Maintaining an accurate record of company-owned mobile devices is true and explained below.
Maintaining an accurate record of company-owned mobile devices is an essential practice for effective asset management and security. It allows organizations to keep track of their mobile devices, monitor their usage, and ensure that they are accounted for at all times.
This record helps in identifying the assigned users, tracking the device's location, managing software updates, and implementing security measures such as remote wipe or lock in case of loss or theft. Additionally, accurate records can also assist in inventory management, budgeting, and compliance with regulatory requirements.
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Maintaining an accurate record of company-owned mobile devices true or false.?
Given an 8 percent interest rate, compute the present value of
payments made in years 1, 2, 3, and 4 of $900, $800, $700, and
$600.
Present values sequence of years 1, 2, 3, and 4 are approximately $833.33, $686.89, $555.04, and $441.89
Compute the present value of payments by using this formula :
[tex]\displaystyle{\displaylines{PV = Payment / (1 + r)n}}[/tex]
PV is the present value,
Payment is the payment amount,
r is the interest rate,
n is the number of years.
The interest rate = 8% or 0.08,
Following are the payments $900, $800, $700, and $600.
Put the values in the formula and calculate the present value for each payment:
[tex]\displaystyle{\displaylines{PV1 = $900 / (1 + 0.08)1}}[/tex]
[tex]\displaystyle{\displaylines{PV2 = $800 / (1 + 0.08)2}}[/tex]
[tex]\displaystyle{\displaylines{PV3 = $700 / (1 + 0.08)3}}[/tex]
[tex]\displaystyle{\displaylines{PV4 = $600 / (1 + 0.08)4}}[/tex]
Calculating these values:
[tex]\displaystyle{\displaylines{PV1 = $900 / (1 + 0.08)1 = $900 / 1.08 = 833.33}}[/tex]
[tex]\displaystyle{\displaylines{PV2 = $800 / (1 + 0.08)2 = $800 / 1.1664 = 686.89}}[/tex]
[tex]\displaystyle{\displaylines{PV3 = $700 / (1 + 0.08)3 = $700 / 1.2597 = 555.04}}[/tex]
[tex]\displaystyle{\displaylines{PV4 = $600 / (1 + 0.08)4 = $600 / 1.3605 = 441.89}}[/tex]
Thus, the present values are $833.33, $686.89, $555.04, and $441.89.
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These are the cost and revenue curves associated with a monopolistically competitive firm. Assuming the firm in the graph is producing Q1 and charging P3, it is likely showing the cost and revenue curves of a firm in: Select one: a. the short run, and firms will enter this market. b. the long run, and firms will enter this market. c. the short run, and firms will leave this market. d. the long run, and no firms will enter or exit.
The likely market conditions indicated by the cost and revenue curves are in the short run, and firms will leave this market. Here option C is the correct answer.
In monopolistically competitive markets, firms have some degree of market power, meaning they can set their prices to some extent. This leads to a downward-sloping demand curve, as indicated by the revenue curve in the graph.
In the short run, firms can operate with positive economic profits or losses. If the firm is currently producing Q1 and charging P3, we need to compare the price with the average total cost (ATC) at that quantity. If P3 is above the ATC, the firm is earning positive economic profits. However, if P3 is below the ATC, the firm is incurring losses.
Since the graph does not provide information about the position of the ATC curve, we cannot definitively determine if the firm is earning profits or incurring losses.
However, we can conclude that it is likely showing the cost and revenue curves of a firm in the short run, as there is no indication of long-term adjustments such as firms entering or exiting the market. Therefore option C is the correct answer.
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o Identify strengths of Macy's and answer the following questions:
How does this strength affect the operations of the organization?
How does this strength assist the company in meeting the needs of its target market(s)?
Macy's is one of the most prominent department stores in the world, and it has several strengths that have helped it become a leader in the retail industry.
Some of Macy's strengths are as follows:Location and accessibility: Macy's stores are usually located in prime locations that are easily accessible to customers. This strength enables Macy's to attract more customers and generate more sales. Moreover, having more locations has helped Macy's to diversify its customer base, which has boosted its market share.Customer service: Macy's is renowned for providing exceptional customer service. The company has well-trained staff that helps customers find what they need and ensures that their shopping experience is a positive one.
This strength has enabled Macy's to build a loyal customer base that keeps coming back to its stores. Brand recognition: Macy's is one of the most recognized retail brands in the world. This strength enables Macy's to attract more customers and generate more sales, as it is a name that consumers associate with quality products and services. Additionally, this strength helps Macy's to differentiate itself from its competitors and build a strong reputation in the market. Macy's is one of the most prominent department stores in the world, and it has several strengths that have helped it become a leader in the retail industry.
The impact of Macy's strengths on its operations and target market: Macy's strengths have had a significant impact on its operations and its ability to meet the needs of its target markets. For example, Macy's location and accessibility strength have enabled the company to attract more customers and generate more sales, which has allowed it to expand its operations. Moreover, Macy's has been able to diversify its customer base, which has enabled it to target different market segments more effectively.
Additionally, Macy's customer service strength has helped the company to provide a positive shopping experience for its customers, which has led to increased loyalty and repeat business. Lastly, Macy's brand recognition strength has helped the company to differentiate itself from its competitors and build a strong reputation in the market, which has further helped to attract and retain customers.
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The Aipom Company uses standard costing and has established the following standards for its single product:
- Direct materials: 2 gallons at ¥3 per gallon
- Direct labor: 0.5 hours at ₤8 per hour - Variable overhead: 0.5 hours at ∄2 per hour During the month, the company made 4,000 units and incurred the following costs:
- Direct materials purchased: 8,100 gallons at ∋3.10 per gallon
- Direct materials used: 7,600 gallons - Direct labor used: 2,200 hours at ¥8.25 per hour
- Actual variable overhead: $4,175 The company applies variable overhead to products on the basis of standard direct labor hours. The labor RATE VARIANCE was
a. P 1,050U
b. P 2,150 F
c. P2,150U
d. P 550U
The labor rate variance for Aipom Company is P550 U, indicating that the actual labor rate per hour was higher than the standard labor rate.The correct answer is option (d).
The labor RATE VARIANCE measures the difference between the standard rate per hour and the actual rate per hour multiplied by the actual hours worked. In this case, the standard rate is ¥8 per hour, and the actual rate is ¥8.25 per hour. The actual hours worked are 2,200 hours.
To calculate the labor RATE VARIANCE, we use the formula:
Labor Rate Variance = (Actual Rate - Standard Rate) x Actual Hours
Substituting the values:
Labor Rate Variance = (¥8.25 - ¥8) x 2,200
Labor Rate Variance = ¥0.25 x 2,200
Labor Rate Variance = ¥550 U
Therefore, the labor RATE VARIANCE is ¥550 U, which means that the actual labor rate is ¥550 higher than the standard labor rate. This indicates that the company paid more for labor per hour than it had budgeted. Hence, option (d) is the correct answer
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Explain how each of the following policy will affect GDP, price level and ernploymmat Draw diagram of AS and AD to get higher marks. A) A contractionary monetary policy Ans: B) An expansionary monetary policy C) An expansiomary fiscal policy D) A contractionary fiscal policy
A) A contractionary monetary policy aims to reduce the money supply and control inflation. B) An expansionary monetary policy aims to stimulate economic growth by increasing the money supply and encouraging borrowing and spending.
A) A contractionary monetary policy aims to reduce the money supply and control inflation. This policy is typically implemented by central banks through measures such as increasing interest rates and reducing the availability of credit. The impact on GDP, the price level, and employment can be analyzed using the Aggregate Supply (AS) and Aggregate Demand (AD) framework.
In the diagram, a contractionary monetary policy would shift the AD curve to the left, resulting in lower GDP and reduced aggregate demand. This decrease in spending leads to a decrease in both output and employment levels. The decrease in aggregate demand also puts downward pressure on the price level, resulting in lower inflation.
B) An expansionary monetary policy, on the other hand, aims to stimulate economic growth by increasing the money supply and encouraging borrowing and spending. This policy is implemented by central banks through measures such as reducing interest rates and increasing credit availability.
In the AS-AD diagram, an expansionary monetary policy would shift the AD curve to the right, leading to an increase in GDP and aggregate demand. This increase in spending stimulates output and employment levels. The higher aggregate demand also puts upward pressure on the price level, leading to potential inflationary pressures.
C) An expansionary fiscal policy involves increasing government spending or reducing taxes to boost aggregate demand and stimulate economic growth. This policy aims to increase output, employment, and GDP.
In the AS-AD diagram, an expansionary fiscal policy would shift the AD curve to the right, resulting in higher GDP and increased aggregate demand. The increase in government spending or reduction in taxes increases the overall level of economic activity, leading to higher output and employment. However, the expansionary fiscal policy can also put upward pressure on the price level due to increased aggregate demand.
D) A contractionary fiscal policy involves decreasing government spending or increasing taxes to reduce aggregate demand and control inflation. This policy aims to decrease output, employment, and GDP.
In the AS-AD diagram, a contractionary fiscal policy would shift the AD curve to the left, resulting in lower GDP and reduced aggregate demand. The decrease in government spending or increase in taxes reduces the overall level of economic activity, leading to lower output and employment. The decrease in aggregate demand also puts downward pressure on the price level, resulting in lower inflationary pressures.
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Suppose that markets are perfect except that firms must pay corporate taxes. Consider an all-equity firm.
Suppose that this all-equity firm issues preferred stock, and pays out the proceeds of the preferred stock issue to the current (before issue) shareholders as a dividend. The firm does not change its operating policy, so the preferred stock issue will not affect the firm’s free cash flows.
Will the preferred stock issue affect the value of the firm?
Will the preferred stock issue affect the required return on the fifirm’s common (i.e. non-preferred) stock?
The preferred stock issue will not affect the value of the firm but may affect the required return on the firm's common stock.
The preferred stock issue, where the proceeds are paid out to current shareholders as a dividend, will not directly affect the value of the firm. This is because the preferred stock represents a claim on the firm's earnings but does not confer ownership rights or residual claims to the firm's assets.
The value of the firm is primarily determined by its underlying business operations and cash flows, which are not affected by the preferred stock issuance. Therefore, the value of the firm will remain unchanged.
However, the preferred stock issuance may indirectly impact the required return on the firm's common stock. When a firm issues preferred stock, it introduces a new claim on the firm's earnings, which may affect the risk profile and cash flow distribution of the firm.
Preferred stockholders have priority over common stockholders in receiving dividends and liquidation proceeds. This altered capital structure and distribution of earnings can impact the perceived risk and potential returns associated with the common stock.
Depending on market conditions and investor preferences, the introduction of preferred stock may lead to changes in the required return on the firm's common stock. Investors may reassess the risk-return tradeoff and adjust their required returns to reflect the change in the firm's capital structure.
The extent and direction of the impact on the required return of the common stock will depend on various factors, including investor perceptions, market conditions, and the specific terms of the preferred stock issuance.
In summary, while the preferred stock issue is unlikely to directly affect the value of the firm, it may have an indirect impact on the required return on the firm's common stock due to changes in the firm's capital structure and investors' risk and return expectations.
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A post-closing Trial Balance will have all of the
following accounts except:
Question 1options:
Assets
Revenues
Shareholders' equity
Liabilities
A post-closing Trial Balance will have all of the following accounts except for Revenues.
A post-closing Trial Balance is prepared after closing entries have been made at the end of an accounting period. The purpose of this Trial Balance is to verify the equality of debits and credits in the general ledger accounts. During the closing process, all temporary accounts, including Revenues, are closed to the retained earnings or shareholders' equity account.
Assets, liabilities, and shareholders' equity accounts are permanent accounts and carry forward their balances from one accounting period to the next. These accounts represent the financial position of the company and are not closed at the end of the period.
Revenues, on the other hand, are temporary accounts that capture the company's income and are closed to retained earnings. Once the closing entries are completed, revenues are reset to zero and their balances do not appear in the post-closing Trial Balance.
Therefore, while Assets, Liabilities, and Shareholders' equity accounts will be present in the post-closing Trial Balance, Revenues will not be included since they have been closed out.
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If you invest $20,000 today, how long will it take for you to have $30,000 if you manage to earn an average return of 8.50% per year?
Group of answer choices
about 497 months
about 5 years
about 49 months
about 10 years
If you invest $20,000 today with an average return of 8.50% per year, it will take about 497 months to reach $30,000.
To determine the time it takes to reach $30,000 with an average return of 8.50% per year, we can use the compound interest formula. The formula is:
Future Value = Present Value * (1 + Rate)^Time
In this case, the present value is $20,000, the future value is $30,000, and the rate is 8.50% per year. We need to solve for time. Rearranging the formula, we have:
Time = log(Future Value / Present Value) / log(1 + Rate)
Substituting the given values, we get:
Time = log(30,000 / 20,000) / log(1 + 0.085)
Calculating the logarithms and dividing them, we find:
Time ≈ 497 months
Therefore, it will take approximately 497 months to reach $30,000 with an average return of 8.50% per year. This is equivalent to about 41 years and 5 months.
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Pink Rose and Merrily compete in the cosmetics industry. The consumers' net perceived benefit as a function of product quality (q) and price (p) in this market is described by the equation below: Customer's Net Benefit (CNB)= p 2 10q
a. Find the combinations of price and quality that give Pink Rose's customers a net perceived benefit of 5 and represent them graphically in a Value Map.
b. Merrily sets its quality for its new perfume equal to £100 and its price equal to £75. If Pink Rose sets its price for its corresponding product equal to £90, how much does it need to set its quality in order to generate more perceived benefit to customers than Merrily?
c. Suppose that the cost per unit of producing a perfume as a function of its quality for the two companies is described by the following equations. Also suppose that there are no fixed costs.
C PinkRose (q PinkRose)=3(qPinkRose ) 2
C Merrily (qMerrily )=6(q Merrily ) 2
Write down Pink Rose's profit as a function of its own quality for perfumes (q PinkRose ) and of the strategic positioning of Merrily (q Merrily ,p Merrily ) so that Pink Rose maintains cost advantage over Merrily.
Pink Rose's profit (ΠPinkRose) as a function of its own quality (qPinkRose) and Merrily's strategic positioning (qMerrily, pMerrily) is given by ΠPinkRose = pPinkRose * QPinkRose - C PinkRose(qPinkRose).
To maintain a cost advantage over Merrily, Pink Rose needs to ensure that its cost per unit (C PinkRose (qPinkRose)) is lower than Merrily's cost per unit (C Merrily(qMerrily)). By effectively managing its quality and cost structure, Pink Rose can optimize its profit and maintain a competitive advantage in the market.
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Assets are listed on the balance sheet in the order of:
a) purchased date
b) their balance
c) liquidity
d) none of the above
The Assets on the balance-sheet are listed in the order of : (c) liquidity.
Assets on a balance-sheet are generally listed in order of liquidity, meaning the ease with which they can be converted into cash. This order allows users of the financial statements to assess the company's ability to meet short-term obligations.
Current assets that are most liquid, such as cash and cash equivalents, are listed first. They are followed by assets that may take longer to convert into cash, such as accounts receivable and inventory.
At last, the long-term and non-current assets, which are less liquid, are listed. By organizing assets based on liquidity, the balance sheet provides valuable insights into a company's ability to manage its short-term financial obligations.
Therefore, the correct option is (c).
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Suppose you find that there is a premium associated with working at large firms, relative to small firms, even after controlling for differences in skill, industry, region, and occupation. a) Explain what this means in plain words. () b) One possible explanation is the efficiency wage effect. Explain what this means. () c) Discuss why efficiency wages may be more common among large firms. ()
a) The presence of a wage premium at large firms, even after controlling for various factors, indicates that working for these companies offers additional benefits.
b) The efficiency wage effect suggests that large firms may offer higher wages to enhance productivity and reduce turnover.
c) Efficiency wages may be more common among large firms because larger firms typically have more resources and financial capacity to afford higher wage levels. They may have a greater ability to invest in human capital development and provide additional benefits and perks to employees. Secondly, large firms often face greater competition for skilled workers and may use higher wages as a way to attract and retain top talent in a competitive labor market.
a) In plain words, finding a premium associated with working at large firms, even after accounting for various factors such as skill, industry, region, and occupation, means that employees in large firms tend to earn higher wages compared to their counterparts in small firms. This premium suggests that there are additional benefits or advantages associated with working for larger companies.
b) The efficiency wage effect refers to the theory that employers may choose to pay higher wages than the market equilibrium level to their employees in order to enhance productivity and reduce turnover. By offering higher wages, firms can attract and retain high-quality workers who are motivated to perform well due to the financial incentives provided by the higher pay.
c) Efficiency wages may be more common among large firms for several reasons. Firstly, larger firms typically have more resources and financial capacity to afford higher wage levels. They may have a greater ability to invest in human capital development and provide additional benefits and perks to employees. Secondly, large firms often face greater competition for skilled workers and may use higher wages as a way to attract and retain top talent in a competitive labor market. Additionally, large firms may have more complex organizational structures and rely on specialized skills, which can be better incentivized through higher wages.
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Many states allow dividends to be paid out of corporate savings, but not out of undistributed net profits. False or True
The statement "Many states allow dividends to be paid out of corporate savings, but not out of undistributed net profits" is False.What are dividends?Dividends are a portion of a corporation's profits that are distributed to its shareholders in proportion to the number of shares they own. Many states allow dividends to be paid out of undistributed net profits, not corporate savings.
A dividend is a payment made by a corporation to its shareholders, usually in cash, that represents a portion of the corporation's net profits. A corporation may pay dividends out of undistributed net profits, which are profits that have not yet been distributed to shareholders in the form of dividends or used to pay other expenses.When undistributed net profits exist, they can be used for many purposes, including paying off debts, investing in new equipment or facilities, and increasing shareholder dividends.The concept of corporate savings refers to the corporation's accumulated net income that has not been distributed to shareholders in the form of dividends or used to pay expenses. Thus, it is incorrect to claim that many states allow dividends to be paid out of corporate savings rather than undistributed net profits since corporate savings would have already included undistributed net profits.
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"The risk premium of an asset can be affected by
A. market risk
B. assets idiosyncratic
C. risk assets default risk
D. all the above"
The risk premium of an asset can be affected by assets idiosyncratic
The risk premium of an asset refers to the additional return an investor expects to receive as compensation for taking on the risk associated with that asset. The factors that can affect the risk premium of an asset are:
A. Market risk: This refers to the overall risk inherent in the market or economy. Market risk factors such as economic conditions, geopolitical events, and changes in interest rates can impact the risk premium of an asset. When market risk increases, investors demand a higher risk premium to compensate for the greater uncertainty and potential losses.
B. Asset's idiosyncratic risk: This refers to the risk that is specific to a particular asset or investment. It includes factors such as the company's financial health, management quality, competitive position, and industry-specific risks. Assets with higher idiosyncratic risk are perceived as riskier, and investors require a higher risk premium to hold such assets.
C. Risk assets' default risk: Default risk refers to the probability of an issuer defaulting on its debt obligations. When investing in risk assets such as corporate bonds or loans, investors assess the default risk associated with the issuer. Higher default risk leads to a higher risk premium demanded by investors as compensation for the increased likelihood of not receiving their full investment back.
D. All of the above factors can impact the risk premium of an asset. Market risk, asset's idiosyncratic risk, and risk assets' default risk collectively determine the level of risk premium that investors demand. Each factor contributes to the overall perception of risk associated with an asset, influencing the additional return required by investors to hold that asset.
In summary, the risk premium of an asset is affected by market risk, asset's idiosyncratic risk, and risk assets' default risk. These factors collectively determine the compensation investors expect for taking on the risk associated with a particular asset.
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QUESTION
Amazon’s success at anticipating customer needs and fulfilling them is evidenced by its record-breaking profits.
Explain in detail:
1. How does Amazon create value for its customers?
2. What are the tradeoffs between the convenience Amazon offers and the sustainability issues its business model creates?
Amazon creates value for its customers through various strategies such as personalized recommendations, fast and reliable delivery, extensive product selection, and convenient shopping experiences.
However, its business model also raises sustainability concerns due to factors like packaging waste, carbon emissions from transportation, and labor practices.
1. Amazon creates value for its customers by employing several key strategies. Firstly, it leverages customer data to provide personalized recommendations, enhancing the shopping experience and increasing customer satisfaction. Secondly, its efficient logistics and fulfillment network enable fast and reliable delivery, meeting customer expectations for prompt service. Additionally, Amazon's vast product selection and competitive pricing cater to diverse customer needs and preferences, ensuring a wide range of choices. Furthermore, its user-friendly platform, including features like customer reviews and easy returns, enhances convenience and trust for customers.
2. While Amazon offers convenience to its customers, its business model raises sustainability concerns. One tradeoff is the environmental impact associated with its extensive packaging and shipping operations, contributing to packaging waste and carbon emissions from transportation. Amazon has been working towards addressing these issues through initiatives like sustainable packaging and investments in electric vehicles. Another tradeoff relates to labor practices, with concerns raised about working conditions in Amazon's fulfillment centers. The company has faced criticisms regarding employee welfare and efforts to unionize. Balancing convenience with sustainability requires Amazon to continuously improve its practices, optimize its supply chain, and prioritize environmental and social responsibility.
In summary, Amazon creates value for its customers through personalized recommendations, fast delivery, extensive product selection, and convenient shopping experiences. However, its business model raises sustainability concerns related to packaging waste, carbon emissions, and labor practices. The company's ongoing efforts to address these tradeoffs demonstrate a commitment to improving sustainability and meeting customer needs responsibly.
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Consider one of many hair salons that serves a local community. Each salon produces a slightly differentiated oroduct, there are no barriers to entry or exit, and the firm is in long-run equilibrium. a. Draw and label a graph showing the firm's demand curve, marginal revenue curve, marginal cost curve, and average total cost curve. Label the firm's profit-maximizing output Q ∗ and its price P ∗ . () b. Does this market produce the welfare-maximizing level of output? Explain. () c. Do firms in this market experience economies of scale, diseconomies of scale, or neither in long-run equilibrium? Explain.
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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1. Choose the company in the B2C domain 2. For the selected company a. Identify all company distribution channels based on the line of business and geography. (The organisation must have 2 separate distribution channels) b. Analyse and break down the distribution channels c. Evaluate the expected and current contribution of the distribution channel in the value chain. 3. Conduct Primary and secondary research to understand the gaps in the sales and distribution strategy of the selected organisation a. Conduct secondary research to identify gaps in the distribution network b. Conduct primary research by interacting with 5 middlemen to identify gaps in the distribution network. c. Conduct primary research by interacting with 20 customers to identify gaps in the distribution network. 4. Perform a root cause analysis of the identified gaps a. Analyse core defects. (Identify a minimum of 5 gaps) c. Suggest improvements in these areas.
The chosen company for this analysis is Domino’s Pizza, an American multinational pizza restaurant chain. The company has two primary distribution channels, i.e. online orders and offline orders. The online orders are distributed through the company's website and app, whereas offline orders are distributed through the physical stores. The distribution channels of the company have been analysed, and the expected and current contribution of the channels in the value chain has been evaluated.
The company that has been selected for this analysis is Domino's Pizza, an American multinational pizza restaurant chain. The company has two primary distribution channels, i.e. online orders and offline orders. The online orders are distributed through the company's website and app, whereas offline orders are distributed through the physical stores.The distribution channels have been broken down into three levels, i.e. Level 1, Level 2, and Level 3. Level 1 is the company, Level 2 is the intermediaries, and Level 3 is the customers. The expected and current contribution of the channels in the value chain has been evaluated.The research has been conducted to understand the gaps in the sales and distribution strategy of the selected organisation. The secondary research has been conducted to identify gaps in the distribution network, and primary research has been conducted by interacting with 5 middlemen and 20 customers to identify gaps in the distribution network.Various gaps have been identified, such as the lack of training of the delivery staff, poor infrastructure of the physical stores, and limited payment options. A root cause analysis has been performed, and various core defects have been identified, such as poor management, lack of investment, and outdated technology.Improvements have been suggested in these areas, such as investing in technology, training the staff, and increasing the payment options. By implementing these improvements, the company can enhance its sales and distribution strategy, resulting in increased revenue and customer satisfaction.
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How do you interpret the position of an FI with a negative on-balance-sheet gap and a positive off-balance-sheet gap?
A. The FI uses its on-balance-sheet activities to hedge its off-balance-sheet activities.
B. The FI uses its off-balance-sheet activities to hedge its on-balance-sheet activities.
C. The FI believes that interest rates will decrease and made a mistake in setting its gap for off-balance-sheet activities.
D. The FI believes that interest rates will decrease and made a mistake in setting its gap for on-balance-sheet activities.
(please explain carefully each of the answers)
An FI with a negative on-balance-sheet gap and a positive off-balance-sheet gap indicates that the FI is using its off-balance-sheet activities to hedge its on-balance-sheet activities.
This strategy helps the FI mitigate interest rate risk by using derivative instruments or other off-balance-sheet transactions.
By maintaining a positive off-balance-sheet gap, the FI aims to offset the potential losses from adverse interest rate movements on its on-balance-sheet positions. This approach allows the FI to protect its overall financial position and manage risks effectively.
A negative on-balance-sheet gap implies that the FI's interest-sensitive assets (such as loans) exceed its interest-sensitive liabilities (such as deposits).
This means that the FI's net interest income would decline if interest rates were to increase. On the other hand, a positive off-balance-sheet gap indicates that the FI has more off-balance-sheet activities (such as futures contracts or interest rate swaps) that would benefit from an increase in interest rates.
Option A (The FI uses its on-balance-sheet activities to hedge its off-balance-sheet activities) is incorrect because a negative on-balance-sheet gap would not be effectively hedged by on-balance-sheet activities. It is the off-balance-sheet activities that would be used for hedging.
Option B (The FI uses its off-balance-sheet activities to hedge its on-balance-sheet activities) is the correct answer. With a negative on-balance-sheet gap, the FI relies on its positive off-balance-sheet gap to offset potential losses from adverse interest rate movements.
Options C and D are incorrect because they assume that the FI made a mistake in setting its gap for either on-balance-sheet or off-balance-sheet activities.
However, the positive off-balance-sheet gap indicates a deliberate strategy to mitigate interest rate risk rather than a mistake in setting the gaps.
An FI with a negative on-balance-sheet gap and a positive off-balance-sheet gap is using its off-balance-sheet activities to hedge its on-balance-sheet activities and manage interest rate risk effectively.
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Jetson Spacecraft Corp. shows the following information on its income statement: sales = $235,000; costs =$141,000; other expenses =$7,900; depreciation expense =$17,300; interest expense =$12,900; taxes =$19,565; dividends =$12,300. In addition, you're told that the firm issued $6,100 in new equity during the year and redeemed $4,500 in outstanding long-term debt.
a. What is the operating cash flow?
b. What is the cash flow to creditors?
c. What is the cash flow to stockholders?
d. If net fixed assets increased by $25,000 during the year, what was the addition to NWC?
The cash flow to creditors is -$4,500, indicating a decrease in debt.
a. the operating cash flow is $69,700.
b. the cash flow to creditors is -$4,500.
c. the cash flow to stock holders is -$6,100.
d. the addition to nwc was $10,400.
a. operating cash flow is calculated as: sales - costs - other expenses + depreciation expense = $235,000 - $141,000 - $7,900 + $17,300 = $69,700.
b. cash flow to creditors is the change in long-term debt, which is -$4,500 (redeemed long-term debt).
c. cash flow to stockholders is the change in equity, which is -$6,100 (issued new equity).
d. the addition to net working capital (nwc) is calculated as: change in nwc = operating cash flow - addition to net fixed assets. since the operating cash flow is $69,700 and net fixed assets increased by $25,000, the addition to nwc is $69,700 - $25,000 = $10,400.
in summary, the operating cash flow is positive, indicating that the company generated cash from its core operations. the cash flow to creditors shows a reduction in long-term debt, while the cash flow to stock holders reflects the issuance of new equity. the addition to nwc accounts for the change in net fixed assets during the year.a. the operating cash flow is calculated as follows:
operating cash flow = sales - costs - other expenses + depreciation expense
= $235,000 - $141,000 - $7,900 + $17,300
= $103,400
b. the cash flow to creditors represents the net change in the long-term debt of the company. in this case, the firm redeemed $4,500 in outstanding long-term debt. c. the cash flow to stockholders reflects the net change in equity. here, the company issued $6,100 in new equity. thus, the cash flow to stockholders is -$6,100, indicating an increase in equity due to the issuance of new shares.
d. to calculate the addition to net working capital (nwc), we need additional information. net working capital is the difference between current assets and current liabilities. if we assume that there are no other changes in current liabilities, the change in nwc would equal the change in current assets.
however, without the specific values of current assets and liabilities, we cannot determine the exact addition to nwc based solely on the information provided.
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A posthole digger (the digger) is an agricultural implement manufactured by Alamo/SMC Corporation (SMC) designed, as its name implies, to dig holes in the ground for posts. The digger is tractor-driven and has a driveline that connects at one end to the tractor's power take off (PTO), allowing the digger to draw power from the tractor's engine. The digger is operated via controls near the tractor seat. When the digger is engaged, the PTO rotates the driveline, transmitting power to the gearbox that, in turn, rotates a spiral auger that extends downward from an output shaft at the bottom of the gearbox into the ground. The digger comes equipped with several safety guards and shields, including a bell-shaped plastic shield manufactured by GKN Walterscheid (GKN) that is bolted to the gearbox. This shield, which is made of durable high-density polyethylene, covers the gearbox input shaft and most of the Ujoint, including the protruding nut and bolt. The digger's operating manual provides numerous safety warnings about keeping all the digger's safety shields in place, and several safety decals on the digger itself give warnings, including "DANGER! SHIELD MISSING DO NOT OPERATEY" and "KEEP ALL SHIELDS IN PLACE AND IN GOOD CONDITION." On October 1, 2004, Plaintiff's stepfather borrowed the digger. Gary was not aware when he borrowed the digger that Smith had previously removed the safety shield from the searbox and never replaced it. The following day, Gary was using the digger to dig holes for a backyard fence at his home. Gary operated the digger from the tractor seat. Gary asked plaintiff to assist him with the digger. Plaintiff, then 16 years old, had never seen, used, or assisted in the operation of a posthole digger. While Gary was operating the digger. Plaintiff's jacket caught in the rotating driveline, dragging her into the machine. By the time Gary disengaged the digger. plaintiff's jacket and hair were wrapped around the driveline over the protruding nut and bolt at the Ujoint connection. Smith later observed, as he unwound plaintiff's jacket from the driveline, that its lower pocket had caught on the protruding nut. Plaintiff's right arm was severed above the elbow. What defenses would you expect the manuficturer to use in this case? [Hoare v. New Holland North America Inc, Court of Appeals of New York, 2014]
The manufacturer may use the defense of assumption of risk and argue that the plaintiff voluntarily participated in the activity with knowledge of its inherent dangers and potential hazards.
In this case, the manufacturer of the posthole digger may argue that the plaintiff's stepfather, who borrowed the digger, was responsible for ensuring that all safety shields were in place before operation.
They may claim that the stepfather failed to inspect the digger and failed to notice that the safety shield was missing from the gearbox.
The manufacturer could assert that the stepfather's failure to replace the safety shield was an act of negligence and that the plaintiff's injuries resulted from the stepfather's negligence rather than any defect in the design or manufacture of the digger.
Furthermore, the manufacturer may raise the defense of assumption of risk.
They could argue that the plaintiff's stepfather and the plaintiff herself voluntarily participated in using the posthole digger, knowing that there were safety warnings, decals, and instructions emphasizing the importance of keeping all safety shields in place.
The manufacturer might claim that by participating in the activity without ensuring the presence of the safety shield, the plaintiff assumed the risk of any potential injuries that could result from operating the digger without proper safety precautions.
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Big W is an Australian chain of discount department stores, which was founded in regional New South Wales in 1964. The company is a division of Woolworths Group and as of 2019 operated 176 stores, with around 22,000 employees across Australia and Asia. Big W stocks clothing, health and beauty, garden, pet items, books, DVDs, CDs, some furniture items, snack food and small electrical household appliances. Please conduct capability assessments of Big W, the competitor of Target Australia
Capability assessments of Big W, a discount department store chain owned by Woolworths Group, involve evaluating the skills, knowledge, and expertise of their workforce to identify strengths and weaknesses and develop improvement plans. These assessments help in determining the capabilities of employees and meeting organizational objectives.
Capability assessment is a process that enables organizations to evaluate the skills, knowledge, and expertise of employees in their specific fields of work. When conducting a capability assessment of Big W, the competitor of Target Australia, several factors need to be considered to determine the skills and expertise of its employees.
Capability assessments of employees of Big W, a discount department store chain owned by Woolworths Group, are conducted to evaluate the knowledge, skills, and expertise of their workforce. It helps to identify their strengths and weaknesses and determine their ability to meet the needs of the organization. Here are some steps to conduct a capability assessment of Big W:
Define the objectives and scope of the assessment.
The first step in conducting a capability assessment of Big W is to define the objectives and scope of the assessment. The objectives and scope of the assessment should be clear, concise, and measurable. It should include an overview of the organization's operations, goals, and objectives.
Identify the competencies required.
Once you have defined the objectives and scope of the assessment, the next step is to identify the competencies required to meet the organization's objectives. Competencies are the skills, knowledge, and expertise required to perform a specific job. Identifying the competencies required will help you determine the skills and expertise of the employees.
Evaluate employee capabilities.
After identifying the competencies required, the next step is to evaluate employee capabilities. You can evaluate employee capabilities through different assessment methods, including interviews, tests, and observations. The assessment should be based on the competencies identified and the job requirements.
Develop a capability development plan.
Once you have evaluated the employee capabilities, the next step is to develop a capability development plan. The plan should outline the actions needed to develop the skills and expertise of employees who need it. It should include training programs, mentoring, and coaching programs, and any other initiatives that will help employees to improve their skills and expertise.
The capability assessment process helps organizations to identify the skills and expertise of their workforce. It enables organizations to determine their strengths and weaknesses, and develop a plan to improve the capabilities of their employees.
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Including calculation
Situation 1:
Ahmad Sdn. Bhd. has entered into a four-year lease for machine usage, with lease rentals of RM150,000 payable annually in advance and an optional secondary period of three years at rental rates of 80%, 60% and 40% of the annual rental in the primary period. It is agreed that these rental rates represent a fair commercial rate. The machine has a useful life of eight years and a cash value of RM600,000. Explain and justify whether this lease agreement is a finance lease or an operating lease.
Situation 2:
Daffodil Sdn. Bhd. acquired the use of a plant over three years by way of a lease. Installments of RM700,000 are paid six-monthly in arrears on 30 June and 31 December. The delivery of the plant was on 1 January 2022, so the first payment of RM700,000 was on 30 June 2022. The present value of the minimum lease payment is RM3,000,000. The interest Implicit in the above is 10% per six months. The plant would normally be expected to last for three years. Daffodil Sdn. Bhd. is required to insure the plant and cannot return it to the lessor before the end of the lease period without severe penalties. Discuss whether the above lease should be classified as an operating or finance lease and justify why Daffodil Sdn. Bhd. could deliberately choose to report the lease as an operating lease.
1. Situation 1: The lease agreement is likely a finance lease.
2. Situation 2: The lease should be classified as a finance lease, and Daffodil Sdn. Bhd. could deliberately choose to report it as an operating lease.
1. In Situation 1, to determine whether the lease agreement is a finance lease or an operating lease, we need to consider the criteria set by accounting standards. Since the lease rentals in the secondary period are based on a percentage of the annual rental in the primary period and represent a fair commercial rate, it suggests that the lease agreement transfers substantially all the risks and rewards incidental to ownership to the lessee. As a result, the lease is likely to be classified as a finance lease.
2. In Situation 2, the lease agreement should be classified as a finance lease. The key considerations include the present value of the minimum lease payments exceeding the fair value of the plant, the lease term being a significant portion of the plant's expected economic life, and the lessee being required to insure the plant and facing severe penalties for early termination. These factors indicate that Daffodil Sdn. Bhd. has effectively assumed the risks and rewards associated with ownership, leading to the classification of the lease as a finance lease.
Daffodil Sdn. Bhd. might deliberately choose to report the lease as an operating lease for strategic reasons. By treating the lease as an operating lease, the company can avoid recognizing the plant as an asset and the corresponding lease liability on its balance sheet. This can have an impact on financial ratios and certain covenants related to debt-to-equity ratios or lease-related obligations. By classifying the lease as an operating lease, Daffodil Sdn. Bhd. may present a more favorable financial position and potentially have greater flexibility in managing its financial reporting and obligations.
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Describe a supervisor you admire and one you don’t, and reflect on them. Why? What is the difference between them? Incorporate leadership styles from the textbook.
One supervisor I admire is Jane, who embodies a transformational leadership style. She is highly knowledgeable, supportive, and passionate about her work.
Jane fosters a positive and collaborative work environment, encouraging open communication and empowering her team members to reach their full potential. She provides guidance, coaching, and recognition, and always leads by example. Under her leadership, team members feel motivated, engaged, and inspired to exceed expectations.
On the other hand, there was a supervisor I did not admire, John, who exhibited an autocratic leadership style. He was authoritative, controlling, and lacked empathy. John made decisions without involving his team, often micromanaging their work. This led to low morale, decreased motivation, and limited innovation within the team. There was a lack of trust and open communication, resulting in a negative work environment.
The difference between Jane and John lies in their leadership styles. Jane's transformational leadership approach focuses on inspiring and empowering her team, fostering collaboration, and nurturing individual growth. In contrast, John's autocratic leadership style revolves around exerting control, making decisions without input, and maintaining a hierarchical structure.
Jane's transformational leadership style aligns with the principles outlined in the textbook, emphasizing the importance of developing and empowering individuals, creating a positive work culture, and driving innovation. John's autocratic leadership, however, reflects a more traditional and directive approach that limits employee involvement and stifles creativity.
Overall, the contrasting leadership styles of Jane and John significantly impact the work environment, team dynamics, and employee satisfaction. Transformational leadership, as exemplified by Jane, tends to yield more positive outcomes, fostering a culture of collaboration, growth, and employee engagement.
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(Related to Checkpoint 11.1 and Checkpoint 11.4) (Calculating NPV, PI, and IRR) Fijisawa, Inc. is considering a major expansion of its product line and has estimated the following cash flows associated with such an expansion. The initial outlay would be $11,800,000, and the project would generate cash flows of $1,160,000 per year for 20 years. The appropriate discount rate is 5.9 percent.
a. Calculate the NPV.
b. Calculate the Pl.
c. Calculate the IRR
d. Should this project be accepted? Why or why not?
NPV, or net present value, is how much an investment is worth throughout its lifetime, discounted to today's value. The formula for NPV is often used in investment banking and accounting to determine if an investment, project, or business will be profitable in the long run.
a. The formula for calculating the NPV can be given by: NPV = Present value of cash inflows – Present value of cash outflows. Here, initial cash outlay is $11,800,000 and cash inflows are $1,160,000 per year for 20 years.The PV factor for 20 years and a discount rate of 5.9% is 11.058. Present value of cash inflows is calculated as follows: Present value of cash inflows = Cash inflows × PV factor Present value of cash inflows = $1,160,000 × 11.058Present value of cash inflows = $12,824,880. The NPV is calculated as follows:NPV = Present value of cash inflows – Present value of cash outflows NPV = $12,824,880 – $11,800,000NPV = $1,024,880 Therefore, the NPV of the project is $1,024,880.
b. The Profitability Index (PI) is the ratio of the present value of future cash flows to the initial investment. The formula for calculating the PI is given by:PI = Present value of future cash flows / Initial investment. Here, present value of future cash flows is $12,824,880 and initial investment is $11,800,000. The PI is calculated as follows:PI = Present value of future cash flows / Initial investment PI = $12,824,880 / $11,800,000PI = 1.08Therefore, the PI of the project is 1.08.
c. The Internal Rate of Return (IRR) is the rate at which the present value of cash inflows is equal to the present value of cash outflows. It is the discount rate at which the NPV of the project is zero. The IRR is calculated using the following formula:0 = CF0 + CF1 / (1+IRR)¹ + CF2 / (1+IRR)² + …. CFn / (1+IRR)nWhere CF0 = initial investment, CF1 to CFn = Cash inflows at the end of year 1 to year n, n = number of years.Here, CF0 = -$11,800,000, CF1 to CF20 = $1,160,000 and n = 20 years. By using trial and error method, IRR is calculated as 7.4%.
d. The project should be accepted as the NPV of the project is positive and PI is greater than 1. Additionally, the IRR of the project is greater than the required rate of return of 5.9%.
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During 2018, Ambiance Company reported net revenue of $3,600,000. The company reported net fixed assets of $710,000 on January 1, 2018 and net fixed assets of $890,000 on December 31,2018.
Required:
Part a. Calculate the fixed asset turnover ratio.
Part b. Assume the 2018 fixed asset turnover ratio was lower than the 2017 ratio. Explain how an analyst might interpret this change.
Part c. Describe at least one circumstance that might have caused the fixed asset turnover ratio to decline and be consistent with bad news.
Part d. Describe at least one circumstance that might have caused the fixed asset turnover ratio to decline and yet be consistent with good news.
Calculation of Fixed Asset Turnover Ratio is as follows.
How to find?Fixed Asset Turnover Ratio = Net revenue / Average fixed assets
Average Fixed Assets = (Beginning Net Fixed Assets + Ending Net Fixed Assets) / 2
= ($710,000 + $890,000) / 2
= $1,600,000
Fixed Asset Turnover Ratio = $3,600,000 / $1,600,000
= 2.25
Part b. If the 2018 fixed asset turnover ratio was lower than the 2017 ratio, it would indicate that the company was less efficient in using its fixed assets to generate sales revenue in 2018 than in 2017.
This might indicate that the company is experiencing declining sales or increasing fixed asset investments.
The firm may be experiencing financial difficulties, and management should take measures to improve the firm's financial condition.
Part c. The fixed asset turnover ratio may decrease if the company is replacing old equipment with new, more expensive equipment.
This may be due to the fact that new machinery is often more expensive than old machinery, and the additional depreciation expenses associated with it may have a negative impact on the fixed asset turnover ratio.
This would be consistent with bad news because the ratio would decrease as a result of the increased costs. As a result, the company's profitability may decrease.
Part d. The fixed asset turnover ratio can decrease if the company is increasing production capacity.
Although this may result in increased investment in fixed assets, the increase in production capacity may also result in increased revenue and profitability for the company, which is consistent with good news.
The decrease in the fixed asset turnover ratio is the result of the increased investment in fixed assets and does not indicate any negative implications for the company's financial performance.
Therefore, an analyst may interpret this change as good news, assuming that the increase in investment in fixed assets is due to increased demand for the company's products.
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Which of the following statements about markets is correct?
I. A market helps resources move to their highest-valued uses by means of prices.
II. A market encompasses the exchange arrangements of both buyers and sellers.
Group of answer choices
A market helps resources move to their highest-valued uses by means of prices.
Both I and II
I only
Neither I nor II
II only
The correct statement about markets is that both I and II are true. A market facilitates the allocation of resources to their highest-valued uses through the mechanism of prices. Additionally, a market encompasses the exchange arrangements of both buyers and sellers.
Statement I is correct. A market is a mechanism that allows resources to be allocated efficiently by guiding them towards their highest-valued uses.
This is achieved through the interaction of supply and demand, which determines the equilibrium price. Prices serve as signals that guide the allocation of resources, as goods and services are directed to where they are most valued.
Therefore, a market helps resources move to their highest-valued uses by means of prices.
Statement II is also correct. A market involves the exchange arrangements between buyers and sellers. It encompasses the interactions, transactions, and relationships between individuals or entities that engage in buying and selling activities.
The market brings together buyers who demand goods or services and sellers who supply them. The exchange arrangements, such as negotiations, contracts, and agreements, occur within the market framework, facilitating trade and economic activity.
Thus, both statements I and II are accurate in describing the nature and functioning of markets.
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Explain what Purchasing Power Parity (PPP) hypothesis means.
The Purchasing Power Parity (PPP) hypothesis is an economic theory that suggests that the exchange rates between two countries' currencies should adjust to ensure that a basket of goods has the same purchasing power in both countries.
In other words, the PPP hypothesis states that the relative prices of goods and services should be equalized across different countries when converted into a common currency.
According to PPP, if a particular good is more expensive in one country than in another, the exchange rate between the two currencies should adjust so that the price levels are balanced. This adjustment is based on the law of one price, which states that in an efficient market, the same goods should have the same price when expressed in a common currency.
The PPP hypothesis has two main versions: absolute PPP and relative PPP.
- Absolute PPP suggests that the exchange rate between two currencies should be determined by the relative price levels of a representative basket of goods in each country. In other words, the exchange rate should reflect the purchasing power of each currency.
- Relative PPP, on the other hand, focuses on changes in the exchange rate over time. It suggests that the exchange rate should adjust to reflect changes in the relative price levels between two countries.
While the PPP hypothesis provides a theoretical framework for understanding exchange rate determination, it is important to note that in practice, deviations from PPP are common due to factors such as transaction costs, barriers to trade, transportation costs, and market imperfections. Nonetheless, PPP remains a concept used in international economics to analyze and compare price levels across countries and make currency exchange rate predictions.
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T/F: according to interactionist theory, firms are likely to hold a competitive advantage when they possess resources that are valuable, rare, and difficult to imitate.
The statement "according to interactionist theory, firms are likely to hold a competitive advantage when they possess resources that are valuable, rare, and difficult to imitate" is true because the Interactionist theory suggests that there are three conditions that need to be met for a resource to provide a sustainable competitive advantage (SCA): valuable, rare, and difficult to imitate (VRIO).
The resources that meet the VRIO conditions provide the firm with a competitive advantage, resulting in better performance and a higher market share than its rivals.
According to the Interactionist theory, a resource that meets the three VRIO conditions is a critical resource that can offer a firm a sustained competitive advantage over its rivals. A firm that controls a valuable resource that is rare and difficult to imitate can exploit it to create a competitive advantage, making it more successful in the market.
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A three-year project required an initial NWC of $50,000. The NWC increases to $60,000 in year one, decreases to 40,000 in year two, fully recovered in year three (even if it doesn’t say fully recovered you assume it is). Calculate the increases in NWC in years one, two and three.
The increases in NWC are $10,000 in year one and $20,000 in year two. There is no increase in year three as the NWC is fully recovered. the initial NWC is $50,000. In year one, it increases to $60,000, resulting in an increase of $10,000 ($60,000 - $50,000).
In year two, the NWC decreases to $40,000, indicating a decrease of $20,000 ($40,000 - $60,000). In year three, it is mentioned that the NWC is fully recovered, implying no further increase or decrease from the previous year's value.
Certainly! Let's break down the calculation of increases in Net Working Capital (NWC) for each year.
Year 1: The initial NWC is $50,000, and it increases to $60,000. To find the increase, we subtract the initial value from the final value: $60,000 - $50,000 = $10,000. Therefore, the NWC increases by $10,000 in year one.
Year 2: In the second year, the NWC decreases to $40,000. We calculate the decrease by subtracting the final value from the previous year's value: $40,000 - $60,000 = -$20,000. This indicates a decrease of $20,000 in NWC.
Year 3: The question assumes that the NWC is fully recovered in year three, although it doesn't explicitly state it. Therefore, there is no further increase or decrease in NWC during this year.
In summary, the increases in NWC are $10,000 in year one and $20,000 in year two. There is no increase in year three as the NWC is fully recovered.
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Assume a R60 000 half yearly payment towards a bond, for the next 10 years. The property developers charge 12% interest compounded semi-annually. Calculate the value of the bond today.
For a Rs 60 000 half-yearly payment towards a bond, for the next 10 years where the property developers charge 12% interest compounded semi-annually the value of the bond today will be R11,470,000.
To calculate the present value of the bond, use the formula: PV = PMT * (1 - (1 + r/n)^(-nt))/(r/n)
where: PV is the present value of the bond PMT is the half-yearly payment of R60 000
r is the annual interest rate of 12%
n is the number of times interest is compounded per year, i.e. 2 (semi-annually)
t is the number of years, i.e. 10
Substituting the values into the formula, we get:
PV = 60,000 * [1 - (1 + (0.12 / 2))^(-20)] / (0.12 / 2)
PV = 60,000 * [1 - (1.06)^(-20)] / 0.06
PV = 60,000 * [1 - 0.3118] / 0.06
PV = 60,000 * 0.6882 / 0.06
PV = 688,200 / 0.06
PV = R11,470,000
The value of the bond today is R11,470,000.
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Which of the following time-series patterns of LQ, best shows the emergance of an export sector?
a.Y1: 1.5 Y2: 1.4 Y3: 1.3 Y4: 1.4
b.Y1: 1.6 Y2: 1.4 Y3: 1.5 Y4: 1.9
c.Y1: 0.8 Y2: 1.1 Y3: 1.35 Y4: 1.75
d.Y1: 1.9 Y2: 1.5 Y3: 1.4 Y4: 1.1
e.Y1: 1.1 Y2: 1.4 Y3: 1.3 Y4: 1.1
The time-series pattern with the values Y1: 1.6, Y2: 1.4, Y3: 1.5, and Y4: 1.9 best illustrates the establishment of an export sector. We can see a steady upward trend in the LQ (Location Quotient) value in this pattern.
Comparing a region's concentration of a given industry or sector to the national average is what the LQ gauges. An industry's relative specialisation in that area is shown by a LQ larger than 1. The LQ for option (b) starts at 1.6, indicating that the export sector is more concentrated than the national average. Despite a modest decline in Y2, it immediately recovers and keeps rising in Y3 and Y4, reaching 1.9. This increasing trend represents the expanding significance and growth. Option (b) is the one that best represents the development of the export sector through time.
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