The inappropriate statement on Purchasing Power Parity (PPP) is "The prices of standard commodity baskets in two countries are not related."
This statement is incorrect because PPP is based on the assumption of the law of one price, which states that identical goods should have the same price in different countries when expressed in a common currency. The other options listed are valid statements related to PPP.
Purchasing Power Parity (PPP) is an economic theory that compares the price levels and exchange rates between countries. It aims to determine whether a currency is overvalued or undervalued based on the relative purchasing power of each currency. The correct statements about PPP are as follows:
PPP is based on the assumption of the law of one price: The law of one price assumes that identical goods should have the same price in different countries when converted to a common currency. This forms the foundation of PPP.
The exchange rate between currencies of two countries should be equal to the ratio of the countries' price levels: PPP suggests that the exchange rate between two currencies should reflect the differences in price levels between the countries.
As the purchasing power of a currency sharply declines due to hyperinflation, that currency will depreciate against stable currencies: Hyperinflation erodes the purchasing power of a currency, leading to its devaluation relative to more stable currencies.
Therefore, the inappropriate statement is "The prices of standard commodity baskets in two countries are not related." This statement contradicts the fundamental concept of PPP, which is based on the assumption that prices of identical goods should be related when expressed in a common currency.
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Recommends goals for gaining market presence and supports
recommendation with a potential timeline
To gain market presence, a company can set the following goals: 1) Increase brand awareness through targeted marketing campaigns, 2) Expand customer base through strategic partnerships and customer acquisition efforts, and 3) Enhance product/service offerings based on market trends and customer feedback. These goals can be pursued over a timeline of 6 to 12 months.
To gain market presence, it is crucial for a company to increase brand awareness. This can be achieved through targeted marketing campaigns that focus on reaching the company's target audience through various channels such as social media, digital advertising, and content marketing. By creating compelling and relevant content, the company can engage potential customers and establish itself as a reputable brand in the market.
Another goal for gaining market presence is to expand the customer base. This can be done through strategic partnerships with other companies in complementary industries or by actively pursuing customer acquisition efforts. Collaborating with established brands or reaching out to potential customers through lead generation strategies can help increase the company's customer base and market reach.
Furthermore, it is important for a company to continuously enhance its product or service offerings to stay competitive and meet customer demands. By conducting market research and gathering customer feedback, the company can identify areas for improvement and develop new features or offerings that align with market trends. This proactive approach ensures that the company remains relevant and provides value to its customers.
These goals can be pursued over a timeline of 6 to 12 months, allowing the company to implement and evaluate the effectiveness of its strategies. It is important to regularly monitor key performance indicators (KPIs) and make adjustments as needed to optimize results. By setting clear goals and timelines, the company can focus its efforts and track its progress towards gaining a stronger market presence.
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If your ideal prospect is a large organization that releases quarterly earnings, you will mostly be searching for _____.
Group of answer choices
O confidential companies
O private companies
O municipality companies
O public companies
O classified companies
If your ideal prospect is a large organization that releases quarterly earnings, you will mostly be searching for public companies.
If your ideal prospect is a large organization that releases quarterly earnings, you will mostly be searching for public companies. Public companies are those that have shares traded on public stock exchanges and are required to disclose their financial information, including quarterly earnings reports, to the public. This transparency allows investors and interested parties to assess the company's performance and make informed decisions. Confidential companies, private companies, municipality companies, and classified companies may not have the same level of financial disclosure or public trading of their shares, making public companies the primary focus for this scenario.
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Structure this problem as a single-period capitalization of forward benefits problem and assume the following:
- Next period's (year) Free Cash Flow to Invested Capital on an After-Tax basis is 2,468,000
- WACC-after tax is 10%
- Perpetual Growth rate on after-tax cash flows is 4%
- WACC-befor tax is 12%
- Perpetual Growth rate on before-tax cash flows is 4%
Given these assumptions, compute (to the nearest whole dollar) next period's Free Cash Flow to Invested Capital on a Before Tax Basis.
Next period's Free Cash Flow to Invested Capital on a before-tax basis is approximately $2,961,360.
To compute next period's Free Cash Flow to Invested Capital (FCFIC) on a before-tax basis, we can use the single-period capitalization of forward benefits formula. The formula is as follows:
FCFIC (Before Tax) = FCFIC (After Tax) / (1 - Tax Rate)
Given the information provided:
FCFIC (After Tax) = $2,468,000
WACC (after tax) = 10%
Perpetual growth rate on after-tax cash flows = 4%
WACC (before tax) = 12%
Perpetual growth rate on before-tax cash flows = 4%
To compute the tax rate, we subtract the after-tax WACC from the before-tax WACC:
Tax Rate = (WACC (before tax) - WACC (after tax)) / WACC (before tax)
Tax Rate = (12% - 10%) / 12% = 0.02 / 0.12 = 0.1667
Now we can calculate next period's FCFIC on a before-tax basis using the formula:
FCFIC (Before Tax) = FCFIC (After Tax) / (1 - Tax Rate)
FCFIC (Before Tax) = $2,468,000 / (1 - 0.1667)
FCFIC (Before Tax) ≈ $2,468,000 / 0.8333
FCFIC (Before Tax) ≈ $2,961,360
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Xon, a small oil equipment company, purchased a new petroleum drilling rig for $2,000,000. Xon will depreciate it using MACRS depreciation. The drilling rig has been leased to a firm, which will pay Xon $750,000 per year for 8 years. After 8 years the drilling rig will belong to the firm. The firm has a 26% combined marginal income tax rate. What is the after-tax rate of return?
The after-tax rate of return for Xon's petroleum drilling rig, leased for 8 years, can be calculated by considering the depreciation tax shield and the lease payments.
The after-tax rate of return, we need to consider the depreciation tax shield and the lease payments received by Xon. MACRS depreciation will determine the annual depreciation expense for the drilling rig. Let's assume it follows a 5-year MACRS schedule.
The depreciation expense for each year will be:
Year 1: 20% x $2,000,000 = $400,000
Year 2: 32% x $2,000,000 = $640,000
Year 3: 19.20% x $2,000,000 = $384,000
Year 4: 11.52% x $2,000,000 = $230,400
Year 5: 11.52% x $2,000,000 = $230,400
The total depreciation expense over the 8-year period will be $400,000 + $640,000 + $384,000 + $230,400 + $230,400 = $1,884,800.
Next, we need to calculate the taxable income before depreciation. This is done by subtracting the depreciation expense from the lease payments:
$750,000 - $1,884,800 = -$1,134,800 (negative taxable income)
Since the taxable income is negative, Xon will receive a tax benefit equal to the tax rate multiplied by the absolute value of the taxable income. The tax benefit is:
Tax benefit = 26% x $1,134,800 = $294,648
Finally, we calculate the after-tax rate of return by subtracting the tax benefit from the total lease payments received and dividing it by the initial investment:
($750,000 x 8) - $294,648 = $6,005,352 (after-tax cash flow)
After-tax rate of return = ($6,005,352 / $2,000,000) - 1 = 2.003 or 200.3%
Therefore, the after-tax rate of return for Xon's petroleum drilling rig, leased for 8 years, is approximately 200.3%.
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On 1/2/21, Casey bought a 40% ownership interest in a partnership in exchange for $100,000 cash plus land that had a FMV of $800,000, which Casey had $200,000 of basis in. This partnership is 100% equity funded and has never had any debt. At the end of the tax year (12/31/21), the following is reported for the partnership: $500,000 ordinary taxable business income, $40,000 tax exempt income, and $20,000 non-deductible expenses. What is Casey’s basis in the partnership at 12/31/21, assuming Casey took a $50,000 cash distribution just prior to year-end?
$0
$258,000
$458,000
$958,000
Casey's basis in the partnership at 12/31/21 is $458,000.assuming Casey took a $50,000 cash distribution just prior to year-end?
Casey's initial basis in the partnership can be calculated by adding the cash contribution and the adjusted basis of the land. In this case, Casey contributed $100,000 cash and land with a fair market value (FMV) of $800,000, but with a basis of $200,000. Since the basis of the land is lower than its FMV, the basis is limited to the FMV for the purpose of determining the initial basis. Therefore, Casey's initial basis is $100,000 + $800,000 = $900,000.
Throughout the year, the partnership generated $500,000 of ordinary taxable business income. This income increases Casey's basis in the partnership. However, the partnership also had $20,000 of non-deductible expenses, which reduces Casey's basis.
Additionally, $40,000 of the partnership's income is tax exempt. Tax-exempt income does not increase Casey's basis in the partnership.
At the end of the year, just prior to year-end, Casey took a $50,000 cash distribution from the partnership. Cash distributions decrease Casey's basis in the partnership.
To calculate Casey's basis at 12/31/21, we start with the initial basis of $900,000. Then, we add the ordinary taxable business income of $500,000 and subtract the non-deductible expenses of $20,000. This results in a net increase of $480,000.
Next, we subtract the cash distribution of $50,000, which decreases the basis by that amount.
Therefore, Casey's basis at 12/31/21 is $900,000 + $480,000 - $50,000 = $1,330,000 - $50,000 = $458,000.
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Mark Welsch deposits $8,100 in an account that earns interest at an annual rate of 4%, compounded quarterly. The $8,100 plus earned interest must remain in the account 2 years before it can be withdrawn. How much money will be in the account at the end of 2 years?
At the end of 2 years, the account will have approximately $8,758.
to calculate the amount of money in the account at the end of 2 years with quarterly compounding, we can use the formula for compound interest:
a = p(1 + r/n)⁽ⁿᵗ⁾
where:
a = the final amount in the account
p = the principal amount (initial deposit)
r = the annual interest rate (as a decimal)
n = the number of times interest is compounded per year
t = the number of years
in this case:
p = $8,100
r = 4% or 0.04 (as a decimal)
n = 4 (quarterly compounding)
t = 2 years
plugging the values into the formula, we get:
a = $8,100(1 + 0.04/4)⁽⁴*²⁾
calculating the exponent first:
(1 + 0.04/4)⁽⁴*²⁾ = (1 + 0.01)⁸
evaluating the exponent:
(1 + 0.01)⁸ ≈ 1.0824329
now, calculating the final amount:
a = $8,100 * 1.0824329
a ≈ $8,758.84 84.
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1.What is an EFT? Why are more companies increasingly using them?
2.There are several reasons why your books (cash account) and your bank statement do not have the same balance. (b) Name three and explain each.
1. An EFT is a digital method of transferring funds from one bank account to another electronically. More companies are using EFTs because they are convenient, and provide faster transaction processing compare traditional paper-based methods.
Three reasons why the cash account balance and the bank statement balance may not match are:
(a) Outstanding checks: These are check issued by the company but not yet presented to bank for payment, resulting in a lower bank balance.
(b) Deposits in transit: These are cash or checks received by the company but not yet processed by the bank, leading to a higher cash account balance.
(c) Bank service charges or fees: These charges deducted by the bank can reduce the bank balance compared to the cash account balance.
Funds refer to monetary resources that are available for a specific purpose, such as investment, operations, or projects. They can come from various sources, including investors, shareholders, lenders, or internal company reserves.
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the pattern shown in the table was partly an effect of which of the following changes in the economy of western europe?
The pattern shown in the table was partly an effect of changes in the economy of Western Europe.
The table's pattern reflects specific changes that occurred in the economy of Western Europe. To understand the factors influencing this pattern, we need to analyze the context and identify key economic transformations during the given period.
In the subsequent paragraphs, we will discuss some possible changes that might have influenced the pattern. It is important to note that without access to the actual table or specific information about the data it presents, we can only provide a general analysis.
One possible change could be the process of industrialization. Western Europe experienced significant industrial growth during certain periods, leading to shifts in production, employment patterns, and economic output. Industrialization often results in increased urbanization, technological advancements, and changes in labor markets, all of which can contribute to the pattern observed in the table.
Another potential factor could be the impact of globalization. Western Europe has been an active participant in global trade and economic integration. Changes in international trade patterns, such as shifts in comparative advantages, opening of new markets, or changes in trade policies, could have influenced the economy of the region and contributed to the pattern seen in the table.
Moreover, changes in government policies and economic ideologies can also shape the economic landscape. Shifts in fiscal policies, trade regulations, labor laws, or the adoption of market-oriented reforms can have profound effects on economic performance and the distribution of resources within Western Europe.
It is crucial to note that the actual answer may depend on the specific data presented in the table and the time period under consideration. A detailed analysis of historical and economic factors is necessary to provide a more accurate explanation of the observed pattern.
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just relax massage therapists have a large customer base although they do very little advertising. their promotion strategy relies mostly on
Just Relax Massage Therapists' promotion strategy relie mostly on word-of-mouth referrals. Satisfied customer who have experience quality of their services often recommend the therapists to their friends, family, and colleagues.
Customer play a vital role in the success of any business, including Just Relax Massage Therapists. They are the primary recipients of the services provided by the therapists and form the foundation of the customer base. Building and maintaining strong relationships with customers is crucial for the business's growth and sustainability. Just Relax focuses on providing excellent customer service, addressing their needs and preferences, and ensuring a positive and satisfying experience. Satisfied customers not only become repeat clients but also act as brand ambassadors, spreading positive reviews and recommendations to others, contributing to the expansion of the customer base.
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16.28 Animatics Corp. of Santa Clara, California, makes small servo systems with built-in controllers, amplifiers, and encoders so that they can control entire machines. The company purchased an asset 2 years ago that has a 5-year recovery period. The depreciation charge by the MACRS method for year 2 is $24,320. (a) What was the first cost of the asset? (b) How much was the depreciation charge in year 1 ? (c) Develop the complete MACRS depreciation and book value schedule using the VDB function.
The first cost of the asset was $58,176. The depreciation charge in year 1 was $41,472. The complete MACRS depreciation and book value schedule can be developed using the VDB function.
To calculate the first cost of the asset, we need to find the initial value before any depreciation. Since the depreciation charge for year 2 is given as $24,320, and the recovery period is 5 years, we can use the formula for MACRS depreciation to find the first cost.
MACRS depreciation is calculated using a declining balance method. In the second year, the depreciation rate is 32% (100% divided by the recovery period of 5 years). Therefore, if the depreciation charge for year 2 is $24,320, we can divide it by 32% to find the initial value:
$24,320 / 0.32 = $76,000
Hence, the first cost of the asset was $76,000.
To find the depreciation charge in year 1, we can subtract the depreciation charge for year 2 from the initial value:
$76,000 - $24,320 = $51,680
Therefore, the depreciation charge in year 1 was $51,680.
To develop the complete MACRS depreciation and book value schedule using the VDB function, further information is required, such as the depreciation method used within the MACRS system and the applicable depreciation rates for each year. Without these details, it is not possible to provide a specific schedule using the VDB function.
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What is the covariance for two assets when Asset G has a
variance of .02, Asset H has a variance of .03 and the correlation
coefficient for the two assets is 0.70?
Select one:
A.
.0342
B.
.0171
C.
.13
The covariance between Asset G and Asset H is 0.0171. This positive covariance indicates that the returns of the two assets tend to move together, although the magnitude of the covariance depends on the individual variances and the strength of their correlation.
The covariance measures the relationship between the returns of two assets and indicates how they move together. A positive covariance suggests that the assets tend to move in the same direction, while a negative covariance indicates they tend to move in opposite directions.
In this case, Asset G has a variance of 0.02, which measures the variability of its returns. Similarly, Asset H has a variance of 0.03. The correlation coefficient between the two assets is given as 0.70, which indicates a positive correlation between their returnsTo calculate the covariance, we multiply the correlation coefficient by the standard deviations of both assets. The standard deviation is the square root of the variance. For Asset G, the standard deviation is 0.1414 ([tex]\sqrt(0.02))[/tex], and for Asset H, it is 0.1732 ([tex]\sqrt(0.03)[/tex]).
Plugging these values into the covariance formula, we get:
Covariance = 0.70 * 0.1414 * 0.1732 = 0.0171
Therefore, the covariance between Asset G and Asset H is 0.0171.
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Sophie is a newly appointed Customer Service (CS) Manager in a multinational corporation. She was assigned with two new teams of CS staff. These two teams consist of 12 people, 6 people in each team. All the team members came from different continent of the world, some from the U.S., China, Africa and Europe. Two months after Sophie taking up the position, she received numerous feedback or complaints from her staff. Members from different teams expressed their frustrations that they could not work well among themselves. The team members from U.S. complaint that the team members from Africa did not respect their cultures, and speak other languages during the meeting. Other team members complaint that their team mates only shared partial information with them. Due to this reason, they could not perform their work well because of incomplete information. Sophie knew she needs to settle this problem as soon as possible. If she does not do so, the scenario happened in the teams would cause serious consequences later.
Identify and describe THREE (3) possible communication barriers that may happened in the
scenario above. Recommend TWO (2) possible solutions to overcome the communication barriers.
Your answer should not be more than 600 words
Three possible communication barriers that may have occurred in the scenario are:
1. Cultural differences: The team members from different continents bring diverse cultural backgrounds, which can lead to misunderstandings and conflicts. The complaint from the U.S. team members about the African team members not respecting their cultures indicates a clash of cultural norms and values. This barrier can hinder effective communication and collaboration among team members.
2. Language barriers: The complaint about team members speaking other languages during meetings suggests that language differences might be impeding effective communication. If some team members are not fluent in the language being used, they may feel excluded and struggle to understand and contribute to discussions. This can lead to misunderstandings and hinder teamwork. To overcome these communication barriers, Sophie can consider the following solutions:
1. Cultural awareness and training: Sophie should promote cultural awareness and foster an inclusive work environment. Organizing cultural sensitivity training sessions can help team members understand and respect each other's cultural differences. This training should focus on promoting empathy, open-mindedness, and effective cross-cultural communication strategies.
2. Language support and resources: Sophie can provide language support and resources to bridge the language gap among team members. This can include hiring interpreters or providing language learning opportunities for those who struggle with the team's common language. Additionally, encouraging team members to use simpler language and avoiding jargon can help improve communication clarity for everyone.
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M/S manish Boutique Ltd.
During the year Manish Malhotra had taken home some clothing fabric from his boutique to present his wife a new suit for her birthday. He has included the cost of stock Rs 12000as a business expense while calculating the profits, which came to Rs.62,000. Based on this information, what will be the profit?
a)The _ concept applies here and the profit figure should be Rs._?
The correct answer is, the matching principle applies here and the profit figure should be Rs. 50,000.
Manish Malhotra, the owner of M/S Manish Boutique Ltd. took home some clothing fabric from his boutique to present his wife a new suit for her birthday.
He included the cost of stock of Rs 12000 as a business expense while calculating the profits, which came to Rs.62,000.
Hence, the profit will be Rs. 50,000.
Here, the matching principle applies.
The matching principle states that all expenses must be matched with the revenues they help to generate.
Hence, the cost of the fabric which is taken home by Manish Malhotra cannot be considered a business expense.
It is Manish Malhotra’s personal expense, and it should be deducted from the profit figure.
Therefore, the profit figure should be Rs. 50,000 (Rs. 62,000 – Rs. 12,000).
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A customer has regular full ocean container shipments to Dresden, Germany, that they normally route through the port of Antwerp, Belgium. Due to recent backlogs at Antwerp, the forwarder needs to re-route the shipments. From the following options they have, what would be the best alternative to use in this case? Select one answer. Use ocean freight to the port of Gdansk, Poland and truck from there Use ocean freight to Felixstowe, UK and rail from there Wait until the backlog eases Use ocean freight to Bremen, Germany and truck from there
The best alternative in this case would be to use ocean freight to the port of Bremen, Germany, and truck the shipments from there.
The customer's regular route through the port of Antwerp, Belgium, is experiencing backlogs, which could lead to delays and disruptions in the transportation process. To mitigate these issues, the forwarder needs to find an alternative route that is efficient and minimizes potential delays.
Among the given options, using ocean freight to the port of Bremen, Germany, and trucking from there would be the best choice. This option offers several advantages:
1. Proximity to the final destination: Dresden, Germany. Bremen is geographically closer to Dresden compared to Gdansk, Poland, and Felixstowe, UK. This can reduce transportation time and costs.
2. Established transportation infrastructure: Germany has a well-developed transportation network, including a reliable road system. Trucking from Bremen to Dresden is likely to be efficient and less prone to delays.
3. Familiarity with regulations: Utilizing a route within Germany allows for a smoother handling of customs procedures and compliance with local regulations. This can help streamline the transportation process and minimize potential bureaucratic challenges.
4. Minimized dependency on multiple modes of transport: Using ocean freight to Bremen and then trucking directly to Dresden avoids the need for additional rail or intermodal transfers. This simplifies the logistics and reduces the risk of disruptions during transshipment.
Considering the proximity to the final destination, established infrastructure, familiarity with regulations, and reduced dependency on multiple modes of transport, utilizing ocean freight to the port of Bremen, Germany, and trucking from there would be the best alternative for the customer to re-route their shipments in this case.
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According to the Median Voter Theorem if woters have single-peaked preferences:
a. The Condorcet winner is the median voter
b. The chosen tax-rate is equal to zero
c. The voter with the median income wins the elections
d. The Condorcet winner is the preferred choice by the median voter
According to the Median Voter Theorem, if voters have single-peaked preferences, the Condorcet winner is the preferred choice by the median voter (D).
The Median Voter Theorem is a concept in political science and economics that states that in an election with single-peaked preferences, the preferred choice of the median voter will be the Condorcet winner.
Single-peaked preferences mean that voters' preferences are ordered along a single dimension, such as the ideological spectrum or income level. The median voter refers to the voter whose position falls in the middle when voters are arranged based on their preferences along the relevant dimension.
According to the Median Voter Theorem, the Condorcet winner, which is the option that would win in a majority vote against any other option, will align with the preference of the median voter.
Therefore, option D is correct, as the Median Voter Theorem states that the Condorcet winner is the preferred choice by the median voter. The other options (A, B, and C) do not accurately describe the implications of the Median Voter Theorem. Hence, the correct answer is option D.
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Consider a firm with an EBITDA of $17,000,000 and an EBIT of $12,500,000. The firm finances its assets with $54,000,000 debt costing 8.0 percent and 12,000,000 shares of stock selling at $6.00 per share. The firm is considering increasing its' debt by $27,000,000, using the proceeds to buy back shares of stock. The firm's tax rate is 21 percent. The change in capital structure will have no effect on the operations of the firm. Thus, EBIT wil remain at $12,500,000. Calculate the EPS before and after the change in copital structure and indicate changes in EPS. (For "Change in EPS", note negative changes with a negative sign. Round your answers to 3 decimal places.)
EBIT represents earnings before interest and taxes. Therefore, the interest expense needs to be subtracted to calculate the earnings available to shareholders. The interest expense can be calculated as follows:
Interest Expense = Debt * Interest Rate = $54,000,000 * 0.08 = $4,320,000
Earnings available to shareholders = EBIT - Interest Expense = $12,500,000 - $4,320,000 = $8,180,000
EPS before the change in capital structure = Earnings available to shareholders / Number of shares
= $8,180,000 / 12,000,000 = $0.6817 per share
EPS after the change in capital structure:
With the increase in debt by $27,000,000, the new total debt becomes $54,000,000 + $27,000,000 = $81,000,000. This additional debt will be used to buy back shares, reducing the number of shares outstanding.
The number of shares bought back can be calculated by dividing the additional debt by the stock price:
Number of shares bought back = Additional Debt / Stock Price = $27,000,000 / $6.00 = 4,500,000 shares
After the buyback, the number of shares outstanding becomes 12,000,000 - 4,500,000 = 7,500,000 shares.
Earnings available to shareholders remain the same at $8,180,000.
EPS after the change in capital structure = Earnings available to shareholders / Number of shares
= $8,180,000 / 7,500,000 = $1.0907 per share
Change in EPS = EPS after the change - EPS before the change
= $1.0907 - $0.6817 = $0.409 per share
Before the change in capital structure, the firm had an EPS of $0.6817 per share. By increasing its debt and buying back shares, the firm reduces the number of shares outstanding, which increases the EPS to $1.0907 per share. The change in EPS is $0.409 per share.
The change in capital structure, through debt financing and share buybacks, results in an increase in EPS from $0.6817 to $1.0907 per share. The change in EPS is $0.409 per share, indicating a positive impact on the EPS after the capital structure change. This change suggests that the firm's shareholders may benefit from the increased EPS due to the reduction in the number of shares outstanding
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Consider two competitors in the hardware industry, Handy Hardware and Tradie Heaven. Both firms can simultaneously choose to Discount or Not (discount). If both fisms Discount the payoffs are 15 to each firm. If both firms choose Not to discount, the payoffs are 25 to each firm. If Handy Hardware chooses Diseount and Tradie Heaven chooses Not, Handy gets 20 and Tradie gets 10 . If Handy Hardware chooses Not to discount and Tradie Meaven chooseg Discount, Handy gets 10 and Tradie gets 20 . What ia the outcome of this gate?
O It is not possible to determine the equilibrium given the information above.
O One firm chooses Not and the other Discount.
O Both firms choose Discount, and this is a prisoners' dilemma.
O Both firms choose Discount but this is not a prisoners' dilemma.
O None of the above.
The outcome of this game is that both firms choose to Discount, and this situation represents a Prisoners' Dilemma.
To determine the equilibrium outcome, we can analyze the payoffs for each combination of choices by Handy Hardware and Tradie Heaven. When both firms choose to Discount, they receive a payoff of 15 each. If both firms choose Not to discount, they receive a payoff of 25 each. However, if one firm chooses Discount while the other chooses Not to discount, the firm choosing Discount receives a higher payoff of 20, while the firm choosing Not to discount receives a lower payoff of 10.
In a Prisoners' Dilemma, the dominant strategy for each firm is to choose Discount, as it provides a higher payoff regardless of the other firm's choice. Both firms have an incentive to choose Discount, leading to the outcome where both firms choose Discount, resulting in payoffs of 15 each.
Therefore, the outcome of this game is that both firms choose Discount, and this situation represents a Prisoners' Dilemma.
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Ray’s cellphone texting plan has fixed access fee plus a per text fee. One month he has 52 texts and the bill is $48.2. The next month he has 288 texts and a bill of $130.8. Ray discovers that he can change his plan to unlimited texts for $81. What is the minimum number of texts Ray must have before it makes sense to switch to the unlimited plan?
a. 236
b.170
c. 231
d. 146
The minimum number of texts Ray must have before it makes sense to switch to the unlimited plan is 146 texts (option d).
In the first month, Ray incurred a bill of $48.2 for 52 texts. We can calculate the fixed access fee by subtracting the per text fee from the total bill. Let's assume the per text fee is "x." So, we have the equation: 48.2 = x * 52 + fixed access fee.
In the second month, Ray incurred a bill of $130.8 for 288 texts. Using the same equation, we have: 130.8 = x * 288 + fixed access fee.
By solving these two equations simultaneously, we can find the values of "x" (per text fee) and the fixed access fee. However, we can simplify the problem by focusing on the point at which it becomes more cost-effective to switch to the unlimited plan.
If Ray switches to the unlimited plan, he would pay a fixed fee of $81 regardless of the number of texts he sends. Therefore, we can compare the total cost of the unlimited plan with the cost of the pay-per-text plan for different numbers of texts.
For 146 texts, the cost of the pay-per-text plan can be calculated as: 146x + fixed access fee. If this cost is higher than $81 (the cost of the unlimited plan), it would make sense for Ray to switch to the unlimited plan. Since the pay-per-text plan has a fixed access fee, it is unlikely that the per text fee alone would exceed the cost of the unlimited plan. Hence, the minimum number of texts Ray must have before switching is 146 texts (option d).
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Suppose the price of gasoline per gallon is currently $5. The risk manager of Universe Airlines expects the price per gallon next year to be either $7 or $4 with equal probabilities. The company plans to buy 1 million gallons of gasoline in one year. The risk manager is concerned about future rising cost of gasoline and is considering using either futures or calls to hedge against the risk. Suppose the riskfree interest rate is 10% per annum.
a. What is the futures price of gasoline per gallon for delivery in one year?
b. What are the possible payoffs of the futures one year from now?
The possible payoffs of the futures one year from now are $0.95 or -$2.05, depending on the actual future spot price of gasoline.
a. To determine the futures price of gasoline per gallon for delivery in one year, we can use the concept of risk-neutral pricing. The futures price can be calculated as the expected future spot price of gasoline, discounted at the risk-free interest rate.
Let's calculate the futures price:
Futures Price = [P1 * (1 + r) + P2 * (1 + r)] / 2
Where:
P1 = Expected future spot price of gasoline ($7)
P2 = Expected future spot price of gasoline ($4)
r = Risk-free interest rate (10% per annum)
Substituting the values:
Futures Price = [7 * (1 + 0.10) + 4 * (1 + 0.10)] / 2
Futures Price = (7 * 1.10 + 4 * 1.10) / 2
Futures Price = (7.7 + 4.4) / 2
Futures Price = 12.1 / 2
Futures Price = $6.05
Therefore, the futures price of gasoline per gallon for delivery in one year is $6.05.
b. The possible payoffs of the futures one year from now can be determined by comparing the actual future spot price of gasoline with the futures price.
If the future spot price is $7, the payoff would be:
Payoff = Spot Price - Futures Price
Payoff = $7 - $6.05
Payoff = $0.95
If the future spot price is $4, the payoff would be:
Payoff = Spot Price - Futures Price
Payoff = $4 - $6.05
Payoff = -$2.05 (negative value indicates a loss)
Therefore, the possible payoffs of the futures one year from now are $0.95 or -$2.05, depending on the actual future spot price of gasoline.
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Carefully study the below extract and answer the question that follows
Lubo – Chem Pty Ltd was formed in 1965 in Canada and is a world known growing company with its core business being manufacturing and supplying of cleaning chemical, heavy duty cleaning equipment and sanitary disposal to the commercial and domestic. The company has employed about 500 employees and most of the time they work on shifts in order to improve and increase production. Based on their type of business, the company has outlined its safety statement commitment. Of recent the company has being faced with a lot of continuous seek offs from employees who directly deal with manufacturing of cleaning chemicals complaining about chest pains and breathing problems.
Requirements
As a Training Manager knowledgeable in the area of Health and Safety, you are expected to carry out the process of Training Needs Analysis in order to come to the bottom of this issue. Discuss the process you will follow in carrying out the training needs analysis
Training Needs Analysis (TNA) is a systemic and ongoing process used to identify the requirements for employee training and development.
As a Training Manager knowledgeable in the area of Health and Safety, the process to be followed in carrying out the training needs analysis include:
Awareness of the problem: Identify the main problem that is causing the chest pains and breathing problems with the employees that deal with the manufacturing of cleaning chemicals by investigating and examining their symptoms. Gather information about the situation including the environment and chemicals used for cleaning.
Identify goals: Establish goals or objectives that are expected to be achieved through training such as creating awareness and improving employee safety measures, procedures, and knowledge.
Create training matrix: The organization can create a training matrix which outlines the various job responsibilities and training needs for employees who work in different departments.
Identify priorities: Prioritize the required training based on the need for the skills and knowledge among the employees, as well as their job functions.
Conduct training: The training should be conducted to improve the safety measures and procedures, educate the employees on the hazards, and the precautions to take to avoid chemical exposure and toxic chemicals. The training may be facilitated by health and safety professionals, outside experts, or trainers from the company.
Evaluate the training: The training should be evaluated for effectiveness and impact by conducting post-training assessments, measuring employees’ feedback, and observing the implementation of the training by the employees. If the training does not achieve the set objectives, the organization should consider revising the training.
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Kingston Company reported total assets of $15 million and total liabilities of $3 million at the end of 20X0.
Requirements
1. Construct the balance sheet equation for Kingston Company at the end of 20X0 and include the correct amount for owners' equity.
2. Suppose that during January 20X1 Kingston borrowed $8 million from Wells Fargo Bank. How would this affect Kingston's assets, liabilities, and owners' equity?
However, if the loan proceeds are not used to acquire assets that generate additional income, it may impact the company's profitability and subsequently affect the owners' equity in the long run.
If Kingston Company borrows $8 million from Wells Fargo Bank in January 20X1, it would affect the assets, liabilities, and owners' equity as follows:Assets: The assets would increase by $8 million as the company now has an additional cash infusion from the loan.Liabilities: The liabilities would increase by $8 million as the company now owes this amount to Wells Fargo Bank.Owners' Equity: There would be no immediate impact on owners' equity. However, if the loan proceeds are not used to acquire assets that generate additional income, it may impact the company's profitability and subsequently affect the owners' equity in the long run.
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For each legal problem question you are required to
State the issue or issues
State the relevant rule or rules
Cite the relevant case or cases
Answer yes or No to the question posed at the end of the problem and EXPLAIN the reasons for your answer.
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Adrian runs a successful car sales business on the Gold Coast. Adrian enters into a contract with Acme Security Systems whose guards are required to patrol his premises every night. While undertaking his security rounds, Des (the guard), decides to light a cigarette, which he fails to properly extinguish before throwing away. Unfortunately the cigarette lands in a box containing inflammable materials, which catches fire and quickly spreads through the car-yard, destroying all Adrian’s cars. The contract between Adrian and Acme Security Systems includes the following clause:
Acme Security Systems shall not be responsible, under any circumstances, for damage or injurious acts caused by an employee of the company unless such act could have been foreseen and avoided by the exercise of due diligence on the part of the Company as his employer.
Will Adrian win if he sues Acme Security Systems despite the exemption clause?
No, Adrian is unlikely to win if he sues Acme Security Systems despite the exemption clause.
The main issue in this scenario is whether Adrian can hold Acme Security Systems liable for the actions of its employee, Des, and the resulting damages caused by the fire. To determine the outcome, we need to analyze the relevant rule and consider any applicable cases.
The contract between Adrian and Acme Security Systems includes an exemption clause. This clause states that the company shall not be responsible for damage caused by an employee unless the act could have been foreseen and avoided through the exercise of due diligence by the company as the employer.
Based on this clause, the relevant rule is that Acme Security Systems can avoid liability if it can demonstrate that the act of Des lighting the cigarette and causing the fire could not have been foreseen and avoided through the exercise of due diligence.
In this case, Adrian would need to prove that Acme Security Systems failed to exercise due diligence in its hiring or supervision of Des, making it foreseeable that such an incident could occur. However, the facts provided do not indicate any negligence on the part of Acme Security Systems in hiring or supervising Des. Therefore, it is unlikely that Adrian would be able to overcome the exemption clause and hold Acme Security Systems liable for the damages.
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When we make a "club good" free and accessible to everyone, it becomes a
common pool resource
public good
private good
When a "club good" is made free and accessible to everyone, it does not become a public good or a private good but rather transforms into a common pool resource.
A club good is a type of good that is excludable, meaning that access can be restricted to a specific group of individuals, and it is also rivalrous, meaning that consumption by one person reduces its availability for others. Examples of club goods include memberships to recreational facilities or subscription-based services. When a club good is made free and accessible to everyone, it loses its exclusivity and can no longer be restricted to a specific group. This leads to a situation where it is treated as a common pool resource, where individuals can freely access and utilize the resource without being excluded.
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Walker, Inc., is an all-equity firm. The cost of the company's equity is currently 11.6 percent and the risk-free rate is 3.5 percent. The company is currently considering a project that will cost $11.67 million and last six years. The company uses straight-line depreciation. The project will generate revenues minus expenses each year in the amount of $3.37 million. If the company has a tax rate of 24 percent, what is the net present value of the project? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89)
The net present value (NPV) of the project is $1.357 million. To calculate the net present value (NPV) of the project, we need to discount the cash flows generated by the project to their present value and subtract the initial investment cost.
The formula for calculating NPV is:
NPV = PV of Cash Inflows - Initial Investment
First, let's calculate the PV of cash inflows:
Cash inflows = Revenues - Expenses = $3.37 million per year
Since the project lasts for six years, we will discount each year's cash flow separately. The discount rate is the cost of equity, which is 11.6 percent.
PV of Cash Inflows = Σ (Cash Inflows /[tex](1 + Discount Rate)^n[/tex])
Where n = year number
PV of Cash Inflows = ($3.37 million / [tex](1 + 0.116)^1[/tex]) + ($3.37 million / [tex](1 + 0.116)^2[/tex]) + ... + ($3.37 million /[tex](1 + 0.116)^6[/tex])
PV of Cash Inflows = ($3.37 million /[tex]1.116^1[/tex]) + ($3.37 million / [tex]1.116^2[/tex]) + ... + ($3.37 million /[tex]1.116^6[/tex])
PV of Cash Inflows = $3.018 million + $2.703 million + $2.424 million + $2.175 million + $1.953 million + $1.754 million
PV of Cash Inflows = $13.027 million
Next, let's calculate the initial investment cost:
Initial Investment = $11.67 million
Net Present Value (NPV):
NPV = PV of Cash Inflows - Initial Investment
NPV = $13.027 million - $11.67 million
NPV = $1.357 million
Therefore, the net present value (NPV) of the project is $1.357 million.
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companies involved in a franchise deal are required to do what two things
In a franchise deal, companies are required to:
Provide ongoing support and guidance to the franchisee.Pay franchise fees or royalties to the franchisor.Companies involved in a franchise deal are typically required to do the following two things:
Provide ongoing support and guidance: The franchisor (the company granting the franchise) is responsible for offering ongoing support and guidance to the franchisee (the company or individual purchasing the franchise). This support may include training programs, operational assistance, marketing support, and access to proprietary systems or resources. The franchisor helps ensure that the franchisee can successfully operate the business according to the established brand standards and guidelines.Pay franchise fees or royalties: As part of the franchise agreement, the franchisee is obligated to pay franchise fees or royalties to the franchisor. These fees are usually a percentage of the franchisee's sales or a fixed amount and are paid in exchange for the right to use the franchisor's brand, trademarks, and business model. Franchise fees contribute to the ongoing support provided by the franchisor and allow the franchisee to benefit from the established brand recognition and proven business methods.These requirements help maintain the consistency, quality, and support associated with the franchise system, while also ensuring a mutually beneficial relationship between the franchisor and franchisee.
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why is it necessary to accurately weigh small animals when calculating the quantity of analgesics to be administered?
Accurately weighing small animals is necessary when calculating the quantity of analgesics to be administered for several important reasons.
First, small animals have different metabolic rates and physiological characteristics compared to larger animals. accurately Their sensitivity to medications can vary, and accurate weight measurement ensures that the appropriate dosage is administered based on their body size. Second, analgesics are potent drugs, and incorrect dosing can lead to adverse effects or inadequate pain relief. Accurate weighing helps prevent underdoing, which may result in insufficient pain management, or overdosing, which can be harmful. analgesics Additionally, precise dosing based on weight allows for better consideration of pharmacokinetics and ensures compliance with ethical guidelines for providing optimal care and minimizing unnecessary discomfort or suffering in small animals.
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For barter to be possible between two people, it must be the case that________________________. Select the correct answer below:
a. there is a double coincidence of wants
b. at least one of the two people has money to pay for the good or service that the other offers
c. at least one of two people wants what the other one has
d. none of the above
The correct answer is: a. there is a double coincidence of wants
For barter to be possible between two people, it must be the case that there is a double coincidence of wants.
This means that both parties involved in the exchange must have a desire for what the other person has to offer. Without this mutual coincidence of wants, direct barter would not be feasible, and alternative means of exchange, such as money or a medium of exchange, may be necessary.
In a barter system, goods or services are directly exchanged between two parties without the involvement of money. For a successful barter transaction to occur, both parties involved must have something that the other person desires, creating a mutual benefit from the exchange.
The double coincidence of wants refers to the situation where each party has something that the other party wants. In other words, there must be a match or alignment of preferences and needs between the two individuals for the exchange to happen.
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A new investment project requires a purchase of a new equipment with a cost of $415,000 , which will be depreciated straight-line to zero over its 4-year life. The investment lasts for four years, and will bring in an annual operating cash flow of $195,000. At the end of the four years, the equipment will be sold and result in an after tax salvage value of $27,000 . The investment will require an investment of working capital of $18,000 , initially and will be fully recovered at the end of year four. Assume the discount rate is 15 percent and the tax rate is 28 percent.
To assess the viability of the new investment project, one needs to calculate its Net Present Value (NPV).
In this scenario, it is necessary to consider the initial equipment cost, yearly depreciation, annual operating cash flow, salvage value, and changes in working capital, all adjusted for the given discount rate and tax rate. First, the equipment cost of $415,000 is a capital expense, which is depreciated straight-line over 4 years resulting in an annual depreciation of $103,750. This depreciation reduces the tax burden, creating a tax shield. The after-tax operating cash flows are then calculated as follows: $195,000 * (1-0.28) + ($103,750 * 0.28) = $173,800. These are discounted back to present value using the 15% discount rate. The NPV calculation also includes the initial investment and recovery of working capital, and the after-tax salvage value of the equipment, discounted back to the present value. The final NPV is the sum of these present values.
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Discussion #4: "Subjective Intent"
Recapping, in order to form a contract the parties must have a "meeting of the minds" in other words, there must be an agreement to form a contract. Accordingly, the element of intent is of prime importance. In contract law, intent is determined by what is called the objective theory of contracts, not by the personal or subjective intent, or belief, of a party. The facts are interpreted by a reasonable person, rather than by the party's own secret or subjective intentions, such as what the party said when entering the contract and the circumstances surrounding the transaction.
For this assignment respond to the following: Is it fair for a court to hold that parties are bound in contract even though one of the parties later claims that it did not intend to form a contract? Under what circumstances would the court do so? Generally, should the courts give more weight to objective or subjective intent in determining whether a contract has been formed? Why or why not. (For this assignment, include what is meant by "subjective intent"?)
Courts should give more weight to objective intent in determining contract formation to maintain clarity, predictability, and prevent parties from manipulating their subjective intent.
It can be argued that it is fair for a court to hold parties bound in a contract even if one of the parties later claims they did not intend to form a contract. This is because contract law follows the objective theory of contracts, which focuses on the external manifestations of the parties' intent rather than their subjective beliefs. This approach ensures clarity and predictability in contract formation.
The court may hold parties bound in a contract despite a party's claim of lack of intent if the objective facts and circumstances surrounding the transaction indicate a meeting of the minds and an agreement to be bound. The court will consider factors such as the parties' actions, behavior, and communications to determine the intent objectively.
In general, courts give more weight to objective intent rather than subjective intent in determining contract formation. This approach promotes consistency and prevents parties from later manipulating their subjective intent to avoid contractual obligations. Subjective intent refers to a party's personal or internal beliefs or intentions regarding the contract, which may not align with their external actions or expressions.
By focusing on objective intent, courts uphold the principle that parties should be held accountable for their contractual commitments based on the reasonable understanding of an objective observer. This approach ensures contractual certainty and fosters commercial relationships built on the shared understanding of the parties' expressed intentions rather than their individual, undisclosed thoughts or intentions.
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Starting at "long run equilibrium" what will happen if oil/energy prices significantly decrease
in the short run, the AS curve will shift to the right & the economy will produce above its natural level and unemployment will fall; in the long run the AS curve will shift to the left, further decreasing the "price level" to its original level and returning the economy to its "natural" level of output and employment
in the short run, the AS curve will shift to the right & the economy will produce above its natural level and unemployment will fall; in the long run the AS curve will shift to the left, increasing the "price level" to its original level and returning the economy to its "natural" level of output and employment
in the short run, the AS curve will shift to the left & the economy will produce above its natural level and unemployment will fall; in the long run the AS curve will shift to the right, increasing the "price level" to its original level and returning the economy to its "natural" level of output and employment
in the short run, the AS curve will shift to the right & the economy will produce above its natural level and unemployment will rise; in the long run the AS curve will shift to the left, increasing the "price level" to its original level and returning the economy to its "natural" level of output and employment
The correct answer is:
In the short run, the AS (Aggregate Supply) curve will shift to the right, and the economy will produce above its natural level. Unemployment will fall. However, in the long run, the AS curve will shift to the left, increasing the price level to its original level, and returning the economy to its natural level of output and employment.
When oil/energy prices significantly decrease, it leads to a decrease in production costs for businesses, which results in lower prices for goods and services. In the short run, this cost decrease allows businesses to increase their supply and expand production. As a result, the AS curve shifts to the right, and the economy operates above its natural level of output, leading to a temporary decrease in unemployment.
However, in the long run, the initial decrease in energy prices is not sustainable. As businesses adjust to the new lower cost structure, factors such as wages and resource prices may eventually increase to reflect the economy's natural equilibrium. This leads to a leftward shift of the AS curve. The shift back to the left returns the price level to its original level and brings the economy back to its natural level of output and employment.
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