We find that the annual sinking fund payment they should establish is approximately $1,981.70 (rounded to the nearest cent).
The Sparks family wants to save enough money to pay for their daughter Jennifer's college tuition in 17 years. The projected tuition for a two-year degree is $35,000. They are looking to establish an annual sinking fund payment to achieve this goal, considering an annual interest rate of 4%.
To calculate the annual sinking fund payment, we can use the formula for the future value of an ordinary annuity:
Future Value = Payment × [(1 + interest rate)^number of periods - 1] / interest rate
In this case, the future value they need to accumulate is $35,000, the interest rate is 4%, and the number of periods is 17 years. Let's calculate the annual sinking fund payment:
$35,000 = Payment × [(1 + 0.04)^17 - 1] / 0.04
To solve for Payment, we rearrange the formula:
Payment = $35,000 × 0.04 / [(1 + 0.04)^17 - 1]
$1,981.70
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how can ethical governance problems in a company make the market
price more than what its fair value is?
Ethical governance problems in a company can make the market price more than what its fair value is because of the following reasons: Due to ethical governance problems in a company, its credibility, goodwill and reputation may be affected.
As a result, investors may lose their confidence in the company leading to a fall in its stock price. However, the price may not fall as much as it should have because of the following reasons:Investors and traders may not be aware of the full extent of the ethical governance problems and may still invest in the company's stocks, thereby propping up the price.
Artificially high demand due to speculation or hype may also prop up the price of the stock, even if it is not justified by the company's financials or fundamentals.The company may also use various tactics to artificially inflate the price of its stocks such as share buybacks, insider trading, etc. which may create a temporary increase in the price of the stock and hide the underlying problems.
This can mislead investors into thinking that the stock is undervalued, which can make the market price more than what its fair value is. Finally, it is also possible that the company's financials or fundamentals are strong enough to justify a higher price despite the ethical governance problems. In such cases, the market price may be higher than what its fair value is, but it may not be due to the ethical governance problems.
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in 250 words explain what are product market stakeholders and
their importance.
Product market stakeholders are individuals or groups who have a direct or indirect interest in a company's products or services and can significantly impact the success or failure of a business in the marketplace. These stakeholders include customers, suppliers, competitors, distributors, and regulatory bodies, among others. Understanding and effectively managing the relationships with these stakeholders is crucial for a company's long-term success and sustainability.
Customers are one of the most important product market stakeholders. They are the end-users of the products or services and their satisfaction and loyalty are essential for the company's profitability. By meeting customer needs and providing value, companies can build strong relationships, foster brand loyalty, and gain a competitive advantage in the market.
Suppliers are another important stakeholder group. They provide the necessary inputs, materials, or components for the production of goods or services. Maintaining positive relationships with suppliers is crucial for ensuring a reliable supply chain, securing favorable pricing, and maintaining product quality.
Competitors are also significant stakeholders as they operate in the same market and vie for the same customers. Understanding the competitive landscape and effectively positioning products or services against competitors is essential for differentiation and market success.
Distributors play a vital role in getting products to customers. They help with product placement, logistics, and expanding the reach of products into different markets. Building strong partnerships with distributors can enhance a company's distribution network and increase market penetration.
Regulatory bodies and government agencies are critical stakeholders, especially in highly regulated industries. Compliance with regulations and maintaining positive relationships with these stakeholders is crucial for avoiding legal issues, ensuring product safety, and meeting industry standards.
Overall, product market stakeholders are essential for the success of a business. By understanding their needs, expectations, and motivations, companies can tailor their products or services to meet market demands, build mutually beneficial relationships, and achieve long-term success in the competitive marketplace. Effectively managing these relationships can lead to increased customer satisfaction, market share, and ultimately, profitability.
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_________ is the shortest book in the old testament.
The shortest book in the Old Testament is the Book of Obadiah. It consists of only one chapter with 21 verses. the Book of Obadiah is a prophetic book that focuses on the judgment and downfall of the nation of Edom.
Edom, the descendants of Esau, had mistreated their brother Israel and rejoiced in their misfortune. The book contains a message of condemnation against Edom and a promise of restoration for Israel. Despite its brevity, it conveys a powerful message about God's justice and faithfulness to His chosen people.
The Book of Obadiah is the shortest book in the Old Testament, consisting of only one chapter with 21 verses. It is a prophetic book that addresses the nation of Edom, the descendants of Esau, who had a tumultuous relationship with their brother Israel. The book condemns Edom for their mistreatment of Israel and their rejoicing in Israel's misfortune. It speaks of God's judgment upon Edom and their ultimate downfall. At the same time, it offers a message of hope and restoration for Israel, assuring them of God's faithfulness and justice. Despite its brevity, the Book of Obadiah conveys significant themes of justice, sibling rivalry, and divine sovereignty.
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2 points You forecast the following levels in year 1 : Accounts Receivable =$137,000; Accounts Payable =$115,000; and Inventory = $43,000. If each of these begins at a level of $0 in year zero, what year 1 incremental cash flow reflects the change in NWC? Enter your answer in dollars and be sure to use a negative sign ( −) if the answer is a cash outflow.
The year 1 incremental cash flow reflecting the change in Net Working Capital (NWC) is -$65,000.
To calculate the change in Net Working Capital, we need to subtract the year 0 levels from the year 1 levels for each component.
The change in Accounts Receivable is $137,000 - $0 = $137,000. This represents an increase in cash flow because as the accounts receivable increase, more cash is tied up in outstanding customer payments.
The change in Accounts Payable is $115,000 - $0 = $115,000. This represents a decrease in cash flow because as the accounts payable increase, less cash is paid out to suppliers.
The change in Inventory is $43,000 - $0 = $43,000. This also represents an increase in cash flow because as inventory levels increase, more cash is tied up in the purchase and storage of goods.
To calculate the overall change in NWC, we sum up the changes in each component: $137,000 + (-$115,000) + $43,000 = $65,000. The negative sign in front of the change in accounts payable indicates a cash outflow. Therefore, the year 1 incremental cash flow reflecting the change in NWC is -$65,000, meaning a cash outflow of $65,000.
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The CRA reports remittances received from a regular remitter using the Statement of Account for Current Source Deductions (PD7A).
True
False
The statement "The CRA reports remittances received from a regular remitter using the Statement of Account for Current Source Deductions (PD7A)" is false.
The Statement of Account for Current Source Deductions (PD7A) is a form provided by the Canada Revenue Agency (CRA) to employers to help them report and remit their payroll deductions, including income tax, Canada Pension Plan (CPP) contributions, and Employment Insurance (EI) premiums. The PD7A is used by employers to calculate and report the amounts owing to the CRA for payroll deductions.
However, it is the responsibility of the employer, not the CRA, to report and remit the deductions accurately using the PD7A form. The CRA does not report the remittances received from regular remitters. Instead, it receives the remittances and verifies the accuracy of the reported amounts through its own processes and systems.
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"Do you see any truly competent workers? They will serve kings rather than working for ordinary people." – Proverbs 22:29
This DQ talks about structural unemployment and how it relates to keeping your skills up to date. What is structural unemployment, and how does it relate to this scriptural passage about truly competent workers?
Structural unemployment refers to a type of unemployment caused by a mismatch between the skills and qualifications of workers and the requirements of available job opportunities.
Structural unemployment arises when changes in the economy, technology, or industry render certain skills or occupations obsolete or less in demand. As a result, individuals possessing those skills may struggle to find suitable employment. The passage from Proverbs 22:29 suggests the recognition and appreciation of highly skilled individuals who possess exceptional competence and abilities.
It implies that such competent workers have the opportunity to serve those in positions of authority, symbolized by kings, who value their skills and are willing to employ them. However, the passage also implies that ordinary people, lacking the same level of competence, may face challenges in securing suitable employment due to a potential mismatch between their skills and the requirements of available job opportunities. Therefore, the scripture indirectly relates to the concept of structural unemployment, highlighting the importance of maintaining and developing relevant skills to remain competitive in the labor market.
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ATT Manufacturing Co. is planning to product new type of desks. Company uses MARR as 10% per year. Evaluate the following two alternatives by Present Worth Analysis using Least Common Multiple (LCM) technique. Select the PW value of Alternative X.
The task is to evaluate two alternatives using Present Worth Analysis with the Least Common Multiple (LCM) technique and select the Present Worth (PW) value of Alternative X.
Present Worth Analysis is a financial analysis method used to compare different investment alternatives by converting their cash flows into their equivalent present values at a specified discount rate.
The Least Common Multiple (LCM) technique is a method that allows for the comparison of cash flows of different lengths by finding the least common multiple of their time periods.
To solve the problem, we would need the cash flows and their respective time periods for Alternative X and the other alternative. Using the LCM technique, we determine the common time period for both alternatives and discount each cash flow to its present value using the given Minimum Attractive Rate of Return (MARR) of 10% per year.
The Present Worth (PW) value of each alternative is calculated by summing the present values of their cash flows.
Once the calculations are performed, the PW value of Alternative X can be identified and selected based on which alternative yields the higher PW value.
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Which of the following would not be considered a barrier to entry?
Group of answer choices
a Patents and other intellectual property required for manufacture
b High regulatory compliance costs
c An elastic market demand
d Economies of scale from producing large quantities of output
An elastic market demand would not be considered a barrier to entry.
Barriers to entry are factors or conditions that make it difficult for new firms to enter a market and compete with existing firms. They can limit competition and give established firms a competitive advantage. Among the options provided, an elastic market demand is not considered a barrier to entry.
An elastic market demand refers to a situation where a small change in price leads to a significant change in quantity demanded. In this context, it means that consumers are responsive to price changes and have many alternative options available to them. While an elastic market demand may affect the profitability and pricing decisions of firms in the market, it does not pose a direct obstacle to new firms entering the market. In fact, it may even encourage competition as firms strive to attract price-sensitive consumers.
On the other hand, options a, b, and d are all examples of barriers to entry. Patents and intellectual property rights can restrict competitors from using or reproducing certain products or technologies. High regulatory compliance costs can create financial and administrative burdens for new entrants. Economies of scale, resulting from producing large quantities of output, can give established firms cost advantages and make it difficult for new entrants to compete on a similar scale.
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Jasper’s unadjusted trial balance reports Unearned Client Revenue of $3,200 and Client Revenue Earned of $29,000. An examination of client records reveals that $2,800 of previously unearned revenue has now been earned.
Prepare the necessary adjusting entry pertaining to these accounts.
Norbert Corporation borrowed $24,000 on December 1, 2011, by issuing a two-month, 8 percent note payable to Service One Credit Union. The entire amount of the loan, plus interest, is due February 1, 2012.
a. Prepare the necessary adjusting entry for interest expense on December 31, 2011.
For Jasper's unadjusted trial balance, the necessary adjusting entry is to debit Unearned Client Revenue for $2,800 and credit Client Revenue Earned for $2,800.
To adjust the accounts of Jasper's unearned and earned client revenue, an adjusting entry is required. Based on the examination of client records, it is found that $2,800 of previously unearned revenue has now been earned.
To reflect this adjustment, the Unearned Client Revenue account needs to be reduced by $2,800 (debited) since the revenue has been earned and should no longer be classified as unearned. Simultaneously, the Client Revenue Earned account needs to be increased by $2,800 (credited) to accurately record the revenue earned during the accounting period.
By making this adjusting entry, the financial statements will correctly reflect the revenue that has been earned, ensuring accuracy and adherence to the matching principle in accounting.
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Based on a steady-state model of fishery economics, a subsidy on fuels used for fishing boats (without improving technology) would cause all the following EXCEPT
a. It exacerbates the overfishing problem
b. It does not change the efficient fishing effort
c. It increases the open-access fishing effort
d. It reduces the maximum sustainable yield
e. It reduces the open-access fish stock.
Based on a steady-state model of fishery economics, a subsidy on fuels used for fishing boats (without improving technology) would cause all the following EXCEPT c. It increases the open-access fishing effort.
In a steady-state model of fishery economics, the efficient fishing effort represents the level of fishing that maximizes the sustainable yield and ensures the long-term viability of the fish stock. The subsidy on fuels used for fishing boats, without improving technology, would have the following effects:
a. It exacerbates the overfishing problem: The subsidy reduces the cost of fuel, making fishing more economically viable. This can lead to increased fishing efforts, potentially exceeding the sustainable level and exacerbating the overfishing problem.
b. It does not change the efficient fishing effort: The efficient fishing effort is determined by the biological characteristics of the fish stock and the underlying model assumptions. The fuel subsidy, without improving technology, does not directly affect the efficient fishing effort.
d. It reduces the maximum sustainable yield: The fuel subsidy encourages increased fishing effort, which can lead to the depletion of the fish stock and a reduction in the maximum sustainable yield. The increased fishing effort driven by the subsidy can exceed the stock's regenerative capacity, leading to an unsustainable level of extraction.
e. It reduces the open-access fish stock: The increased fishing effort resulting from the fuel subsidy can deplete the open-access fish stock, as more fish are caught and removed from the population. This can negatively impact the long-term health and abundance of the fish stock.
However, it is incorrect to state that the subsidy increases the open-access fishing effort. The open-access fishing effort refers to the unregulated or unrestricted level of fishing that occurs in the absence of management measures. While the subsidy may lead to increased overall fishing effort, it does not specifically target or increase the open-access fishing effort.
Therefore, the correct answer is c. It increases the open-access fishing effort.
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1) The ER between the Swiss franc and the US dollar is one to one in the spot market. The interest rates in Switzerland and the US are -.01 and .03 respectively. Swiss franc. What kind of arbitrage will induce a profit for you, if the spot rate is 1.05 Swiss francs equal $1? Assume you start with $1 million.
2) Expound on interest parity theory in the aforementioned context. Is the above situation sustainable?
The ER between the Swiss franc and the US dollar is one to one in the spot market. The interest rates in Switzerland and the US are -.01 and .03 respectively.
1) Contributing in Switzerland: On the off chance that we change over $1 million into Swiss francs at the spot rate, we would get 1.05 million Swiss francs. By contributing this sum in Switzerland at an intrigued rate of -0.01, after one year, the speculation would be worth: 1.05 million * (1 - 0.01) = 1.0395 million Swiss francs
2) Contributing within the US: If we convert $1 million into Swiss francs and after that change over it back to dollars at the spot rate, we would have: 1.05 million / 1.05 = $1 million
By contributing this sum within the US at an intrigued rate of 0.03, after one year, the speculation would be worth: $1 million * (1 + 0.03) = $1.03 million
Comparing the returns, it is obvious that contributing within the US yields the next return. Hence, the arbitrage opportunity is to change over $1 million into Swiss francs, change over it back to dollars at the spot rate, and contribute within the US to win the next return.
In the given setting, the intrigued rate within the US is higher than the intrigued rate in Switzerland (0.03 vs. -0.01). Concurring with intrigued equality hypothesis, we would anticipate the Swiss franc to devalue in esteem relative to the US dollar to counterbalance the intrigued rate differential.
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Exercise 1-6A (Algo) Identifying product versus SG\&A costs LO 1-2, 1-3 A review of the accounting records of Stuart Manufacturing indicated that the company incurred the following payroll costs during the month of March. Assume the company's financial statements are prepared in accordance with GAAP.
1. Salary of the company president −$31,300.
2. Salary of the vice president of manufacturing −$15,800
3. Salary of the chief financial officer −$19,000.
4. Salary of the vice president of marketing −$16,000.
5. Salarles of middle managers (department heads, production supervisors) in manufacturing plant- $205,000
6. Wages of production workers- $928,000
7. Salaries of administrative secretaries −$104,000.
8. Salaries of engineers and other personnel responsible for maintaining production equipment- $182,000.
9. Commissions pald to sales staff −$245,000. Required
a. What amount of payroll cost would be classified as SG\&A expense?
b. Assuming that Stuart made 4,300 units of product and sold 3,225 of them during the month of March, determine the amount of payroll cost that would be included in cost of goods sold. (Do not round intermediate calculations.)
a) The amount of payroll cost classified as SG&A expense is $415,300.
b) If Stuart made 4,300 units of product and sold 3,225 of them during the month of March, the amount of payroll cost included in the cost of goods sold is approximately $987,821.25.
a. To determine the amount of payroll cost classified as Selling, General, and Administrative (SG&A) expense, we need to identify the costs that are not directly related to the production of goods. Based on the information provided:
Salary of the company president
Salary of the chief financial officer
Salary of the vice president of marketing
Salaries of administrative secretaries
Commissions paid to sales staff
These costs are associated with management, administration, and sales functions rather than the direct production of goods. Therefore, they would be classified as SG&A expenses. Adding up these costs, we have:
$31,300 + $19,000 + $16,000 + $104,000 + $245,000 = $415,300.
b. To determine the amount of payroll cost included in the cost of goods sold (COGS), we need to consider the costs directly associated with the production of goods. In this case:
Salarles of middle managers in manufacturing plant
Wages of production workers
Salaries of engineers and other personnel responsible for maintaining production equipment
These costs directly contribute to the manufacturing process. Summing up these costs, we have:
$205,000 + $928,000 + $182,000 = $1,315,000.
Since we are given the number of units produced (4,300) and sold (3,225), we can calculate the payroll cost included in the COGS per unit:
$1,315,000 / 4,300 = $305.81 per unit.
To determine the amount included in the COGS for the 3,225 units sold, we multiply the per-unit cost by the number of units sold:
$305.81 * 3,225 = $987,821.25.
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Abbi is receiving an insurance payout and has a choice of the following when money is worth 3.5% compounded annually: Option 1$7000 per year paid at the end of each year for 7 years Option 2$17000 paid now, \$22 000 paid 5 years from now, and $6000 paid 7 years from now What is the PV of Option 1?
a. $43014 b. $44300 c. $42802 d. $45023
The present value (PV) of Option 1 is approximately $43014. Therefore, the correct answer is (a) $43014.
To calculate the present value (PV) of Option 1, we need to discount the future cash flows back to the present using the given interest rate of 3.5% compounded annually.
Option 1 offers $7000 per year paid at the end of each year for 7 years. We can calculate the PV using the formula for the present value of an annuity:
PV = Cash Flow * [1 - (1 + r)^(-n)] / r
where r is the interest rate and n is the number of years.
Plugging in the values:
Cash Flow = $7000
r = 3.5% or 0.035
n = 7
PV = $7000 * [1 - (1 + 0.035)^(-7)] / 0.035
PV ≈ $43014
Therefore, the present value of Option 1 is approximately $43014.
From the given options, the correct answer is (a) $43014.
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diversity and conclusion unit 6. my instructor would like to know what my approach would look like ..... consider this...... you are the manager..... two women in your group that refuse to work with three other women and one man..... that you are responsible for. they are rude nasty to each other. they don't socialize or even talk with each other. it is clear that they come from different backgrounds........ they dress. speak, look and behave differently..... but have the skills needed for the job. using the tools you described.. how would you manage this situation and what would you do if they ultimately refuse to work with each other? so I'm guessing, me to use what you gave me before with the do's and don'ts I guess he want me to use that information thank you
Diversity in conclusion unit 6As a manager, in case two women in your group refuse to work with three other women and one man, you will have to understand that diversity exists and it is bound to be seen in all aspects of life.
People have different backgrounds, cultures, beliefs, values, dressing, and behavior, and it should not be an issue as long as the job is getting done.
In this regard, managing such a situation requires the following tools:
1. Effective communication,
2. Respect for diversity,
3. Problem-solving and decision-making skills,
4. Conflict resolution and mediation,
5. Positive reinforcement and feedback,
6. Active listening.
7. Encourage team building activities, such as social outings, lunches, or team building exercises to build relationships, boost morale, and create a sense of belonging.
Within this scenario, you should consider team-building activities that can bring the team together. If the two women still refuse to work with the other team members, consider seeking an external mediator to find out the root of the conflict and help the parties resolve it.
It's important to remain professional and focused on the task at hand. If the two women continue to refuse to work with the other team members, disciplinary action may be necessary. However, this should only be a last resort, after all other options have been exhausted.
Overall, managing diversity in the workplace requires an open mind, respect for others, and the ability to find solutions to any conflict that arises.
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Which of the following is an example of an adjusting entry?
a. Recording the purchase of supplies on account
b. Recording depreciation expense on a truck
c. Recording the billing of customers for services rendered.
Recording depreciation expense on a truck is an example of an adjusting entry.
An adjusting entry is made at the end of an accounting period to ensure that the financial statements reflect the correct account balances and adhere to the matching principle. Adjusting entries are necessary to recognize revenues and expenses in the period in which they are earned or incurred, even if the associated cash transactions have not occurred.
Recording depreciation expense on a truck is an example of an adjusting entry because it recognizes the allocation of the truck's cost over its useful life as an expense. Depreciation is a non-cash expense, and adjusting entries are made to reflect the gradual wear and tear or obsolescence of long-term assets.
Option a, recording the purchase of supplies on account, is an example of a regular entry to record a transaction. It does not involve adjusting the accounts at the end of an accounting period.
Option c, recording the billing of customers for services rendered, is also a regular entry to record the revenue earned when services are provided. It does not involve adjusting the accounts at the end of an accounting period.
Therefore, only option b, recording depreciation expense on a truck, is an example of an adjusting entry.
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You are required to compute a cost for an employee who belongs to a client where we use Cost Plus Model instead of Fixed Mark-up Model. If Cost Plus Model includes employee compensation, employer cost, mark-up fees and Fixed Plus Model includes straight mark-up on the employee compensation; what would be the the hourly bill rate, monthly and annual cost to client based on the below?
Employee Name: John Smith
Employee Salary: $52,000.00 (based on 2080 billable hours)
Employee Hourly Pay: $25.00
Employer FICA: $1,500.00
Employer SUTA: $300.00
Employer FUTA: $42.00
Employer Benefits: $15,000.00
Work Compensation: $900.00
Contract Mark-up: 20%
The hourly bill rate for the client would be $30.00. The monthly cost to the client would be $5,832.00, and the annual cost would be $69,984.00.
The hourly bill rate is calculated by adding the employee's hourly pay ($25.00) to the mark-up fee (20% of $25.00 = $5.00), resulting in $30.00. The monthly cost to the client is obtained by multiplying the hourly bill rate by the number of billable hours in a month (160 hours) and adding the employer costs and benefits, resulting in $5,832.00. The annual cost is calculated by multiplying the monthly cost by 12, resulting in $69,984.00.
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Management accounting is an integral part of the management process. As such, it provides essential information for the following objectives except
a. Maintaining the current level of resource utilization as well as internal and external communication.
b. Measuring and evaluating performance.
c. Planning strategies and controlling current activities of the organization.
d. Enhancing objectivity in decision-making.
Management accounting plays a crucial role in the management process by providing essential information for various objectives. The correct option is A.
The objective that management accounting does not directly address is option (a), which refers to maintaining the current level of resource utilization as well as internal and external communication.
While management accounting provides valuable information for measuring and evaluating performance (option b), planning strategies and controlling current activities (option c), and enhancing objectivity in decision-making (option d), its primary focus is not on resource utilization and communication.
Instead, management accounting primarily deals with financial and non-financial data analysis, cost management, budgeting, forecasting, and providing relevant information for effective decision-making and strategic planning within an organization. Hence. option A is correct.
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Masterson, Inc., has 4.1 million shares of common stock outstanding. The current share price is $84, and the book value per share is $11. The company also has two bond issues outstanding. The first bond issue has a face value of $70 million, has a coupon rate of 5.1 percent, and sells for 98 percent of par. The second issue has a face value of $50 million, has a coupon rate of 5.60 percent, and sells for 108 percent of par. The first issue matures in 20 years, the second in 12 years. The most recent dividend was $3.95 and the dividend growth rate is 5 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 21 percent. What is the company’s WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
The company's Weighted Average Cost of Capital (WACC) is approximately 7.24%.
To calculate the WACC, we need to determine the cost of equity and the cost of debt, and then apply the weights of each component.
Cost of Equity:
Using the Dividend Discount Model (DDM), we can calculate the cost of equity.
Dividend expected next year = Current dividend * (1 + Dividend growth rate) = $3.95 * (1 + 5%) = $4.145
Cost of equity = Dividend / Current stock price = $4.145 / $84 = 0.0493 or 4.93%
Cost of Debt:
For each bond issue, we need to calculate the cost of debt.
First Bond Issue:
Coupon payment = Face value * Coupon rate = $70,000,000 * 5.1% = $3,570,000
Current bond price = Face value * Bond price = $70,000,000 * 98% = $68,600,000
Number of periods = Maturity in years * Number of coupon payments per year = 20 * 2 = 40
Yield to maturity (YTM) = Calculate using financial calculator or Excel's RATE function = 3.85%
Second Bond Issue:
Coupon payment = Face value * Coupon rate = $50,000,000 * 5.60% = $2,800,000
Current bond price = Face value * Bond price = $50,000,000 * 108% = $54,000,000
Number of periods = Maturity in years * Number of coupon payments per year = 12 * 2 = 24
Yield to maturity (YTM) = Calculate using financial calculator or Excel's RATE function = 3.85%
Weighted Average Cost of Debt:
Weighted Average Cost of Debt = (Debt 1 / Total Debt) * Cost of Debt 1 + (Debt 2 / Total Debt) * Cost of Debt 2
Total Debt = Debt 1 + Debt 2 = $70,000,000 + $50,000,000 = $120,000,000
Weighted Average Cost of Debt = ($70,000,000 / $120,000,000) * 3.85% + ($50,000,000 / $120,000,000) * 3.85% = 2.0167%
WACC Calculation:
Weighted Average Cost of Capital (WACC) = (Equity Weight * Cost of Equity) + (Debt Weight * Cost of Debt) * (1 - Tax Rate)
Equity Weight = Market Value of Equity / Total Value of the Company = (Shares Outstanding * Current Stock Price) / (Shares Outstanding * Current Stock Price + Total Debt) = $352,400,000 / $472,400,000 = 74.69%
Debt Weight = Total Debt / Total Value of the Company = $120,000,000 / $472,400,000 = 25.31%
WACC = (0.7469 * 4.93%) + (0.2531 * 2.0167%) * (1 - 21%) = 7.24%
The company's Weighted Average Cost of Capital (WACC) is approximately 7.24%. This represents the required return on the company's total capital, taking into account the cost of both equity and debt financing.
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Suppose that a firm has estimated its demand curve as q = 172,864 - 59*q, where P is the price per unit and q is the quantity of units produced. What is the firm's marginal revenue equal to when it produces 2,786 units? Please round to two decimal places. (Hint: this is the demand, not the inverse demand!)
We need to multiply the derivative of the demand function with respect to quantity (q) in order to determine the marginal revenue. q = 172,864 - 59q is the formula for the demand function. We get -59 when we take this function's derivative with regard to q. Therefore, when the company produces 2,786 units, the marginal revenue is equal to -592,786 = -$164,774
Demand in economics refers to a consumer's desire to buy products and services as well as their readiness to pay a given price for them. The amount requested of an item or service often decreases as its price rises. The amount required will rise in response to a drop in the cost of a commodity or service.
Because it makes sense and organically happens throughout nearly any day, demand is a concept that both consumers and businesses are highly acquainted with. Customers who are keeping an eye on particular things, for instance, could buy more of them when the prices are low.
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A firm employs 100 workers at a wage rate of €10 per hour, and 50 units of capital at a rate of €15 per hour. The firm is currently operating at a point on its isoquant curve. At this point, the marginal product of labour is 20, and the marginal product of capital is 25. Is the firm currently minimising costs? Explain your answer clearly. If the firm is not minimising costs, explain if it should hire more labour or more capital in order to do so.
The question aims to identify whether the firm is currently minimizing its costs or not. Let's see how that can be achieved in this case.
Calculation of Marginal Productivity The Marginal Product of Labor (MPL) = 20The Marginal Product of Capital (MPK) = 25Step 2: Calculation of Marginal Productivity Ratio The Marginal Productivity Ratio (MPR) is calculated by dividing MPL by MPK:MPR = MPL/MPK = 20/25 = 0.8Step Calculation of Input Price Ratio Input price ratio (w/r) = Wage rate (w)/ Rental Rate of Capital (r)= 10/15= 2/3 = 0.67Step Comparison of MPR and Input Price Ratio We need to compare the MPR (0.8) and Input price ratio (0.67) of the firm.
Since MPR is greater than the Input Price Ratio (0.8 > 0.67), the firm should hire more capital and less labor to reduce the cost in the short run, which is more profitable.
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1. List and explain 2 strategies to Improve organizational effectiveness. 2. List and explain 2 techniques for goal setting. 3. List and explain 2 ways to practice workplace equity and inclusion.
To improve organizational effectiveness, clear communication channels and continuous learning are key. Setting SMART goals and utilizing the OKR framework aid in effective goal setting. Promoting workplace equity and inclusion involves diverse hiring, employee resource groups, and diversity training programs.
1. Strategies to Improve Organizational Effectiveness:
a) Clear Communication Channels: Establishing open and transparent communication channels within an organization is vital for enhancing organizational effectiveness. This ensures information flows smoothly, reducing misunderstandings and fostering collaboration.
b) Continuous Learning and Development: Encouraging a culture of continuous learning and development boosts organizational effectiveness. Providing opportunities for professional growth and training equips employees with the skills needed to enhance productivity and adapt to changes.
2.Techniques for Goal Setting:
a) SMART Goals: Setting Specific, Measurable, Achievable, Relevant, and Time-bound (SMART) goals enables individuals and teams to create clear objectives that are actionable and trackable.
b) OKRs (Objectives and Key Results): The OKR framework involves defining ambitious objectives and measurable key results, enabling teams to align efforts, prioritize initiatives, and achieve impactful outcomes.
3.Ways to Practice andWorkplace Equity Inclusion:
a) Diverse Hiring and Inclusive Recruitment Practices: Promoting workplace equity and inclusion begins with diverse hiring and inclusive recruitment strategies. These involve actively seeking candidates from various backgrounds and implementing unbiased selection processes.
b) Employee Resource Groups and Diversity Training: Establishing Employee Resource Groups (ERGs) and providing diversity training programs create platforms for employees to connect, support one another, and raise awareness about biases, fostering an inclusive work environment.
Implementing these strategies and techniques enhances organizational effectiveness, fosters a positive work culture, and promotes equity and inclusion within the workplace.
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Calculate and analyze the Standardized statements and the
different types of financial ratios by functional categorization of
the National Bank of Canada for 2019, 2020 and 2021
years.
The National Bank of Canada, or NBC, is one of Canada's largest commercial banks. It was founded in 1859 and provides a wide range of banking, wealth management, and financial planning services to individuals, businesses, and institutions.
The following are the standardized statements and financial ratios by functional categorization of the National Bank of Canada for the years 2019, 2020, and 2021:
2019:Net Income: $2,658 million
Total Assets: $273,704 million
Total Liabilities: $246,018 million
Total Equity: $27,686 million
Common Equity Tier 1 Ratio: 11.9%
Return on Equity (ROE): 9.6%
Return on Assets (ROA): 0.97%
Efficiency Ratio: 56.2%
2020:Net Income: $2,361 million
Total Assets: $289,202 million
Total Liabilities: $262,270 million
Total Equity: $26,932 million
Common Equity Tier 1 Ratio: 12.1%
Return on Equity (ROE): 8.8%
Return on Assets (ROA): 0.83%
Efficiency Ratio: 55.7%
2021:Net Income: $2,280 million
Total Assets: $334,188 million
Total Liabilities: $301,903 million
Total Equity: $32,285 million
Common Equity Tier 1 Ratio: 12.5%
Return on Equity (ROE): 7.1%
Return on Assets (ROA): 0.68%
Efficiency Ratio: 57.6%
What is the significance of Standardized Statements?The NBC's standardized statements are important because they provide investors, creditors, and other interested parties with a standardized set of financial statements that are easy to compare across companies.
By using standardized statements, analysts can identify trends and compare performance over time. The NBC's standardized statements are grouped by functional category, such as assets, liabilities, income, and expenses. This makes it easier for analysts to compare the bank's performance to other banks in the same industry.
What are Financial Ratios?Financial ratios are tools used by investors, creditors, and analysts to assess a company's financial health.Ratios are derived from financial statements and are used to measure a company's liquidity, profitability, solvency, and efficiency. Common financial ratios include;
*Current ratio
*Quick ratio
*Debt-to-equity ratio
*Return on equity ratio
*Return on assets ratio.
These ratios can be compared to industry averages or the company's historical ratios to identify trends and potential problems.
What do the Financial Ratios for the National Bank of Canada show?The NBC's financial ratios for the years 2019, 2020, and 2021 show a decline in profitability and efficiency over time. The bank's return on equity (ROE) and return on assets (ROA) ratios have both declined over the three-year period, indicating that the bank is becoming less profitable. Additionally, the bank's efficiency ratio has increased, indicating that it is becoming less efficient at generating revenue. However, the bank's common equity tier 1 ratio has increased, indicating that it has become more solvent over time.
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You find a pale and sweaty maintenance worker who complains of trouble breathing and of the feeling of a heavy weight on his chest. After activating EMS, what should you do next?
If you find a maintenance worker who complains of trouble breathing, feels a heavy weight on their chest, and appears pale and sweaty, it could be indicative of a potentially serious medical condition such as a heart attack. In this situation, it is crucial to take immediate action to help the individual. After activating EMS (Emergency Medical Services) by calling the appropriate emergency number, you should:
1. Stay with the worker: Provide reassurance and let them know that help is on the way. Encourage them to stay calm and avoid any physical exertion.
2. Assist with prescribed medication: If the worker carries any prescribed medication for a known condition like angina, such as nitroglycerin, help them take it as directed.
3. Monitor vital signs: Keep an eye on the worker's condition. If they lose consciousness, check for breathing and initiate CPR if necessary. Be prepared to provide CPR until professional medical help arrives.
4. Gather information: If possible, gather relevant information about the worker's medical history, any known allergies, or any recent activities or events that might be relevant to their current condition. This information can be helpful for the medical professionals who will be providing treatment.
Remember, it is essential to prioritize the worker's well-being and rely on professional medical assistance. The actions outlined above aim to support the worker and maintain their safety until professional help arrives.
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Management has asked each department for two ways users can protect themselves online. What would you tell them?
The two ways users can protect themselves online is as follows mentioned below.
Strong and Unique Passwords: Encourage users to create strong and unique passwords for their online accounts. A strong password should be at least 8-12 characters long and include a combination of uppercase and lowercase letters, numbers, and special characters.
It is important to avoid using common or easily guessable passwords, such as birthdates or simple words. Additionally, users should avoid reusing passwords across multiple accounts, as this can increase the risk of a security breach. Utilizing a password manager can help users generate and securely store complex passwords.
Awareness of Phishing Attacks: Educate users about the risks of phishing attacks and how to identify and avoid them. Phishing is a fraudulent attempt to obtain sensitive information, such as usernames, passwords, or credit card details, by disguising as a trustworthy entity through email, phone calls, or malicious websites.
Users should be cautious when clicking on links or downloading attachments from unknown sources, and they should verify the legitimacy of websites or emails before providing any personal or financial information. Encourage users to report any suspicious emails or websites to the appropriate IT department or authorities.
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What is a viable cause for the right shift of this Demand Curve
below?
Group of answer choices
Government Budget Surplus
All of the Above
Investment Tax Incentives
Government Budget Deficit
A viable cause for the right shift of a demand curve could be government budget deficit. When the government runs a budget deficit, it typically involves increasing spending or reducing taxes to stimulate economic activity.
This can lead to an increase in consumer income and purchasing power, resulting in higher demand for goods and services. As a result, the demand curve would shift to the right, indicating an increase in quantity demanded at each price level.Government budget deficit refers to a situation where the government's total spending exceeds its total revenue within a given period, usually a fiscal year. It represents the shortfall between the government's expenditures and its income, including tax revenues, fees, and other sources of revenue.
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Toronto Food Services is considering installing a new refrigeration system that will cost $500,000. The system will be depreciated at a rate of 20% (Class 8 ) per year over the system's five-year life and then it will be sold for $70,000. The new system will save $250,000 per year in pre-tax operating costs. An initial investment of $60,000 will have to be made in working capital. The tax rate is 35% and the discount rate is 10%. Calculate the NPV of the new refigeration Assignment area of Blackboard.
The total dollar return on the bond over the past year was $60.00.
The total dollar return on the bond over the past year was $60.00. The total nominal return on the bond over the past year was 6.38%. The total real rate of return on the bond, adjusted for inflation, was 2.38%. The total percentage return on the ABC share was 8.43%. The dividend yield on the ABC share was 1.81%. The capital gain yield on the ABC share was 6.62%.
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A computer-products retailer purchases laser printers from a manufacturer at a price of $500 per printer. During the year the retailer will try to sell the printers at a price higher than $500 but may not be able to sell all of the printers. At the end of the year, the manufacturer will pay the retailer 30 percent of the original price for any unsold laser printers. No one other than the manufacturer would be willing to buy these unsold printers at the end of the year.
At the beginning of the year, before the retailer has purchased any printers, what is the opportunity cost of laser printers? In other words, what must a retailer "give up" in order to add one laser printer to its inventory?
After the retailer has purchased the laser printers, what is the sunk cost associated with each printer?
Suppose that at the end of the year, the retailer still has a large inventory of unsold printers. The retailer has set a retail price of $1,200 per printer. A new line of printers is due out soon, and it is unlikely that many more old printers will be sold at this price. The marketing manager of the retail chain argues that the chain should cut the retail price by $1,000 and sell the laser printers at $200 each. The general manager of the chain strongly disagrees, pointing out that at $200 each, the retailer would "lose" $300 on each printer it sells. Is the general manager’s argument correct?
The opportunity cost of laser printers for the retailer, before purchasing any printers, is the potential revenue that could be earned by using the resources required to acquire and sell a printer for an alternative purpose. It represents the value of the next best opportunity foregone. In this case, the opportunity cost could be the potential profit from selling other computer products or investing in different business ventures.
After the retailer has purchased the laser printers, the sunk cost associated with each printer is the original purchase price of $500. A sunk cost is a cost that has been incurred and cannot be recovered, regardless of future decisions or actions. Even if the retailer is unable to sell the printers or receives a partial payment from the manufacturer for unsold units, the sunk cost remains the same.
The general manager's argument is incorrect. The argument assumes that the retail price of $200 would result in a loss of $300 on each printer sold ($500 purchase price minus $200 selling price). However, this perspective overlooks the fact that the manufacturer will pay the retailer 30 percent of the original price for any unsold printers. If the retailer sells a printer for $200, it would still receive $150 ($500 * 30%) from the manufacturer, reducing the loss to $150 per printer. Therefore, while selling at $200 may not be ideal, it would result in a smaller loss compared to maintaining the original retail price.
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which of following does the IRS consider a capital asset? A. a design patent created by the taxpayer B. a fully depreciated computer used in the taxpayer business C. an IRS publication downloaded for free from the irs.gov website D. Virtual currency
A capital asset, according to the IRS, can be defined as any asset that a taxpayer owns and uses for business purposes. Hence the correct answer is option B a fully depreciated computer used in the taxpayer business.
These can be tangible, such as machinery and equipment, or intangible, such as patents and copyrights. The IRS recognizes design patents as capital assets. A fully depreciated computer used in the taxpayer's business is also considered a capital asset. The IRS publication downloaded for free from the irs.gov website is not a capital asset because it does not have any tangible value. Virtual currency is also a capital asset, but it must be reported separately on tax returns and is subject to capital gains tax.
B. a fully depreciated computer used in the taxpayer business are the two options that the IRS considers capital assets.
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Shady Inc. manufactures outdoor umbrellas. The company has the capacity to produce 100,000 units per year, but it currently produces and sells 75,000 units per year. The following information relates to current production:
Sales price per unit $42
Variable costs per unit:
Manufacturing $25
Marketing and administrative $10
Total fixed costs:
Manufacturing $79,000
Marketing and administrative $25,000
If a special sales order is accepted for 5,500 umbrellas at a price of $42 per unit, fixed costs remain unchanged, and no variable marketing and administrative costs will be incurred for this order, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)
A. Increase by $38,500
B. Increase by $231,000
C. Increase by $93,500
D. Decrease by $93,500
The answer is: D. Decrease by $93,500.
Shady Inc. manufactures outdoor umbrellas. The company has the capacity to produce 100,000 units per year, but it currently produces and sells 75,000 units per year.
The following information relates to current production:Sales price per unit $42Variable costs per unit:Manufacturing $25Marketing and administrative $10Total fixed costs: Manufacturing $79,000 Marketing and administrative $25,000The operating income for Shady Inc can be calculated as follows:
Operating income = Total Sales - Total Variable Costs - Total Fixed CostsThe total sales of Shady Inc is calculated as $42 x 75,000 = $3,150,000
The total variable cost of Shady Inc can be calculated as follows:Total variable cost = Manufacturing Variable Cost + Marketing and Administrative Variable CostTotal manufacturing variable cost = 75,000 x $25 = $1,875,000
Total marketing and administrative variable cost = 75,000 x $10 = $750,000Total variable cost = $1,875,000 + $750,000 = $2,625,000Total fixed cost = $79,000 + $25,000 = $104,000
Therefore,Operating income = Total Sales - Total Variable Costs - Total Fixed Costs= $3,150,000 - $2,625,000 - $104,000= $421,000 Now, if a special sales order is accepted for 5,500 umbrellas at a price of $42 per unit, fixed costs remain unchanged, and no variable marketing and administrative costs will be incurred for this order.
The total variable cost for this special sales order can be calculated as follows:Variable manufacturing cost = 5,500 x $25 = $137,500Variable marketing and administrative cost = $0Total variable cost = $137,500 + $0 = $137,500
The revenue earned from the special sales order = $42 x 5,500 = $231,000Operating income for this special order can be calculated as follows:Operating income = Total Revenue - Total Variable Cost - Total Fixed Costs= $231,000 - $137,500 - $104,000= -$10,500.
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the model was criticized, the model evolved incorporating time value of money to create the discounted payback method. The modeis stili refectad faulty ranking criteris but they provided important information about liguldity and risk. faulty ranking criteria but they provided important information about liquidity and risk. Cash flows expected in the distant future are risky than cash flows received in the near-term-which suggests that the payback period can also serve as an indicator of project risk. Suppose Extensive Enterprises's CFO is evaluating a project with the following cash inflows. She does not know the project's initial cost; however, she does know that the project's regular payback period is 2.5 years. If the project's weighted average cost of capital (WACC) is 9%, what is its NPV? $379,440 $344,945 5327,698 9362,192 Which of the following statements indicate a disadvantage of using the discounted payback period for capital budgeting decisions? Check all that apply, The discounted payback period is calculated using net income instead of cash flows. The discounted payback period does not take the time value of money into account. The discounted payback period does not take the project's entire life into account.
The NPV of the project can be calculated based on the given information about the regular payback period and the project's weighted average cost of capital (WACC). However, the information provided in the question is insufficient to determine the NPV.
To calculate the NPV, we need the project's initial cost and the cash inflows for each period. Since the initial cost is not provided, we cannot determine the NPV. The NPV represents the present value of all cash inflows and outflows of a project, discounted at the project's WACC. Without the initial cost and specific cash inflows, it is not possible to compute the NPV in this case.
Regarding the disadvantages of using the discounted payback period for capital budgeting decisions, we need to check the statements provided:
1. The discounted payback period is calculated using net income instead of cash flows: This statement is not applicable because the discounted payback period is actually calculated using discounted cash flows, not net income. It takes into account the time value of money by discounting the cash flows to their present values.
2. The discounted payback period does not take the time value of money into account: This statement is incorrect. The discounted payback period does consider the time value of money by discounting the cash flows. It reflects the fact that cash flows received in the distant future are riskier than cash flows received in the near-term.
3. The discounted payback period does not take the project's entire life into account: This statement is true. The discounted payback period focuses on the time it takes to recover the initial investment, considering the discounted cash flows. It does not explicitly consider the project's entire life or the cash flows beyond the payback period.
In conclusion, the correct statement indicating a disadvantage of using the discounted payback period for capital budgeting decisions is: - The discounted payback period does not take the project's entire life into account.
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