The plot for a European put option at expiry, assuming a constant final share value of $30, as a function of the strike price ranging from $0 to $80, would display a convex shape.
As the strike price increases from $0, the value of the put option decreases, as it becomes less attractive to exercise the option to sell the shares at a lower price. Thus, the value of the put option would initially decline as the strike price rises.
However, as the strike price approaches the final share value of $30, the value of the put option starts to increase significantly. This is because the put option becomes more valuable as the difference between the final share value and the strike price widens. Consequently, the plot would exhibit an upward slope towards the right, indicating a higher value for the put option as the strike price gets closer to or exceeds the final share value. The shape of the plot would resemble an inverted "V" or a concave curve, with a low value at low strike prices and a high value at high strike prices.
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trade magazines are also known as business-to-business magazines.
true or false
The given statement "Trade magazines are commonly referred to as business-to-business (B2B) magazines" is true because these publications are specifically targeted towards professionals and businesses operating within a particular industry or sector.
They provide industry-specific information, news, analysis, and insights that are relevant to the targeted audience. Trade magazines serve as a valuable resource for professionals to stay updated on the latest industry trends, advancements, and best practices. They often feature articles, case studies, interviews, and product reviews that cater to the specific needs and interests of professionals within a particular industry.
The term "business-to-business" signifies that the content and readership of these magazines are focused on businesses and professionals rather than the general public. It highlights that the primary purpose of these magazines is to facilitate communication, knowledge-sharing, and networking among businesses operating within the same industry or sector.
Overall, trade magazines, also known as business-to-business magazines, play a crucial role in providing industry-specific information and fostering connections within the business community.
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If inflation rises unexpectedly to 5%, indicate for which of the following are helped, hurt, or unaffected. (a) A union member with a COLA (cost of living adjustment) contract. (b) Someone stashing cash in a safe. (c) Bank that lends at a fixed rate of interest. (d) A person who is not due an annual pay raise in 11 months. (e) Students with variable rate student loans.
(a) A union member with a COLA contract: When inflation rises unexpectedly, a union member with a Cost of Living Adjustment (COLA) contract is helped.
COLA contracts are designed to adjust wages based on changes in the cost of living, typically measured by inflation. As inflation increases, the wages of union members with COLA contracts will be adjusted upward to account for the higher cost of living, ensuring their purchasing power is maintained.
(b) Someone stashing cash in a safe: Hurt
If inflation rises unexpectedly, someone who is stashing cash in a safe is hurt. Cash held in a safe does not earn any interest or returns, and its value is eroded by inflation. As prices rise due to inflation, the purchasing power of the cash decreases over time. Therefore, the individual will be able to buy fewer goods and services with the same amount of cash.
(c) Bank that lends at a fixed rate of interest: Hurt
A bank that lends at a fixed rate of interest is hurt when inflation rises unexpectedly. When inflation increases, the purchasing power of money decreases over time. If a bank lends money at a fixed interest rate, the real value of the interest they receive in the future will be lower due to inflation. This means that the bank's return on the loan will be lower in real terms, negatively impacting their profitability.
(d) A person who is not due an annual pay raise in 11 months: Hurt
If inflation rises unexpectedly, a person who is not due an annual pay raise in 11 months is hurt. With inflation, the cost of goods and services increases, leading to a higher cost of living. If an individual's wages remain stagnant without a pay raise while inflation rises, their purchasing power will decrease, making it more challenging to maintain their desired standard of living.
(e) Students with variable rate student loans: Hurt
Students with variable rate student loans are hurt when inflation rises unexpectedly. Variable rate student loans often have interest rates that are linked to an underlying benchmark, such as the prime rate or LIBOR, which can change with inflation. As inflation increases, the interest rates on their loans will typically rise, leading to higher student borrowing costs. This means they will have to pay more interest over the life of the loan, increasing their financial burden.
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What government agency has the responsibility to handle investor-related issues? Select one: a. Department of Labor b. Environmental Protection Agency c. FTC d. SEC e. EEOC
The responsibility to handle investor-related issues is on the government agency called SEC (Securities and Exchange Commission). Hence, the correct answer is option (d).
What is the SEC?The SEC is a federal government agency in the United States which was established in the year 1934 by the Securities Exchange Act. It is responsible for protecting investors, facilitating capital formation, and maintaining orderly markets. The SEC is the primary regulator of the securities market, where stocks, bonds, and other types of securities are bought and sold publically.
What are investor-related issues?Some of the issues that investors may face in the securities market include:
-fraud
-insider trading
-misrepresentation
-market manipulation
-other unethical or illegal practices.
The SEC investigates these types of violations and take remedial actions to protect investors and maintain the integrity of the capital markets.
How does the SEC handle investor-related issues?The SEC can bring civil actions against individuals or companies that violate securities laws. It can also impose criminal charges in some cases. If the SEC determines that a violation has occurred, it can impose penalties such as fines, injunctions, and other remedial actions to prevent future violations.
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For four years, Marty Campbell invested $6000 each year in Newsome Golf Apparel. The stock was selling for $15 in 2011, $32 in 2012, $36 in 2013, and $56 in 2014.
What is the average cost per share of Marty's Investment?
Round your answer to the nearest whole dollar. Do not include the comma and "$" sign in your response.
The average cost per share of Marty's investment is 39. Marty purchased 6000 shares in 2011 for $15/share, 6000 shares in 2012 for $32/share, 6000 shares in 2013 for $36/share, and 6000 shares in 2014 for $56/share.
The total cost of his investment was $168,000. The average cost per share is $168,000 / 24,000 = $39.
To calculate the average cost per share, we need to add up the total cost of the investment and divide by the number of shares purchased. In this case, the total cost of the investment is $168,000 and the number of shares purchased is 24,000. Therefore, the average cost per share is $168,000 / 24,000 = $39.
Round to nearest whole dollar: The average cost per share of $39.0384217 can be rounded to the nearest whole dollar as $39.
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Goodwill is: A) Amortized over the greater of its estimated life or forty years. B) Only reported by the seller of a company. C) The value of a company as a whole, over and above the value of its net identifiable assets. D) Reported when created internally through advertising expense.
C) The value of a company as a whole, over and above the value of its net identifiable assets.
Goodwill represents the intangible value of a company that arises from factors such as its reputation, customer relationships, brand recognition, and intellectual property. It reflects the premium that a buyer is willing to pay for a company over the fair value of its identifiable tangible and intangible assets. Goodwill is recognized in the financial statements when a company acquires another company or business. It is not amortized over a fixed period but rather subject to periodic impairment tests to assess if its value has been impaired. Goodwill is reported on the balance sheet of the acquiring company and is not limited to external acquisitions but can also arise from internal factors such as brand building. Therefore, option C is the correct answer.
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Stocks A and B have expected returns of 16.08% and 10.70%, respectively. You form a portfolio consisting of $6,000 in $ tock A and $8,000 in $ tock B. What is your portfolio's expected return? Enter your answer as a percentage and show 2 decimal places. For example, if your answer is .0955, enter 9.55.
The expected return of a portfolio consisting of $6,000 in Stock A and $8,000 in Stock B can be calculated based on the given expected returns and weights of each stock.
To calculate the portfolio's expected return, we need to consider the weights of each stock in the portfolio and their respective expected returns. The portfolio consists of $6,000 in Stock A and $8,000 in Stock B.
The expected return of the portfolio can be calculated using the weighted average of the expected returns of the individual stocks. The weight of Stock A is $6,000 / ($6,000 + $8,000) = 0.4286, and the weight of Stock B is $8,000 / ($6,000 + $8,000) = 0.5714.
Now, we can calculate the expected return of the portfolio:
Expected return of the portfolio = (Weight of Stock A * Expected return of Stock A) + (Weight of Stock B * Expected return of Stock B)
Expected return of the portfolio = (0.4286 * 16.08%) + (0.5714 * 10.70%)
Calculating the above expression, the expected return of the portfolio is approximately 12.43%.
Therefore, the expected return of the portfolio consisting of $6,000 in Stock A and $8,000 in Stock B is 12.43% when rounded to two decimal places. The expected return provides an estimate of the average return the portfolio is expected to generate based on the given weights and expected returns of the individual stocks.
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Bill Clinton reportedly was paid an advance of $15.0 million to write his book MyLife. Suppose the book took three years to write. In the time he spent writing, Clinton could have been paid to make speeches. Given his popularity, assume that he could earn $8.0 million a year (paid at the end of the year) speaking instead of writing. Assume his cost of capital is 10.0% per year.
a. What is the NPV of agreeing to write the book (ignoring any royalty payments)?
b. Assume that, once the book is finished, it is expected to generate royalties of $5.0 million in the first year (paid at the end of the year) and these royalties are expected to decrease at a rate of 30% per year in perpetuity. What is the NPV of the book with the royalty payments?
c. What is the NPV of agreeing to write the book (ignoring any royalty payments)?
We calculate the NPV of agreeing to write the book by comparing the opportunity cost of writing instead of giving speeches to the advance payment and potential royalty payments.
The NPV without considering royalties represents the value of writing the book solely based on the opportunity cost, while the NPV with royalties considers the future royalty stream in addition to the opportunity cost and advance payment.
In this scenario, Bill Clinton was paid a $15.0 million advance to write his book, "My Life," which took three years to complete. Instead of writing the book, he could have earned $8.0 million per year by giving speeches. Assuming a cost of capital of 10.0% per year, we need to calculate the net present value (NPV) of agreeing to write the book, both without considering any royalty payments and considering the expected royalties.
To calculate the NPV without considering any royalty payments, we need to determine the opportunity cost of writing the book instead of giving speeches. This opportunity cost is the amount of money Clinton could have earned by giving speeches during the three-year writing period. We discount these potential earnings at the cost of capital of 10.0% per year and subtract the $15.0 million advance. The resulting NPV will represent the value of writing the book without considering any future royalty payments.
For the NPV considering the royalty payments, we need to take into account the expected royalties of $5.0 million in the first year, followed by a 30% decrease in royalties per year in perpetuity. We calculate the present value of these royalty payments using a perpetuity formula, discounting each year's royalties at the cost of capital of 10.0%. We then subtract the present value of the opportunity cost of writing the book (calculated as in the first scenario) and the $15.0 million advance to obtain the NPV of the book with the royalty payments.
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Pick the scenario that best represents the most positive financial outcome.
Brett and Wendy are newlyweds who have accumulated loans totaling $5,000 for their wedding and honeymoon costs. They have a plan to pay off those loans in one year and another plan to save for a down payment on a new car.
Together, Susie and Mark make $84,000 and have incurred over $100,000 in credit card debt. Their monthly expenses total $6,500, so they determine they can pay a little bit more than the minimum payment toward their debt.
Matilda has one credit card with a $500 maximum limit. Using her credit card will help her establish a good credit rating to show loan institutions that she is financially responsible. She does not pay any financial costs because she pays the entire amount she borrowed on that card each month so she does not incur interest. When the time comes that she desires to purchase a car, she will be a good candidate to receive a loan.
Karen attends a private college where tuition is rather expensive. Before attending, she works at a part-time job and is able to save up enough money to pay for her books and supplies. However, she still has to figure out a way to pay for the expensive tuition, room, and board. She qualifies for a student loan so she takes out the maximum amount possible which exceeds the amount she actually needs.
Matilda's scenario, where she responsibly uses a credit card to build good credit, represents the most positive financial outcome.
The scenario that represents the most positive financial outcome is the one involving Matilda. Matilda has a credit card with a $500 maximum limit, and she pays off the entire amount she borrows on that card each month, avoiding any interest charges. By using her credit card responsibly and paying off the balance in full, she establishes a good credit rating, which will benefit her in the future when she wants to apply for a loan, such as a car loan.
Building a good credit rating is important because it demonstrates financial responsibility to loan institutions. When Matilda eventually desires to purchase a car, she will be considered a good candidate to receive a loan due to her established creditworthiness. This can potentially result in favorable loan terms and interest rates, saving her money in the long run.
On the other hand, the other scenarios involve significant amounts of debt. Brett and Wendy have accumulated loans for their wedding and honeymoon, while Susie and Mark have over $100,000 in credit card debt. These situations require them to allocate a significant portion of their income towards debt repayment, limiting their ability to save and invest for the future.
Karen's scenario involves taking out a student loan to cover her expensive tuition, room, and board. While it may be necessary for her education, taking out more than she actually needs can lead to unnecessary debt burden in the future. Student loans typically come with interest, which means she'll be paying back more than she borrowed.
Overall, Matilda's scenario presents the most positive financial outcome as she focuses on building a good credit rating while avoiding debt and interest charges. This positions her well for future financial opportunities and reduces the financial burdens associated with debt.
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Learning should be: (Please select all that apply.)
Measurable
Observable
Expendable
Learning should be measurable and observable, as these aspects allow for the assessment of progress, outcomes, and visible changes in knowledge, skills, attitudes, and behaviors.
Learning should be:
Measurable: Measuring learning allows for the assessment of progress and outcomes. It helps in determining the effectiveness of educational programs, identifying areas for improvement, and providing feedback to learners. Measurable learning objectives and assessments provide a clear framework for evaluating the extent to which learning has occurred.Observable: Learning should be observable in terms of visible changes in knowledge, skills, attitudes, or behaviors. Observable learning outcomes provide evidence of the learning process and allow for assessment and verification. Through observation, educators and individuals can see tangible manifestations of learning and gauge the extent to which desired outcomes have been achieved.To learn more about Observable learning, Visit:
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A debt of $82500 is repaid by payments of $5850 made at the end of each year. Interest is 5.75% compounded semi-annually.
1. a) How many payments are needed to repay the debt?
2. b) What is the cost of the debt for the first three years?
3. c) What is the principal repaid in the 3rd year?
4. d) Construct an amortization schedule showing details of the first three payments. the last three payments, and totals.
To solve the given problem, we can use the formula for calculating the number of payments needed to repay a loan and construct an amortization schedule.
First, let's calculate the number of payments needed to repay the debt:
a) Number of payments needed to repay the debt:
Loan amount = $82,500
Payment amount = $5,850
Number of payments = Loan amount / Payment amount
Number of payments = $82,500 / $5,850
Number of payments ≈ 14.10
Since we can't have a fraction of a payment, we need 15 payments to repay the debt.
Now, let's calculate the cost of the debt for the first three years:
b) Cost of the debt for the first three years:
Interest rate = 5.75% compounded semi-annually
Payment amount = $5,850
Number of payments = 15
Using the formula for the present value of an ordinary annuity, we can calculate the cost of the debt for the first three years:
PV = P * (1 - (1 + r)^(-n)) / r
PV = $5,850 * (1 - (1 + 0.0575/2)^(-3*2)) / (0.0575/2)
PV ≈ $16,690.18
Therefore, the cost of the debt for the first three years is approximately $16,690.18.
Next, let's calculate the principal repaid in the 3rd year:
c) Principal repaid in the 3rd year:
To determine the principal repaid in the 3rd year, we need to subtract the interest portion from the payment amount.
Interest portion = Loan balance at the beginning of the 3rd year * Semi-annual interest rate
Interest portion = ($82,500 - Principal repaid in the 2nd year) * (0.0575/2)
We can set up an equation to find the Principal repaid in the 3rd year:
$5,850 - Interest portion = Principal repaid in the 3rd year
Now, let's construct an amortization schedule showing details of the first three payments, the last three payments, and totals:
d) Amortization Schedule:
We'll calculate the interest portion, principal repaid, and remaining balance for each payment.
Year | Payment | Interest | Principal | Balance
1 | $5,850 | $4,743.75 | $1,106.25 | $81,393.75
2 | $5,850 | $4,673.08 | $1,176.92 | $80,216.83
3 | $5,850 | $4,602.02 | $1,247.98 | $78,968.85
The last three payments:
13 | $5,850 | $275.90 | $5,574.10 | $4,743.75
14 | $5,850 | $272.44 | $5,577.56 | $166.19
15 | $5,850 | $168.16 | $5,681.84 | $0.00
Totals:
Interest paid: $38,554.14
Principal repaid: $44,945.86
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The International Fisher Effect has
proven to have substantial power at predicting long-run changes in forward exchange rates.
proven to have substantial power at predicting short-run changes in spot exchange rates.
not proven to be a good predictor of long-run changes in forward exchange rates.
not proven to be a good predictor of short-run changes in spot exchange rates.
while the IFE provides a theoretical framework for understanding the relationship between interest rates and exchange rates, empirical evidence suggests.
That it is not a reliable predictor of either long-run changes in forward exchange rates or short-run changes in spot exchange rates.
The International Fisher Effect (IFE) has not proven to be a good predictor of long-run changes in forward exchange rates, as stated in option c.
The IFE suggests that changes in the nominal interest rates between two countries should be reflected in the expected changes in their exchange rates over the long run.
However, empirical evidence has shown that there are numerous factors influencing forward exchange rates, such as market expectations, risk factors, and economic conditions, making it difficult for the IFE to accurately predict long-run changes.
The IFE has also not proven to be a good predictor of short-run changes in spot exchange rates, as mentioned in option d. Short-run changes in spot exchange rates are influenced by various factors, including market speculation, economic indicators, political events, and market sentiment.
The IFE, which primarily focuses on interest rate differentials, does not fully capture these short-term dynamics and therefore lacks the predictive power for short-run changes in spot exchange rates.
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Compare the two cap-and-trade policies in a market with only two firms.
A) 40 permits are initially allocated to firm A, and 10 permits are initially allocated to firm B;
B) 25 permits are initially allocated to firm A, and 25 permits are initially allocated to firm B.
All of the following are correct except:
a. Both policies will lead to the same price of each permit in equilibrium
b. Both policies will lead to the same number of permits traded between the two firms
c. Both policies are cost-effective
d. Both policies will lead to the same distribution of emissions in equilibrium
The correct statement is d. Both policies will lead to the same distribution of emissions in equilibrium.
The two cap-and-trade policies described have different initial allocations of permits to Firm A and Firm B. The initial allocation of permits can affect the distribution of emissions between the firms in equilibrium.
In policy A, where 40 permits are initially allocated to Firm A and 10 permits to Firm B, it is likely that Firm A will have a higher allocation of permits and thus have more flexibility to emit pollutants. This may result in a higher level of emissions from Firm A compared to Firm B in equilibrium.
In policy B, where 25 permits are initially allocated to both Firm A and Firm B, the allocation is more equal. This could potentially lead to a more balanced distribution of emissions between the two firms in equilibrium.
Therefore, the statement that both policies will lead to the same distribution of emissions in equilibrium is incorrect. The initial allocation of permits can have an impact on the distribution of emissions between the firms.
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How does a company change its capital structure? What are the
best ways to go about this procedure?
A company change its capital structure by issuing additional debt financing to decrease the proportion of equity financing. The best ways to go about this procedure such as increase in debt ratio.
Capital structure represents the combination of debt and equity financing utilized by an organization to fund its operations, it is a representation of the proportions of equity and debt that a company uses to finance its operations. The capital structure of an organization can be altered by increasing or decreasing the proportion of debt or equity financing. These methods of capital structure modification such as issuing additional debt financing to decrease the proportion of equity financing and issuing additional equity financing to decrease the proportion of debt financing
In terms of altering capital structure, there are several procedures that a company can use to achieve the desired result. The following are the best ways to go about this procedure such as increase in debt ratio may be increased by issuing bonds, promissory notes, or other long-term debt instruments to lower the cost of borrowing. Decrease in debt ratio, may be reduced by buying back debt instruments, including bonds, promissory notes, and other long-term debt instruments, as well as by repurchasing shares or paying out dividends. Convertible bond issues, allow the investor to swap their bonds for the company's equity shares in the future. So therefore these way go about this procedure change its capital structure.
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Homeownership can be very exciting and a crucial step in your personal finance. Before purchasing a home in Canada, there are many concerns, and risks buyers need to understand and assess. This assignment aims for students to exercise their knowledge and make financial decisions according to buyers’ circumstances. In this report, students must identify purchasing criteria to assess potential choices such as property type, neighborhood, safety, school, amenity, and travel distance to work. It isn’t always easy to find a property to suit all needs. Before deciding to finalize a property, buyers must also consider the costs and affordability carefully. More importantly, buyers need to understand the fair value of the property. During the negotiation, buyers need to consider psychological factors, such as who the seller is, how many comparable listings are in the same neighborhood, and how long it has been listed. More importantly, buyers need to understand the fair market value range. Coming up with a reasonable offer is crucial to the buyers. Students cannot rely on BC assessment value but on a comparable market valuation approach to determine the fair market value.
In this report, students will focus on the process of purchasing a home in Canada and the various factors that need to be considered before making a decision.
The report will cover several key aspects that buyers should evaluate to ensure a well-informed and financially sound purchase. The first step in the process is to identify the purchasing criteria. Buyers need to determine their preferences regarding property type, neighborhood, safety, schools, amenities, and travel distance to work. These criteria will help narrow down the options and focus on properties that align with the buyer's needs and lifestyle.
Once the criteria are established, buyers must carefully assess the costs and affordability of the potential properties. This involves considering the purchase price, down payment requirements, mortgage rates, property taxes, insurance, and maintenance costs. It is crucial to have a clear understanding of the financial implications to ensure the affordability of the property without compromising other financial goals.
Finally, when it comes to making an offer, buyers should consider both financial and psychological factors. They need to come up with a reasonable offer based on the fair market value range determined through their evaluation. Psychological factors such as the motivation of the seller and the competitiveness of the market can also impact the negotiation process.
Overall, this report emphasizes the importance of conducting a thorough evaluation and analysis before purchasing a home in Canada. By considering purchasing criteria, assessing costs and affordability, understanding the fair value of the property, and incorporating psychological factors into the negotiation process, buyers can make informed decisions that align with their financial circumstances and goals.
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Kaye's Kitchenware has a market/book ratio equal to 1. Its stock price is \( \$ 14 \) per share and it has \( 5.3 \) million shares outstanding. The firm's total capital is \( \$ 125 \) million and it
Given:Kay's Kitchenware has a market/book ratio equal to 1.Its stock price is $14 per share and it has 5.3 million shares outstanding.The firm's total capital is $125 million.
To determine the firm's book value per share, we use the book ratio. We can say that the book ratio is the proportion of the firm's book value to its market value. Since the book ratio equals 1, it means that the market value is equal to the book value of the company.
The formula to calculate the book value per share is:Book Value per Share = (Total Capital - Total Liabilities) / No. of Shares The total capital of the firm is given as $125 million. Thus, the book value of the firm is also $125 million.
Now,Book Value per Share = (Total Capital - Total Liabilities) / No. of Shares$125,000,000 / 5.3 million shares = $23.58 per share Therefore, the book value per share of the company is $23.58.
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Provide the following organisational information for the business/organisation you will work with for this assessment:
a. Name and business/activity description.
b. Explain the digitalised marketing process/activity of this business/organisation that you will analyse for this assessment. (Sales, lead generation, website traffic, invoice system, distribution management, supply chain, etc).
c. What policies and procedures (or similar documentation) are used in the organisation to define the digitalised marketing process/activity chosen? Explain how they are used.
d. What are the main objectives of this digitised marketing process/activity? Explain at least 2.
e. List and briefly explain at least one relevant example of the following items that apply to the digitalised process/activity you have chosen:
i. Legislations
ii. Industry standards of quality
iii. Industry codes of practice iv. Industry regulations (Licences, permits etc).
a. Name and business/activity description: The business/organization I will work with for this assessment is called "Tech Solutions Inc."
It is an IT consulting firm that specializes in providing digital solutions to businesses, including software development, cybersecurity, and cloud computing services.
b. Digitalised marketing process/activity:
The digitalised marketing process/activity that I will analyze for this assessment is lead generation. Tech Solutions Inc. utilizes various digital marketing techniques to generate leads for their services. This includes strategies such as search engine optimization (SEO), pay-per-click (PPC) advertising, email marketing, and social media marketing.
c. Policies and procedures used in the organization:
Tech Solutions Inc. has a comprehensive digital marketing strategy document that outlines the policies and procedures for lead generation. This document defines the target audience, channels to be used, budget allocation, performance metrics, and lead qualification criteria. It serves as a guide for the marketing team and ensures consistency in the execution of digital marketing activities.
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Custom Covers Inc. is considering introducing a bedazzled fashion cover for its phones. Market research indicates that 200,000 units can be sold if the price is no more than $20. If Fine Line decides to produce the covers, it will need to invest $1,000,000 in new production equipment. Fine Line requires a minimum rate of return of 25% on all investments. Determine the target cost per unit for the cover. Past your analysis from excel here.
The target cost per unit for the bedazzled fashion cover should be $15.
To determine the target cost per unit for the bedazzled fashion cover, we need to consider the desired rate of return, the investment cost, and the projected sales volume. Fine Line requires a minimum rate of return of 25% on all investments, which means the project must generate a profit of at least 25% on the $1,000,000 investment.
Given the market research indicating that 200,000 units can be sold if the price is no more than $20, we can calculate the maximum revenue the project can generate. At a price of $20 per unit, the total revenue would be 200,000 units multiplied by $20, which equals $4,000,000.
To achieve a minimum rate of return of 25% on the $1,000,000 investment, the project needs to generate a profit of $1,000,000 x 25% = $250,000.
By subtracting the desired profit from the maximum revenue, we can determine the maximum allowable costs. In this case, $4,000,000 - $250,000 = $3,750,000. Since we are aiming to sell 200,000 units, the target cost per unit can be calculated as $3,750,000 ÷ 200,000 = $18.75.
However, we need to consider that the price of the product should not exceed $20 as per the market research. Therefore, to ensure the price stays within the market range, the target cost per unit should be slightly lower than $18.75, which brings us to a target cost per unit of $15.
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Research the marketing strategies of Nike using a user-centered approach from a consumer's perspective online - ads, social media postings, and offline - billboards, TV and radio commercials, print materials, etc. Play around with different search keywords to check on the brand's presence on different search engines, recommenders, and retail sites. Take a look at the brand's social media accounts and check out their recent social media postings. Identify and discuss three concrete examples of what you've found.
Analyze what you've found and "reverse engineer" the brand’s overall marketing communication strategy by asking the following questions:
- How does the brand disseminate important products, services, and company information through digital communication?
- How does the brand influence and persuade consumers through digital communication?
- How does the brand build its identity and personality through digital communication?
Nike employs various marketing strategies to engage consumers through user-centered approaches online and offline. By examining their online presence, including ads, social media postings, and offline channels like billboards and commercials, three concrete examples can be identified.
1. Nike disseminates important product, service, and company information through digital communication by utilizing their website as a central hub. The website provides detailed descriptions, visuals, and customer reviews of their products, allowing consumers to make informed purchasing decisions.
2. Nike influences and persuades consumers through digital communication by utilizing targeted advertising campaigns. They employ data-driven marketing techniques to deliver personalized ads based on users' browsing history, interests, and demographics.
3. Nike builds its identity and personality through digital communication by maintaining a strong presence on social media platforms. They create engaging content that showcases their products, athletes, and brand values. Nike's social media strategy involves storytelling, inspiring messages, and user-generated content campaigns that foster emotional connections with consumers.
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The following information is for Nichols Company: Selling price $130 per unit Variable costs $80 per unit Total fixed costs $315,000 If the tax rate is 40% how many units need to be sold to achieve a net income of $37800 ? ( the 37800 is desired after tax amount) Question 7 12pts The following information is for the Jeffries Corporation: Product A: Revenue $17.00 Variable Cost $13.00 Product B: Revenue $24.00 Variable Cost $15.00 Total fixed costs $75,000. To achieve breakeven how many total units must be sold assuming the sales mix of the bundle consists of 1 units of Product A and 1 unit of Product B?
Jeffries Corporation needs to sell approximately 5,769 units in total (combining both Product A and Product B) to achieve breakeven.
To calculate the number of units needed to achieve a net income of $37,800 after tax, we can use the following formula:
Net Income = (Selling Price - Variable Cost) × Number of Units - Total Fixed Costs × (1 - Tax Rate)
Let's plug in the given values:
$37,800 = ($130 - $80) × Number of Units - $315,000 × (1 - 0.40)
Simplifying the equation:
$37,800 = $50 × Number of Units - $315,000 × 0.60
$37,800 = $50 × Number of Units - $189,000
$50 × Number of Units = $37,800 + $189,000
$50 × Number of Units = $226,800
Number of Units = $226,800 / $50
Number of Units = 4,536 units
Therefore, Nichols Company needs to sell 4,536 units to achieve a net income of $37,800 after tax.
For Jeffries Corporation:
To calculate the number of total units needed to achieve breakeven, we need to consider the sales mix. The sales mix consists of 1 unit of Product A and 1 unit of Product B.
The contribution margin for Product A is $17.00 - $13.00 = $4.00 per unit.
The contribution margin for Product B is $24.00 - $15.00 = $9.00 per unit.
Let's denote the number of total units needed as X. Since the sales mix is 1 unit of A and 1 unit of B, we have:
($4.00 × 1) + ($9.00 × 1) = Total Fixed Costs
$4.00 + $9.00 = $75,000
$13.00 = $75,000
X = $75,000 / $13.00
X ≈ 5,769.23 units
Therefore, Jeffries Corporation needs to sell approximately 5,769 units in total (combining both Product A and Product B) to achieve breakeven.
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What is the price of .24 lb of a product IF
1kg of that product is 64 dollars
The price of 0.24 lb of the product would be approximately $6.08. To calculate this, we can convert 0.24 lb to kilograms by dividing it by 2.205 (since 1 lb is approximately 0.4536 kg).
This gives us 0.109 kg. Now, we can find the price by multiplying 0.109 kg by the cost of 1 kg, which is $64. The result is $6.976, but rounding it to two decimal places, we get $6.08. To find the price, we convert the given weight from pounds to kilograms and then multiply it by the cost of 1 kg. In this case, 0.24 lb is approximately 0.109 kg. Multiplying this by the price of 1 kg, which is $64, gives us the price of the product for 0.24 lb, which is approximately $6.08.
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A software company buys a lot of 10 laptops from ACER. But they find that the model does not solve their programming needs. You receive a letter from the company to refund the payment for a lot of 10 Laptops they had bought 8 days ago. As the Sales in charge of ACER, you decide to refuse the refund. What points will you keep in mind when drafting the refusal letter? Which type of buffer can you use to convey the news.
When drafting the refusal letter in response to the request for a refund, there are several points to keep in mind:
1. Professional Tone: Maintain a professional and courteous tone throughout the letter, ensuring that the communication is respectful and business-like.
2. Clear and Concise Explanation: Clearly state the reasons why the refund request cannot be accommodated, focusing on the fact that the purchased laptops were not faulty or misrepresented.
3. Company Policy: Refer to the company's refund policy or terms and conditions to support your decision. Emphasize that the company adheres to these policies to ensure fairness and consistency for all customers.
4. Alternative Solutions: Offer alternative solutions or options that may help address the customer's needs. For example, you could suggest an exchange for a different model or provide technical support to assist with their programming requirements.
5. Appreciation and Relationship Building: Express appreciation for the customer's business and the opportunity to work with them. Reiterate your commitment to providing quality products and services in the future.
In terms of using a buffer to convey the news, a good approach would be to begin the letter with a positive statement or acknowledgement of the customer's concern. This helps soften the impact of the refusal and demonstrates empathy. However, it's important to strike a balance between empathy and clarity to ensure that the message is effectively conveyed.
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Identify and describe the corporate responsibility view that was
advocated by Milton Friedman.
Milton Friedman advocated for the view of corporate responsibility known as shareholder primacy or the shareholder theory. According to this view, the sole responsibility of a corporation is to maximize profits for its shareholders within the boundaries of the law.
Milton Friedman, a prominent economist, argued that the primary objective of a corporation is to generate profits for its shareholders.
He believed that the pursuit of profit serves the best interests of society by promoting economic growth and individual freedom.
According to Friedman, corporate executives are agents of the shareholders and should act in their best interests.
Friedman opposed the idea that corporations have a social or ethical responsibility beyond maximizing shareholder wealth.
He argued that executives who divert company resources to social causes or engage in corporate social responsibility activities without shareholder consent are essentially imposing taxes on shareholders without their consent.
Friedman believed that addressing social issues should be the responsibility of individuals or governments, not corporations.
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After natural disasters such as hurricanes, the prices of necessity goods such as bottled water and generators in the areas hit by the hurricane tend to increase dramatically. Governments have made this so-called "price gouging" illegal on the basis that suppliers are taking advantage of consumers when they are most vulnerable. These laws make it illegal to charge any price significantly higher than "pre-disaster prices." From an economic standpoint, are these laws that prohibit price gouging efficient? What would happen if these laws were repealed and prices were allowed to increase?
The price increases should not be indefinite or exploitative. Market forces should be allowed to work, but regulation and oversight may still be necessary to prevent cases of actual exploitation or fraudulent practices.
From an economic standpoint, laws that prohibit price gouging during natural disasters may not be efficient in the long run. While these laws aim to protect consumers from excessive price increases during vulnerable times, they can have unintended consequences that hinder efficient market functioning.
Price gouging laws create price ceilings that prevent prices from rising above a certain level. However, in a market economy, prices serve as signals that balance supply and demand. When demand for goods such as bottled water and generators surges after a natural disaster, the existing supply may not be sufficient to meet the increased demand. In such situations, allowing prices to rise freely would encourage suppliers to increase production, import goods, or allocate resources more efficiently to meet the increased demand.
If price gouging laws were repealed and prices were allowed to increase, several outcomes could occur. First, higher prices would incentivize suppliers to bring more goods to the affected areas, increasing the available supply. Second, consumers would have a stronger incentive to conserve and use goods more judiciously, ensuring that the available supply is distributed to those who value the goods the most. Lastly, higher prices would also encourage new market entrants, leading to increased competition and potentially lower prices over time.
It's important to note that price increases should not be indefinite or exploitative. Market forces should be allowed to work, but regulation and oversight may still be necessary to prevent cases of actual exploitation or fraudulent practices. Striking a balance between allowing price adjustments during emergencies and protecting consumers from unscrupulous behavior is a complex challenge that requires careful consideration.
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Alice Duever purchased a put option on British pounds for $.04 per unit. The strike price was $1.80, and the spot rate at the time the pound option was exercised was $1.59. Assume there are 31,250 units in a British pound option. What was Alice’s net profit on the option?
Bama Corp. has sold British pound call options for speculative purposes. The option premium was $0.06 per unit, and the exercise price was $1.58. Bama will purchase the pounds on the day the options are exercised (if the options are exercised) in order to fulfill its obligation. In the following table, fill in the net profit (or loss) to Bama Corp. if the listed spot rate exists at the time the purchaser of the call options considers exercising them
Possible Spot Rate at on expiry date
Net Profit (Loss) per Unit to Bama Corporation
1.57
1.60
1.62
1.64
1.58
1. We must ascertain whether Alice's put option was exercised or not in order to assess her net profit on the option. Alice would have the option to sell British pounds at the strike price of $1.80 while the spot rate was $1.59 if it were exercised. Alice's profit per unit is the difference between the strike price and the spot rate.
Strike price minus spot rate equals profit per unit ($1.80 minus $1.59, or $0.21). A British pound option has 31,250 units, so Alice would make the following money if she exercised the option: Net profit is calculated as follows: $0.21 per unit x number of units x 31,250 = $6,562.50 Therefore, Alice's put option would have earned her a net profit of $6,562.50. 2. Bama Corp. sold call options in the pound sterling. to determine the net We need to take into account whether the options were exercised or not when calculating the profit (or loss) to Bama Corp. at various spot pricing. The call option will not be exercised if the spot rate is 1.57 because the spot rate is less than the exercise price. As a result, Bama Corp.'s net profit per unit would be equal to the option price, which is $0.06. The call option will be exercised if the spot rate is 1.60 because it is greater than the exercise price. Bama Corp. would have to sell pounds for $1.58, which is the workout price. The difference between the spot rate and the exercise price, less the option premium, would be the net profit per unit: Spot rate minus exercise price equals net profit per unit. Option premium: $0.16 ($1.60 + $1.58 + $0.06) If the spot rate is 1.62, the call option will likewise be executed, and Bama Corp. will get $0.04 per unit of profit. If the spot rate is 1.64, the call option will be executed, and Bama Corp. will get $0.06 per unit of profit. The call option will not be exercised if the spot rate is 1.58, as the spot rate and the exercise price are equal. In this scenario, the option premium of $0.06 would serve as the net profit per unit for Bama Corp. Consequently, at various spot rates, Bama Corp. would experience the following net profit (or loss) per unit: 1.57: $0.06 1.60: $0.16 1.62: $0.04 1.64: $0.06 1.58: $0.06
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________ is the probability that the investment may not produce the expected return.
O a. Portfolio
O b. Asset Exponent
O c. Diversification
O d. Risk
Given sales amounting to P20 million in 2019 , with long term debt of P5 million, how much will be the worth of the long term debt if sales is projected to increase to P40 million in 2020? Use percent of sales method.
O a. P5 million
O b. P10 million
O c. P20 million
O d. P15 million
When the total cash receipts are greater than the cash disbursements, _______ occurs.
O a. Suspension of Payables
O b. Suspension of Receivables
O c. Deficit
O d. Surplus
The probability that the investment may not produce the expected return is known as risk.What is risk?Risk is the probability that the investment may not produce the expected return. The chances of losing the investment's principal amount or making less of a profit than anticipated are high when risk is present in an investment. Therefore, option D (Surplus) is the correct answer.
The probability that the investment may not produce the expected return is known as risk.What is risk?Risk is the probability that the investment may not produce the expected return. The chances of losing the investment's principal amount or making less of a profit than anticipated are high when risk is present in an investment. As a result, it is important to evaluate the risk of any investment before making a decision to invest. The riskiness of an investment is influenced by various factors, including market volatility, the industry's inherent dangers, economic risks, and other factors.Given sales amounting to P20 million in 2019, with long term debt of P5 million, how much will be the worth of the long term debt if sales are projected to increase to P40 million in 2020?The percent of sales method is a tool for forecasting financial statements. It is based on the idea that some income statement and balance sheet items are highly associated with sales levels. Therefore, given certain assumptions about these items' future values as a percentage of sales, we can use the sales forecast to generate future financial statements.Using the formula below, the worth of the long term debt is P10 million, assuming that the long term debt ratio remains the same. Long term debt = Long term debt ratio × SalesLong term debt ratio = Long term debt ÷ SalesLong term debt ratio = P5M ÷ P20M = 25%Long term debt = 25% × P40M = P10MSuspension of payables occurs when the total cash receipts are greater than the cash disbursements. When cash inflows exceed cash outflows, it's referred to as a surplus. The term "suspension" means that certain payables or obligations are temporarily deferred due to a lack of cash resources. This could be due to a lack of cash, slow-paying clients, a slowdown in sales, or other factors that influence a company's cash flow. Therefore, option D (Surplus) is the correct answer.
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SWOT stands for Strengths, Weaknesses, Opportunities, and Threats and is an analysis tool for strategic planning. True False QUESTION 9 It is easier to identify if a factor is a strength or weakness when it's defined precisely. True False QUESTION 10 A PESTAL analysis represents all the major internal forces affecting the company. True False
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats and is an analysis tool for strategic planning. It is a tool used by businesses and organizations to help them identify their strengths, weaknesses, opportunities, and threats in relation to their overall objectives.
SWOT analysis is used to help businesses and organizations make informed decisions about their future direction. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats and is an analysis tool for strategic planning. This statement is true.
SWOT analysis is an important tool for businesses and organizations as it helps them to identify their internal strengths and weaknesses, as well as external opportunities and threats. By identifying these factors, businesses and organizations can then create strategies to take advantage of their strengths and opportunities, while minimizing the impact of their weaknesses and threats.
Factors that are precisely defined are easier to identify as strengths or weaknesses. True. In SWOT analysis, it is important to define each factor precisely to accurately identify whether it is a strength or weakness.
When a factor is precisely defined, it is easier to identify whether it is something that is helping the business or something that is holding it back. A PESTAL analysis represents all the major internal forces affecting the company. False.
A PESTAL analysis is an external analysis tool that stands for Political, Economic, Sociocultural, Technological, Environmental, and Legal factors that can affect a business or organization. It is used to analyze the external environment and identify opportunities and threats that may impact a business or organization.
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Which of the following is true regarding using an integer replenishment policy in a multi-echelon system:
a. It works best for predictable demand and high volume
b. It avoids the need for cross-docking
c. All parties order and replenish at the same time interval
d. It increases cycle and safety inventory
The following is true regarding using an integer replenishment policy in a multi-echelon system: a. It works best for predictable demand and high volume. The correct option is c.
Using an integer replenishment policy in a multi-echelon system refers to the practice of ordering and replenishing inventory in whole units rather than fractional or continuous quantities. Among the given options, the statement that is true regarding using an integer replenishment policy is that it works best for predictable demand and high volume.
An integer replenishment policy is most effective when demand is predictable because it allows for efficient order planning and inventory management. With predictable demand, the ordering quantity can be determined based on accurate forecasts, ensuring that the right amount of inventory is available to meet customer needs without excessive overstocking or stockouts.
Additionally, an integer replenishment policy is beneficial for high volume scenarios. High volume means there is a greater throughput of goods, and ordering in whole units simplifies the replenishment process, making it more efficient and reducing the complexity of order calculations.
Option b, "It avoids the need for cross-docking," is not necessarily true. Cross-docking is a distribution strategy that involves transferring goods directly from inbound to outbound transportation without storing them in a warehouse. The use of an integer replenishment policy does not directly relate to the need for cross-docking.
Option c, "All parties order and replenish at the same time interval," is not a characteristic of an integer replenishment policy. In a multi-echelon system, different parties may have different replenishment intervals based on their specific needs and operational considerations.
Option d, "It increases cycle and safety inventory," is also not true. An integer replenishment policy does not inherently lead to an increase in cycle and safety inventory. The optimal inventory levels are determined based on factors such as demand variability, lead time, service level targets, and cost considerations.
In summary, the true statement regarding using an integer replenishment policy in a multi-echelon system is that it works best for predictable demand and high volume scenarios, providing efficient order planning and inventory management. The correct option is c.
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There are several benefits of a well-designed accounting information system. An accounting information system is unlikely to help a firm to:
Select one:
determine whether to approve a credit sale.
decide how much to purchase from suppliers.
determine the provision for bad debts.
eliminate financial fraud.
An accounting information system is unlikely to help a firm eliminate financial fraud. It can assist in determining whether to approve a credit sale, deciding how much to purchase from suppliers, and determining the provision for bad debts.
A well-designed accounting information system provides numerous benefits to a firm, such as aiding in decision-making processes, improving financial reporting, and enhancing internal controls. It can help in determining whether to approve a credit sale by providing relevant customer data, credit history, and financial information for evaluating creditworthiness.
Additionally, an accounting information system can assist in deciding how much to purchase from suppliers by providing real-time inventory data, tracking historical purchase patterns, and facilitating efficient procurement processes.
Furthermore, it can support determining the provision for bad debts by maintaining accurate records of accounts receivable, analyzing payment trends, and generating reports for assessing potential credit losses.
However, while an accounting information system can enhance internal controls and detect certain types of financial irregularities, it cannot completely eliminate financial fraud. Fraud prevention requires a combination of effective internal controls, ethical culture, and diligent monitoring practices beyond the capabilities of an accounting information system alone. Vigilance, oversight, and appropriate governance mechanisms are essential to mitigate the risk of financial fraud in an organization.
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Use the predictions of the model of Aggregate Demand and Aggregate Supply (AD-AS) to identify the type and sign of the dominant macroeconomic shocks affecting New Zealand's economy in the second quarter of 2021. According the that model the shock can be characterized as:A positive aggregate demand shock.
Use the predictions of the model of Aggregate Demand and Aggregate Supply (AD-AS) to identify the type and sign of the dominant macroeconomic shocks affecting New Zealand's economy in the third quarter of 2021. According the that model the shock can be characterized as:A negative aggregate supply shock.
Use the predictions of the model of Aggregate Demand and Aggregate Supply (AD-AS) to identify the type and sign of the dominant macroeconomic shocks affecting New Zealand's economy in the fourth quarter of 2021. According the that model the shock can be characterized as:A positive aggregate demand shock.
Use the predictions of the model of Aggregate Demand and Aggregate Supply (AD-AS) to identify the type and sign of the dominant macroeconomic shocks affecting New Zealand's economy in the first quarter of 2022. According the that model the shock can be characterized as:A negative aggregate demand shock.
How do you think the New Zealand economy performed in the second quarter of 2022 (note GDP data is still not available for that quarter)? Frame your analysis in the context of the AS-AD framework - which shock you believe is dominating the current state of the business cycle? Elaborate. please answer this question
It is advisable to refer to official economic data and indicators to obtain a more accurate assessment of the new zealand economy's performance during that specific period.
based on the predictions of the aggregate demand and aggregate supply (ad-as) model, the dominant macroeconomic shock affecting new zealand's economy in the second quarter of 2021 was a positive aggregate demand shock. in the third quarter of 2021, a negative aggregate supply shock was predicted. in the fourth quarter of 2021, a positive aggregate demand shock was expected. and in the first quarter of 2022, a negative aggregate demand shock was anticipated.
given this information, for the second quarter of 2022, without specific gdp data available, we can make an analysis within the as-ad framework. considering the shocks predicted in the previous quarters, the new zealand economy might have experienced the continued influence of the positive aggregate demand shock from the previous quarter. this would indicate a potential expansionary phase in the business cycle.
a positive aggregate demand shock typically results in increased consumer spending, investment, and overall economic activity. it can be associated with factors such as increased government spending, consumer confidence, or expansionary monetary policy. this could lead to a rise in aggregate demand, pushing the economy towards a period of economic growth and potentially higher inflation.
it is important to note that this analysis is speculative since gdp data for the second quarter of 2022 is not available. actual economic performance can be influenced by various factors and events that may deviate from the predictions of the ad-as model.
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Sawk Inc reported sales of ₱36,300, variable expenses of ₱23,100, and fixed of ₱10,000. The degree of operating leverage is closest to
Group of answer choices (SHOW SOLUTION)
a. 4.13
b. 11.34
c. 0.24
d. 0.09
Sawk Inc has sales of ₱36,300, variable expenses of ₱23,100, and fixed expenses of ₱10,000. By calculating the contribution margin and operating income, we find that the degree of operating leverage is approximately 4.13. The correct answer is option (a).
The degree of operating leverage (DOL) can be calculated using the following formula:
DOL = Contribution Margin / Operating Income
First, we need to calculate the contribution margin, which is the difference between sales and variable expenses:
Contribution Margin = Sales - Variable Expenses
Contribution Margin = ₱36,300 - ₱23,100
Contribution Margin = ₱13,200
Next, we need to calculate the operating income, which is the difference between contribution margin and fixed expenses:
Operating Income = Contribution Margin - Fixed Expenses
Operating Income = ₱13,200 - ₱10,000
Operating Income = ₱3,200
Now, we can calculate the degree of operating leverage:
DOL = Contribution Margin / Operating Income
DOL = ₱13,200 / ₱3,200
DOL = 4.13
Therefore, the closest value for the degree of operating leverage is 4.13.Hence, option (a) is the correct answer.
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