: $494,000

Liability:

Accounts Payable: $20,500

Unearned Revenue: $25,000

Mortgage Payable (due in 2023): $210,000

Total Liabilities: $255,500

Equity:

Common Shares: $155,000

Retained Earnings (Dec 21, 2021): $22,900

Total Equity: $177,900

Total Liabilities and Equity: $494,000

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The Journal entries have been written in the space that we  have below

07/01/2017:

Retained Earnings Dr 450,000

Dividends Payable Cr 450,000

(Note: Dividends declared out of Retained Earnings)

08/01/2017:

Equipment Dr 72,000

Profit and Loss Cr 72,000

(To reverse overstatement of depreciation)

09/01/2017:

Dividends Payable Dr 450,000

Cash Cr 450,000

12/01/2017:

Profit and Loss Dr 90,000

Equity Dividend Cr 90,000

12/15/2017:

Profit and Loss Dr 42,000

Preference Dividend Cr 42,000

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The statement "A potential downside of using qualitative forecasting methods like the Executive Opinion is that you may be introducing bias into your forecasts, based on a person's subjective ideas" is true as they are less structured than quantitative method.

Qualitative forecasting refers to forecasting techniques that are reliant on opinions, intuition, and informed judgments. Qualitative forecasting methods are less structured than quantitative methods, and they are used to generate predictions of future events.

The Executive Opinion, which involves seeking the opinions of senior executives about future market conditions, is an example of a qualitative forecasting technique. Although this method has advantages, such as being able to produce forecasts in situations where little historical data is available, it has the potential to introduce bias into the forecasts since it is reliant on subjective ideas and not hard data.

Complete Question

A potential downside of using qualitative forecasting methods like the Executive Opinion is that you may be introducing bias into your forecasts, based on a person's subjective ideas. True or False

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