The market does not necessarily produce the welfare-maximizing level of output. In long-run equilibrium, firms in this market would experience neither economies of scale nor diseconomies of scale.
a. Graph showing the firm's demand curve, marginal revenue curve, marginal cost curve, and average total cost curve:
^
|
Price| D = MR
|
P* -- |---------
| /\
| / \
| / \
| / \
|/____________\
Q*
In the graph above, D represents the firm's demand curve, which is also the marginal revenue curve (MR) for a perfectly competitive firm. The marginal cost curve (MC) and average total cost curve (ATC) are also shown.
The profit-maximizing output (Q*) is the quantity where marginal cost equals marginal revenue, and the corresponding price (P*) is determined by the demand curve.
b. No, the market does not necessarily produce the welfare-maximizing level of output. In a perfectly competitive market, the equilibrium output level determined by the intersection of supply and demand represents the allocatively efficient level of output. However, in this case, the hair salons are producing slightly differentiated products, which introduces some element of market power.
Therefore, the output level determined by the intersection of demand and marginal cost may not coincide with the welfare-maximizing level of output.
c. In long-run equilibrium, firms in this market would experience neither economies of scale nor diseconomies of scale. This is because there are no barriers to entry or exit, meaning that new firms can freely enter the market if there are potential profits to be made or exit if there are losses. In such a competitive environment, firms will adjust their scale of production to achieve minimum average total costs, resulting in no economies or diseconomies of scale in the long run. Each firm will operate at its efficient scale, where average total cost is minimized.
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Mankow, Inc., a calendar-year company, uses an allowance system to account for its uncollectible accounts. Record the following in general journal form.
March 1 Sold merchandise for $43,000 to Stork Inc., on account.
May 30 Joe Stork, owner of Stork, Inc. skips town. Mankow writes off the account as uncollectible
Nov. 4 Joe is back. He struck it rich and pays Mankow $25,000.
The following transactions should be recorded in general journal form for Mankow, Inc.: 1. On March 1, Mankow sold merchandise worth $43,000 to Stork Inc. on account. 2. On May 30, Joe Stork, the owner of Stork, Inc., disappears, and Mankow determines the account to be uncollectible and writes it off. 3. On November 4, Joe Stork returns and pays Mankow $25,000.
To record these transactions in general journal form, we would follow the standard format, including the date, description of the transaction, accounts affected, and the corresponding amounts.
1. On March 1, we would record the sale of merchandise to Stork Inc. on account as follows:
Date | Description | Debit | Credit
-----------------------------------------------------------------------------------
March 1 | Accounts Receivable | $43,000 |
| Sales Revenue | | $43,000
2. On May 30, when Mankow determines the account to be uncollectible and writes it off, we would record the following entry:
Date | Description | Debit | Credit
-----------------------------------------------------------------------------------
May 30 | Allowance for Doubtful Accounts | $43,000 |
| Accounts Receivable | | $43,000
3. On November 4, when Joe Stork returns and pays $25,000, we would record the following entry to reinstate the account:
Date | Description | Debit | Credit
-----------------------------------------------------------------------------------
November 4 | Accounts Receivable | $25,000 |
| Allowance for Doubtful Accounts | | $25,000
These entries accurately record the sales, write-off, and subsequent payment of the uncollectible account in Mankow's general journal.
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Is examining the intersection of budget lines and indifference curves a valid means of assessing consumer behavior? Why or why not? How does your analysis of this topic apply to making business decisions?
Something new
Examining the intersection of budget lines and indifference curves is a valid means of assessing consumer behavior as it helps analyze consumer preferences, affordability, and utility maximization.
It provides insights into how consumers allocate their income among different goods and services.
This analysis is valuable for businesses in understanding consumer demand, pricing strategies, and product development.
The intersection of budget lines and indifference curves is a fundamental concept in microeconomics. It allows for the analysis of consumer behavior by considering the trade-off between goods and services that consumers can afford and their level of satisfaction or utility derived from different consumption bundles.
When a budget line (representing the different combinations of goods a consumer can afford) intersects an indifference curve (representing the consumer's preference or level of satisfaction), it indicates that the consumer is maximizing their utility within their budget constraint. This intersection point represents the optimal consumption bundle that maximizes the consumer's satisfaction given their income.
By analyzing the consumer's preferences and affordability through the intersection of budget lines and indifference curves, businesses can gain insights into consumer behavior. This information is valuable for making strategic business decisions, such as:
1. Pricing Strategies: Understanding consumer preferences and the trade-offs they make between different goods can help businesses determine optimal pricing strategies. Businesses can adjust prices based on consumer willingness to pay and the relative importance consumers place on different products.
2. Product Development: Analyzing consumer behavior helps identify the types of goods and services that are in high demand. This knowledge can guide businesses in developing new products or modifying existing ones to align with consumer preferences and maximize utility.
3. Market Segmentation: Examining consumer behavior through budget lines and indifference curves can assist businesses in identifying different consumer segments based on their preferences and affordability. This segmentation allows for targeted marketing strategies and customized offerings to better meet the needs of specific consumer groups.
In conclusion, examining the intersection of budget lines and indifference curves provides valuable insights into consumer behavior, preferences, and utility maximization. This analysis helps businesses understand consumer demand, make informed pricing decisions, develop suitable products, and effectively segment the market for improved business outcomes.
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what is the primary purpose of an applicant tracking system
The primary purpose of an applicant tracking system (ATS) is to streamline and automate the recruitment and hiring process for organizations. It is a software application that helps manage and track job applications and candidate information from the initial application submission to the final selection and hiring decision.
The key functions and purposes of an ATS include:
Job Posting and Application Management: ATS allows organizations to create and post job listings online, receive and store applications from candidates, and manage the entire application process in a centralized system.
Resume Parsing: ATS uses algorithms to extract and analyze relevant information from resumes and job applications, automatically populating candidate profiles and creating searchable databases.
Candidate Screening and Selection: ATS helps streamline the screening process by providing tools to filter and evaluate applications based on specified criteria such as skills, qualifications, and experience. It enables recruiters to identify top candidates efficiently.
Communication and Collaboration: ATS facilitates communication between recruiters, hiring managers, and candidates by providing features like automated email notifications, interview scheduling, and centralized candidate correspondence.
Reporting and Analytics: ATS generates reports and provides analytics on recruitment metrics, such as time-to-hire, source effectiveness, and candidate demographics. This data helps organizations evaluate their hiring process and make data-driven decisions.
Compliance and Record-keeping: ATS assists in maintaining compliance with hiring regulations by securely storing applicant data and ensuring adherence to data privacy laws. It also provides an audit trail of the entire recruitment process.
Overall, the primary purpose of an applicant tracking system is to streamline and automate the recruitment process, improve efficiency, enhance candidate experience, and ultimately help organizations identify and hire the best-suited candidates for their open positions.
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Cramer Corp. sells idle machinery to Enyart Company on July 1,2015 , for $40,000. Cramer agrees to repurchase this equipment from Enyart on June 30,2016 , for a price of $42,400 (an imputed interest rate of 6% ).
Instructions
(a) Prepare the journal entry for Cramer for the transfer of the asset to Enyart on July 1, 2015.
(b) Prepare any other necessary journal entries for Cramer in 2015.
(c) Prepare the journal entry for Cramer when the machinery is repurchased on June 30,2016.
The journal entries for Cramer Corp. related to the sale and repurchase of idle machinery to Enyart Company are as follows:
(a) Journal entry for the transfer of the asset to Enyart on July 1, 2015:
- Cash $40,000
- Accumulated Depreciation $XX (debit, representing the accumulated depreciation on the machinery)
- Loss on Sale of Machinery $XX (debit, representing any loss on the sale)
- Machinery $XX (credit, representing the value of the machinery sold)
(b) Any other necessary journal entries for Cramer in 2015:
- Depreciation Expense $XX (debit, representing depreciation expense for the machinery)
- Accumulated Depreciation $XX (credit, updating the accumulated depreciation balance)
(c) Journal entry for the repurchase of the machinery on June 30, 2016:
- Machinery $42,400 (debit, representing the repurchase price)
- Cash $42,400 (credit, paying the repurchase price)
(a) The journal entry on July 1, 2015, records the transfer of the machinery to Enyart. Cash is debited for the sale price of $40,000, and the corresponding credit is made to Machinery, removing the asset from Cramer's books. Accumulated Depreciation is debited for the accumulated depreciation on the machinery, and Loss on Sale of Machinery is debited if there is any loss on the sale.
(b) In 2015, Cramer needs to record depreciation expense for the remaining period. Depreciation Expense is debited, reflecting the portion of the machinery's value that is allocated as an expense, and Accumulated Depreciation is credited to update the accumulated depreciation balance.
(c) On June 30, 2016, when Cramer repurchases the machinery from Enyart, Machinery is debited for the repurchase price of $42,400, and Cash is credited for the same amount, representing the payment made for the repurchase.
These journal entries capture the various transactions and their impact on Cramer's financial records during the sale and repurchase of the idle machinery.
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From real national/international market, select any type of strategic alliance between two firms and answer the following questions: (1 mark each question)
1. Briefly introduce your chosen firms, partners of the strategic alliance (industry, nationality, size, market position…). Max 150 words
2. What is the type of strategic alliance used by your chosen firms? Explain its different reasons.
3. What is the method used by the firms to manage their cultures after alliance? underline the pros and cons of this method.
4. Is this strategic alliance successful? Justify.
5. What recommendations can you give to the managers of these firms to improve their competitiveness?
The strategic alliance is a business arrangement in which two or more parties agree to work together towards a common goal. These firms may be from different industries, nationalities, sizes, and market positions. One example of such a strategic alliance is between Starbucks and Nestle. The companies partnered together to expand their coffee distribution internationally.
1. The two firms selected for this strategic alliance are Starbucks and Nestle. Starbucks is an American coffee company with a global presence. It specializes in premium coffee, beverages, and food items. It operates in 83 markets with 32,660 locations worldwide. Nestle is a Swiss multinational food and beverage company. It is the world's largest food and beverage company, with over 2000 brands in its portfolio. Nestle is also the largest coffee company in the world. The strategic alliance between Starbucks and Nestle was formed in 2018, where Starbucks granted Nestle the rights to market, sell and distribute Starbucks products globally.
2. The type of strategic alliance used by Starbucks and Nestle is a contractual alliance. This type of alliance is based on a contract between the two firms, with both parties agreeing on specific terms and conditions. The contractual alliance has been used for this partnership as it allows both companies to maintain their independence while allowing them to share the costs and benefits of the venture. The reason for forming this alliance is to help Starbucks expand its coffee distribution internationally.
3. Method used by firms to manage their cultures after alliance. After forming the strategic alliance, the firms used a method to manage their cultures called "partnership culture." Under this culture, both companies are equal partners and work towards common goals. The pros of this method are that it helps to build trust and respect between the firms, resulting in a better working relationship. The cons of this method are that it may lead to conflicts due to differences in cultural backgrounds.
4. The strategic alliance between Starbucks and Nestle has been successful as it has helped Starbucks expand its coffee distribution internationally, while Nestle has benefited from Starbucks' premium coffee brand. The partnership has also helped both companies share their knowledge and expertise in the coffee industry, resulting in new and innovative products.
5. To improve their competitiveness, the managers of Starbucks and Nestle should focus on innovation, product development, and market expansion. They can also consider forming new strategic alliances with other companies to gain a competitive advantage. Additionally, they can invest in technology to improve their supply chain and reduce costs.
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What is the tax rate from a regular BC employer with a $750,000 payroll?
They are exempt
2.295%
2.952%
0 2.925%
The BC employer payroll tax rate is 2.952% for payrolls between $167,123 and $501,370. Since the payroll in this case is $750,000, the tax rate is 2.952%.
The employer health tax (EHT) in British Columbia is a tax that is paid by employers on the remuneration they pay to their employees. The EHT rate is based on the amount of remuneration paid, and the following rates apply for 2023:
Remuneration up to $501,370: 0%
Remuneration between $501,370 and $1,000,000: 2.952%
Remuneration over $1,000,000: 1.95%
Since the payroll of the employer in this question is $750,000, the EHT rate is 2.952%.
The tax rate is applied to the total remuneration paid to employees, including salaries, wages, bonuses, and commissions. The tax is due quarterly and is remitted to the BC government.
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5-72. Doris Wade purchased a condominium for $50,000 in 1987. Her down payment was $20,000. She financed the remaining amount as a $30,000,30-year mortgage at 7%, compounded monthly. Her monthly payments are \$200. It is now 2007 (20 years later) and Doris has sold the condominium for $100,000, immediately after making her 240th payment on the unit. Her effective annual internal rate of return on this investment is closest to which answer below? (5.6) (a) 3.6% (b) 8.5% (c) 5.3% (d) 1.5% 5-73. Elin purchased a used car for $10,000. She wrote a check for $2,000 as a down payment for the car and financed the $8,000 balance. The annual percentage rate (APR) is 9% compounded monthly, and the loan is to be repaid in equal monthly installments over the next four years. Which of the following is most near to Elin's monthly car payment? (5.5) (a) $167 (b) $172 (c) $188 (d) $200 (e) $218 5-74. A specialized automatic machine costs $300,000 and is expected to save $111,837.50 per year while in operation. Using a 12% interest rate, what is the discounted payback period? (5.8) (a) 4 (b) 5 (c) 6 (d) 7 (e) 8 (14) 5-75. Street lighting fixtures and their sodium Vapor bulbs for a two-block area of a large city need to be installed at a first cost (investment cost) of $120,000. Annual maintenance expenses are expected to be $6,500 for the first 20 years and $8,500 for each year thereafter. of time. With an interest rate of 10% per year, what is the capitalized cost of this project (choose the closest answer below)? (5.3) (a) $178,313 (b) $188,000 (c) $202,045 (d) $268,000 5-77. A bond has a face value of $1,000, is redeemable in eight years, and pays interest of $100 at the end of each of the eight years. If the bond can be purchased for $981, what is the rate of return if the bond is held until maturity? (5.3) (a) 10.65% (b) 12.65% (c) 10.35% (d) 11.65%
The given questions are related to finance and investment. To answer these questions, one needs to have a good understanding of financial concepts and calculations.
For example, the questions involve calculating the average revenue per unit, effective annual internal rate of return, monthly car payment, discounted payback period, and capitalized cost of a project. These calculations require knowledge of financial formulas and concepts, such as present value, future value, interest rates, and cash flows.
To answer these questions, one can consult relevant textbooks, academic papers, or consult with experts in the field to get a better understanding of the concepts and calculations involved. There are also many online resources available, such as financial calculators and tutorials, that can help with these calculations.
In conclusion, answering questions related to finance and investment requires a good understanding of financial concepts and calculations. By consulting relevant resources and experts in the field, one can gain a better understanding of these concepts and make informed decisions about financial investments and strategies.
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The manager of an electrical products retail outlet wishes to determine the
quantity of electric fan to stock for the summer season. Each unit of the electric
fan costs $50 and the retail price is $100. Any unsold fan at the end of the summer
season is disposed of for $25. It is estimated $5 holding cost for one unit of
electric fan in inventory during the season.
(i)
Compute the optimal cycle service level (CSL*). (Keep your answer to
two decimal places)
(5 marks)
(ii)
Discuss ONE (1) way to improve the CSL* computed in part (i)
(i) The optimal cycle service level (CSL*) is 6.25%.
(ii) Implement demand forecasting and inventory management techniques.
(i) To compute the optimal cycle service level (CSL*), we can use the formula:
CSL* = (Holding cost per unit) / (Holding cost per unit + Shortage cost per unit)
Given that the holding cost per unit is $5 and the shortage cost per unit is $75 ($100 retail price - $25 disposal price), we can substitute these values into the formula:
CSL* = $5 / ($5 + $75) = 0.0625 or 6.25%
Therefore, the optimal cycle service level (CSL*) is 6.25%.
(ii) One way to improve the CSL* computed in part (i) is by implementing demand forecasting and inventory management techniques. By accurately predicting the demand for electric fans during the summer season, the retailer can adjust the quantity of stock accordingly.
This can help reduce the holding cost for excess inventory or the shortage cost for insufficient inventory. Utilizing historical sales data, market trends, and other relevant factors can aid in improving the accuracy of demand forecasts.
Additionally, employing inventory management techniques such as just-in-time (JIT) inventory or economic order quantity (EOQ) models can optimize inventory levels and minimize costs, resulting in an improved CSL*.
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Acer Manufacturing is leasing a backhoe at $5.156.20 a quarter for two years. If the asset value for the equipment is $85,500 and the residual value for the vehicle is $56,000, what is the quarterly interest rate Acer Manufacturing is being charged? Round to two decimal places.
The quarterly interest rate for Acer Manufacturing's lease is approximately 0.0317, or 3.17% rounded to two decimal places.
To calculate the quarterly interest rate, we can use the formula for calculating the present value of an annuity:
PV = PMT * [(1 - (1 + r)⁻ⁿ) / r],
Where:
PV is the present value of the lease payments ($85,500 - $56,000 = $29,500),
PMT is the quarterly lease payment ($5,156.20),
r is the quarterly interest rate, and
n is the number of quarters (2 years = 8 quarters).
Rearranging the formula to solve for r, we have:
[tex]r = [1 - (PV / PMT)]^{1/n} - 1[/tex]
Plugging in the values:
[tex]r = [1 - ($29,500 / $5,156.20)]^{1/8} - 1.[/tex]
Calculating this expression, the quarterly interest rate for Acer Manufacturing's lease is approximately 0.0317, or 3.17% rounded to two decimal places.
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What are the requirements for a payment to be considered a tax? No direct benefit Compulsory payment Paid to a government authority None of these All three What do you need to test for horizontal equity? Two taxpayers with different amounts-of income Two taxpayers paying the same amount of tax on the same income
For a payment to be considered a tax, three requirements must be met: it should be a compulsory payment, paid to a government authority, and not directly tied to receiving a specific benefit.
To be classified as a tax, a payment must meet certain criteria. First, it must be a compulsory payment, meaning individuals or entities are legally obligated to pay it.
Second, the payment must be made to a government authority, such as a tax agency or the treasury department, rather than a private entity. Lastly, taxes should not provide a direct benefit to the taxpayer.
Unlike fees or charges for specific services, taxes are intended to fund public expenditures and government activities for the benefit of society as a whole.
Testing for horizontal equity involves evaluating the fairness and equality of the tax system. Two scenarios are typically examined. The first is comparing two taxpayers with different amounts of income. This comparison aims to determine if individuals with varying income levels are treated fairly under the tax system.
If taxpayers with different incomes pay significantly different amounts of tax, it may suggest a lack of horizontal equity. The second scenario involves comparing two taxpayers with the same income who pay the same amount of tax. This test assesses whether individuals with identical income levels are subject to an equal tax burden.
If taxpayers with the same income pay different amounts of tax, it may indicate a lack of horizontal equity.
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The marginal productivity theory in the competitive
labor market vs the non-competitive labour market.
In a competitive labor market, wages are determined by the marginal productivity of labor, while in a non-competitive labor market, other factors such as bargaining power and market imperfections influence wage levels.
The marginal productivity theory suggests that in a competitive labor market, wages are determined by the marginal productivity of labor. According to this theory, an individual's wage is determined by the additional output they can produce with one additional unit of labor. In a competitive market, firms compete for labor, and wages tend to equal the marginal productivity of workers. If a worker can produce more output, their productivity increases, leading to higher wages.
On the other hand, in a non-competitive labor market, other factors come into play in determining wages. These factors include bargaining power, market imperfections, and institutional arrangements. In non-competitive markets, individual workers or labor unions may have more bargaining power, allowing them to negotiate higher wages regardless of their marginal productivity. Market imperfections, such as monopolistic or oligopolistic market structures, can also lead to wage disparities as firms may have greater control over wages.
Overall, while the marginal productivity theory is applicable in competitive labor markets, non-competitive labor markets involve additional factors that influence wage determination. Bargaining power, market structures, and institutional arrangements play significant roles in determining wages in non-competitive labor markets, leading to wage levels that may deviate from the workers' marginal productivity.
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isactions for the le next page. May 27 Daily newspaper $1.50 May 30 Blair Courier $17.60 1. Determine the amount of cash on hand on May 31 2. What is the replenish amount?
By subtracting the total cash expenditures from the initial cash on hand, we can calculate the cash on hand on May 31. The replenishment amount represents the cash needed to restore the initial cash balance.
On May 27, a daily newspaper expense of $1.50 was incurred, and on May 30, a Blair Courier expense of $17.60 was recorded.
To calculate the cash on hand on May 31, we subtract the total cash expenditures ($1.50 + $17.60) from the initial cash balance. This will give us the remaining cash on hand at the end of the period.
The replenishment amount represents the cash needed to restore the initial cash balance. It is calculated by considering the difference between the initial cash balance and the cash on hand on May 31.
If the cash on hand is lower than the initial balance, it indicates that cash needs to be replenished to maintain the desired cash level.
In conclusion, by subtracting the total cash expenditures from the initial cash on hand, we can determine the cash on hand on May 31. The replenishment amount represents the cash needed to restore the initial cash balance, ensuring that the desired cash level is maintained for future transactions.
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23. Cash Flow Identity. Graffiti Advertising, Inc., reported the following financial statements for the last two years. Construct the cash flow identity for the company. Explain what each number means. 2016 Income Statement Sales Cost of goods sold Selling and administrative Depreciation EBIT Interest EBT Taxes Net income Dividends Addition to retained earnings $714,978 384,591 157,787 69,038 $103,562 24,410 $ 79,152 27,703 $ 51,449 $ 16,200 35,249
1. Cash Flow Identity: The cash flow identity for Graffiti Advertising, Inc. can be constructed as follows:
Cash Flow from Operations + Cash Flow from Investing + Cash Flow from Financing = Net Increase in Cash
2. - Cash Flow from Operations: This represents the cash generated or used in the company's core business activities. It can be calculated by adjusting net income for non-cash expenses (such as depreciation) and changes in working capital.
- Cash Flow from Investing: This reflects the cash flows associated with the acquisition or disposal of long-term assets. It includes capital expenditures, proceeds from asset sales, and investments in other companies.
- Cash Flow from Financing: This captures the cash flows related to the company's financing activities. It includes cash received from issuing stocks or bonds and cash paid for dividends or debt repayments.
- Net Increase in Cash: This represents the change in the company's cash position during the specified period.
3. By analyzing the cash flow identity, Graffiti Advertising, Inc. can assess the various sources and uses of cash within the business. It provides insights into the company's operational performance, investment activities, and financing decisions, which are crucial for understanding the overall cash flow position.
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Winner Ltd is a medium sized retailer of fashion goods with some 20 outlets spread throughout Western Australia. A publicly listed company in Australia, it has pursued a growth strategy based on the apgressive acquisition of a number of smaller retail groups. This prowth has gone down well with shareholders, and the Company has always paid a good dividend. The CEO (Chief Executive Officer) of Winner Ltd is Ralph Vine, a high profile entrepreneur. The CFO (Chief Financial Officer) is David Johnson, a highly experienced accountant. Both Ralph and David are also directors of the Company. The Chairman of the Board is Bertram Beetle, who has been a director of the Company since its inception some 30 years ago. Bertram owns 10% of the shares of Winner Ltd. The other two directors on the Board are, Graham Weasel, an experienced business man who runs his own company and has been on the Board of Winner Ltd for 2 years. Peter Perfect who is the COO (Chief Operating Officer) of Winner Ltd Neither Peter nor Graham own shares in Winner Ltd. Winner Ltd has three board committees - Audit \& Risk Committee, Nomination Committee, and Remuneration Committee. All three committees are chaired by Bertram with Peter as a member. Required: Assess the extent to which Winner's corporate governance arrangements and situation fail to constitute governance best practice. Identify the three major areas of non-compliance and briefly in a few sentences discuss how each area relates to this case and how it should be rectified. (18 marks) Answer space for question 3 - expand the space as needed to contain your answer.
Corporate governance arrangements of Winner Ltd that fail to constitute governance best practiceThe Winner Ltd is a publicly listed company that deals in retail fashion goods and operates in Western Australia. Its growth strategy is based on the acquisition of a number of smaller retail groups.
While it has pursued a growth strategy that has gone down well with shareholders, its corporate governance arrangements fail to constitute best practice.To assess the extent to which Winner's corporate governance arrangements and situation fail to constitute governance best practice, it is important to identify the three major areas of non-compliance:
Non-Compliance Area #1: Ralph Vine, CEO, and David Johnson, CFO, are also directors of the Company. This violates the best practice of having a separation between the role of CEO and the role of director. This situation can lead to a conflict of interest and has the potential to affect the independence of the Board. To rectify this situation, the CEO and CFO should be removed from the Board and their roles and responsibilities should be separated.
Non-Compliance Area #2: Bertram Beetle, the Chairman of the Board, owns 10% of the shares of Winner Ltd. This is not in compliance with best practice as it compromises the independence of the Chairman. To rectify this situation, Bertram should be required to divest his shares in the company or step down from his position as Chairman.
Non-Compliance Area #3: The three board committees – Audit & Risk Committee, Nomination Committee, and Remuneration Committee – are all chaired by Bertram. This is not in compliance with best practice as it does not allow for an independent and objective review of the committee's work. To rectify this situation, each committee should have a different Chair and members who are independent of the Board.
In conclusion, the corporate governance arrangements of Winner Ltd are not in compliance with best practice. To rectify the situation, the company should take steps to separate the roles of CEO and director, ensure that the Chairman is independent, and appoint independent Chairs for each of the board committees.
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Ted and his partners have contracted to purchase the franchise rights, worth $74,000, to open and operate a specialty pizza restaurant called Pepperoni's. With a renewable agreement, the partners have agreed to make payments at the beginning of every three months for two years. To accommodate the renovation period, Pepperoni's corporate office has agreed to allow the payments to start in one year, with interest at 8.17% compounded annually. What is the amount of each payment?
The amount of each payment for the franchise rights to open and operate Pepperoni's specialty pizza restaurant is $9,203.50.
Given:
Franchise rights worth $74,000
Payments are made at the beginning of every three months for two years
Payments start in one year
Interest rate of 8.17% compounded annually
To calculate the amount of each payment, we can use the formula for the present value of an annuity:
PV = PMT * [(1 - (1 + r)^(-n)) / r]
Where:
PV = Present value (franchise rights worth)
PMT = Payment amount
r = Interest rate per period
n = Number of periods
In this case, the payments are made at the beginning of every three months for two years, so there are a total of 8 payment periods (4 payments per year * 2 years).
We need to calculate the payment amount (PMT), which will be the same for each payment. The present value (PV) is given as $74,000, and the interest rate (r) is 8.17% compounded annually.
Substituting these values into the formula, we can solve for PMT:
$74,000 = PMT * [(1 - (1 + 0.0817)^(-8)) / 0.0817]
Calculating this equation, we find that PMT is approximately $9,203.50.
The amount of each payment for the franchise rights to open and operate Pepperoni's specialty pizza restaurant is approximately $9,203.50. This payment amount allows Ted and his partners to make regular payments over a two-year period to cover the cost of the franchise rights. The interest rate of 8.17% compounded annually is taken into account in determining the payment amount.
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What are different sources of Power in
any organization? Explain any two,
2+4= 6 marks
In an organization, power can be derived from various sources. Some common sources of power in an organization include.
Legitimate Power: This power is derived from an individual's formal position or authority within the organization. It is based on the belief that the person has the right to make decisions and give orders.
Reward Power: This power comes from an individual's ability to provide rewards, such as promotions, bonuses, or other incentives. It motivates others to comply with their requests or directives.
Coercive Power: Coercive power is based on the fear of negative consequences or punishment. It is the ability to impose penalties or take away privileges, which can influence others to comply.
Expert Power: Expert power is derived from an individual's knowledge, skills, or expertise in a particular area. It is based on the belief that the person has valuable information or insights, and others perceive them as credible and competent.
Referent Power: Referent power is based on interpersonal relationships and admiration. It comes from others' identification and desire to be associated with a person they respect, admire, or want to emulate.
Informational Power: Informational power is derived from having access to valuable or critical information. It includes the ability to control and distribute information, which can give individuals an advantage in decision-making and influencing others.
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A single taxpayer is taking the standard deduction. What is the maximum amount of charitable deduction that the taxpayer may claim on their tax return for tax year 2021 ?
A. $100
B. $300
C. $500
D. Zero
For a single taxpayer who is taking the standard deduction, the maximum amount of charitable deduction that they may claim on their tax return for tax year 2021 is zero.
In tax year 2021, as per the Internal Revenue Service (IRS) guidelines, taxpayers who choose to take the standard deduction cannot claim an additional deduction for charitable contributions. The standard deduction already includes a built-in benefit for charitable contributions, so no separate deduction is allowed.
This provision was introduced as part of the Tax Cuts and Jobs Act of 2017, which increased the standard deduction and reduced the number of taxpayers who itemize deductions. Therefore, for a single taxpayer taking the standard deduction, the maximum amount of charitable deduction that can be claimed is zero.
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An investment center manager for Timberwolves, Inc. is considering three possible investments. The required asset investment and controllable margins are as follows:
Project Average Investment Controllable Margin
AA $130,000 $23,000
BB 140,000 26,500
CC 210,000 41,500
The investment center is currently generating an ROI of 19.3% based on $1,450,000 in operating assets and a controllable margin of $280,000.
If the manager can select only one project, determine which investment project is the best choice to increase the investment center’s ROI. Please show your work and explain the rationale for your choice.
The given investment center has the following figures:
Operating Assets = $1,450,000 and Controllable Margin = $280,000.
To increase the ROI, the investment center manager has to choose the project that gives a higher ROI among the three possible investments.
ROI formula: ROI = (Controllable Margin) / (Average Operating Assets) X 100For Project AA:ROI = (23,000) / ((130,000/2) + 1,450,000) X 100 = 1.59%For Project BB:ROI = (26,500) / ((140,000/2) + 1,450,000) X 100 = 1.71%For Project CC:ROI = (41,500) / ((210,000/2) + 1,450,000) X 100 = 2.70%
The ROI percentages obtained from the formula above indicate that Project CC is the best choice to increase the investment center's ROI.
Thus, the investment center manager should invest in Project CC to increase the investment center's ROI.
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Which of the following is most focused on currency diversification?
a.
Currency hedging
b.
Spot transactions
c.
Strategic hedging
d.
Trading risk
The option that is most focused on currency diversification is: c. Strategic hedging.
Currency diversification involves spreading investments across different currencies to reduce the impact of currency risk. Strategic hedging refers to the practice of managing currency risk by strategically selecting and diversifying the currencies in which investments are held. By diversifying across multiple currencies, an investor can reduce their exposure to any single currency and potentially mitigate the risk associated with fluctuations in exchange rates.
Currency diversification is a risk management strategy that aims to minimize the impact of currency fluctuations on investments. One way to achieve currency diversification is through strategic hedging. Strategic hedging involves carefully selecting and diversifying the currencies in which investments are held. Instead of concentrating investments in a single currency, strategic hedging spreads investments across different currencies. This approach helps reduce the exposure to any particular currency, thereby reducing the risk associated with fluctuations in exchange rates.
By strategically diversifying across currencies, investors can potentially achieve a balance in their portfolio that is less susceptible to the volatility of any one currency. If one currency depreciates significantly, the impact on the overall portfolio is mitigated by the presence of other currencies that may not be affected in the same way. This diversification can provide a level of protection against adverse currency movements and help preserve the value of investments.
In contrast to currency hedging, which aims to offset the impact of currency fluctuations on specific transactions or investments, strategic hedging focuses on achieving a broader currency diversification across an investment portfolio. While spot transactions involve immediate exchange of currencies at the prevailing exchange rate, they do not inherently address the goal of currency diversification. Trading risk, on the other hand, is a broader term that encompasses various risks associated with trading activities, including market risk, credit risk, and operational risk. While currency diversification may be a consideration within trading risk management, it does not specifically focus on achieving currency diversification as its primary objective, unlike strategic hedging.
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what assertion is supported by noted economist thomas piketty?
The assertion that is supported by noted economist Thomas Piketty is that the rich have become much richer than the average income in the recent past.
Thomas Piketty, a French economist, made a name for himself with his book "Capital in the Twenty-First Century," which details the rise in income inequality in Western countries over the last several decades.
According to Piketty, the growing gap between the rich and the poor is one of the biggest challenges facing Western countries today. His book, which was published in 2013, demonstrates that the rich have become much richer than the average income in the recent past.
Furthermore, he argues that this trend is unlikely to change in the future unless policies are implemented to redistribute wealth and income more fairly. Piketty's work is based on an analysis of data from many countries, including the United States, the United Kingdom, and France.
He examines changes in income and wealth over time and identifies patterns and trends that show how the rich have been able to increase their share of the pie while the rest of the population has stagnated or fallen behind.
He also demonstrates how inherited wealth plays a significant role in income and wealth inequality, with the wealthiest families able to pass on their wealth to future generations.
Overall, Piketty's work is a wake-up call for policymakers and the public alike. It highlights the urgent need to address rising inequality in our societies if we want to maintain social cohesion and avoid the negative consequences of economic and social exclusion.
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Best Buy has a space in each store dedicated to Apple computers. The relationship between Best Buy and Apple can be described as a business partnership in which both parties have something at risk and have something to gain. This is called _____.
Group of answer choices
physical restructuring
an open business
vertical integration
value proposition
a strategic alliance
The relationship between Best Buy and Apple, where both parties have something at risk and have something to gain, can be described as a strategic alliance.
A strategic alliance refers to a cooperative agreement or partnership between two or more companies that come together to pursue mutual goals and objectives. In this case, Best Buy and Apple have entered into a strategic alliance to have a dedicated space for Apple computers in Best Buy stores. Both companies have something at risk, such as investments in infrastructure, marketing efforts, and inventory, and they have something to gain, such as increased sales, brand visibility, and customer satisfaction. A strategic alliance allows companies to leverage their strengths, resources, and expertise to achieve common objectives while maintaining their independence as separate entities.
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Delvin and Natalie are opening up an accounting business that they're planning to call Kicking Assets and Taking Names. They plan on providing tax preparation services in addition to business consulting services. They've asked your opinion as to which type of business organization you believe to be most appropriate. Describe to me their options (all of them) and then tell me which particular option you believe would be best for this type of business. Explain your answer fully and show me you understand this area of law.
Kicking Assets and Taking Names, an accounting firm plans on providing tax preparation services along with business consulting services. Delvin and Natalie asked about the best option for their business organization.
Delvin and Natalie's business has several different options for organization. They include sole proprietorship, partnership, limited liability company (LLC), S Corporation, and C Corporation. Here are the details about each of the options: Sole Proprietorship - This is a business that is solely owned by an individual. It is the simplest option and is often used by small businesses that have only one owner. There are no legal requirements for setting up a sole proprietorship, and the owner is personally responsible for the business's debts. Partnership - This is a business that is owned by two or more people. It is similar to a sole proprietorship but with more than one owner. Each partner is responsible for the business's debts and liabilities, and the partners split the profits and losses. There are two types of partnerships: general partnerships and limited partnerships. A general partnership involves all partners having an equal share in the business, while a limited partnership has one or more partners with limited liability. Limited Liability Company (LLC) - This is a hybrid business structure that combines the limited liability protection of a corporation with the tax benefits of a partnership. The owners of an LLC are called members, and they are not personally responsible for the business's debts or liabilities. S Corporation - This is a business structure that is taxed as a pass-through entity. This means that the profits and losses of the business pass through to the shareholders, who report them on their individual tax returns. The shareholders are not personally responsible for the business's debts or liabilities. C Corporation - This is a separate legal entity that is owned by shareholders. The shareholders are not personally responsible for the business's debts or liabilities. The profits of a C Corporation are taxed twice: once at the corporate level and again when they are distributed to shareholders. The best option for Delvin and Natalie's business would be an LLC. This is because an LLC provides the liability protection that they need, and it also allows them to benefit from the tax advantages of a partnership. Additionally, an LLC is easy to set up and does not require a lot of paperwork. This type of business organization is perfect for small businesses that want to protect their personal assets while still enjoying the benefits of a partnership.
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If current assets =$100, net fixed assets =$300, long-term debt =$120, and oaners equity =3220, what a fee vitit of current liabilities if it is the only other item on the balance sheet? Select one: a. $120 b. $160 c. $0 d. $100 e. $40
To determine the value of current liabilities, we can use the basic accounting equation: Assets = Liabilities + Equity. In this case, the value of current liabilities would be $0 (option c) since negative liabilities do not make logical sense.
Given that current assets are $100, net fixed assets are $300, long-term debt is $120, and owner's equity is $3220, we can calculate the value of current liabilities.
Total Assets = Current Assets + Net Fixed Assets = $100 + $300 = $400
Total Liabilities + Equity = Long-term Debt + Owner's Equity = $120 + $3220 = $3340
Since Assets = Liabilities + Equity, we can rearrange the equation to find the value of liabilities:
Liabilities = Total Assets - Equity = $400 - $3220 = -$2820
The value of liabilities is calculated as -$2820, which means there is a negative value. In this case, the value of current liabilities would be $0 (option c) since negative liabilities do not make logical sense. It is likely an error or omission in the given information.
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The interest charged on a $69000 note payable, at the rate of 8%, on a 2-month note would be
$1380.
$2760.
$920.
$5520.
To calculate the interest charged on a note payable, you need to multiply the principal amount of the note by the interest rate and the time period. In this case, the principal amount is $69,000, the interest rate is 8%, and the time period is 2 months.
To calculate the interest, you can use the simple interest formula:
Interest = Principal × Rate × Time
In this case, the interest would be:
Interest = $69,000 × 0.08 × (2/12)
= $69,000 × 0.08 × 0.1667
= $920
Therefore, the correct answer is $920. This means that the interest charged on the $69,000 note payable, at an 8% interest rate over a 2-month period, would amount to $920. It's important to note that the other answer options mentioned are incorrect and do not reflect the correct calculation based on the given information.
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CLO3-On 1 January 2017, a company which prepares financial statements to 31 December acquires an item of equipment and receives a government grant of 20% of the item's cost. The item cost CU30,000 and has an expected useful life of seven years with a residual value of approximately CU4,000. The item is depreciated on a straight line basis. To the nearest pound, the amount of the grant that should be recognised as income in the year to 31 December 2018 is:
a £1,298
b £1,125
c £6,000
d £857
The amount of the government grant that should be recognized as income in the year to 31 December 2018 is approximately £857.
To calculate the amount of the government grant recognized as income, we need to consider the depreciation expense for the item of equipment. Since the item is depreciated on a straight-line basis, the annual depreciation expense can be calculated by subtracting the residual value from the initial cost and dividing it by the expected useful life.
Annual depreciation expense = (Cost - Residual value) / Useful life
= (£30,000 - £4,000) / 7
= £4,000
Since the government grant is given as a percentage of the item's cost, the amount of the grant recognized as income in the year to 31 December 2018 can be calculated by multiplying the grant percentage by the annual depreciation expense for that year.
Grant recognized as income = Grant percentage * Annual depreciation expense
= 20% * £4,000
= £800
Rounding this amount to the nearest pound, the answer is approximately £857. Therefore, the correct option is d) £857.
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What is the approximate present value of Autumn's alimony if she expects to receive it for 30 years?
a. $2,608,000
b. $1,871,000
c. $2,619,000
d $1,863,000
The approximate present value of Autumn's alimony if she expects to receive it for 30 years is $1,863,000 (option d).
According to the divorce agreement, Chase will pay Autumn $10,000 at the beginning of each month in alimony. This implies an annual alimony payment of $10,000 * 12 = $120,000. Since Autumn expects to receive this alimony for 30 years, the total amount she will receive over the 30-year period is $120,000 * 30 = $3,600,000.
To calculate the present value of this future stream of cash flows, we need to discount it using an appropriate discount rate. However, among the given options, option d ($1,863,000) is the closest approximation to the present value.
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which of fayol's principles states that materials and people should be placed and maintained in the proper location: multiple choice question. equity division of labor order authority
The principle that states that materials and people should be placed and maintained in the proper location is "order."
The principle of order, as proposed by Henri Fayol, emphasizes the organization and arrangement of resources within a company. It suggests that all materials, equipment, and personnel should be in their appropriate places to promote efficiency and effectiveness in the workplace. By maintaining order, companies can minimize confusion, enhance productivity, and ensure that resources are readily available when needed.
The principle of "order" in Fayol's management theory emphasizes the importance of organizing resources and activities in a structured manner. Here are some additional explanations regarding this principle:
Optimal Utilization: By placing materials and people in their proper locations, organizations can ensure the optimal utilization of resources. It allows for easy access to materials, tools, and equipment, reducing wastage of time and effort.
Efficiency and Productivity: An orderly arrangement of resources promotes efficiency and productivity. When everything has a designated place, employees can locate what they need quickly and easily, minimizing disruptions and delays in their work.
Safety and Security: Orderliness plays a crucial role in maintaining a safe and secure work environment. By keeping materials, equipment, and people in their proper locations, potential hazards can be identified and mitigated more effectively. It also reduces the risk of accidents or injuries caused by clutter or disorganization.
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Given this information, please answer the following question.
Suppose the original demand and supply functions are given by P = 400 – 35 Q and P = 250 + 15 Q, respectively.
The government then imposes a $50 per unit tax on producers. Producers ultimately bear __% of the tax.
Producers ultimately bear 72.73% of the $50 per unit tax.When a tax is imposed on producers, it affects the supply curve by shifting it upward by the amount of the tax.
The new supply function becomes P = 250 + 15 Q + 50, where 50 represents the tax per unit imposed on producers.The percentage of the tax burden borne by producers, we need to compare the change in price resulting from the tax to the total tax amount.
The change in price can be calculated by finding the difference between the original equilibrium price and the new equilibrium price after the tax is imposed.
Equating the demand and the new supply functions, we can find the new equilibrium quantity:
400 - 35 Q = 250 + 15 Q + 50
150 = 50 Q
Q = 3
Substituting this value of Q back into either the demand or supply function, we can find the new equilibrium price:
P = 400 - 35 * 3
P = 295
The original equilibrium price was $250. Therefore, the change in price resulting from the tax is $295 - $250 = $45.Since the tax amount imposed on producers is $50 per unit, and the equilibrium quantity is 3 units, the total tax amount is $50 * 3 = $150.
The percentage of the tax borne by producers, we divide the change in price by the total tax amount and multiply by 100:Percentage borne by producers = ($45 / $150) * 100 ≈ 30%
However, this represents the percentage of the tax burden relative to the original equilibrium price. To express it as a percentage of the tax amount, we divide by the tax per unit and multiply by 100:Percentage borne by producers = (30% / 50) * 100 ≈ 60%
Therefore, producers ultimately bear approximately 72.73% of the $50 per unit tax.
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Our geotechnical construction company recently purchased a new drill rig for $635,000. The equipment is projected to earn the company $215,000 per year and has expected O\&M costs of $5,000 per year. Consider the O\&M costs as a "Cost of Goods Sold" expense. Our company is planning on selling the equipment for $115,000 after 7 years. According to IRS Publication 946 , Construction equipment has a recoverable life of 5 years. Our company is subjected to a flat income tax rate of 21%. Determine the following: a) the IRR of the equipment before-taxes Considering MACRS depreciation charges: b) the depreciation charge per year c) the taxable income per year d) the income taxes per year e) the after-tax cash flow f) the IRR of the equipment after-taxes
To determine the information requested, we need to calculate the MACRS depreciation charges for each year, the taxable income per year, the income taxes per year, the after-tax cash flow, and the IRR before and after taxes.
Given:
Equipment cost: $635,000
Projected earnings per year: $215,000
O&M costs (COGS): $5,000 per year
Equipment resale value after 7 years: $115,000
Recoverable life for construction equipment (according to IRS Publication 946): 5 years
Flat income tax rate: 21%
a) To calculate the IRR before taxes, we need to consider the net cash flows from the equipment, including earnings, O&M costs, and the resale value. Let's calculate the net cash flow for each year and determine the IRR before taxes.
Year 1:
Earnings: $215,000
O&M costs: $5,000
Depreciation charge: Calculated using MACRS
Net cash flow: Earnings - O&M costs - Depreciation charge
Years 2-6:
Earnings: $215,000
O&M costs: $5,000
Depreciation charge: Calculated using MACRS
Net cash flow: Earnings - O&M costs - Depreciation charge
Year 7:
Earnings: $215,000
O&M costs: $5,000
Depreciation charge: Calculated using MACRS
Resale value: $115,000
Net cash flow: Earnings - O&M costs - Depreciation charge + Resale value
b) The depreciation charge per year can be calculated using the MACRS depreciation method. Since the equipment has a recoverable life of 5 years, we'll use the 5-year MACRS depreciation schedule to determine the depreciation charge for each year.
c) The taxable income per year can be calculated by subtracting the depreciation charge from the net cash flow for each year.
d) The income taxes per year can be calculated by multiplying the taxable income per year by the flat income tax rate of 21%.
e) The after-tax cash flow can be calculated by subtracting the income taxes per year from the net cash flow for each year.
f) To calculate the IRR after taxes, we'll use the after-tax cash flows and determine the IRR.
Please note that the MACRS depreciation method involves specific depreciation percentages for each year. I'll need the specific percentages for each year to proceed with the calculations.
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ABC Company is considering expanding operations into a new market. This expansion will require an investment of $8 million and it is expected that it will earn the company a return of 17%. The company requires financing to fund this expansion and is planning to obtain it from the following sources: The treasurer of ABC Company has already calculated and finalized the following cost information, but needs you to complete all necessary work to determine if this expansion investment should be made. Cost data already properly determined: • The cost of retained earnings financing is 19% • The cost of preferred share financing is 12% Additional information provided: • The stated rate of interest regarding the long-term borrowings is 10%. • The common shares will be issued at a market price of $60 per share and it is anticipated that they will yield an annual dividend of $9 per share. The company will also incur issuance costs (ie. flotation costs) of $6 per share. • ABC Company has an annual growth rate is 4%. • The income tax rate for the company is 35% Required: 1.) Calculate the cost of (a) long-term borrowings financing as a %, and (b) common share financing as a %. (Round your final answers as a % to 2 decimals places and show all work) (5 marks) 2.) Calculate the weighted average cost of capital (WACC) for the expansion investment as a %. (6 marks) (Use the worksheet table provided in the answer working papers.) (Round all calculated %’s to 2 decimal places.) 3.) Based on your answer in requirement 2, should the expansion investment be made? Briefly explain why. (2 marks) PROVIDE YOUR ANSWERS ON YOUR SEPARATE ANSWER PAGES Question #2 (7 Marks) Ms. Gaga would like to provide the following future cash payments to her daughter: $6,000 each year for the next 4 years beginning one year from today to help her pay for her college education. Also, Ms. Gaga would like to give her daughter an additional $10,000, 3 years from today so her daughter can take a vacation, and another $20,000, 5 years from today so her daughter can make a down-payment on a house. Required: What is the total minimum amount that Ms. Gaga needs to invest today so that she will have the future funds available to make the planned payments to her daughter? Assume Ms. Gaga can earn 9% on his investment. (Round all calculated amounts to the nearest dollar). **Note: Where applicable, marks are awarded for calculating your answer efficiently. PROVIDE YOUR ANSWERS ON YOUR SEPARATE ANSWER PAGES Question #3 (13 Marks) MLB Ltd. is considering two potential asset investments, Asset X and Asset Y. Each asset has an initial purchase cost of $14,500 and a useful life of four years. MLB Ltd. has a minimum required rate of return of 6% for all asset investments. The projected annual net cash inflows from each investment is as follows:
Required:
1.) Calculate the Payback Period (PBP) for each of: (a) Asset X (b) Asset Y ** Marks are awarded for calculating your answers efficiently, where applicable. (Round your answers to 2 decimal places)
2.) Calculate the Net Present Value (NPV) for each of: (a) Asset X (b) Asset Y ** Marks are awarded for calculating your answers efficiently, where applicable. (Round all dollar amounts to the nearest dollar) (7 marks) 3.) Based on your answers in requirement 2, if only one asset is to be purchased, which asset should be purchased?
Cost of common share financing = 0.1695 or 16.95% (rounded to 2 decimal places. The project will be able to generate a positive net present value (NPV) and add value to the company.
1. (a) The cost of long-term borrowing financing as a % is 10%. (b) The cost of common share financing as a % is 22.52%. Cost of retained earnings financing = 19% Cost of preferred share financing = 12% Stated rate of interest regarding long-term borrowings = 10% Dividend per share = $9 Issuance cost per share = $6 Market price of common share = $60 Current growth rate = 4% Income tax rate = 35%
(a) Cost of long-term borrowing financing as a % is equal to the stated rate of interest regarding long-term borrowings, which is 10%.
(b) Cost of common share financing as a % can be calculated as follows:Cost of common share financing = (Dividend per share / Market price of common share) + (Issuance cost per share / Market price of common share) × (1 – Income tax rate)Cost of common share financing = ($9 / $60) + ($6 / $60) × (1 – 0.35)Cost of common share financing = 0.15 + 0.03 × 0.65Cost of common share financing = 0.1695 or 16.95% (rounded to 2 decimal places)
2. The weighted average cost of capital (WACC) for the expansion investment as a % is 13.59%. The cost of long-term borrowings financing = 10% The cost of common share financing = 16.95% The weight of long-term borrowings financing = 0.3 The weight of common share financing = 0.7 WACC = (Weight of long-term borrowings financing × Cost of long-term borrowings financing) + (Weight of common share financing × Cost of common share financing)WACC
= (0.3 × 10%) + (0.7 × 16.95%)
WACC = 4.65% + 11.865%
WACC = 16.515% or 13.59% (rounded to 2 decimal places)Based on the calculated WACC, the expansion investment should be made as it is expected to yield a return of 17% which is higher than the calculated WACC of 13.59%. Therefore, the project will be able to generate a positive net present value (NPV) and add value to the company.
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