Based on the given information, the question asked to Vincent, "Would a new computer with advanced features resolve all your issues?", can be classified as an implication question. Implication questions are used by salespeople to understand the potential consequences or impact of a problem or situation.
The question asked to Lee, "How many people use your computer?", can be classified as a situation question. Situation questions are used to gather information about the current state or circumstances of the prospect. Therefore, the correct answer is: The question asked to Vincent is an implication question, whereas the question asked to Lee is a situation question.
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Discount loan (interest and principal at maturity). Chuck Ponzi has talked an elderly woman into loaning him $10,000 for a new business venture. She has, however, successfully passed a finance class and requires Chuck to sign a binding contract on repayment of the $10,000 with an annual interest rate of 11% over the next 15 years. Determine the cash flow to the woman under a discount loan, in which Ponzi will have a lump-sum payment at the end of the contract. What is the amount of payment that the woman will receive at the end of years 1 through 14?
In a discount loan scenario, the cash flow to the woman at the end of each year can be calculated by determining the present value of the lump-sum payment that Chuck Ponzi will make at the end of the contract.
The formula for calculating the present value of a future lump-sum payment is:
Present Value = Future Value /[tex](1 + Interest Rate)^n[/tex]
To calculate the cash flow for each year, we need to find the present value of the $10,000 at the end of each year using the formula above. Here are the calculations for years 1 through 14:
Year 1:
Present Value = $10,000 /[tex](1 + 0.11)^1[/tex]
Year 2:
Present Value = $10,000 /[tex](1 + 0.11)^2[/tex]
Year 3:
Present Value = $10,000 / [tex](1 + 0.11)^3[/tex]
Year 4:
Present Value = $10,000 / [tex](1 + 0.11)^4[/tex]
Year 5:
Present Value = $10,000 / [tex](1 + 0.11)^5[/tex]
Year 6:
Present Value = $10,000 / [tex](1 + 0.11)^6[/tex]
Year 7:
Present Value = $10,000 / [tex](1 + 0.11)^7[/tex]
Year 8:
Present Value = $10,000 /[tex](1 + 0.11)^8[/tex]
Year 9:
Present Value = $10,000 /[tex](1 + 0.11)^9[/tex]
Year 10:
Present Value = $10,000 / [tex](1 + 0.11)^{10}[/tex]
Year 11:
Present Value = $10,000 / [tex](1 + 0.11)^{11[/tex]
Year 12:
Present Value = $10,000 /[tex](1 + 0.11)^{12[/tex]
Year 13:
Present Value = $10,000 / [tex](1 + 0.11)^{13[/tex]
Year 14:
Present Value = $10,000 / [tex](1 + 0.11)^{14[/tex]
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Kaleb Konstruction, Inc., has the following mutually exclusive projects available. The company has historically used a three-year cutoff for projects. The required return is 13 percent.
Year Project F Project G
0 -$ 132,000 -$ 202,000
1 61,500 41,500
2 48,500 56,500
3 58,500 88,500
4 53,500 118,500
5 48,500 133,500
Required:
(a) Calculate the payback period for both projects. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).
Calculate the NPV for both projects. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)
The payback period for Project F is 2.38 Years and for Project G is 3.13 Years.
The payback period determines the length of time it takes for an investment to generate cash flows equal to its initial cost. Payback Period has to be calculated by taking cumulative cash flows.
Project F
Year 1: Cumulative Cash Flow = $61,500
Year 2: Cumulative Cash Flow = $61,500 + $48,500 = $110,000
Year 3: Cumulative Cash Flow = $110,000 + $58,500 = $168,500
The cumulative cash flow of $168,500 exceeds initial investment of $132,000.
Payback Period = Year 2 + (132,000 - 110,000)/58,500 = 2.38 Years
Project G
Year 1: Cumulative Cash Flow = $41,500
Year 2: Cumulative Cash Flow = $41,500 + $56,500 = $98,000
Year 3: Cumulative Cash Flow = $98,000 + $88,500 = $186,500
Year 4: Cumulative Cash Flow = $186,500 + $118,500 = $305,000
The cumulative cash flow of $305,000 exceeds initial investment of $202,000.
Payback Period = Year 3 + (202,000 - 186,500)/118,500 = 3.13 Years
NPV of Project F is and Project G is
NPV measures the difference between present value of future cash inflows and outflows.
Project F
Year 0: -132,000
Year 1: 61,500 × 0.88 = 54,120
Year 2: 48,500 × 0.78= 37,830
Year 3: 58,500 × 0.69=40365
Year 4: 53,500 × 0.61= 32635
Year 5: 48,500 × 0.54=26190
NPV = $59140
Project G
Year 0: -202,000
Year 1: 41,500 × 0.88 = 36520
Year 2: 56,500 × 0.78= 44070
Year 3: 88,500 × 0.69= 61065
Year 4: 118,500 × 0.61= 72285
Year 5: 133,500 × 0.54= 72090
NPV = 84030
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Why is strategic planning necessary? Why do organizations engage in the strategic planning process? From your readings, what are your thoughts about the ACHE's strategic plan development process? Does it represent best practices, based on your textbook? Can you envision using a similar process within a general health care setting? Why or why not?
Strategic planning is necessary for organizations since it provides a roadmap for the company's future by specifying its vision, objectives, and priorities.
Strategic planning also allows businesses to identify and respond to critical internal and external environmental factors that might threaten their existence. Organizations engage in the strategic planning process to enhance their competitive advantage and increase their chances of long-term success. Strategic planning promotes the alignment of resources and activities with the organization's goals and objectives, resulting in increased productivity, improved decision-making, and enhanced communication. ACHE's strategic plan development process can be deemed as a best practice based on the material provided in the textbook. The planning process starts with a review of ACHE's internal and external environments to recognize areas where ACHE can enhance its services and expand its reach. A SWOT analysis is performed to identify the organization's strengths, weaknesses, opportunities, and threats. ACHE then uses its vision, mission, and values to guide the development of specific strategic goals and objectives. The strategic plan includes actions to achieve each goal, metrics to measure success, and timelines for implementation and review. As part of the planning process, ACHE engages its stakeholders, including board members, employees, and members, to get their input and buy-in for the plan. ACHE also recognizes that the strategic plan is a living document that needs to be reviewed and updated regularly to reflect changing environmental circumstances.I can envision using a similar process within a general healthcare setting. The process is appropriate for any organization that wants to be proactive in shaping its future and enhancing its competitive advantage. A healthcare organization can use the same process to develop a strategic plan that aligns its resources and activities with its goals and objectives. The organization can also engage its stakeholders in the planning process to ensure that their input and buy-in are incorporated into the plan. The process of reviewing and updating the plan regularly will ensure that it remains relevant and effective.
In conclusion, strategic planning is necessary for organizations to identify and respond to critical internal and external environmental factors that might threaten their existence. Organizations engage in the strategic planning process to enhance their competitive advantage and increase their chances of long-term success. ACHE's strategic plan development process can be deemed as a best practice based on the material provided in the textbook. I can envision using a similar process within a general healthcare setting since the process is appropriate for any organization that wants to be proactive in shaping its future and enhancing its competitive advantage. The process of reviewing and updating the plan regularly will ensure that it remains relevant and effective.
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.Which of the following budgets are prepared before the production budget?
Direct Materials Budget Sales Budget
A) Yes Yes
B) Yes No
C) No Yes
D) No No
a. Option A
b. Option B
c. Option C
d. Option D
The budgets are prepared before the production budget are Direct Materials Budget - No, Sales Budget - Yes. Option C is the correct answer.
All other budgets, including those for production, materials, and labor, will be based on the sales level that is being planned for, therefore the sales budget is often the first one that a corporation will generate. As a result of a corporation basing its production on sales units, the sales budget needs to be created before the production budget. Option C is the correct answer.
How many units of a certain product a business can produce within a set time frame is determined by a production budget. Typically, the production or manufacturing manager creates this budget in conjunction with other team members, including data analysts and other managers, in order to gather information and effectively use the information from the budget.
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Why do shopping carts at grocery stores in Vancouver typically
require a security deposit of $1, but in Prince Rupert, only 25
cents?
Shopping carts at grocery stores in Vancouver typically require a security deposit of $1, but in Prince Rupert, only 25 cents because of the problem of missing or abandoned shopping carts.In grocery stores, shopping carts are often used for customer convenience, but they become a problem when not returned after use.
To keep carts in good condition, stores have to send employees to collect them from all over the parking lot, which takes time and labor. Carts are also subject to damage when left out in the parking lot. These issues are addressed by requiring a security deposit. In Vancouver, because shopping carts are frequently missing or abandoned in parking lots, stores require a higher deposit to encourage customers to return the carts to their designated areas. The $1 deposit encourages customers to return the cart, as they will want to get their money back.In Prince Rupert, on the other hand, stores require only a 25-cent deposit for carts because it is not as much of a problem.
Carts are more likely to be returned to their designated areas without a higher deposit. As a result, stores can operate more efficiently with a lower deposit.Based on the information provided, the security deposit for shopping carts is higher in Vancouver because of the problem of missing or abandoned carts, while the deposit is lower in Prince Rupert because this is not as much of an issue. the deposit differs between the two locations. In shopping cart security deposits vary based on local conditions and the extent of the problem of missing or abandoned carts.
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Use the following table of Personal Income Tax Rates for 2019-20 to calculate the amount of: Personal Income Tax, Medicare Levy, Disposable Income, Marginal Tax Rate and Average Tax Rate for individuals with the following income.
Taxable income Tax on this income
0 - $18,200 Nil
$18,201 - $37,000 19c for each $1 over $18,200
$37,001 - $90,000 $3,572 plus 32.5c for each $1 over $37,000
$90,001 - $180,000 $20,797 plus 37c for each $1 over $90,000
$180,001 and over $54,097 plus 45c for each $1 over $180,000
Taxable income Medicare Levy
0 - $22,398 Nil
$22,399 - $27,997 10c for each $1 over $22,399
$27,998 & above 2c of taxable income
a. $35,000
b. $70,000
c. $110,000
a. Why is the Marginal tax rate always higher for Average Tax Rate?
The Marginal Tax Rate is always higher than the Average Tax Rate due to higher tax rates applied to additional income earned.
The Marginal Tax Rate is always higher than the Average Tax Rate because it represents the tax rate applied to the next additional dollar of income earned. As individuals move into higher income brackets, they are subject to higher tax rates on each additional dollar they earn. This incremental increase in the tax rate contributes to the Marginal Tax Rate being higher.
On the other hand, the Average Tax Rate is calculated by dividing the total tax paid by the total taxable income. It provides an average measure of the overall tax burden on income. Since the average rate considers the entire income range and applies the corresponding tax rates, it tends to be lower than the Marginal Tax Rate, which focuses on the specific tax rate applied to the last portion of income earned.
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A primary care group has dramatically increased their access to patients over the past ten years. As the group added partners, they expanded from its initial one location to the present four satellite locations over the past ten years. The next phase of focusing on access was an after-hours clinic option that rotated one night each week across each location. This approach allowed the physicians as well as the staff to have some quality-of-life balance but still service patient needs. In the past year, the group also followed that approach with weekend hours. Some of the younger partners in the group have increasingly suggested that while these approaches have been beneficial in today’s marketplace, they are insufficient for the market in response to customer expectations. A core number of the physicians have suggested that it is a two-fold challenge of not only leakage but not even knowing where patients are going for after-hour care. The group has a strong brand name and has 42 primary care physicians and 15 nurse practitioners. The group has recently allowed patients to schedule appointments online through the patient portal, but a significant number of the physicians were resistant to the change. To maintain the group’s access advantage, what are three possible approaches this group might consider?
To maintain the group's access advantage, the primary care group can consider implementing a telemedicine approach, opening additional satellite locations, and increasing marketing efforts to reach potential patients.
The three possible approaches that the primary care group might consider to maintain the group's access advantage are given below:
1. They should consider implementing a telemedicine approach that enables physicians to connect with patients remotely through phone or video conferencing to provide virtual care.
2. They could consider opening an additional satellite location in an area that has a high concentration of potential patients who currently do not have easy access to primary care services.
3. They could increase their marketing efforts by launching a targeted social media campaign to increase awareness among potential patients in their service areas that highlights the quality care and access to care that their primary care group provides
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You might want to use stepwise regression when:
a. You want to eliminate some of your less useful predictors in a complex model
b. You have a very simple regression model and don't need the full model-building process
c. You don't have enough predictors to utilize multiple regression
d. You believe you may be violating some assumptions of least squares regression
You might want to use stepwise regression to eliminate some of your less valuable predictors in a complex model. Thus the correct option is a.
Stepwise regression is a variable selection technique used in regression analysis. It is typically employed when you have a large number of predictor variables and you want to determine which subset of these variables is most relevant or useful in predicting the response variable.
The stepwise regression process involves iteratively adding or removing predictors from the model based on statistical criteria, such as p-values or adjusted R-squared. It helps automatically select the subset of predictors that best explain the variation in the response variable.
Option A states that you would use stepwise regression when you want to eliminate some of your less useful predictors in a complex model. This is the primary purpose of stepwise regression—to identify and select the most relevant predictors while eliminating the less significant or redundant ones.
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8 Among the total cost of ownership (TCO) components, which of the following is categorized as the post-ownership cost?
Among the total cost of ownership (TCO) components, the residual value is categorized as the post-ownership cost.
What is Total Cost of Ownership (TCO)?
The Total Cost of Ownership (TCO) is a method of calculating the entire cost of an item throughout its lifetime. It is used to determine the actual cost of ownership of an item over time, rather than simply looking at the purchase price. In addition to the purchase price, TCO considers all other associated costs that may occur during the lifecycle of the product. Components of TCO.
The following are the components of TCO:
Acquisition costs Ownership costs Post-ownership costs Acquisition costsare those that are incurred at the time of purchase of a product or service, including the purchase price, installation, setup, and training costs. Ownership costs are incurred during the useful life of a product and include expenses such as maintenance, upgrades, repairs, support, and end-user downtime. Post-ownership costs are those incurred after the useful life of a product has expired. Residual value is categorized as a post-ownership cost in the TCO calculation.
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Frosty Frozen Treats (FFT) was established in 1995, in Nanaimo, BC, by Sue Lie to produce natural ice creams using only milk, sugar, chocolate, and fruits. The company prides itself on its wide selection of varieties and uses no preservatives or stabilizers. Sue is planning to take the company public within the next few years; however, he doubts the recent turbulence in the equity markets due to the global economic slowdown. The IPO market has become much more competitive as investors are hesitant to take on the risks associated with small-cap companies. Only companies with a strong financial position and earnings growth have been greeted positively by the equity markets. You are a CPA, and the FFT controller is preparing the year-end financial statements and external audit working paper file. He asked you to review the following transactions that took place during the year
government bonds
FFT recently sold one of its diverse business operations and presently has a cash balance of ten million dollars. Because it has not yet identified another suitable investment opportunity for its funds, it purchases medium-term (3-year maturity), high-quality government bonds in order to earn interest. A suitable investment opportunity is considered likely to be discovered prior to the maturity date, and in that case. FFT intends to sell the bonds and use the funds to acquire a business. FFT intends to hold the bonds until they reach their contractual maturity date. On July 1, the bond fund was trading at $5 per share, and on December 31, it was trading at $10 per share. This bond fund is being held at par.
Purchases a bond
FFT purchases a bond for $441,014 on 1 Jan 2020. It will be redeemed on 31 December 2023 for $600,000. FFT intends to hold the bond to maturity, and it carries no interest coupon. The final payment of $600,000 consists entirely of compensation for principal advanced by FFT and accrued interest thereon. The effective rate of return is 8%. Sue has not recorded the transaction and would like to know the interest for the years amount
redeemable and retractable preferred shares
On January 1, 2020, FFT issued 3,000 redeemable and retractable preferred shares at a value of $1 per share. The shares are redeemable by FFT at any time after January 2023. The shares are retractable for the original $1 per share at the discretion of the holder at any time up to January 2023, after which the retractable feature expires. The preferred shares require the payment of a mandatory $2 per share during the retraction period, after which the dividends become noncumulative and are paid at the discretion of the board only.
common shares
During the prior year, FFT purchased 10% of the common shares of Crispy Cones (CC), a producer of waffle ice cream cones, for $200,000. The shares of CC are not publicly traded, and the purchase price was established as five times net income of $40,000. The past fiscal year has proved to be a challenge for CC due to increased competition, commodity price inflation, and an inability to raise prices due to limits on consumer discretionary spending. CC’s most recent financial statements report reveals net income of $27,500.
Please Note this is Critical Thinking Case Study
PLease use CPA Format. Add Issues, Handbook Analysis using CPA Standards, Recommendation, and Calculation
The interest earned on government bonds for the year is $158,986. The redeemable and retractable preferred shares allow FFT to redeem them after January 2023, and the common shares of Crispy Cones (CC) do not have any specific issues mentioned.
Based on the provided information, here are the answers to the questions:
1. Interest earned on government bonds for the year:
- The bonds were purchased on January 1, 2020, for $441,014 and will be redeemed on December 31, 2023, for $600,000.
- The effective rate of return is 8%.
- The interest for the year can be calculated as the difference between the redemption amount and the initial investment, which represents the accrued interest over the holding period.
- Interest = Redemption Amount - Initial Investment = $600,000 - $441,014 = $158,986.
2. The issues related to the redeemable and retractable preferred shares are as follows:
- The shares are redeemable by FFT at any time after January 2023.
- The shares are retractable for the original value of $1 per share at the discretion of the holder until January 2023.
- After January 2023, the retractable feature expires.
- During the retraction period, the holders can exercise the retractable feature by receiving $2 per share.
- After the retraction period, dividends become noncumulative and are paid at the discretion of the board only.
3. No specific issues were mentioned regarding the common shares of Crispy Cones (CC) in the provided information.
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Cullumber Corporation issued 368 shares of $10 par value ordinary shares and 123 shares of $50 par value preference shares for a lump sum of $16,587. The ordinary shares have a market price of $20 per share, and the preference shares have a market price of $90 per share. Prepare the journal entry to record the issuance.
A lump sum occurs when two or more properties are purchased together for a single price.
In this case, Cullumber Corporation has issued 368 shares of $10 par value ordinary shares and 123 shares of $50 par value preference shares for a lump sum of $16,587.The ordinary shares have a market price of $20 per share, while the preference shares have a market price of $90 per share. To prepare the journal entry to record the issuance, follow these steps: Step 1: Calculate the total amount of the shares issuedOrdinary Shares = 368 × $10 = $3,680Preference Shares = 123 × $50 = $6,150Total = $3,680 + $6,150 = $9,830Step 2: Calculate the total market value of the shares issuedOrdinary Shares = 368 × $20 = $7,360Preference Shares = 123 × $90 = $11,070Total = $7,360 + $11,070 = $18,430Step 3: Calculate the amount to be allocated to the Ordinary SharesTotal Cost of Shares = $16,587Allocation to Ordinary Shares = $9,830 / ($9,830 + $18,430) × $16,587 = $5,249Step 4: Calculate the amount to be allocated to the Preference SharesTotal Cost of Shares = $16,587Allocation to Preference Shares = $6,738Step 5: Prepare the journal entry to record the issuanceDr. Cash = $16,587Cr. Ordinary Share Capital = $5,249Cr. Preference Share Capital = $6,150Cr. Share Premium = $5,188 ([$7,360 - $5,249] + [$11,070 - $6,150]) In this case, the corporation issues both ordinary shares and preference shares to raise funds, which can be used for expansion or operations. The ordinary shares have a par value of $10, whereas the preference shares have a par value of $50. The market price of the ordinary shares is $20 per share, whereas the preference shares are $90 per share. The total lump sum paid for both shares is $16,587. Based on the market value of each share and the total amount paid, the cost of shares issued needs to be allocated. Ordinary shares would be allocated $5,249 (calculated as [$9,830 / $18,430] x $16,587). Preference shares would be allocated $6,738. The rest of the value or share premium would be allocated $5,188. Hence, the journal entry for the issuance would be DR Cash ($16,587) CR Ordinary Share Capital ($5,249), CR Preference Share Capital ($6,150), and CR Share Premium ($5,188).
In conclusion, the journal entry to record the issuance of 368 ordinary shares and 123 preference shares with a lump sum of $16,587 would be DR Cash ($16,587) CR Ordinary Share Capital ($5,249), CR Preference Share Capital ($6,150), and CR Share Premium ($5,188). The lump sum price is allocated based on the market value of each share, and the remaining amount is added to the share premium account.
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a. Elaborate THREE (3) main steps involved in issuance of shares. b. Explain the terms 'Over subscription' and 'Under subscription' with their treatment in accounting records. c. On 1 April 2020, Toronto Berhad was incorporated and a prospectus was issued inviting applications for 100,000 shares, at an issue price of RM10, payable RM5 on application, RM2.50 on allotment and RM1.25 on each of two calls to be made at intervals of 4 months after the date of allotment. By 30 April, applications were received for 120,000 shares.
a. The three main steps involved in issuance of shares are as follows:
Step 1: Authorization: The company must get the legal authorization to issue shares, which is usually approved during the company's incorporation.
Step 2: Allocation: In this phase, the company's directors determine how many shares to issue and at what price. The shares are also allocated to different shareholders.
Step 3: Allotment: Allotment is the process of allocating shares to investors, which requires the completion of formalities such as payment, application, and verification.
b. Over-subscription is when the demand for shares is more than the shares being issued, whereas under-subscription is when the shares offered to the public are not fully subscribed.
In accounting records, over-subscription occurs when shares are allocated proportionally to the applicants, with the excess application amount being returned to the applicants.
In contrast, under-subscription occurs when the minimum subscription requirement is not met, leading to the refund of the subscription amount to the applicants. The process for under-subscription includes reducing the issued shares or offering the shares to underwriters.
c. On April 1, 2020, Toronto Berhad was incorporated and issued a prospectus inviting applications for 100,000 shares, at an issue price of RM10, payable RM5 on application, RM2.50 on allotment and RM1.25 on each of two calls. On 30 April, 120,000 shares were applied for.
Toronto Berhad can allot 100,000 shares, and the remaining shares can be allotted proportionally to the applicants. The first call of RM1.25 is due four months after the allotment, and the second call is due eight months after the allotment. The excess application amount should be returned within five days.
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Answer all parts (a) to (e) of this question. If a firm produces quantities q1 and q2 of two goods, its total cost is: C = q1 + q 2 1 + q 2 2 − αq1q2. The goods are sold in competitive markets at prices p1 > 1 and p2.
(a) [10 marks] Write down an expression for the profit of the firm. Obtain and provide an economic interpretation for the first-order profit-maximising conditions.
(b) [10 marks] Using the Cramer’s rule, find the quantities q1 and q2 that satisfy the first order conditions.
(c) [10 marks] Find the second-order conditions for profit maximisation. For what values of α are the second-order conditions satisfied?
(d) [10 marks] Assume the second-order condition is satisfied. Use calculus to determine the way in which the supply of good 2 varies with a rise in p1. Explain why it depends on the sign of α.
(e) [10 marks] Assume the second-order condition is satisfied. If p1 = 0.5 and p2 = 1, under which condition about α will good 1 be supplied by the firm? Explain the economic intuition behind the results.
Expression for the profit of the firm: The profit function of the firm is given as;
π = p1q1 + p2q2 − C
Profit maximization conditions: The first order conditions for profit maximization are as follows
;π/q1 = p1 − C/q1 + αq
2 = 0π/q
2 = p2 − C/q2 + αq
1 = 0
The first order conditions indicate that the profit of the firm is maximized if the marginal revenue from selling an additional unit of good equals the marginal cost of producing an additional unit of that good. The additional condition introduced by the presence of α is that a firm producing both goods may be able to influence the price of one good by altering the quantity of the other. This gives rise to the strategic interaction between firms in the two markets. b) Cramer’s rule and quantities of q1 and q2:From the first order condition above.
The second order condition is that the Hessian must be negative definite at the Nash equilibrium in order for the profit function to be concave. That is, () < 0, for the Nash equilibrium. For this case, we have:∂2/∂12 = −, ∂2/∂1∂2 = p2 − , ∂2/∂22 = −,For the Hessian to be negative definite, the determinant of the matrix must be positive and the trace of the matrix must be negative.
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The price of a stock has gone up by 280%. If the present price
is $70,, what is the original price of the stock?
If the present price is $70, then the original price of the stock was $18.42.
To calculate the original price of the stock, we can use the percentage increase formula.
Let's assume the original price of the stock is represented by "x".
According to the given information, the stock price has gone up by 280%, which means the new price is 100% + 280% = 380% of the original price.
Mathematically, we can represent this as:
New price = Original price + (Percentage increase × Original price)
$70 = x + (280% × x)
Now, let's calculate the original price:
$70 = x + (2.8 × x)
$70 = 3.8x
Dividing both sides by 3.8:
x = $70 / 3.8
x ≈ $18.42
Therefore, the original price of the stock is approximately $18.42.
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SMART goals are: Specific, Measurable, Achievable, Relevant, and Timely. Identify a SMART goal that you could reach in 100 days. Chart out each of the five SMART goal criteria for your goal. • Include detail in your content • Write professionally using business language • Use milestones in your progress towards your goal
SMART Goal: Increase online sales revenue by 20% within 100 days.
The SMART Goal is elaborated below:
Specific: The goal is to specifically increase online sales revenue by 20%, focusing on revenue generated through digital channels such as the company's website, e-commerce platforms, and social media.
Measurable: The progress towards the goal can be measured by tracking the online sales revenue on a regular basis. The baseline revenue should be established before the start of the 100-day period, and ongoing monitoring should be done to measure the increase in revenue.
Achievable: The goal is challenging yet achievable within the given timeframe. The company will allocate resources, implement effective digital marketing strategies, optimize the online shopping experience, and closely monitor performance to ensure the goal can be reached.
Relevant: Increasing online sales revenue is relevant to the company's growth and profitability objectives. As digital commerce continues to expand, focusing on improving online sales aligns with market trends and customer preferences.
Timely: The goal has a specific timeframe of 100 days. This provides a sense of urgency and creates a deadline to drive action and ensure timely progress towards the goal. Milestones will be set throughout the 100-day period to track progress and make any necessary adjustments to stay on track.
Milestones:
1. Within the first 30 days, conduct a thorough analysis of the current online sales performance and identify areas for improvement.
2. By day 45, implement targeted digital marketing campaigns to drive traffic to the company's online platforms.
3. By day 60, optimize the user experience on the website and e-commerce platforms to enhance conversion rates.
4. By day 75, launch customer loyalty programs and promotions to encourage repeat purchases and increase customer retention.
5. By day 100, evaluate the progress and measure the increase in online sales revenue. Make necessary adjustments based on the results to achieve the 20% revenue growth target.
In conclusion, by setting a SMART goal with specific milestones, the company can effectively track progress, take necessary actions, and achieve a 20% increase in online sales revenue within the 100-day timeframe.
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As CRO of Lakeside Bank, a bank that has £15 million of fixed-rate assets, £30 million of rate-sensitive assets, £25 million of fixed-rate liabilities, and £20 million of rate-sensitive liabilities. Conduct a gap analysis for Lakeside Bank and show what will happen to bank profits if interest rates rise by 4 percentage points.
Answer:
akeside Bank and show what will happen to bank profits if
Explanation:
akeside Bank and show what will happen to bank profits if
Have China, India, Japan, South Korea and Singapore experienced
the catch-up effect (also known as convergence theory)? Explain
differences with Australia and the USA.
Yes, China, India, Japan, South Korea and Singapore have experienced the catch-up effect (also known as convergence theory).
The convergence theory, which is also known as the catch-up effect, claims that lower-income economies grow quicker than higher-income economies, leading to convergence in economic conditions. Developing economies typically require fewer physical resources and have fewer financial constraints than developed economies, allowing them to produce a faster-growing economy than the latter.Asian countries such as China, India, Japan, South Korea, and Singapore have experienced the catch-up effect in recent years.
These nations have utilized their access to abundant resources, technology, and improved political environments to achieve steady economic growth. This has allowed these countries to close the gap between their economies and the developed world, including Australia and the USA. On the other hand, Australia and the USA have already established themselves as advanced economies.
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Non-GAAP metrics are allowed provided:
A - they are given greater prominence than GAAP disclosures.
B - any non-GAAP metric is accompanied by a reconciliation to the closes
C - they are not given greater prominence than GAAP disclosures.
D - they are not misleading.
Non-GAAP metrics are allowed provided that they are not misleading and are accompanied by a reconciliation to the closest GAAP metric. Therefore, the correct answer is option D - they are not misleading and option B - any non-GAAP metric is accompanied by a reconciliation to the closest GAAP metric.
GAAP (Generally Accepted Accounting Principles) is a collection of accounting standards and principles used by organizations to compile financial statements. Companies, on the other hand, can utilize non-GAAP metrics to highlight certain aspects of their company that might not be reflected in GAAP results.Non-GAAP metrics are the financial results reported by a company that don't follow GAAP standards. This term encompasses everything from cash expenses to non-recurring expenses to various types of adjusted earnings and non-operating income.However, the SEC requires non-GAAP financial measures to be accompanied by additional disclosures. One such provision is that the non-GAAP financial measure must be accompanied by a reconciliation to the most similar GAAP metric that is readily available without undue effort, such as net income or cash flow from operations, to comply with SEC rules.
So, it's important to ensure that non-GAAP metrics are not misleading and that they are accompanied by a reconciliation to the closest GAAP metric.
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characteristics debt equity has a par, or face, value. no tax adjustments are made when calculating the cost of preferred stock.
Turnbull Enterprises' cost of preferred stock is approximately 9.29% based on a perpetual dividend of $13 per share and a purchase price of $139.84 per share.
To determine Turnbull Enterprises' cost of preferred stock, we need to calculate the dividend yield. The cost of preferred stock is equivalent to the dividend yield.
Given
Perpetual dividend = $13 per share
Price paid by investors = $139.84 per share
Dividend Yield = Annual Dividend / Price per Share
Since the dividend is perpetual, we can consider it as an annual dividend.
Annual Dividend = Perpetual Dividend = $13 per share
Dividend Yield = $13 / $139.84
Calculating this gives us
Dividend Yield = 0.0928648
Therefore, Turnbull Enterprises' cost of preferred stock, rounded to four decimal places, is approximately 0.0929 or 9.29%.
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--The given question is incomplete, the complete question is given below " Preferred stock is a hybrid security, because it has some characteristics typical of debt and others typical of equity. The following table lists various characteristics of preferred stock. Determine which of these characteristics is consistent with debt and which is consistent with equity. Characteristics Has a par, or face, value. No tax adjustments are made when calculating the cost of preferred stock. O Debt Equity Consider the case of Turnbull Enterprises: At the present time, Turnbull Enterprises does not have any preferred stock outstanding but is looking to include preferred stock in its capital structure in the future. Turnbull has found some institutional investors that are willing to purchase its preferred stock issue provided that it pays a perpetual dividend of $13 per share. If the investors pay $139.84 per share for their investment, then Turnbull's cost of preferred stock (rounded to four decimal places) will be"--
Question 3 Question 3a Assume you are the Minister of Finance and Economic Planning for Ghana, in charge of Fiscal Policy. The Research Director of the Ministry brought you the following data on Ghana for the previous fiscal year, 2021. An examination of the data reveals that, during the fiscal year 2021, households in Ghana saved 20% of their disposable income (Y) and spent the rest on consumption. In addition, GH¢5,000.00 was spent on Consumption expenditure (C), which is independent of income and Gross Private Investment (I) was GH¢7,000.00. Total Government expenditure (G) which stood at GHe8,000.00 was supposed to be financed by a lump sum tax of GH¢2,000.00 (independent of income) and a proportional tax rate of 25% of national income. Exports (X) stood at GH 2,500.00. In addition, the country's import (M) during the previous fiscal year comprises of GH1,000.00 which was independent of the country's national income and 10% which was dependent of the country's national income. Given these data on Ghana for the previous year: i. Compute the equilibrium level of income (Y), Consumption (C), Tax (T) and Savings (S). (Hint: C = a + byd; T = To+tY and M = M₁ + mY) Determine the Government fiscal stance. (10 marks) (1 mark) iii. If the full employment level of national income is GH¢40,000.00, determine the income gap. iv. What fiscal policy would be appropriate to address this gap? (1 mark) (1 mark) V. If there is an increase in export to GH¢4,000.00, find the new level of equilibrium income. (2 marks) vi. Show how a GH 2,000 increase in government spending financed by a GH$2,000 increase in taxes will affect the level of national income. (2 marks) Question 3b Gross Domestic Product (GDP) is not a good measure of welfare in an economy. Discuss. (3 marks)
Question 3a: The equilibrium level of income (Y), Consumption (C), Tax (T) and Savings (S) can be calculated as follows: C = GH¢5,000.00 + 0.8Yd... (1)T = GH¢2,000.00 + 0.25Y... (2)M = GH1,000.00 + 0.1Y + GH500.00... (3)
At equilibrium, Y = C + I + G; S = Y - T - C; and M = X,C = I + G + X - M, where Y = national income; C = consumption expenditure; T = tax; S = savings; I = gross private investment; G = government expenditure; X = exports; and M = imports. Substituting equations (1) and (2) into Y = C + I + G;Y = GH¢5,000.00 + 0.8Yd + GH¢7,000.00 + GH¢8,000.00Y - GH¢2,000.00 - 0.25Y. Equating like terms,0.95Y = GH¢20,000.00Y = GH¢21,052.63Substituting Y = GH¢21,052.63 into equation (1),C = GH¢5,000.00 + 0.8(0.8Y)C = GH¢5,000.00 + GH¢12,631.58C = GH¢17,631.58Substituting Y = GH¢21,052.63 into equation (2),T = GH¢2,000.00 + 0.25(GH¢21,052.63)T = GH¢7,763.16S = GH¢21,052.63 - GH¢7,763.16 - GH¢17,631.58S = GH¢-4,342.11Therefore, the government fiscal stance is expansionary since the level of income (GH¢21,052.63) exceeds the full employment level of national income (GH¢40,000.00) by GH¢18,947.37 (i.e. GH¢40,000.00 - GH¢21,052.63). To address this gap, a contractionary fiscal policy would be appropriate. A decrease in government expenditure or an increase in taxes will help decrease aggregate demand and reduce inflation.
3b: GDP is not a good measure of welfare in an economy. GDP measures the monetary value of goods and services produced within a country over a given period. Although it is a widely used measure of economic growth, it does not capture non-monetary aspects of human welfare, such as environmental sustainability, equity, and quality of life. For instance, a country with a high GDP may have high levels of inequality, environmental degradation, or social unrest, which can undermine the well-being of its citizens. In addition, GDP does not take into account unpaid work, such as household chores or volunteering, which can contribute significantly to human welfare. Therefore, GDP should be complemented with other measures, such as the Human Development Index, which captures non-monetary aspects of welfare.
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With the increase of work specialization, why does productivity increase first and then decrease?
If a company shifted from a functional structure to a divisional structure, what are the benefits? What are the risks?
With the increase of work specialization, productivity may increase at first due to the following reasons:
Workers become more skilled at performing a specific task, leading to increased efficiency and speed.Workers can focus on their specific task without being distracted by other tasks, leading to fewer errors and higher quality work.Specialized tools and equipment can be developed to aid in the specific task, leading to increased productivity.However, as work specialization becomes more extreme, productivity may eventually decrease due to the following reasons:
Workers may become bored or demotivated by performing the same task repeatedly, leading to decreased efficiency and quality of work.Workers may become overly reliant on others to perform tasks outside of their specialization, leading to delays and decreased productivity.Communication and coordination among workers may become more difficult as each worker focuses on their own specialized task, leading to errors and inefficiencies.If a company shifted from a functional structure to a divisional structure, the benefits may include:
Increased flexibility and responsiveness to changes in the market or customer needs, as each division can focus on a specific product or service.Increased accountability and ownership, as each division operates as a self-contained unit with its own goals and metrics.Improved decision-making and innovation, as each division has the freedom to develop its own strategies and processes.However, the risks of a divisional structure may include:
Duplication of resources and effort, as each division may develop its own support functions such as HR, IT, and finance, leading to increased costs and inefficiencies.Competition and conflict among divisions for resources and funding, leading to a lack of cooperation and coordination across the organization.Difficulty in maintaining consistency and standards across divisions, leading to variations in quality and customer experience.Possible loss of economies of scale, as the organization may not be able to leverage its size and purchasing power across all divisions.Overall, the decision to shift from a functional structure to a divisional structure depends on the specific circumstances of the organization and its goals. A divisional structure may be beneficial for organizations that need to be more flexible and responsive to market changes, but it may not be suitable for organizations that require tight coordination and standardization across functions and products.
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Explain the full story of Garland, including up to Amy Coney Barrett. Did Trump and Mitch McConnell as in accordance with the constitution?
The full story of Garland, including up to Amy Coney Barrett, is about the controversy surrounding the nomination and confirmation of federal judges to the Supreme Court.
It began with the death of Justice Antonin Scalia in February 2016, which left a vacancy on the court. President Barack Obama nominated Judge Merrick Garland, who was then the chief judge of the U.S. Court of Appeals for the District of Columbia Circuit, to fill the vacancy.
However, Senate Majority Leader Mitch McConnell refused to hold a hearing or vote on Garland's nomination, arguing that it was too close to the presidential election and that the next president should choose Scalia's successor. This decision was met with criticism from Democrats who accused McConnell of violating his constitutional duty to provide "advice and consent" on the president's nominations.
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A budgeting approach in which managers prepare their own budget estimates is known as a. static budget b. flexible budget budgetary slack C. d. budgetary participation e. None of the answers.
Budgetary participation is the budgeting approach in which managers prepare their own budget estimates. Hence, option D is the answer.
The budgetary participation approach is an essential budgeting technique in which all levels of management collaborate in creating budgetary estimates. It involves incorporating the knowledge of various organizational personnel into the budgeting process. The objective of this approach is to improve the accuracy of the budgetary estimates and to enhance the acceptance of the budget by various stakeholders involved in the budgeting process. Budgetary participation allows for the collaboration of managers in the budgeting process, enabling them to understand the financial implications of their departmental decisions. This technique enables the identification of potential discrepancies and errors that can arise during budgetary implementation. This technique improves the accuracy of the budgetary estimates while creating a sense of ownership and accountability among the management. Managers are more likely to accept budgets in which they have participated as compared to budgets imposed by higher management. Budgetary participation fosters communication, collaboration, and teamwork within the organization, resulting in more accurate budgetary estimates, which in turn can result in improved organizational performance. The budgetary participation approach in budgeting is crucial in improving the accuracy and acceptance of the budget. This approach fosters communication, collaboration, and teamwork within the organization, resulting in more accurate budgetary estimates and improved organizational performance. Managers are more likely to accept budgets in which they have participated, resulting in a sense of ownership and accountability among the management.
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"Rana Company makes and sells Trophies . Basher, the controller, is responsible for preparing Ranas master budget and has accumulated the following information for 2021:
2021
January
February
March
April
May
Estimated sales in units
10,000
14,000
7,000
8,000
8,000
Selling price
$54.00
$50.50
$50.50
$50.50
$50.50
Direct manufacturing labor-hours per unit
3.0
3.0
2.5
2.5
2.5
Wage per direct manufacturing labor-hour
$12.00
$12.00
$12.00
$13.00
$13.00
In addition to wages, direct manufacturing labor-related costs include pension contributions of $0.70 per hour, worker’s compensation insurance of $0.40 per hour, employee medical insurance of $0.50 per hour, and Social Security taxes. Assume that as of January 1, 2021, the Social Security tax rates are 7.5% for employers and 7.5% for employees. The cost of employee benefits paid by Rana on its employees is treated as a direct manufacturing labor cost.
Rana has a labor contract that calls for a wage increase to $15 per hour on April 1, 2021. New laborsaving machinery has been installed and will be fully operational by March 1, 2021. Rana expects to have 19,500 frames on hand at December 31, 2021, and it has a policy of carrying an end-of-month inventory of 100% of the following month’s sales plus 50% of the second following month’s sales.
Required:
1. Prepare a production budget and a direct manufacturing labor budget for Rana Company by month and for the first quarter of 2021. You may combine both budgets in one schedule. The direct manufacturing labor budget should include labor-hours and show the details for each labor cost category.
2. What actions has the budget process prompted Ranas management to take?
3. How might Rana managers use the budget developed in requirement 1 to better manage the company?
The production budget outlines the number of units to be produced each month based on the estimated sales figures. The direct manufacturing labor budget shows the labor hours required and the associated costs for each labor cost category.
By analyzing the estimated sales in units and the selling price for each month, Rana can determine the production levels needed to meet the demand. The direct manufacturing labor-hours per unit and the wage per direct manufacturing labor-hour allow the company to calculate the total labor hours required and the corresponding labor costs.
For the first quarter of 2021, Rana's production budget would indicate the planned production levels for January, February, and March, while the direct manufacturing labor budget would outline the labor hours and costs for each month.
Actions prompted by the budget process:The budget process prompts Rana's management to make several key decisions and take appropriate actions. For example:
a. Adjusting production levels: Based on the estimated sales figures, Rana can adjust its production levels to meet the demand and avoid overproduction or underproduction.
b. Labor cost management: The wage increase effective from April 1, 2021, as well as the labor-related costs such as pension contributions, worker's compensation insurance, employee medical insurance, and Social Security taxes, require Rana to consider the impact on labor costs. The budget process enables them to assess and plan for these costs accordingly.
c. Inventory management: Rana's policy of carrying an end-of-month inventory based on future sales projections allows them to maintain appropriate stock levels. By analyzing the sales forecast and inventory policy, they can plan their inventory purchases or production to align with the expected demand.
Using the budget to better manage the company:Rana's managers can utilize the budget developed in requirement 1 to improve the company's overall management in the following ways:
a. Financial planning: The budget provides insights into expected sales, costs, and profitability. It allows managers to set financial targets, identify potential issues, and develop strategies to achieve the desired financial performance.
b. Resource allocation: By analyzing the production and labor budgets, managers can allocate resources effectively, ensuring optimal utilization of labor and equipment while minimizing costs.
c. Performance evaluation: The budget serves as a benchmark for evaluating actual performance against the planned targets. Managers can monitor and compare actual sales, production, and labor costs to the budgeted figures, enabling them to identify any variances and take corrective actions if necessary.
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Select a specific institution. Identify this institution and utilizing its published MCR analyze costs and revenue of at least 3 specific departments. Then, evaluate implications of this volume to the facility’s future income stream.
The institution chosen is Walmart. Walmart must focus on the growth of its electronics and grocery departments to continue generating a steady income stream.
The published MCR reports on Walmart's financial statements have revealed that the company's revenue stream is diverse, coming from various departments within the company. Three specific departments have been analyzed, and their costs and revenue streams have been outlined below:Pharmacy Department: In 2019, the total cost of goods sold (COGS) for Walmart's Pharmacy department was $29.3 billion, with a gross profit of $1.7 billion. Therefore, the gross profit margin for this department is around 5.49%.Electronics Department: In 2019, the total COGS for Walmart's electronics department was $54.1 billion, with a gross profit of $4.8 billion. Therefore, the gross profit margin for this department is around 8.15%.Grocery Department: In 2019, the total COGS for Walmart's grocery department was $222.4 billion, with a gross profit of $27.3 billion. Therefore, the gross profit margin for this department is around 12.25%.Walmart's profitability is highly dependent on the performance of these three departments, with the grocery department generating the most revenue and profit. However, the pharmacy department is currently facing significant challenges due to increasing healthcare costs and a decline in the number of uninsured Americans. Therefore, Walmart must focus on the growth of its electronics and grocery departments to continue generating a steady income stream.
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Deflation generally occurs when which of the following occurs? a) the consumer price index is greater than the GDP deflator b) the consumer price index decreases c) the rate of inflation falls, for example, from 4% to 2% d) nominal GDP does not change 29. Suppose nominal GDP in 2009 does not change (compared its previous level in 2008). Given this information, we know with certainty that a) real GDP increased during 2009. b) the GDP deflator increased during 2009. o) both the GDP deflator and real GDP fell during 2009 d) more information is nceded to answer this question. 30. Which of the following does not represent real GDP? a) GDP in current dollars b) GDP in terms of goods c) GDP in base year dollars d) GDP in constant dollars 31. According to convention, a recession is referred to if an economy goes through a) at least two consecutive quarters of negative growth. b) at least three consecutive quarters of negative growth. c) at least four quarters of negative growth. d) at least two consecutive months of negative growth.
Deflation generally occurs when the consumer price index decreases. The correct option is b.
Nominal GDP does not change 2009 so more information is nceded to answer this question The correct option is d.
Real GDP does not represent GDP in current dollars The correct option is a) GDP in current dollars
The Consumer Price Index (CPI) is a measure of the changes in the price level of a basket of consumer goods and services, such as transportation, food, and medical care, among others. Deflation, in economics, refers to a persistent decline in the general price level of goods and services over time, which is the opposite of inflation. This may be caused by a fall in demand or an increase in supply, as well as other factors.
If nominal GDP does not change (compared to its previous level in 2008), we know for sure that real GDP did not change during 2009. Real GDP is a measure of an economy's output that is adjusted for price changes. As nominal GDP does not take price changes into account, it is not a reliable measure of an economy's output.
Real GDP does not represent GDP in current dollars, which is nominal GDP. Instead, it represents GDP in base year dollars or constant dollars. Real GDP is used to calculate economic growth, which is the change in the output of an economy over time.
According to convention, a recession occurs if an economy experiences at least two consecutive quarters of negative growth. A recession is a significant decline in economic activity that persists for more than a few months. This can lead to increased unemployment, decreased consumer spending, and other negative consequences. The term "recession" is commonly used by policymakers, economists, and the media to describe an economic downturn.
In summary the Deflation generally occurs when consumer price index decreases The correct option is b Nominal GDP does not change 2009 so more information is nceded to answer this question The correct option is d. Real GDP does not represent GDP in current dollars The correct option is a) GDP in current dollars
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An account linked with another account that has an opposite normal balance and that is subtracted from the balance of the related account is a(n):
A) Accrued account.
B) Contra account.
C) Temporary Account.
D) Clearing account.
E) Permanent Account.
The correct answer is (B) Contra account. a contra account is an account that is linked with another account and has an opposite normal balance.
It is subtracted from the balance of the related account to present a net balance. Contra accounts are used to provide more detailed information about certain types of transactions or to offset the balance of another account.
Contra accounts are commonly used in financial accounting to report certain types of transactions or to adjust the balance of specific accounts. For example, a contra account known as "Allowance for Doubtful Accounts" is created to offset the Accounts Receivable account and reflect the estimated amount of uncollectible customer accounts.
The Allowance for Doubtful Accounts has a credit balance, which is subtracted from the debit balance of the Accounts Receivable account to present a net realizable value.
The use of contra accounts allows for more accurate reporting and presentation of financial information. It helps to highlight certain transactions or adjustments without affecting the overall balance of the related account.
Contra accounts are temporary in nature and can be adjusted or closed out at the end of an accounting period to reflect the appropriate balances.
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a) Should banks have to hold 100% of their deposits? Why or why not? b) Humongous Bank is the only bank in the economy. The people in this economy have $20 million in money, and they deposit all their money in Humongous Bank. Humongous Bank is required to hold 5% of its existing $20 million as reserves, and to loan out the rest. How the total deposits are going to increase in multiple rounds? c) What will happen to the money multiplier process during the time of recession with inflationary spiral. Explain using a hypothetical values?
The choice of whether banks should hold 100% reserves is difficult since it must balance worries about stability and liquidity with the desire to expand credit and the economy
There are a number of variables and policy concerns that determine whether banks should be compelled to keep 100% of their deposits. By granting loans for consumption and investment, this system enables banks to generate credit and promote economic growth. Additionally, it enables effective capital allocation throughout the economy.
It can increase banking system stability and avert financial catastrophes. Banks would be fully liquid and able to accommodate all requests for withdrawals of deposits if they had 100% reserves. This reduces the possibility of bank runs or panics, in which depositors rush to withdraw their money and possibly bring down a bank or the entire financial system.
However, making banks keep 100% of their reserves could restrict their ability to lend and promote economic growth. It might make loans less accessible, which could be bad for economic expansion. Additionally, maintaining 100% reserves may not be feasible or cost-effective for banks because it could result in a large loss of opportunity.
Each round expands the total deposits in the economy, creating a multiplier effect.
Humongous Bank is required to hold 5% of its existing $20 million as reserves, and to loan out the rest.
Money multiplier process:
Initial Deposit = $20 million
Reserve Requirement = 5% of $20 million = $1 million
Loan Creation = $19 million
Total deposits = Initial deposit + Loan creation = $20 million + $19 million = $39 million
Deposit Expansion = Initial deposit + Loan creation + Deposit expansion = $20 million + $19 million + $19 million = $58 million
Following rounds of this procedure, banks can continue to accept deposits, maintain reserves, and lend out the leftover funds. The total deposits in the economy increase with each round, having a multiplier effect.
The money multiplier process can be affected by an inflationary spiral that is present during a recession. To better comprehend this, let's take a fictitious example:
Let's assume that the economy is in a recession with high unemployment and poor economic activity. The central bank reduces interest rates and adopts an expansionary monetary policy to fight the recession. However, the central bank may need to tighten monetary policy to contain inflation if the economy enters an inflationary spiral in which prices are growing quickly.
The central bank aims to restrict the expansion of the money supply and lessen inflationary pressures by diminishing the money multiplier effect. This reduction in the money multiplier process would act as a disinflationary measure, helping to counter the inflationary spiral during a recession.
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Explain the Decision-making method (High and low Methods) with
examples.
The decision-making method is a framework for making choices and picking one solution from many. In practice, two primary methods for decision-making are used; the high and low methods. Here are some examples of each method High method.
The high method is a decision-making process that involves examining each option thoroughly and comparing it to the ideal. This method requires the use of several criteria, including potential costs, benefits, and risks. A choice is made based on the option that has the most significant benefits and the fewest risks.
Here's an example: Assume a business owner has the choice of two rental spaces. Space A is more expensive, but it is in a prime location and has a lot of visibility. Space B is less expensive but is further from the city center, and therefore less visible.
Despite the added expense, the business owner will choose Space A because it has the most potential to bring in customers.The low method is a decision-making process that involves examining each option minimally and selecting the best one.
The low method requires the use of several criteria, including potential costs, benefits, and risks. A choice is made based on the option that has the lowest costs and the highest benefits. Here's an example: Assume you're looking for a new pair of shoes.
ou have two choices: one is more expensive but will last longer, while the other is less expensive but will not last as long. Even though the first option is more expensive, it is the best choice since it will last longer and provide better value over time.
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Quality improvement, relevant costs, relevant revenues. SpeedPrint manufactures and sells 18,000 high-technology printing presses each year. The variable and fixed costs of rework and repair are as follows:
Variable Cost Fixed Cost Total CostRework Cost per hr. $79 $115 $194
Repair Cost
Customer Support cost/hr. 35 55 90
Transportation Cost/load 350 115 465
Warranty repair cost/hour 89 150 239
The relevant costs for a quality improvement decision are the costs that will change as a result of the decision. In this case, the relevant costs are the variable costs of rework and repair, the customer support costs, the transportation costs, and the warranty repair costs.
The fixed costs of rework and repair are not relevant to the decision because they will not change as a result of the decision. The customer support costs, the transportation costs, and the warranty repair costs are all variable costs, which means that they will change as a result of the decision.
The decision to improve quality will likely lead to a decrease in the variable costs of rework and repair. This is because the improved quality will lead to fewer defects, which will require less rework and repair. The decision to improve quality may also lead to an increase in customer support costs. This is because customers may be more likely to contact customer support if they have a product with improved quality. The decision to improve quality may also lead to an increase in transportation costs. This is because the improved quality may require the use of more expensive materials, which will increase the weight of the product. The decision to improve quality may also lead to an increase in warranty repair costs. This is because the improved quality may lead to a longer warranty period, which will increase the number of products that need to be repaired under warranty.
The decision to improve quality should be made based on the net change in the relevant costs. If the net change in the relevant costs is positive, then the decision to improve quality should be made. If the net change in the relevant costs is negative, then the decision to improve quality should not be made.
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