Koala company originally issued 100,000,000 shares of its $10 par value stock for $35 per share in 2017. In July 2021, company reacquired 5,000,000 shares at $15 per share to re-issued. In November, it re-issued these 3,000,000 treasury shares for $39. Instructions: a. Prepare the journal entries to record all above transactions b. Prepare stockholders' equity section of balance sheet at 31st December 2021

Answers

Answer 1

The journal entries for Koala Company's stock transactions are as follows:

Issuance of 100,000,000 shares:

Debit Cash for $3,500,000,000Credit Common Stock for $1,000,000,000Credit Additional Paid-in Capital for $2,500,000,000

Repurchase of 5,000,000 shares:

Debit Treasury Stock for $75,000,000Credit Cash for $75,000,000

Reissuance of 3,000,000 treasury shares:

Debit Cash for $117,000,000Credit Treasury Stock for $45,000,000Credit Additional Paid-in Capital for $72,000,000

How to prepare journal entries for Koala Company's stock transactions?

Issuance of 100,000,000 shares at $35 per share in 2017:

Cash = 100,000,000 shares * $35 per share

Cash = 3,500,000,000

Common Stock = 100,000,000 shares * $10 par

Common Stock = 1,000,000,000

Additional Paid-in Capital 2,500,000,000

Repurchase of 5,000,000 shares at $15 per share in July 2021:

Treasury Stock 75,000,000

Cash = 5,000,000 shares * $15 per share

Cash = 75,000,000

Reissuance of 3,000,000 treasury shares at $39 per share:

Cash = 3,000,000 shares * $39 per share

Cash= $117,000,000

Treasury Stock $45,000,000

Additional Paid-in Capital $72,000,000.

Read more about journal entries

brainly.com/question/28390337

#SPJ4


Related Questions

Q7)
If you deposit $1,976.00 into an account paying 16.20% annual
interest compounded monthly, how many years until there is
$25,723.00 in the account? (1.5 points)?

Answers

It would take approximately 7.5 years for the account to reach $25,723.00 with a $1,976.00 initial deposit and an annual interest rate of 16.20% compounded monthly.

To calculate the number of years required to reach a specific amount in an account, we can use the formula for compound interest:

[tex]A = P(1 + r/n)^(nt)[/tex]

Where:

A = Desired amount ($25,723.00)

P = Principal (initial deposit, $1,976.00)

r = Annual interest rate (16.20% or 0.162)

n = Number of times interest is compounded per year (12 for monthly compounding)

t = Number of years (unknown)

We need to solve for t, so we rearrange the formula:

[tex]t = (log(A/P)) / (n * log(1 + r/n))[/tex]

Plugging in the values, we have:

A = $25,723.00

P = $1,976.00

r = 0.162

n = 12

[tex]t = (log(25723/1976)) / (12 * log(1 + 0.162/12))[/tex]

Using a calculator, we can evaluate this expression:

t ≈ 7.5 years

Learn more about annual interest rate here :-

https://brainly.com/question/20631001

#SPJ11

1- which of the following is not a proposal?
a. academic reaserch, b. bussiness plan, c. grant, d.all are proposal
______________________________________
2- types of follow up letters include:
______________________________________
3-ambiguity should be....... in communications
a. avoided, b. encouraged, c. removed, d. permited
__________________________________________
4-linkdin is not....
a. website, b. networking tool, c. professional forum, d. a dete site
___________________________________
5-A resume may need to exclude:
a. refrences, b. education, c. work history, d. summary of skills
___________________________
6-A/an _______letter is interrogatory in nature
a. claims, b. sales, c. adjustment, d. inquiry
_________________________________
7-avoid using company email for:
a. formal use, b. informal use, c. personal use, d. formal and personal use
[ ] __________________________
[ ] 8- memos can include:
[ ] a. transitory, b. transmittal, c. technical, d. all are types of memos
_______________________________
9-which of the following is not a resume
a. functional, b. curriculum viate, c. chronological, d. all are resumes
______________________________
10-which font prefered for email?
a. Tahoma, b. time new roman, c. arial, d.
all are okay to use
_____________________________________
11-A client can be insulting but proffesional needs to focus
a. A problem, b. consequences, c. how he feels about it, d. both problem and consequences
______________________________
12-which experience should never be listed on resume:
a. video games, b. trips to disney land, c. comic books collections, d. what to list depends on the jop?
_________________'________
13-A technical document based on
a. intuition, b. usable information, c. speculation, d. equivocation, e. all of these
________________________
14-A technical document focuses
a. mostly on readers needs, b. purely on writers needs, c. on the subject and the writer, d. on the writer impressions, e. on none of this
___________________
15-a technical communicators task to
a. impose his or her thoughts on the reader, b. select the mosy useful material, c. interpret for readers, d. B and C, e. all of these

Answers

- A report is not a proposal. A report is a document that details the findings of a study or research and presents them in an organized way.

It can also include recommendations for future action, but it is not a proposal as it does not aim to persuade the reader to take a specific action or make a decision.2. Which experience should never be listed on a resume? - Any experience that is irrelevant to the job or position that you are applying for should not be listed on a resume. For example, if you are applying for a job in marketing, listing your experience as a cashier is not relevant and should be left out. Similarly, any experience that is controversial or unprofessional should also not be listed. It is important to tailor your resume to the job you are applying for and only include relevant and appropriate experiences that demonstrate your skills and qualifications.

To know more about report  visit:

https://brainly.com/question/26177190

#SPJ11

Which one of the following factors would increase the demand for oranges?

a. a reduction in the price of bananas, a substitute product
b. development of a line of high-yield orange trees that are also more freeze resistant
c. a decrease in consumer income
d. an increase in the price of grapefruit, a substitute produc

Answers

Among the given options, the factor that would increase the demand for oranges is: d. an increase in the price of grapefruit, a substitute product (option d).

In economics, the law of demand states that if the price of a good or service increases, the quantity demanded decreases, and vice versa. Conversely, if other things are constant, an increase in demand leads to an increase in the price of the good or service.

A substitute product is an item that can be used in place of another. If the price of one item increases, it becomes more expensive relative to its substitute, and the demand for its substitute increases. In this situation, people will prefer to buy oranges because the price of grapefruit, which is a substitute for oranges, has increased.The demand for oranges would increase because it is a substitute for grapefruit, which has become more expensive. As a result, option d is the answer to this question. The correct option is d.

For more about demand:

https://brainly.com/question/30402955


#SPJ11

Discuss the several roles of Foreign Direct Investment (FDI) in
digital economy.

Answers

FDI plays a pivotal role in driving technological advancements, fostering innovation and entrepreneurship, and promoting economic growth and human capital development in the digital economy.

Foreign Direct Investment (FDI) plays several crucial roles in the digital economy. Firstly, FDI facilitates technology transfer and knowledge sharing between countries. Multinational corporations investing in foreign markets bring with them advanced technologies, expertise, and best practices, contributing to the development and diffusion of digital technologies in the host country. This helps bridge the technological gap and enhances the host country's digital capabilities.

Secondly, FDI promotes economic growth and innovation in the digital economy. Foreign investments stimulate domestic entrepreneurship, competition, and innovation by creating new business opportunities and fostering collaboration between local and foreign firms. The influx of FDI can lead to the establishment of digital startups, research and development centers, and technology hubs, fostering a vibrant and dynamic digital ecosystem.

Furthermore, FDI in the digital economy encourages job creation and human capital development. Foreign investors often bring in skilled workers and invest in workforce training and development programs, leading to the transfer of knowledge and the acquisition of digital skills by the local workforce. This contributes to job creation, increased employability, and the overall development of human capital in the host country.

Overall, FDI plays a pivotal role in driving technological advancements, fostering innovation and entrepreneurship, and promoting economic growth and human capital development in the digital economy. By facilitating technology transfer, fostering innovation, and enhancing digital capabilities, FDI contributes to the growth and development of digital industries and enables countries to participate in the global digital economy.

learn more about FDI here; brainly.com/question/31758637

#SPJ11

A perfectly competitive constant cost industry is populated with many firms, and potential entrants, who all have the (long-run) cost function () = ^3 − 20^2+ 100 + 8,000.

1) Suppose each firm in the industry currently has the following short-run cost function.

() = 50^2 − 1,500 + 20,000.
Assuming the number of firms is the same as in (b.ii), what is the industry's

aggregate short-run supply curve (P), that gives the total quantity supplied at

an arbitrary price P?

2) Suppose the demand curve shifts to ′d = 3000 − 3P.

i)What will be the new price in the industry before the entry or exit of firms? Hint: equate short-run supply to demand, and solve for P.

ii) How many firms will enter or exit the industry till it is in long-run

equilibrium again? Hint: you can answer this without answering the previous questions

Answers

The short-run cost function of each firm, which is:() = 50² − 1,500 + 20,000. The total cost of production for each firm is obtained by multiplying the variable cost (50²) by the quantity produced, adding the fixed cost (20,000) to the result, and subtracting the profit (1,500).

So, the short-run supply curve of each firm is obtained by equating the price to the marginal cost as follows: P = MC = 100q−1From this equation, we can solve for q as: q= (P+1)/100. Hence, the supply curve of each firm is: q = (P+1)/100Therefore, the total quantity supplied by all firms is the sum of the quantities supplied by each firm: Qs = qn = n (P+1)/100The industry's short-run supply curve is obtained by adding up the quantities supplied by each firm as follows: Qs = n (P+1)/100, where n is the number of firms. 2) i) The new demand function is given by: d = 3000 − 3PSubstituting the supply function in the above equation we get; n (P+1)/100 = 3000 − 3PP = (30,000/n) − (n/100)The new price in the industry is obtained by equating the short-run supply and demand curves and solving for P.P = (30,000/n) − (n/100)The number of firms is given as n, therefore the above equation gives us the price P. ii)In the long-run equilibrium, the number of firms in the industry adjusts such that the price is equal to the minimum of the long-run average cost curve, which is given by the cost function in the question. In the long-run, the industry is in equilibrium when there are no more entry or exit of firms.

To find out how many firms will enter or exit the industry till it is in long-run equilibrium again, we need to find out the long-run average cost curve, which is given by the cost function in the question. We have the following long-run average cost curve: AC(q) = TC(q)/q= (q³ − 20q² + 100q + 8,000)/q. The minimum of the long-run average cost curve occurs at the output level where MC(q) = AC(q). So, we have: MC(q) = AC(q)= 3q² − 40q + 100= 100q−1q = 20Therefore, each firm produces 20 units in the long-run equilibrium, and the number of firms can be found as: N = Q/20= (30,000/P − P/100)/20So, the number of firms will increase if the price is above the minimum of the long-run average cost curve, which is equal to P = 200, and decrease if the price is below it.

To know more about supply curve visit:-

https://brainly.com/question/30740064

#SPJ11

A video rental store has two video cameras available for customers to rent. Historically, demand for cameras has followed this distribution. The revenue per rental is $40. If a customer wants a camera and none is available, the store gives a $15 coupon for tape rental.
Demand Relative Frequency Revenue Cost
0 .35 0 0
1 .30 40 0
2 .20 80 0
3 .10 80 15
4 .05 80 30
A. What is the expected demand?
B. What is the expected revenue?
C. What is the expected cost?
D. What is the expected profit?

Answers

, the expected demand is 1.2.The expected revenue is $40.The expected cost is $3.The expected profit is $37. Given: A video rental store has two video cameras available for customers to rent.

Historically, demand for cameras has followed this distribution. The revenue per rental is $40. If a customer wants a camera and none is available, the store gives a $15 coupon for tape rental. Demand Relative Frequency Revenue Cost0 .35 0 01 .30 40 02 .20 80 03 .10 80 154 .05 80 30To solve the given problem, we can use the formula:Expected value= (Relative frequency x value)A. What is the expected demand?The expected demand is: (0.35 * 0) + (0.3 * 1) + (0.2 * 2) + (0.1 * 3) + (0.05 * 4)= 0 + 0.3 + 0.4 + 0.3 + 0.2= 1.2.B. What is the expected revenue?The expected revenue is:(0.35*0) + (0.30*40) + (0.20*80) + (0.10*80) + (0.05*80)= $0 + $12 + $16 + $8 + $4= $40.C. What is the expected cost?The expected cost is:(0.10*15) + (0.05*30)= $1.5 + $1.5= $3.D. What is the expected profit?The expected profit is:Expected profit= Expected revenue - Expected cost= $40 - $3= $37.

to know more about cost, visit

https://brainly.com/question/28147009

#SPJ11

The expected demand is 1.3, the expected revenue is $51, the expected cost is $1.50, and the expected profit is $49.50.

The expected demand, revenue, cost, and profit are calculated as follows:

Expected demand = Σ(x * P(x)) Where x is the number of cameras demanded and P(x) is the relative frequency of demand.

A. Expected demand = (0 * 0.35) + (1 * 0.30) + (2 * 0.20) + (3 * 0.10) + (4 * 0.05)

Expected demand = 1.3

B. Expected revenue = (expected demand * revenue per rental) - (expected number of $15 coupons given)

Expected revenue = (1.3 * $40) - (0.10 * $15)

Expected revenue = $51

C. Expected cost = (expected number of cameras rented * cost per camera) + (expected number of $15 coupons given)

Expected cost = (1.3 * $0) + (0.10 * $15)

Expected cost = $1.50

D. Expected profit = expected revenue - expected cost

Expected profit = $51 - $1.50

Expected profit = $49.50

Thus, the expected demand is 1.3, the expected revenue is $51, the expected cost is $1.50, and the expected profit is $49.50.

To know more about revenue, visit:

https://brainly.com/question/14952769

#SPJ11

The business manager at Albertsons finds when she decreases the price of Sprite from $2.00 to $2.40, the price elasticity of demand is -3.25. How much did quantity demanded change and in what direction ? Is it in the elastic or inelastic part of the demand curve ? Explain the results qualitatively. Does the finding align with what you would expect ? Show all work and calculations.

Answers

When the price of Sprite is decreased from $2.00 to $2.40, the price elasticity of demand is -3.25.

This indicates a change in quantity demanded, but it's necessary to calculate the exact amount and direction. The analysis will determine whether the demand is elastic or inelastic and provide a qualitative explanation of the results.

To calculate the change in quantity demanded, we can use the formula for price elasticity of demand:

Price Elasticity of Demand = (% Change in Quantity Demanded) / (% Change in Price)

Given that the price elasticity of demand is -3.25, we can substitute the known values into the equation:

-3.25 = (% Change in Quantity Demanded) / (% Change in Price)

Since the price decreases from $2.40 to $2.00, the percentage change in price can be calculated as follows:

(% Change in Price) = (New Price - Original Price) / (Original Price) = ($2.00 - $2.40) / ($2.40) = -0.1667

Substituting the calculated percentage change in price (-0.1667) into the equation, we can solve for the percentage change in quantity demanded:

-3.25 = (% Change in Quantity Demanded) / (-0.1667)

Simplifying the equation, we find that the percentage change in quantity demanded is approximately 0.5417 or 54.17%.

The negative sign in the price elasticity of demand indicates an inverse relationship between price and quantity demanded. Since the price decreased and the quantity demanded increased, it suggests that Sprite is an elastic good. This means that consumers are responsive to changes in price, and a small price decrease led to a relatively large increase in the quantity demanded. The finding aligns with what we would expect in terms of price elasticity, as lower prices often lead to higher demand, especially for non-essential products like soft drinks.

Learn more about price elasticity, below:

https://brainly.com/question/32539362

#SPJ11

question 1
using two examples and a short discussion , explain why an
understanding of the time value of money is important when planning
for future needs and objectives ?

Answers

Understanding the time value of money is crucial when planning for future needs and objectives as it helps in making informed financial decisions and assessing the potential impact of inflation. The two examples are retirement planning and purchasing a home.

By recognizing that money has different values at different points in time, individuals can effectively evaluate investment opportunities, determine the true cost of borrowing, and set realistic financial goals.

The first example is retirement planning. The time value of money emphasizes that the earlier you start saving for retirement, the more time your money has to grow through compounding.

By understanding this concept, individuals can make regular contributions to their retirement accounts and take advantage of the power of compounding to accumulate a larger retirement fund over time.

Another example is purchasing a home. When considering a mortgage, understanding the time value of money allows you to assess the overall cost of borrowing. By comparing different mortgage options, you can determine the total interest paid over the loan term and make an informed decision that aligns with your long-term financial objectives.

In both examples, an understanding of the time value of money enables individuals to make informed decisions, optimize their financial resources, and work towards achieving their future needs and objectives.

To know more about inflation, refer to the link:

https://brainly.com/question/31108471#

#SPJ11

KADS, Inc. has spent $500,000 on research to develop a new computer game. The firm is planning to spend $300,000 on a machine to produce the new game. Shipping and installation costs of the machine will be capitalized and depreciated; they total $60,000. The machine has an expected life of three years, a $85,000 estimated resale value, and falls under the MACRS seven-year class life. Revenue from the new game is expected to be $700,000 per year, with costs of $350,000 per year. The firm has a tax rate of 21 percent, an opportunity cost of capital of 11 percent, and it expects net working capital to increase by $150,000 at the beginning of the project. What will the cash flows for this project be? (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.)

Answers

To calculate the cash flows for the project, we need to consider the initial investment, annual operating cash flows, salvage value, and changes in net working capital.

Initial investment:

Research and development cost: -$500,000

Machine cost: -$300,000

Shipping and installation cost: -$60,000

Net working capital increase: -$150,000

Annual operating cash flows (Year 1 to Year 3):

Revenue: $700,000

Costs: -$350,000

Taxable income: Revenue - Costs = $700,000 - $350,000 = $350,000

Taxes (21%): -$73,500 (Taxable income × Tax rate)

Net operating cash flow: Revenue - Costs - Taxes = $700,000 - $350,000 - $73,500 = $276,500

Salvage value (end of Year 3):

Salvage value: $85,000

Now let's calculate the cash flows for each year:

Year 0:

Initial investment: -$500,000 - $300,000 - $60,000 - $150,000 = -$1,010,000

Year 1 to Year 3:

Operating cash flow: $276,500

Year 3:

Salvage value: $85,000

Therefore, the cash flows for this project are as follows:

Year 0: -$1,010,000

Year 1 to Year 3: $276,500 per year

Year 3: $85,000

Learn more about cash flows here:

https://brainly.com/question/27994727

#SPJ11

Describes accountants’ role across the sustainability cycle,
including how the profession can add value to
sustainability-oriented activities.
10 marks please

Answers

Accountants have a critical role in managing sustainability across the supply chain. They are important in creating sustainable processes within the organization, reporting on sustainability progress, and ensuring that stakeholders are informed about the organization’s sustainability efforts.

The role of the accountants across the sustainability cycle is described below:

1. Planning and control: Accountants can be part of the team that plans for sustainability activities in an organization. They can provide input on the economic feasibility of various sustainability initiatives and work with other stakeholders to identify areas where the organization can reduce its carbon footprint and improve its environmental sustainability.

2. Performance measurement: Accountants can measure an organization’s sustainability performance and report on it to stakeholders. This includes providing data on the organization’s greenhouse gas emissions, energy usage, water usage, waste production, and other key sustainability metrics.

3. Risk management: Accountants can help identify sustainability-related risks and develop strategies to mitigate them. This includes identifying supply chain risks, assessing the financial risks associated with sustainability initiatives, and ensuring compliance with environmental regulations.

4. Assurance: Accountants can provide assurance services to stakeholders on an organization’s sustainability performance. This includes auditing sustainability data to ensure its accuracy and reliability and providing independent assurance on sustainability reports. The profession can add value to sustainability-oriented activities in several ways. They can help identify and prioritize sustainability initiatives, provide assurance on sustainability reports, and measure an organization’s sustainability performance.

To learn more about stakeholders, visit:

https://brainly.com/question/30799016

#SPJ11

Global use of similar sources, and the threat of new emerging countries, represent which of the following drivers of international trade? a a Technology Drivers.
b Cost Drivers c The Walmart Effect. d Competition Drivers

Answers

The driver of international trade represented in this scenario is "Competition Drivers."

Competition drivers refer to factors that arise from competition among firms in the global market. The global use of similar sources implies that countries are competing for access to similar resources or inputs

. This competition can lead to innovation, efficiency, and lower costs, which are key drivers of international trade. Additionally, the threat of new emerging countries indicates the entry of new players in the global market, creating increased competition and further driving international trade. Therefore, the scenario aligns with competition drivers as countries strive to maintain a competitive edge and expand their presence in the global marketplace.

To learn more about innovation

Click here brainly.com/question/30510537

#SPJ11

Write a case study on Chinese company in International
marketing strategy about 3000 words.

Answers

A case study on a Chinese company in international marketing strategy could focus on a specific company's journey in expanding its market presence and implementing effective marketing strategies on a global scale. The case study could examine various aspects, such as the company's market entry strategy, target markets, competitive positioning, branding and promotion, distribution channels, and adaptation to local market conditions.

It would be essential to analyze the company's marketing approach in different countries and regions, considering factors like cultural nuances, consumer behavior, regulatory environments, and competitive landscapes. The case study could also delve into the challenges faced by the company, such as cultural barriers, language differences, logistical complexities, and competition from local and international players.

Furthermore, the case study could explore the company's strategies for building brand awareness, market share, and customer loyalty in international markets. It may discuss the company's product or service offerings, pricing strategies, promotional campaigns, digital marketing initiatives, and customer relationship management.

To provide a comprehensive analysis, the case study could incorporate real-life examples, market data, and industry insights to support the evaluation of the company's international marketing strategies and their impact on business growth and profitability. The conclusion could summarize the key learnings and provide recommendations for the company's future international marketing endeavors.

learn more about marketing here:brainly.com/question/27155256

#SPJ11

RUE or FALSE:

a contract is not discharged by a foreseeable circumstance no matter how difficult or costly the performance may become

Answers

False. The parties must also establish that the circumstances leading to frustration could not have been anticipated by the parties when they concluded the contract.

Foreseeable circumstances are the events that could reasonably be expected to happen or to cause damages. When circumstances make performance harder or more expensive, a contract is not automatically discharged. This means that the parties must fulfil their contractual obligations as closely as possible, even if this means incurring additional expenses or effort. The doctrine of frustration holds that if the purpose of a contract has been entirely frustrated, it will no longer be possible to enforce the terms of the contract.

The doctrine of frustration is applied only in exceptional situations. An unexpected event, such as a natural disaster, which would render a contract difficult or impossible to fulfil, may constitute grounds for its discharge.The party who asserts the occurrence of frustration of a contract must provide proof of it. The parties must also establish that the circumstances leading to frustration could not have been anticipated by the parties when they concluded the contract.

To know more about parties visit:

https://brainly.com/question/31680923

#SPJ11

using newton's 2nd law in rotational form, wirte but do not solve a differential equation in terms of m, l, and physical constants

Answers

The differential equation in terms of mass (m), length (l), and physical constants for rotational motion can be written as:

I * α = τ

Newton's second law in rotational form states that the torque (τ) acting on an object is equal to the moment of inertia (I) of the object multiplied by the angular acceleration (α) of the object. The moment of inertia depends on the mass distribution of the object and is a measure of its resistance to rotational motion.

The equation I * α = τ relates the rotational variables, where I represents the moment of inertia, α represents the angular acceleration, and τ represents the torque acting on the object. This equation is analogous to F = ma in linear motion, where F represents force, m represents mass, and a represents acceleration.

In terms of mass (m), length (l), and physical constants, the moment of inertia (I) would be specific to the object being considered. The physical constants involved may vary depending on the system or object under consideration.

The differential equation I * α = τ is a fundamental equation in rotational motion that relates the torque acting on an object to its moment of inertia and angular acceleration. This equation can be used to analyze and solve problems related to rotational motion in various physical systems. The specific values of the moment of inertia and physical constants would depend on the particular object or system being studied.

To know more about rotational motion, visit

https://brainly.com/question/30459585

#SPJ11

Suppose a closed economy has gross domestic product (GDP) of $10,000, Taxes of $3,000, Consumption of $6,000, and Government expenditures of $1,500. How much is private saving; public saving; national saving, respectively?
Select one alternative:
a $1,000; $1,000; $2,000
b $4,000; $1,500; $5,500
c $1,000; -$1,500; -$500
d $1,000; $1,500; $2,500

Answers

Private saving is $1,000; public saving is $1,500; and national saving is $2,500.

Private saving is calculated by subtracting consumption from GDP:

Private saving = GDP - Consumption

= $10,000 - $6,000

= $4,000

Public saving is calculated by subtracting government expenditures from taxes:

Public saving = Taxes - Government expenditures

= $3,000 - $1,500

= $1,500

National saving is the sum of private saving and public saving:

National saving = Private saving + Public saving

= $4,000 + $1,500

= $5,500

Therefore, the correct option is (d) $1,000; $1,500; $2,500, where private saving is $1,000, public saving is $1,500, and national saving is $2,500.

learn more about consumption click here;

brainly.com/question/25411156

#SPJ11

You are planning to lunch an innovative and unique product in the market in the
upcoming year. You are brainstorming on the pricing aspect of the product with your
team. Your team decided that let’s charge the maximum price in the initial stage of the
product and then lower down the costs gradually. Discuss about which pricing strategy
your team planned to adopt here and what advantages your team would have been
observed here in order to employ this specific strategy

Answers

The pricing strategy that your team planned to adopt is called skimming pricing strategy. The advantages of this strategy include Profit Maximization, Brand Image etc.

Skimming pricing involves setting a high initial price for a new and unique product and gradually reducing the price over time. This strategy allows your team to target early adopters and customers who are willing to pay a premium price for the innovative features or benefits of the product.

Profit Maximization: By setting a high initial price, your team can capture maximum revenue from customers who value the unique features of the product and are willing to pay a premium.Brand Image: A high initial price can create an image of exclusivity and quality for the product, positioning it as a premium offering in the market.Early Adopter Focus: Skimming pricing allows your team to target early adopters who are more likely to embrace new and innovative products, generating positive word-of-mouth and creating a buzz in the market.Competitive Advantage: Setting a high price initially can deter potential competitors from entering the market and undercutting your pricing, giving your team a competitive advantage and allowing time to establish a strong market presence.Price Reduction Flexibility: Gradually lowering the price over time enables your team to expand the customer base and appeal to more price-sensitive segments, ensuring broader market penetration and sustained sales growth.

To know more about Skimming pricing refer to-

https://brainly.com/question/27625994

#SPJ11

1. Bentley Corporation and Rolls Manufacturing are considering a merger. The possible states of the economy and each company’s value in that state are shown here: State Probability Bentley Rolls Boom .70 $ 300,000 $ 270,000 Recession .30 115,000 85,000 Bentley currently has a bond issue outstanding with a face value of $130,000. Rolls is an all-equity company.
a. If the companies continue to operate separately, what are the total value of the companies, the total value of the equity, and the total value of the debt?
b. What would be the value of the merged company? What would be the value of the merged company’s debt and equity?
c. How much would shareholders gain or lose in the merger? How much would bondholders gain or lose in the merger?

Answers

a. If the companies continue to operate separately, the total value of Bentley Corporation would be $300,000 in the boom state and $115,000 in the recession state.

The total value of Rolls Manufacturing would be $270,000 in the boom state and $85,000 in the recession state. Since Rolls is an all-equity company, it does not have any outstanding debt. Therefore, the total value of equity for both companies would be the same as their respective total values.

b. To determine the value of the merged company, we need to consider the probabilities of each state of the economy. The value of the merged company in the boom state would be 0.70 * ($300,000 + $270,000) = $420,000, and in the recession state, it would be 0.30 * ($115,000 + $85,000) = $60,000. The total value of the merged company would be the sum of these values, which is $480,000. Since Bentley has an outstanding bond with a face value of $130,000, the value of the merged company's debt would be $130,000.

c. To calculate the gain or loss for shareholders in the merger, we need to compare the value of their equity before and after the merger. The gain or loss for shareholders would be the difference between the value of their equity in the merged company and the value of their equity in the separate companies. For bondholders, the gain or loss would be the difference between the value of their bond in the merged company and the value of their bond in Bentley Corporation.

Learn more about recession here:

https://brainly.com/question/31926163

#SPJ11

In determining project progress and results, all aspects of a
project are important and interrelated. 2.2. Determine how
stakeholder engagement can be managed and controlled. (10)

Answers

All parts of a project are significant and interconnected in determining project development and success. An essential component of project management that must be handled and regulated is stakeholder involvement.

Effective stakeholder management ensures that stakeholders are actively involved in the project and that their needs and expectations are met. There are several ways to manage and control stakeholder engagement. These consist of: Create a plan for engaging stakeholders: A strategy for including stakeholders should be created at the start of the project. This plan should identify all stakeholders, their needs and expectations, and how they will be engaged throughout the project. The plan should also identify the level of engagement required for each stakeholder and how often they will be engaged. Regular reviews and revisions to the plan are required. Maintain frequent communication with stakeholders: It's critical to keep stakeholders informed about the status of the project through regular communication. Communication should be two-way and should involve active listening and feedback. Communication should also be tailored to each stakeholder's needs and expectations. Engage stakeholders in decision making: Stakeholders should be involved in decision making throughout the project. This helps to ensure that their needs and expectations are met. Decision making should be transparent and based on objective criteria. Manage stakeholder expectations: Stakeholder expectations should be managed throughout the project. This includes managing their expectations around project outcomes, timelines, and costs. It also includes managing their expectations around their level of involvement in the project. Resolve stakeholder conflicts: Stakeholder conflicts should be resolved quickly and effectively.

To Know more about project development

https://brainly.com/question/31389516

#SPJ11

Explain how Zoom seeks to nurture long-term value creation. (500 words)
should include these concepts:
sustainable innovation culture
becoming value player
long term relationship marketing

Answers

Zoom seeks to nurture long-term value creation through several strategies, including fostering a sustainable innovation culture, becoming a value player, and engaging in long-term relationship marketing.

Sustainable Innovation Culture
One of Zoom's key strategies for long-term value creation is to foster a sustainable innovation culture. This means that the company is focused on constantly improving its product and services to meet the changing needs of its customers.

Becoming a Value Player
Another way that Zoom seeks to nurture long-term value creation is by becoming a value player in the market. This means that the company is focused on delivering high-quality products and services at a reasonable price, rather than just competing on price alone.  

Long-Term Relationship Marketing
Finally, Zoom seeks to nurture long-term value creation through long-term relationship marketing. This means that the company is focused on building strong relationships with its customers over time, rather than just focusing on short-term sales.  


Overall, Zoom's approach to long-term value creation is based on a combination of sustainable innovation culture, becoming a value player, and long-term relationship marketing. By focusing on these strategies, the company is able to build a strong brand, attract and retain customers, and continue to grow and thrive over the long term.

Know more about value creation  here:

https://brainly.com/question/30387759

#SPJ11

On 1 April 2019, Lisa borrowed $37576 at an interest rate of 2.37% from her employer, Solarcity Pty Ltd. This was lower than that offered to the public. Lisa uses the entire amount to replace the loan on her main residence. No part of the expense would have been deductible to Lisa under the Tax Acts. Solarcity Pty Ltd is not entitled to claim input tax credit for GST purposes. Required: Calculate the Fringe Benefits Tax that Solarcity Pty Ltd is liable to pay on this loan fringe benefit for the 2020 FBT year. Only enter numbers & round to the nearest dollar Answer

Answers

Given information:Borrowed amount = $37576Interest rate = 2.37%The loan amount was used to replace the loan on her main residence. Hence, none of the expenses would have been deductible to Lisa under the Tax Acts.Solarcity Pty Ltd is not entitled to claim input tax credit for GST purposes.

To calculate the Fringe Benefits Tax that Solarcity Pty Ltd is liable to pay on this loan fringe benefit for the 2020 FBT year.Fringe Benefit Tax (FBT) can be calculated by the following formula:FBT = taxable value × FBT rateHere, the taxable value of the loan fringe benefit can be calculated using the following formula:Taxable value = loan amount × (Interest rate - Benchmark interest rate)Since the interest rate offered to Lisa was lower than the benchmark interest rate, the benchmark interest rate will be used as the interest rate for the above formula.

Benchmark interest rate = 5.37% (2020 FBT year)Taxable value = $37576 × (5.37% - 2.37%)= $37576 × 0.03= $1127.28Hence, the Fringe Benefits Tax that Solarcity Pty Ltd is liable to pay on this loan fringe benefit for the 2020 FBT year is:$1127.28 × 47% (FBT rate for the 2020 FBT year)= $529.15 ≈ $529 (rounded to the nearest dollar)Answer: $529

To know more about Interest rate  visit:-

https://brainly.com/question/28272078

#SPJ11

Which of the following is one of the four basic questions that must be answered in all economies? O A. Is productive capacity growing? B. Why are products sometimes priced too low? C. What is produced and where is it produced? D. Where is the productive capacity?

Answers

The correct answer is: C. What is produced and where is it produced?

In any economy, it is crucial to determine what goods and services are produced and where they are produced. This question relates to the allocation of resources and the decision-making process regarding the production of various goods and services.

The answer to this question involves considering factors such as consumer demand, available resources, technology, and comparative advantage. The goods and services produced may vary based on the preferences and needs of the society, as well as the available resources and technological capabilities.

The location of production also plays a significant role. It involves decisions regarding the geographic distribution of production facilities and resources. Factors such as transportation costs, availability of raw materials, labor force, infrastructure, and market access can influence the location decisions.

The question of what is produced and where it is produced is crucial for understanding the dynamics of an economy. It helps in determining the allocation of resources, identifying comparative advantages, and meeting the needs of the society. By addressing this question, economies can make informed decisions about resource allocation, production strategies, and overall economic development.

To know more about produced, visit;
https://brainly.com/question/30141735
#SPJ11

In comparison, what paths has Vienna, Budapest and Prague taken in terms of hotel market development?

Answers

Vienna, Budapest, and Prague have taken various paths in terms of hotel market development. Here's a brief comparison of their paths: Vienna's hotel market has a long history, dating back to the beginning of the 20th century, when the city was a well-known cultural center.

Vienna's hotel market has a large number of upscale hotels, with several luxury chains such as the Hilton, Marriott, and Intercontinental. These hotels cater to high-end tourists and business travelers, with room rates that are higher than those in Budapest and Prague. Budapest's hotel market is relatively young compared to Vienna, with the city's tourism industry developing significantly in the last two decades. The city has seen a significant increase in international visitors, with the number of tourists reaching a record high in 2019.

Budapest's hotel market is diverse, with a mix of budget hotels and upscale hotels. The city has seen significant growth in the budget hotel segment, with several international chains such as the Ibis and Mercure opening properties in the city. However, there are also several upscale hotels in Budapest, such as the Four Seasons and Kempinski. Prague's hotel market has a long history, dating back to the 19th century when the city was a popular destination for wealthy Europeans. The city's hotel market has continued to expand since then, with the number of tourists reaching a record high in 2019.
To know more about market development visit :

https://brainly.com/question/31331934

#SPJ11

Decompose the effects of an increase in pension benefits on consumption, retirement years, and years of work into substitution and income effects. Does the substitution effect of the increase in pension benefits increase or decrease the age of retirement? Does the income effect increase or decrease the retirement age?

Answers

An increase in pension benefits can have both substitution and income effects on consumption, retirement years, and years of work.

The substitution effect of the increase in pension benefits tends to increase the age of retirement, while the income effect can either increase or decrease the retirement age, depending on various factors such as the individual's preferences and financial situation.

The substitution effect refers to the change in behavior caused by the relative price of goods or services. In the case of an increase in pension benefits, the higher income from the pension can make retirement more financially feasible and attractive, leading individuals to substitute leisure (retirement) for work. This substitution effect tends to increase the age of retirement, as individuals can afford to retire earlier.

On the other hand, the income effect reflects the change in behavior due to the overall increase in income. The income effect can vary depending on individual preferences and financial circumstances. If the increased pension benefits significantly improve an individual's financial well-being, they may choose to retire earlier due to the higher income. Conversely, if individuals have a desire for more consumption or a need to maintain their standard of living, the increased income from the pension may lead them to work longer before retiring.

Ultimately, the impact of the income effect on retirement age can vary among individuals, and it depends on their personal preferences, financial situation, and priorities.

Learn more about pension, below:

https://brainly.com/question/28319433

#SPJ11

An effective planning process begins by Multiple Choice O seeking the knowledge of external experts. O generating alternative goals and plans for various scenarios. O gathering, interpreting and summarizing information about the situation. evaluating previous performance.

Answers

An effective planning process begins by gathering, interpreting, and summarizing information about the situation.

To ensure an effective planning process, it is crucial to gather relevant information about the current situation. This includes collecting data, facts, and insights related to the organization's internal and external environment. By obtaining a comprehensive understanding of the situation, planners can make informed decisions and develop appropriate goals and plans.

Gathering information involves conducting research, analyzing market trends, evaluating competitors, and assessing internal capabilities and resources. Interpreting and summarizing this information helps in identifying opportunities, potential challenges, and areas for improvement.

By starting the planning process with a thorough information-gathering phase, organizations can base their decisions on a solid foundation of knowledge. This increases the chances of developing realistic goals and effective plans that align with the organization's objectives and take into account the complexities of the situation.

learn more about market trends here:

https://brainly.com/question/27824964

#SPJ11

$100 a year from now is:
Select one:
a.
equal to $100 today
b.
equal to $90 today
c.
it depends on interest rate
d.
equal to $99 today

Answers

$100 a year from now is not equal to $100 today. The correct answer depends on the interest rate. It is not equal to $90 today, as option b suggests. The present value of $100 to be received in the future will be less than $100 due to the time value of money. The value of money decreases over time due to factors such as inflation and the opportunity cost of using money in other investments. Therefore, the present value of $100 a year from now will be less than $100 today.

The correct answer is option c, "it depends on the interest rate." The value of money changes over time due to the concept of time value of money. The time value of money recognizes that receiving money in the future is less valuable than receiving the same amount of money today.

The exact present value of $100 to be received in the future depends on the interest rate or discount rate applied. The interest rate represents the cost of borrowing money or the return on investment that could be earned by investing money elsewhere. If the interest rate is positive, the present value of $100 received in the future will be less than $100 today. This is because the interest rate reflects the opportunity cost of using the money for other purposes during the time period.

For example, if the interest rate is 5%, the present value of $100 received in one year would be less than $100. It could be around $95.24. This means that $95.24 today would be considered equivalent to $100 to be received in one year when the interest rate is 5%.

Therefore, the value of $100 a year from now is not equal to $100 today. Its present value depends on the interest rate, and it will be less than $100 today. Option d, "equal to $99 today," is also incorrect as it does not take into account the impact of the interest rate on the present value.

learn more about dollar here:brainly.com/question/14982791

#SPJ11

While disciplinary measures are relied upon by management for the enforcement of work rules, as well as comprise the majority of issues with which arbitrators are confronted for resolution, discipline needs to be imposed in accordance with certain legal standards. Among them are the following: Industrial due process, industrial equal protection, individualized treatment, an appropriate level of evidentiary proof, as well as the parameters of procedural due process generally and the more specific application of Weingarten rules. Identify and explain the relevance of several of these concepts to the use of discipline in the workplace.

Answers

Disciplinary measures are an essential tool used by the management of an organization to enforce work rules and regulations and to ensure that the employees work according to the set standards.

These measures are frequently brought to arbitrators for a resolution. In this sense, an arbitrator is a neutral party that is authorized to mediate on a disputed issue between the management and the employees, and they can make legally binding decisions.The enforcement of discipline in the workplace must be carried out according to legal standards. The following are some of the legal standards that should be upheld:Industrial due process: This concept involves a fair and impartial hearing of the facts and a reasonable chance to respond to the allegations made against them. For instance, a worker must have the opportunity to be heard by management before a final decision is made regarding their punishment.Industrial equal protection: It requires that employees who are subject to discipline are treated equally under the law, regardless of their race, sex, or any other demographic characteristic. Individualized treatment: Discipline should be customized to each case, and not administered as a one-size-fits-all solution. The punishment for each case should be based on the gravity of the situation and the employee's past conduct, among other factors. An appropriate level of evidentiary proof: To avoid biased or unjust decisions, the evidence presented should be sufficient, credible, and of high quality. This means that any witness testimony and documents presented should be of a high standard.Procedural due process: A fair procedure must be adhered to in the disciplinary process. An accused worker has the right to know the charges against them, the right to a hearing, and the right to present their side of the story.Weingarten rules: These rules provide employees with the right to union representation during investigatory interviews, ensuring that their interests are protected.In conclusion, it is important for management to follow these legal standards to ensure that their disciplinary actions do not infringe on the rights of their employees. Arbitrators must also apply these legal standards when resolving disputes brought before them.

To learn more about employees:

https://brainly.com/question/18633637

#SPJ11

What is the value of research in your everyday life and when you are completion a graduate degree? Minimum of 200 words

Answers

Research plays a vital role in everyone's life. It makes humanity more aware of its surroundings and environment. It creates a sense of intellect among the people of society. With increasing technological advancements, everyone must acquire knowledge. Research helps in improving the overall personality.

Research is important to understand, increase knowledge, and get information for social life. Social research is conducted to extend knowledge about some aspects of society like humanities, business or any social science.

Research allows you to pursue your interests, to learn something new, to hone your problem-solving skills and to challenge yourself in new ways. Working on a faculty-initiated research project gives you the opportunity work closely with a mentor–a faculty member or other experienced researcher.

Learn more about Research at:

https://brainly.com/question/24174276

#SPJ4

Which events would lead to an increase in the marginal product of labor for every quantity of labor?

Answers

events such as technological advancement, improved working conditions, increase in the quality of inputs, and efficient management can lead to an increase in the marginal product of labor for every quantity of labor.

The law of diminishing returns states that as more and more units of a variable input are added to a fixed input, the marginal product of the variable input will eventually decline, that is, there will be diminishing marginal returns. However, there are certain events that may lead to an increase in the marginal product of labor for every quantity of labor. These events are:
1. Technological advancement: Technological advancements can lead to an increase in the marginal product of labor. This can be through the introduction of new technologies that make work easier, faster, and more efficient. For example, a company that adopts a new machine that speeds up the production process will see an increase in the marginal product of labor.
2. Improved working conditions: An improvement in working conditions such as better equipment, better lighting, better ventilation, and comfortable working space can lead to an increase in the marginal product of labor. This is because workers will be more comfortable and productive in their work environment.
3. Increase in the quality of inputs: An increase in the quality of inputs such as raw materials, tools, and equipment can lead to an increase in the marginal product of labor. For example, using high-quality raw materials in production can result in better-quality products and, in turn, higher marginal productivity of labor.
4. Efficient management: Efficient management can lead to an increase in the marginal product of labor. This is because effective management can identify inefficiencies in the production process and address them. This can lead to a more streamlined production process, which will result in higher marginal productivity of labor.

To know more about product visit;

brainly.com/question/31815585

#SPJ11

Identify three entrepreneurial companies that were acquired in
recent years,
including the transaction size and some transaction details that
were disclosed.
Discuss the costs and benefits of being ac

Answers

The three entrepreneurial companies that were acquired in recent years, including the transaction size  are

Whole Foods Market which was Acquired by Amazon with the Transaction Size: $13.7 billionGitHub  which was Acquired by Microsoft with the Transaction Size: $7.5 billionLinkedIn  which was Acquired by Microsoft with the Transaction Size of $26.2 billion

What is Entrepreneurship?

The creation or extraction of economic value is referred to as entrepreneurship. According to this definition, entrepreneurship is considered as transformation that typically involves greater risk than is typical when beginning a business and may also involve values other than just financial ones.

The process of starting, setting up, and operating a new company in order to make money while taking on financial risk is known as entrepreneurship.

Learn more about Entrepreneurship at;

https://brainly.com/question/353543

#SPJ4

The standard deviation (volatility) of the average rate of return on bank assets in the U.S. banking system:
a. Is a good approximation to the average volatility of individual bank returns.
b. Likely understates the average volatility of individual bank returns.
c. Likely overstates the average volatility of individual bank returns.
d. Is a reasonable guide to the level of riskiness in the banking system.

Answers

The standard deviation of the average rate of return on bank assets in the U.S. banking system likely understates the average volatility of individual bank returns.

The standard deviation of a set of data measures how spread out the data is. In the case of the average rate of return on bank assets, the standard deviation measures how much the returns of individual banks vary from the average return. A high standard deviation indicates that the returns of individual banks are more volatile than the average return.

There are a number of factors that can contribute to the volatility of individual bank returns. These include the types of loans and investments that banks make, the level of interest rates, and the economic conditions. Banks that make riskier loans or investments are more likely to experience large swings in their returns. Similarly, banks that are exposed to economic downturns are more likely to experience lower returns.

As a result of these factors, the standard deviation of the average rate of return on bank assets likely understates the average volatility of individual bank returns. This is because the average return is not affected by the individual risk profiles of banks. As a result, the average return is more stable than the returns of individual banks.

To learn more about rate of return here brainly.com/question/17164328

#SPJ11

Other Questions
Question 1 (Multiple Choice Worth 3 points)(06.04 MC)Wally's Wonderful Widgets is owned by its founder, Wally, and has several hundred employees who produce a number of usefulgoods. The company wants to publicly sell shares of ownership in the company in exchange for money to expand business. Towhich economic institution would Wally's Wonderful Widgets turn?O Stock marketO Federal ReserveO Local credit unionO Local bank Suppose a,b,n are integers and n>0 s.t. 63a^5b^4=3575n^3,what is the smallest possible n. Explain your answer. You would like to create a portfolio that is equally invested in a risk-free asset and two stocks. One stock has a beta of 0.55. If you want the portfolio to be equally as risky as the overall market, what must be the beta of the second stock? 0 2.25 O 2.45 1.00 0.33 None of the answers is correct QUESTION 6 Given vectors u = and v=, find the resultant vector u + v. O O how much pure maple syrup should be added to 48 tablespoons of a 45 solution? Cost Terminology; Contribution Format Income Statement [LO1-2, LO1-4, LO1-6] Miller Company's total sales are $171,000. The company's direct labor cost is $20,520, which represents 30% of its total conversion cost and 40% of its total prime cost. Its total selling and administrative expense is $25,650 and its only variable selling and administrative expense is a sales commission of 5% of sales. The company maintains no beginning or ending inventories and its manufacturing overhead costs are entirely fixed costs. Required: 1. What is the total manufacturing overhead cost? 2. What is the total direct materials cost? 3. What is the total manufacturing cost? 4. What is the total variable selling and administrative cost? 5. What is the total variable cost? 6. What is the total fixed cost? 7. What is the total contribution margin? 1. Total manufacturing overhead cost $ 69,600 2. Total direct materials cost $ 52,200 3. Total manufacturing cost $ 100,920 4. Total variable selling and administrative cost $8,700 5. Total variable cost $ 60,900 6. Total fixed cost 17,400 7. Total contribution margin 113,100 $ $ - How can an accountant use QuickBooks to keep track of a companys customers, vendors, orders, sales, and receivables?- What are the limitations of working with QuickBooks as a customer and vendor management program? A. Describe THREE (3) ways in which a project may be closed or terminated. (9 marks) Outline THREE (3) positive and TWO (2) negative impacts closure of a project has on team members. (5 marks) B. C. Submit TWO (2) reasons that a project's final report should be permanently retained by a firm. (6 marks) (Total 20 marks) PYD Or a body moves on a coordinate line such that it has a position s=f(t)=t^2-8t+7 on the interval 0(greater than or equal to)t(greater than or equal to)9 with s in meters and t in secondsa)find the bodys displacement and average velocity for the given time intervalb)find the bodys speed and acceleration at the endpoints of the intervalc)when,if ever,during the interval does the body change direction?section 3.4 Suppose the price of a share of MCD stock is $220. A March put option on MCD stock has a premium of $7 and an exercise price of $226. Ignoring commissions, the option writer will earn a profit if the price of the share becomesa. $216b. $220c. $213d. $219 Lia helps the organization succeed by motivating and inspiring her peers to work together toward team goals. In this case, Lia is known as a(n) A figurehead. manager. leader. D expert. Why do economies of scale and monopoly power exist with network goods? a Many small firms must develop to serve all of the consumers willing to pay for access to the network good, so their costs are driven down. b Network goods require a group of sellers working together and this cooperation reduces the firms' cost per unit. c Just as the value of a network good decreases to each user as the total number of users increases, so does the long run average cost decrease as output increases. d As the number of people connected to a network increases, the greater the benefits each person gets and the smaller the cost per unit to supply. c. Take rest for a week. Avoid tasks which require ______ activity. physical please help if you can answer any its helpful thanks so much A bank has decided to set its interest rates to compound monthly on all deposits in order to give customers the same benefits as its current offering of 2.50% compounded quarterly. At what value should the monthly compounded interest rate be set? A user acquired a new workstation and is attempting to open multiple large Excel files simultaneously. The user is not experiencing the expected performance when executing such large requests. Which of the following should a technician do FIRST? A. Increase the swap partition.B. Upgrade the CPU in the workstation. C. Upgrade the power supply in the workstation. D. Upgrade the RAM in the workstation. A certain organization trying to decide where to locate their future factory is considering three locations: Denver, Seattle, and Portland.They are taking into account four factors: labor costs, currency stability, proximity to market, and tax.Using the data in the following table tocalculate the scores achieved by each of the three considered locations, anddetermine which location should be chosen for the new facility based on the weighted factory location model. Find the linearization L (x, y) of the function f (x, y) = 137-4x - 16y at (4,2). L(x, y) = -48x-32y+209 what should the value of alpha and beta be in holt's model in order to minimise the MAD? (q13) You invest in a fund and it is expected to generate $3,000 per year for the next 5 years. Find the present value of the investment if the interest rate is 4% per year compounded continuously.