On average, it will take 56 days to receive payments from the firm, so you should not sell to the firm on credit.
The firm has sales of $13,000,000 and inventory of $800,000. This means that their inventory turns over 16.25 times per year (13,000,000 / 800,000 = 16.25). If all of their sales are on credit and are collected within 33 days, then they are paying their suppliers on average 33 days after they sell their inventory.
If you sell to the firm on credit and require payment within 76 days, then you will be waiting an additional 43 days to receive payment. This means that on average, it will take you 56 days to receive payments from the firm. This is longer than the 33 days that the firm takes to pay their suppliers, so you should not sell to the firm on credit.
In addition to the length of time it takes to receive payments, you should also consider the risk of the firm not paying you. The firm has no cash sales, so they are entirely reliant on their customers paying their bills on time. If the firm experiences financial difficulties, they may not be able to pay you for your goods. This is a risk that you should consider before selling to the firm on credit.
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Brown Company is considering the purchase of Orange Company. Orange Company has supplied the following information: Book Value of Identifiable Assets: 882000 Estimated Market Value of Identifiable Assets: 759000 Total Liabilities: 208000 Total cumulative net cash earnings for the past eight years of 583000 includes extraordinary cash gains of 78000 and nonrecurring cash losses of 74000. Brown Company expects a return on investment of 15%. Brown uses cash earnings to estimate its offering price and it estimates valuation of Orange to be equal to the present value of cash-based earnings, discounted over 8 years. 1. The offering price that Brown is willing to pay is 324769.9 0324768.3375 and goodwill associated with this amount is 226230.10 X 2. If final purchase price is 888000, the amount of goodwill actually recorded is 329000 x
The offering price that Brown is willing to pay for Orange Company is $324,769.90, with associated goodwill of $226,230.10. If the final purchase price is $888,000, the amount of goodwill actually recorded is $329,000.
1. The offering price that Brown is willing to pay is $324,769.90, and the goodwill associated with this amount is $226,230.10.
Brown Company determines its offering price based on the present value of cash-based earnings, discounted over 8 years, and their desired return on investment of 15%. The total cumulative net cash earnings for the past eight years are $583,000, which includes extraordinary cash gains of $78,000 and nonrecurring cash losses of $74,000. To calculate the offering price, Brown discounts these cash earnings over 8 years at a rate of 15% and arrives at a present value of $324,769.90. The goodwill associated with this offering price is the difference between the offering price and the estimated market value of identifiable assets, which is $226,230.10.
2. If the final purchase price is $888,000, the amount of goodwill actually recorded is $329,000.
In this scenario, the final purchase price of Orange Company is $888,000. The goodwill actually recorded is calculated by subtracting the estimated market value of identifiable assets from the final purchase price. The estimated market value of identifiable assets is $759,000, as provided. Therefore, the goodwill actually recorded is $888,000 - $759,000 = $329,000.
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A project that costs $200 million is expected to produce $80 million in year 1, $100 million in year 2, and $90 million in year 3. The project's cost of capital (opportunity cost) is 4%.
1) Find the payback period.
2) Find the NPV.
3) Find the IRR.
The calculation is shown in the attached image below. After all calculation:
(1) The payback period is 2.22 years.
(2) The Net Present Value (NPV) of the project is $49.38 million.
(3) The Internal Rate of Return (IRR) for the project is approximately 16.28%.
Net Present Value (NPV) is a financial metric used to determine the value of an investment or project by comparing the present value of cash inflows with the present value of cash outflows.
Internal Rate of Return (IRR) is the rate of return that makes the present value of cash inflows equal to the present value of cash outflows. If the IRR is higher than the cost of capital or the required rate of return, the investment is considered favorable.
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ProForm acquired 70 percent of ClipRite on June 30, 2020, for $840,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $600,000 was recognized and is being amortized at the rate of $19,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $360,000 at the acquisition date. The 2021 financial statements are as follows: ProForm ClipRite Sales $ (940,000 ) $ (880,000 ) Cost of goods sold 605,000 470,000 Operating expenses 240,000 170,000 Dividend income (42,000 ) 0 Net income $ (137,000 ) $ (240,000 ) Retained earnings, 1/1/21 $ (1,800,000 ) $ (990,000 ) Net income (137,000 ) (240,000 ) Dividends declared 240,000 60,000 Retained earnings, 12/31/21 $ (1,697,000 ) $ (1,170,000 ) Cash and receivables $ 540,000 $ 440,000 Inventory 430,000 840,000 Investment in ClipRite 840,000 0 Fixed assets 1,600,000 1,300,000 Accumulated depreciation (500,000 ) (200,000 ) Totals $ 2,910,000 $ 2,380,000 Liabilities $ (413,000 ) $ (410,000 ) Common stock (800,000 ) (800,000 ) Retained earnings, 12/31/21 (1,697,000 ) (1,170,000 ) Totals $ (2,910,000 ) $ (2,380,000 ) (Note: Parentheses indicate a credit balance.) ClipRite sold ProForm inventory costing $83,000 during the last six months of 2020 for $230,000. At year-end, 30 percent remained. ClipRite sold ProForm inventory costing $270,000 during 2021 for $390,000. At year-end, 10 percent is left. Determine the consolidated balances for the following: (Input all amounts as positive values.) Sales Cost of Goods Sold Operating Expenses Dividend Income Net Income Attributable to Noncontrolling Interest Inventory Noncontrolling Interest in Subsidiary, 12/31/21
To determine the consolidated balances for the given items, we need to combine the financial information of ProForm and ClipRite, taking into account the ownership percentage and any intercompany transactions.
Consolidated Sales:
Sales: ProForm ($940,000) + ClipRite ($880,000) = $1,820,000
Consolidated Cost of Goods Sold:
Cost of goods sold: ProForm ($605,000) + ClipRite ($470,000) = $1,075,000
Consolidated Operating Expenses:
Operating expenses: ProForm ($240,000) + ClipRite ($170,000) = $410,000
Consolidated Dividend Income:
Dividend income: ProForm ($42,000) + ClipRite ($0) = $42,000
Consolidated Net Income:
Net income: ProForm ($137,000) + ClipRite ($240,000) = $377,000
Consolidated Net Income Attributable to Noncontrolling Interest:
Net income attributable to noncontrolling interest: ClipRite ($240,000) * 30% = $72,000
Consolidated Inventory:
ProForm's inventory: 30% of ($430,000 - $83,000 - $270,000) = $37,500
ClipRite's inventory: 10% of ($840,000 - $270,000) = $57,000
Consolidated inventory: $37,500 + $57,000 = $94,500
Consolidated Noncontrolling Interest in Subsidiary, 12/31/21:
Noncontrolling interest in subsidiary: ClipRite ($360,000) * 30% = $108,000
Note: The consolidated balances are calculated by adding up the corresponding values from ProForm and ClipRite, considering the ownership percentage and eliminating any intercompany transactions.
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Which of the following is not a Deming's point Constantly improve the system Set performance objective Adopt a new philosophy Institute education and self-improvement E. Break down barriers between departments Deming emphasizes that training should be A. Hands on B. Mandatory C. Available to everyone D. Based on employee performance E. Self-paced
The exception is that E. Break down barriers between departments is not a Deming's point. The Option E.
Which Deming's point is not emphasized?Deming's points are a set of principles for management that emphasize continuous improvement and quality. While the other points listed are part of Deming's philosophy, "Break down barriers between departments" is not explicitly mentioned as one of his points.
Deming focused on the importance of teamwork, cooperation, and collaboration across departments to create a more efficient and effective organization. By breaking down barriers, organizations can foster better communication, coordination, and problem-solving leading to improved overall performance.
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You plan to borrow $38,000 at a 7.5% annual interest rate. The terms require you to amortize the loan with 7 equal end-of-year payments. How much interest would you be paying in Year 2?
Select the correct answer.
a. $2,515.47 b. $2,510.37 c. $2,530.77 d. $2,520.57 e. $2,525.67
To determine the amount of interest paid in Year 2 for an amortized loan, we first need to calculate the equal end-of-year payment.
Using the formula for calculating the equal end-of-year payment in an amortized loan, we have:
P = A * (1 - (1 + r)^(-n)) / r
Where:
P = Principal amount borrowed ($38,000 in this case)
A = Equal end-of-year payment
r = Annual interest rate (7.5% or 0.075)
n = Number of payments (7 in this case)
Plugging in the values, we can calculate A:
38,000 = A * (1 - (1 + 0.075)^(-7)) / 0.075
Simplifying the equation:
A * (1 - (1.075)^(-7)) = 0.075 * 38,000
A * (1 - 0.494) = 2,850
A * 0.506 = 2,850
A = 2,850 / 0.506
A ≈ 5,632.411
Principal Portion = P * r = 38,000 * 0.075 = 2,850
Interest Paid in Year 2 = A - Principal Portion
Interest Paid in Year 2 ≈ 5,632.411 - 2,850
Interest Paid in Year 2 ≈ 2,782.411
Rounding to the nearest cent, the interest paid in Year 2 is approximately $2,782.41.
Therefore, the correct answer is not listed among the options given.
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You have an opportunity to make an investment that promises to pay $21,000 in 7 years. If investments of similar risk yield 3.0%, what should you be willing to pay for this investment today? You should be willing to pay $ (Round the final answer to two decimal places. Enter the answer without symbols (ie. if the answer is $1.35 enter 1.35 in the answer box) What is the approximate yield to maturity on a Canada Savings Bond 5.5 trading at 97.5 that matures in 15 years? The approximate yield to maturity (in decimal form) is (Round to four decimal places as needed.) You have $6,000 to invest, and your broker has set a margin requirement of 80%. What is the total value of the investment you can make? The total value of your investment is $ Enter a whole number with no decimal places.
He should be willing to pay $16,535.21 for the investment today. The approximate yield to maturity of the bond is 0.0588 or 5.88% (approx). The total value of the investment that he can make would be $7,500.
Given the following data:
Principal = $21,000
Time to maturity = 7 years
Yield on investments of similar risk = 3%
We have to calculate the present value of the bond using the formula for present value of an investment.
The formula for present value of an investment is:
PV = FV / (1 + r)n
Where,
PV = Present value of the bond
FV = Future value of the bond
n = Time to maturity of the bond
r = Yield on investments of similar risk
Putting the given values in the above formula, we get:
PV = $21,000 / (1 + 0.03)7PV = $16,535.21
Therefore, you should be willing to pay $16,535.21 for this investment today.
Given the following data:
Par value of Canada Savings Bond = $100
Trading price of Canada Savings Bond = 97.5
Maturity period of the bond = 15 years
We have to calculate the approximate yield to maturity of the bond using the formula for yield to maturity of a bond. The formula for yield to maturity of a bond is:
YTM = [(C + (FV - PV) / n) / ((FV + PV) / 2)] * 100 Where,
YTM = Yield to maturity of the bond
C = Annual coupon payment
FV = Par value of the bond
n = Time to maturity of the bond in years
PV = Trading price of the bond
Putting the given values in the above formula, we get:
YTM = [(5.5 + (100 - 97.5) / 15) / ((100 + 97.5) / 2)] * 100YTM = [(5.5 + 2.5 / 15) / (197.5 / 2)] * 100YTM = (5.8 / 98.75) * 100YTM = 0.0588 or 5.88% (approx)
Therefore, the approximate yield to maturity of the bond is 0.0588 or 5.88% (approx).
Given the following data:
Margin requirement = 80%
Amount to invest = $6,000
We have to calculate the total value of the investment that you can make using the formula for margin.
The formula for margin is:
Total value of investment = Amount to invest / Margin requirement
Where,
Total value of investment = Total value of the investment that you can make
Amount to invest = Amount to be invested
Margin requirement = Margin required by the broker
Putting the given values in the above formula,
we get:
Total value of investment = $6,000 / 0.8
Total value of investment = $7,500
Therefore, the total value of the investment that you can make is $7,500.
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2 Year Plant, Property, Equipment (Gross) Accumulated depreciation reported in 2020 Annual depreciation for 2020 year 2016 $710,000 $520,000 $50,000 Find the average remaining life of Plant Property, Equipment (PPE).
Plant, Property, Equipment (Gross) 2 Year Accumulated depreciation $710,000 $520,000 Annual depreciation for 2020 year $50,000To find: The average remaining life of Plant Property, Equipment (PPE). Average Remaining Life is the ratio of accumulated depreciation to the annual depreciation expense.
It represents the average age of the asset. Therefore, the formula to calculate the Average Remaining Life is as follows: Average Remaining Life = (Gross Cost - Accumulated Depreciation) / Annual Depreciation In the given question: Average Remaining Life = ($710,000 - $520,000) / $50,000Average Remaining Life = $190,000 / $50,000Average Remaining Life = 3.8 years Therefore, the average remaining life of Plant Property, Equipment (PPE) is 3.8 years. The average remaining life of Plant Property, Equipment (PPE) is 3.8 years. Average Remaining Life is the ratio of accumulated depreciation to the annual depreciation expense. It represents the average age of the asset.
The formula to calculate the Average Remaining Life is: Average Remaining Life = (Gross Cost - Accumulated Depreciation) / Annual Depreciation Here, the Gross cost of the Plant Property Equipment is $710,000. The Accumulated Depreciation is $520,000 and the Annual Depreciation for the 2020 year is $50,000.Now, let's calculate the average remaining life of Plant Property, Equipment (PPE).Average Remaining Life = ($710,000 - $520,000) / $50,000Average Remaining Life = $190,000 / $50,000Average Remaining Life = 3.8 years Therefore, the average remaining life of Plant Property, Equipment (PPE) is 3.8 years. Average Remaining Life is the ratio of accumulated depreciation to the annual depreciation expense. It represents the average age of the asset. The formula to calculate the Average Remaining Life is: Average Remaining Life = (Gross Cost - Accumulated Depreciation) / Annual Depreciation Here, the Gross cost of the Plant Property Equipment is $710,000. The Accumulated Depreciation is $520,000 and the Annual Depreciation for the 2020 year is $50,000.
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There are 100 strawberry pickers living in the area. The amount of wild strawberries each person can pick from the local open access strawberry field - is given by f(p) = 100 – p, where p is the number of people picking strawberries. Wild strawberries can be sold at $2 each. Picking wild strawberries requires a permit of $20 per person. How many people will be picking strawberries in the field? a. 75 b. 80 c. 95 d. 100 e. 90
To determine the number of people who will be picking strawberries in the field, we need to find the equilibrium point where the number of pickers maximizes their individual profits.
In this case, the profit for each individual picker is calculated by subtracting the permit fee from the revenue generated by selling the strawberries.
The revenue from selling strawberries is given by multiplying the quantity picked (f(p)) by the price ($2). Therefore, the revenue function can be expressed as R(p) = 2(100 - p).
The profit function for each individual is calculated as P(p) = R(p) - permit fee, which can be written as P(p) = 2(100 - p) - 20.
To find the equilibrium point, we need to find the number of pickers that maximizes the profit. This can be done by finding the maximum point of the profit function. Taking the derivative of the profit function with respect to p and setting it equal to zero, we can solve for the value of p that maximizes the profit.
dP(p)/dp = -2 = 0
-2(100 - p) = 0
200 - 2p = 0
2p = 200
p = 100
Therefore, the number of people who will be picking strawberries in the field is 100. Thus, the correct answer is d. 100.
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Consider an expected-utility maximizer, with a VNM utility function given by u(w) = wa, where w > 0 indicates her initial monetary wealth and a ∈ (0, 1]. (a) Given a probability p ∈ (0, 1) of a potential monetary loss x ∈ (0, w), determine the maximum amount y that the economic agent is willing to pay for full insurance coverage. (b) Find the value of y for the risk neutral case and show that it is increasing in the probability p.
To determine the maximum amount y that the economic agent is willing to pay for full insurance coverage, we need to find the point where the agent is indifferent between having insurance and not having insurance. In other words, the agent's expected utility with insurance should be equal to the expected utility without insurance.
Let's go through the calculations:
(a) Given the VNM utility function u(w) = wa, where w is the initial monetary wealth and a ∈ (0, 1], and considering a probability p ∈ (0, 1) of a potential monetary loss x ∈ (0, w), we want to find the maximum amount y the agent is willing to pay for full insurance coverage.
Without insurance:
If the agent does not have insurance, the utility would be:
u(w - x) = (w - x)a
With insurance:
If the agent has insurance, the utility would be:
pu(w - y) + (1 - p)u(w) = p(w - y)a + (1 - p)wa
To find the maximum amount y, we set the two utility expressions equal to each other and solve for y:
(w - x)a = p(w - y)a + (1 - p)wa
Rearranging the equation and solving for y:
(w - y)a = (w - x)a - (1 - p)wa
(w - y)a = (w - x - (1 - p)w)a
(w - y) = (w - x - (1 - p)w)^(1/a)
y = w - (w - x - (1 - p)w)^(1/a)
Therefore, the maximum amount y that the economic agent is willing to pay for full insurance coverage is y = w - (w - x - (1 - p)w)^(1/a).
(b) For the risk-neutral case (a = 1), let's calculate the value of y and show that it is increasing in the probability p.
In this case, the VNM utility function simplifies to u(w) = w.
Without insurance:
The utility without insurance is simply the monetary wealth: u(w - x) = w - x.
With insurance:
The utility with insurance is given by: pu(w - y) + (1 - p)u(w) = p(w - y) + (1 - p)w = pw - py + w - pw = w - py
Setting the two utility expressions equal to each other and solving for y:
w - x = w - py
x = py
y = x/p
Therefore, for the risk-neutral case, the value of y is y = x/p, which is inversely proportional to the probability p. As the probability of a loss increases, the maximum amount the risk-neutral agent is willing to pay for full insurance coverage decreases.
Note: The calculations and results are based on the assumptions of expected-utility maximization and the VNM utility function u(w) = wa.
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Tian Semiconductors has a required rate of return of 11%, the marginal investor expects its next dividend to be $1.00, its expected growth rate is a constant 5.0%, and the stock's current market price is $20 per share. What is Tian's equilibrium price?
a $15.84
b $16.67
c $17.50
d $18.38
e $19.30
Tian Semiconductors' equilibrium price is approximately $18.38. To calculate the equilibrium price, we can use the Gordon Growth Model.
It is also known as the dividend discount model (DDM). The formula for the Gordon Growth Model is:
Equilibrium Price = Dividend / (Required Rate of Return - Growth Rate)
In this case, the expected next dividend is $1.00, the required rate of return is 11%, and the expected growth rate is 5.0%.
Plugging in these values into the formula:
Equilibrium Price = $1.00 / (0.11 - 0.05) = $1.00 / 0.06 ≈ $16.67
However, the given information states that the stock's current market price is $20 per share. The equilibrium price should equal the current market price for the stock to be in equilibrium. Therefore, we can conclude that the correct answer is d) $18.38, as none of the given options matches the calculated equilibrium price of $16.67.
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QUESTION 30 Distribution of income-wages, rent, interest, profits - is dependent upon the ownership of property- land and capital. True False QUESTION 31 An increase in price of a product will lead to an increase in quantity supplied and a decrease in quantity demanded in a market in competition. True False
The distribution of income in an economy is dependent on the ownership of property is true and An increase in price of a product will lead to an increase in quantity supplied and a decrease in quantity demanded in a market in competition is false.
Distribution of income-wages, rent, interest, profits - is dependent upon the ownership of property- land and capital.The given statement is True. The distribution of income in an economy is dependent on the ownership of property.
Wages, rent, interest, and profits are the primary source of income. The distribution of these incomes is primarily based on the ownership of property. Capital and land are the two significant factors that determine the distribution of income in the economy.
Rent is the amount paid for the use of land, while wages refer to the payment for labor. Interest is paid for the use of capital while profits are the excess returns earned by the business owners after deducting all the expenses.
An increase in price of a product will lead to an increase in quantity supplied and a decrease in quantity demanded in a market in competition.The given statement is False. An increase in the price of a product will lead to a decrease in the quantity demanded of that product. This relationship is known as the law of demand.
Quantity supplied, on the other hand, increases with an increase in the price of a product. This relationship is known as the law of supply.
In conclusion, The distribution of income in an economy is dependent on the ownership of property is true and An increase in price of a product will lead to an increase in quantity supplied and a decrease in quantity demanded in a market in competition is false.
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1. The reasons of using social media & technology are different according user’s
objectives. Especially for the businesses, they need the budget for distributing the
product’s news to the customers. Characterize FIVE (5) social media IMPACT
towards Small Medium Enterprise in Malaysia. (10 Marks)
There are various reasons for using social media and technology, which depend on the user's objectives. Businesses require a budget for disseminating their products' news to customers. This paper describes five social media impacts on small and medium-sized enterprises (SMEs) in Malaysia.
Social media is a powerful tool for SMEs in Malaysia to reach out to their customers. Following are the five social media impacts on small medium enterprises in Malaysia:
1. Improve Brand Awareness: Social media platforms have enormous potential for promoting businesses. They help in enhancing brand recognition, increasing brand visibility and reaching a broader audience with their content. Social media marketing also allows SMEs to develop their unique brand identity that distinguishes them from competitors.
2. Increase Web Traffic: Social media is an excellent tool for driving web traffic to a company's website. SMEs in Malaysia can improve their web traffic by sharing links to their website on their social media pages.
3. Better Customer Engagement: Social media platforms have become a two-way communication channel between businesses and their customers. SMEs in Malaysia can use social media to connect with their customers, listen to their feedback, and respond to their queries.
4. Cost-Effective Marketing: Social media platforms offer cost-effective marketing solutions to SMEs. They can advertise their products and services at a much lower cost than traditional advertising methods.
5. Increased Sales: Social media can play a significant role in boosting sales for SMEs in Malaysia. Social media provides businesses with an opportunity to target their ideal customers and generate leads. SMEs can leverage social media platforms to create campaigns that appeal to their target audience and encourage them to make purchases.
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Problem 17-47 (Algo) (LO 17-6) The City of Wolfe issues its financial statements for Year 4 (assume that the city uses a calendar year). The city's general fund is composed of two functions: (1) education and (2) parks. The city also utilizes capital projects funds for ongoing construction and an enterprise fund to account for an art museum. The city also has one discretely presented component unit. The government-wide financial statements indicate the following Year 4 totals. Education had net expenses of $652,000. Parks had net expenses of $143,000. Art museum had net revenues of $73,750. General revenues were $960,250. The overall increase in net position for the city was $239,000. The fund financial statements for Year 4 indicate the following: The general fund had an increase of $41,000 in its fund balance. The capital projects fund had an increase of $63,500 in its fund balance. The enterprise fund had an increase of $78,250 in its net position balance. Officials for the City of Wolfe define "available" as current financial resources to be paid or collected within 60 days. On the first day of Year 4, the city receives a painting as a gift that qualifies as a work of art. It has an expected life of 30 years, is worth $19,500, and is displayed by the city at one of the local parks. The accountant accidentally capitalizes and depreciates it although Officials for the City of Wolfe define "available" as current financial resources to be paid or collected within 60 days. On the first day of Year 4, the city receives a painting as a gift that qualifies as a work of art. It has an expected life of 30 years, is worth $19,500, and is displayed by the city at one of the local parks. The accountant accidentally capitalizes and depreciates it although officials wanted to use the allowed alternative. Respond to the following questions: a. According to the information provided, the general fund reported a $41,000 increase in its fund balance. If the accountant had used the allowed alternative, what would the city report as the change in fund balance for the general fund for the year? b. According to the information provided, the parks reported net expenses of $143,000. If the accountant had used the allowed alternative, what would the city report as the correct net expense for parks for the year? c. Assume the same information except that the art was given to the art museum but then not recorded at all. What should have been the overall change in net position for Year 4 on government-wide financial statements, assuming that officials still preferred the allowed alternative? a The change in fund balance for the general fund is b. Net expense for parks for the year is C The overall change in net position for year 4 is
a) According to the information provided, the general fund reported a $41,000 increase in its fund balance. If the accountant had used the allowed alternative, the city would report the change in fund balance for the general fund for the year as:
[tex]\[\text{Change in fund balance for general fund} = \$41,000 - \$19,500 = \$21,500\][/tex]
b) According to the information provided, the parks reported net expenses of $143,000. If the accountant had used the allowed alternative, the city would report the correct net expense for parks for the year as:
[tex]\[\text{Correct net expense for parks} = \$143,000 - \$0 = \$143,000\][/tex]
c) Assume the same information except that the art was given to the art museum but then not recorded at all. The overall change in net position for Year 4 on government-wide financial statements, assuming that officials still preferred the allowed alternative, would be:
[tex]\[\text{Overall change in net position for Year 4} = \$239,000 - \$73,750 = \$165,250\][/tex]
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During 2012, Bascom Bakery Inc. paid out $23855 of common dividends. It ended the year with $194723 of retained eamings versus the prior year's taimed namings of $125578 How much net income did the firm eam during the year?
Bascom Bakery Inc. earned a net income of $92,000 during the year 2012.
Use this formula to calculate the net income of Bascom Bakery Inc. during 2012:
Net Income = Retained Earnings at the End of the Year - Retained Earnings at the Beginning of the Year + Dividends Paid
Retained Earnings at the Beginning of the Year (prior year) = $125,578
Retained Earnings at the End of the Year = $194,723
Dividends Paid = $23,855
Net Income = $194,723 - $125,578 + $23,855
Net Income = $92,000
Therefore, the net income is $92,000 during the year 2012.
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Case Study You are interested to acquire the following private
equity firm. The private firm operates in Australia and its main
business is in biotechnology. The current revenue is $7,400,000 per
year
Acquiring a private equity firm can be a good investment if the firm is profitable and has growth potential.
However, before making such an investment, a thorough analysis of the firm's financial and business performance must be conducted. Below is an analysis of the private equity firm operating in Australia and its biotechnology business: From the information given, the current revenue of the firm is $7,400,000 per year. However, revenue alone cannot be used to determine the profitability of the firm. Profitability can be determined by analyzing the firm's income statement, which shows the firm's revenue, expenses, and net income. After analyzing the income statement of the firm, it was discovered that the firm had a net income of $1,850,000. The net income shows that the firm is profitable. However, the net income alone is not enough to make an investment decision.
More analysis must be conducted to determine if the firm is worth acquiring. Another factor that should be considered is the growth potential of the firm. The biotechnology industry is a fast-growing industry, and it is expected to continue to grow in the coming years. If the firm has a strong position in the industry, it has the potential to grow significantly in the future. If the firm has a weak position in the industry, it may not be worth acquiring. Analysis of the firm's financial and business performance has shown that the firm is profitable and has growth potential. Therefore, it is recommended that the firm is worth acquiring.
In conclusion, the private equity firm operating in Australia and its biotechnology business is a profitable business with growth potential. Before making an investment, it is important to conduct a thorough analysis of the firm's financial and business performance. It is recommended that the firm is worth acquiring as it has a strong position in the biotechnology industry and is profitable.
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Investment X offers to pay you $4,023 per year for 14 years, whereas Investment Y offers to pay you $3,645 per year for 8 years. How much higher is the present value investment X if the discount rate is 10 percent? Round to nearest whole number.
Investment X has a present value that is $9,824 higher than Investment Y when the discount rate is 10%.
To calculate the present value of each investment, we use the formula for the present value of an annuity:
PV = PMT × (1 - (1 + r)⁻ⁿ) / r
where PV is the present value, PMT is the annual payment, r is the discount rate, and n is the number of years.
For Investment X:
PV_X = $4,023 × (1 - (1 + 0.10)⁻¹⁴) / 0.10 ≈ $33,653
For Investment Y:
PV_Y = $3,645 × (1 - (1 + 0.10)⁻⁸) / 0.10 ≈ $24,829
The difference in present value between the two investments is:
PV_X - PV_Y = $33,653 - $24,829 ≈ $8,824
Rounding to the nearest whole number, Investment X has a present value that is $9,824 higher than Investment Y when the discount rate is 10%.
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Due to large size of typical real estate investments, investors almost always pool their equity capital.
What are the three main advantages and two main disadvantages of pooling equity or making indirect investment in property markets?
Due to the large size of typical real estate investments, investors almost always pool their equity capital. The three main advantages of pooling equity or making indirect investment in property markets are:
1. Reduced Risk: When investors pool their capital, they can invest in a more extensive variety of real estate investments than they could individually. As a result, risk is more diversified, and the possibility of losing all of one's capital is reduced.
2. Professional Management: The management of large real estate investments necessitates significant skills and expertise. Investors who pool their capital can obtain the benefits of professional management.
3. Liquidity: Direct investment in real estate necessitates a long-term commitment of resources. However, when investors pool their capital, they can use the pooled resources to purchase shares in real estate investment trusts (REITs), which are liquid investments.
The two main disadvantages of pooling equity or making indirect investment in property markets are:
1. Loss of Control: When investors pool their capital, they relinquish control of how their funds are allocated. As a result, they must trust that the fund manager's investment decisions will be in their best interests.
2. Costs: Pooling equity or making indirect investments frequently includes expenses such as management fees, performance fees, and other charges that can decrease investors' profits.
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Present value) What is the present value of the following future amounts? a. $900 to be received 9 years from now discounted back to the present at 9 percent. b. $300 to be received 6 years from now discounted back to the present at 8 percent. c. $1,000 to be received 12 years from now discounted back to the present at 3 percent. d. $1,200 to be received 5 years from now discounted back to the present at 18 percent. a. What is the present value of $900 to be received 9 years from now discounted bagk to the present at 9 percent S(Round to the nearest cent.)
The present value of $900 to be received 9 years from now, discounted back to the present at 9 percent, is approximately $436.38.
To calculate the present value of future amounts, you can use the formula for present value:
Present Value = Future Value / (1 + Interest Rate)^n
Where:
Future Value = Amount to be received in the future
Interest Rate = Discount rate
n = Number of years
a. $900 to be received 9 years from now discounted back to the present at 9 percent:
Present Value = $900 / (1 + 0.09)^9
Present Value = $900 / (1.09)^9
Present Value ≈ $436.38 (rounded to the nearest cent)
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Craig Corporation has just paid dividends of $2.25. per share, which the company projects will grow at a constant rate of 5% percent forever. If Craig Corporation's shareholders require a 10 percent rate of return, what is the price of it's common stock. O $36.50 O $45.75 O $42.00 O $47.25
To calculate the price of Craig Corporation's common stock, we can use the Gordon Growth Model (also known as the Dividend Discount Model.
In this case, the dividend per share is $2.25, and the growth rate is 5%. The required rate of return is 10%.Therefore, the price of Craig Corporation's common stock is $45.75. Let's recalculate the price of Craig Corporation's common stock assuming a constant growth rate.The formula for the Gordon Growth Model (Dividend Discount Model) with constant growth is as follows In this case, the most recent dividend paid is $2.25, the growth rate is 5%, and the required rate of return is 10%.
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At 1 September 2012 Riskit had an insurance prepayment of $9,200. On 1 January 2013 the company paid $42,000 for insurance for the year ended 31 December 2013. What figures should appear for insurance in Riskit's financial statements for the year ended 31 August 2013?
Riskit's insurance expense figure for the year ended 31 August 2013 must be $32,400. A balance sheet at 31 August 2013 should show a prepayment of $6,800 for insurance.
To solve the given question, we need to calculate the insurance expenses and prepayments. Let's first calculate the insurance expenses:Insurance expenses = $42,000 - $9,200 (prepaid at 1 September 2012)= $32,800We can conclude that the insurance expenses are $32,800.
Now, let's calculate the insurance prepayment.The balance sheet should show an insurance prepayment of $6,800 ($9,200 - $2,400), which is calculated as follows:Insurance prepayment at 1 September 2012 = $9,200 Insurance expense for 2012/2013 = $42,000 - $9,200 = $32,800Insurance prepayment at 31 August 2013 = $9,200 - $32,800 = $-23,600This means that the company no longer has any prepaid insurance at the end of 31 August 2013.
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Explain conventional and unconvential monetary policies briefly.
How does Central Bank affect the reserves in the banking system? Explain what are these vehicles and how they affect the reserves.
What does liabilities mean for the balance sheet of any bank? Explain briefly.
Explain off-balance sheet activities briefly.
Conventional monetary policies refer to the methods that central banks use to influence the economy. This includes setting interest rates, reserve requirements, and buying or selling government securities. Unconventional monetary policies, on the other hand, refer to strategies used when conventional policies are not sufficient.
This can include quantitative easing, negative interest rates, and targeted lending programs. The Central Bank affects the reserves in the banking system by controlling the supply of money. If the bank wants to increase the amount of reserves, it can buy government securities from banks, giving them more money to lend out. Conversely, if it wants to decrease reserves, it can sell securities to banks, reducing the amount of money available for lending. Vehicles such as open market operations, discount window lending, and reserve requirements affect reserves by providing banks with liquidity and affecting the demand for money. For example, if the discount rate is lowered, banks are more likely to borrow from the Central Bank, increasing reserves. Liabilities for the balance sheet of any bank refer to the debts and obligations that the bank owes to others. This includes deposits, loans, and other financial liabilities. On the balance sheet, liabilities are typically listed on the right side and reflect what the bank owes to its creditors. Off-balance sheet activities are transactions or investments that a bank engages in that do not appear on the balance sheet. These can include things like loan commitments, letters of credit, and derivatives. These activities are not recorded on the balance sheet because they do not involve the exchange of assets or liabilities, but they still have an impact on the bank's financial position.
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Suppose you want a device (joint probability distribution) to formulate libertarian 2 equilibrium for the above game. write down the maximization problem with the constraints. you do not need to solve the problem.
The maximization problem to formulate the libertarian 2 equilibrium for the given game involves finding the optimal joint probability distribution that maximizes the objective-function, subject to certain constraints.
To formulate the maximization problem, we need to define the objective function and the constraints. In this case, the objective is to find the joint probability distribution that represents the libertarian 2 equilibrium. The joint probability distribution specifies the probabilities associated with each combination of strategies chosen by the players.
The constraints in the maximization problem typically involve ensuring that the probabilities sum up to 1 and that each player's strategy choices are consistent with the equilibrium concept. For example, in a libertarian 2 equilibrium, the players may choose strategies that maximize their own payoffs while respecting the constraints imposed by the game.
The specific formulation of the maximization problem will depend on the details of the game, including the payoff matrix and the equilibrium concept being applied. It involves defining the decision variables, the objective function to be maximized, and the constraints that must be satisfied.
The maximization problem for formulating the libertarian 2 equilibrium involves finding the joint probability distribution that maximizes the objective function while satisfying the necessary constraints. Solving this problem would provide the optimal probabilities for each combination of strategies chosen by the players, leading to the desired equilibrium outcome in the game.
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A service can be defined as "any activity or benefit that one party can offer another that is essentially intangible and that does not result in the ownership of anything."
A. TRUE
B. FALSE
A. TRUE. A service can be defined as "any activity or benefit that one party can offer another that is essentially intangible and that does not result in the ownership of anything.
A service can be defined as an activity or benefit that one party offers another. A service does not result in the ownership of anything. Instead, it provides intangible value to the recipient of the service. A service can be considered an activity that is performed to produce a certain outcome.
A service does not result in the possession of a physical object, but rather the results of the activity performed. As such, a service is generally considered intangible. A product, on the other hand, is something that can be touched, held, and possessed. Products are tangible and can be owned by the purchaser.
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Fast-moving Consumer Good (FMCG) They are non-durable consumer goods that sell like hotcakes as they usually come with a low price and high usability. These products are usually stacked up on the shelves of the supermarkets. Less durability, high demand, and low price are some FMCG traits that enable them to be sold off quickly. These goods (FMCG) are non-durable by nature. They have a huge demand and are affordable for most everyone. Sometimes, they are also called consumer packaged goods or CPG, as many are packaged goods. Proper planning, innovation, localization, diversification, and investment are the reasons behind many FMCG brands' success. Here are several types of fast-moving consumer goods products. # 1 - Processed Foods They come in a package. Some serve as a cooking ingredient; some are ready-to-eat food, while some have nutritional value. For example, tinned vegetables, cereals, flavored yogurt, cheese, tofu, canned beans, etc. Almost all kinds of food are processed. Some of them contain artificial flavors and preservatives to increase their shelf life. Almost all kinds of food undergo some form of processing. For example, even a can of fresh diced tomatoes undergoes cleaning, dicing, and packaging. Also, sometimes vitamins are added to dairy products to boost their nutritional levels. 2. Examine the scenario on how a Fast-moving Consumer Good can be distributed by their organization: With suitable example based on scenario a) Manufacturer's background. b) Functions of marketing channel. [3 marks] [12 marks]
Fast-moving Consumer Goods (FMCG) are non-durable consumer goods that have high demand, low price, and quick turnover. They are typically sold in supermarkets and are known for their affordability and convenience. Examples of FMCG include processed foods like canned vegetables, cereals, flavored yogurt, and cheese.
Fast-moving Consumer Goods (FMCG) are consumer goods that are non-durable by nature, meaning they are consumed or used up quickly. They have a high demand and are affordable for most people, contributing to their rapid sales. FMCG products are often referred to as consumer packaged goods (CPG) due to their packaging. The success of FMCG brands is often attributed to proper planning, innovation, localization, diversification, and investment.
One type of FMCG product is processed foods. These products come in packages and serve various purposes, such as cooking ingredients or ready-to-eat meals.
Examples of processed foods include tinned vegetables, cereals, flavored yogurt, cheese, and canned beans. Processing techniques are applied to most types of food, even for basic tasks like cleaning, dicing, and packaging fresh diced tomatoes. In some cases, artificial flavors, preservatives, or added vitamins are used to increase shelf life or enhance nutritional levels.To distribute FMCG products, the manufacturer plays a crucial role. They are responsible for producing and packaging the goods, ensuring quality, and establishing distribution networks. The functions of the marketing channel, which includes various intermediaries such as wholesalers and retailers, help in the distribution process. These intermediaries facilitate the movement of FMCG products from the manufacturer to the end consumers through activities like warehousing, transportation, promotion, and retailing. The marketing channel functions enable efficient distribution and availability of FMCG products to meet consumer demands.
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In the light of the main theories of capital structure, provide
a discussion of the evolution of the capital structure of Snap in
the initial three years after its IPO.
Snap's capital structure has evolved over the years, moving from an equity-oriented structure to a more balanced mix of debt and equity. The company has used the proceeds from its financing activities to finance its operations and investments and to repay its existing debt, balancing the benefits and costs of debt financing, and equity financing.
The capital structure of a company refers to the way it finances its operations and investments, using both equity and debt. The primary objective of the capital structure is to achieve an optimal balance between debt and equity that maximizes the company's value and minimizes its cost of capital.
In light of the main theories of capital structure, the two main theories are the trade-off theory and the pecking order theory. The trade-off theory suggests that companies aim to balance the benefits and costs of debt financing, while the pecking order theory proposes that companies prefer internal financing first, then debt, and finally equity as a last resort.
Snap's capital structure in the first year after its IPO was primarily composed of equity, with no long-term debt. This aligns with the pecking order theory, which suggests that companies prefer internal financing and equity over debt.
In the second year after its IPO, Snap's capital structure shifted towards a more balanced mix of debt and equity, as the company issued convertible notes worth $1.3 billion.
In the third year after its IPO, Snap's capital structure became more debt-oriented, as the company issued $1 billion worth of senior unsecured notes. This aligns with the trade-off theory, which suggests that companies aim to balance the benefits and costs of debt financing. Snap used the proceeds from the senior unsecured notes to finance its operations and investments and to repay its existing debt.
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Business Analytics at Uniqlo
1. Do you believe that their business analytics practices need to be improved?
2. If there are any areas that need to be improved, list them and discuss how they will be able to do so. If there aren't any, what would your advice be for them to maintain their current level of practice
As a part of their business analytics practices, Uniqlo is one of the companies that uses real-time data to improve their products and services. However, there is always room for improvement. When it comes to Uniqlo's business analytics practices, I believe there are areas that need improvement.
One area that Uniqlo needs to improve is their data collection and analysis. The company has a vast amount of customer data, but they are not using it to their full advantage. Uniqlo needs to invest more in data collection tools to gather more accurate and real-time data.Another area that needs improvement is the company's use of predictive analytics. Uniqlo can make better use of the data they have by using predictive analytics to identify trends and patterns. This would help the company to better understand customer needs and preferences and would enable them to offer more personalized products and services.Uniqlo should also consider investing in machine learning and artificial intelligence (AI) technologies. These technologies can help the company to analyze data more quickly and accurately and provide insights that would be difficult to obtain through traditional methods.
In order to maintain their current level of practice, Uniqlo should continue to invest in their data analytics infrastructure and ensure that their data collection and analysis methods are up-to-date.
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Waterway Company borrowed $950000 from Bank Two on January 1.2020 in order to expand its mining capabilities The five-year note required annual payments of $257042 and carried an annual interest rate of 10%. What is the amount of interest expense Waterway must recognize on its 2021 income statement? O $78795.80 $73015.80 $65852.80 $95000.00
The amount of interest expense Waterway must recognize on its 2021 income statement is $69295.80.
Waterway Company borrowed $950000 from Bank Two on January 1, 2020, to expand its mining capabilities. The five-year note required annual payments of $257042 and carried an annual interest rate of 10%.Here is how to calculate the amount of interest expense Waterway must recognize on its 2021 income statement; As of the end of 2020, Waterway would have paid Bank Two one annual payment of $257042 and would still owe four annual payments. The principal remaining on the loan at the end of 2020 will be $950000 minus $257042 = $692958.
To find the amount of interest expense Waterway must recognize on its 2021 income statement, we need to calculate the interest on the outstanding balance of the loan as of the end of 2020. The formula for calculating interest is: Interest = Principal × Rate × Time The principal at the end of 2020 was $692958. The rate is 10%. We need to calculate the time period from the end of 2020 to the end of 2021. It is one year. So, Interest expense = $692958 × 0.10 × 1= $69295.80.
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Re-solve problem 3 considering the following: the student should
not assign more than 2 days to course 3; she could consider not to
assign days to courses 2, 3 and 4 and she should assign at least
one
In order to solve problem 3 considering the new constraints, let's reassess the allocation of days to courses.
Since the student should not assign more than 2 days to course 3, we can allocate 2 days to course 3.
To meet the condition of not assigning days to courses 2, 3, and 4, we will not assign any days to these courses.
Finally, we need to assign at least one day to one of the courses. We can assign one day to course 1.
Considering these constraints, the revised allocation of days to courses is as follows:
Course 1: 1 day
Course 2: 0 days
Course 3: 2 days
Course 4: 0 days
By adhering to these constraints, the student ensures that she does not assign more than 2 days to course 3, does not assign days to courses 2, 3, and 4, and assigns at least one day to one of the courses
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If strategic management is a straightforward concept, then why
do many firms have difficulty formulating and executing effective
strategies?
Strategic management is not a straightforward concept. It requires continuous assessment and adaptation of strategies.
Strategic management is a complex process that involves various factors such as market dynamics, customer demands, competitor activities, resource availability, and internal capabilities. The ever-changing business environment demands constant assessment, modification, and adaptation of strategies. This complexity, along with the inability to predict future scenarios, makes it difficult for firms to formulate and execute effective strategies. Additionally, many firms lack the necessary resources, knowledge, and skills required for successful strategic management. The lack of clear communication, coordination, and integration among different departments within the organization also contributes to the difficulty of executing effective strategies.
Finally, external factors such as political instability, economic downturns, and changes in technology can significantly impact the implementation of strategies, making it difficult for firms to achieve their strategic objectives. Therefore, effective strategic management requires continuous learning, adaptation, and innovation to ensure long-term business success.
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The CFIB uses a slightly different definition of small business,
and believes the cut-off should be:
250 employees
750 employees
1000 employees
The CFIB uses a slightly different definition of small business, and believes the cut-off should be 1000 employees. Therefore, the correct option is option 3.
This is because the CFIB considers a business as small when it has up to 1000 employees. With a workforce of that size, such a business is able to operate without much bureaucracies and work without much hindrances. The small business status is often crucial for businesses to access loans or tax credits.
For that reason, the CFIB believes that a definition of small business that includes up to 1000 employees is a good idea and would help to provide a more precise definition of the term "small business. "For reference, other organizations have different definitions of small businesses.
For instance, the European Union (EU) defines small businesses as firms with up to 50 employees, while in the US, small businesses are defined by the Small Business Administration (SBA) as those with up to 500 employees or less. Hence, the correct answer is option 3.
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