Built Rite Corp. is evaluating an extra dividend versus a share repurchase. In either case, $7,500 would be spent. Current earnings are $1.24 per share, and the stock currently sells for $32 per share. There are 5,000 shares outstanding. Ignore taxes and other imperfections. You own one share of stock in this company. If the company issues the dividend, your total investment will be worth (per share) as compared to (per share) if the company opts for a share repurchase. Ignore market imperfection (Ignore taxes, transaction costs, and commission fees).

The ratio that indicates that Z, Inc. is undervalued is the PEG ratio (B). Since the implied stock price using the PEG ratio ($52) is less than the current stock price ($60), Z, Inc. is undervalued by the market.

1. Implied stock price using the PE ratio:

We know that the PE ratio of the industry is 16 and the earnings per share for Z, Inc. is $4. The implied stock price using the PE ratio formula is:

Implied Stock Price = PE Ratio × EPS= 16 × $4= $64

Thus, the implied stock price of Z, Inc. using the PE ratio is $64.2.

Implied stock price using the PEG ratio:

Given, the PEG ratio of the industry is 1.3 and the growth rate of Z, Inc. is 10%.

The implied stock price using the PEG ratio formula is:

PEG Ratio = PE Ratio ÷ Growth Rate

Implied Stock Price = PEG Ratio × EPS= (PE Ratio ÷ Growth Rate) × EPS= (1.3 × 4) ÷ 0.10= $52

Thus, the implied stock price of Z, Inc. using the PEG ratio is $52.3.

Implied stock price using the price-EBIT ratio:

Given, the price-EBIT ratio of the industry is 10 and the EBIT per share for Z, Inc. is $6. The implied stock price using the price-EBIT ratio formula is:

Implied Stock Price = Price-EBIT Ratio × EBIT per Share= 10 × $6= $60

Thus, the implied stock price of Z, Inc. using the price-EBIT ratio is $60.4.

The ratio that indicates that Z, Inc. is undervalued is the PEG ratio (B). Since the implied stock price using the PEG ratio ($52) is less than the current stock price ($60), Z, Inc. is undervalued by the market.

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The seller would need to reduce her price using  elasticity of demand by $0.10 (10 cents) to increase the quantity sold by 20 percent.

To determine how much the seller would need to reduce her price to increase the quantity sold by 20 percent,

use the concept of elasticity of demand.

The formula to calculate the percentage change in quantity demanded given the percentage change in price is,

% Change in Quantity Demanded = Elasticity of Demand × % Change in Price

The elasticity of demand is 4, and we want to increase the quantity sold by 20 percent.

Plug in the values and solve for the percentage change in price,

20% = 4 × % Change in Price

Dividing both sides by 4 gives us,

% Change in Price

= 20% / 4

= 5%

To calculate the actual price reduction needed, multiply the current price by the percentage change in price,

Price Reduction

= $2 × 5%

= $0.10

Therefore, as per elasticity of demand the seller would need to reduce her price by $0.10 (10 cents) to increase the quantity sold by 20 percent.

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Given: Cost of the property = $3,500,000.LTV = 75%.Formula used:Debt to Equity Ratio = Total Debt / Total Equity.

Ann’s Debt to Equity ratio for this purchase can be calculated as follows:Total debt = (LTV / 100) × Cost of propertyTotal debt = (75 / 100) × $3,500,000Total debt = $2,625,000Total equity = Cost of property - Total debtTotal equity = $3,500,000 - $2,625,000Total equity = $875,000Debt to Equity Ratio = Total Debt / Total Equity Debt to Equity Ratio = $2,625,000 / $875,000Debt to Equity Ratio = 150 / 50 Debt to Equity Ratio = 3:1Therefore, the correct option is B. 3:1.

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The total deposit made for the period of six years can be computed as P5400*12*6 = P3,10,800. The number of months between the time the deposit stopped and when it resumed is four years * 12 months = 48 months.

The total amount withdrawn from the establishment of the belt and nuts factory is P2,300*48 = P1,10,400. In order to find the total deposit made over the period of six years, the monthly deposit made must be multiplied by the number of months in six years.P5400 is deposited monthly, therefore the total deposit made is P5400*12*6 = P3,10,800.When the deposit stopped after the sixth year, a period of four years went by before it was resumed.

Four years is equivalent to 48 months, thus, the total number of months the deposit was not made was 48 months.At the point of resuming the deposit, the establishment of a belt and nuts factory was created, which required the monthly withdrawal of P2,300. Therefore, the total amount withdrawn is P2,300*48 = P1,10,400.

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The value of Samsung's preferred stock is $22.To calculate the value of Samsung's preferred stock, we can use the formula for the present value of perpetuity. The formula is as follows:

Value of preferred stock = Dividend / Required return

In this case, the dividend is the constant annual dividend of $2.2, and the required return is 10% (0.10 in decimal form).

Value of Samsung's preferred stock = $2.2 / 0.10 = $22

Therefore, the value of Samsung's preferred stock is $22.

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Given: Earnings per share next year = 3.81Retention ratio = 30%Equity cost of capital = expected return on new investment = 11%Earnings growth rate = 3.3% per year Dividend due in one year .

The Gordon growth model is given as: P = D1 / (Ke - g)where, P = current stock priced 1 = next year's dividend Ke = equity cost of capital g = earnings growth rate We can find out the value of D1 as:D1 = Earnings per share * Retention ratio[tex]D1 = 3.81 * 0.30D1 = $1.143Now we can find out the value of P as:P = D1 / (Ke - g)P = 1.143 / (0.11 - 0.033)P = $12.77[/tex]

Therefore, the current stock price of the firm is[tex]$12.77[/tex].

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The correct option is that the call option with a market price of $75 has a lower premium than the call option with a market price of $80. 

A call option is an agreement where the owner of the option has the right to buy an underlying asset, which is typically a stock, at a predetermined price, which is known as the strike price, before the option contract expires.The premium for a call option is the price that the owner of the option must pay to buy the call option, which gives the owner the right to buy the underlying asset at the strike price.

The premium for a call option is based on various factors, including the underlying asset's market price, the strike price, the time until expiration, and the volatility of the underlying asset. The higher the market price of the underlying asset, the higher the premium for a call option.

On the other hand, if the market price of the underlying asset is low, then the premium for a call option will also be low. This is because the option is less likely to be exercised if the market price of the underlying asset is lower than the strike price. Therefore, in this case, the call option with a market price of $75 has a lower premium than the call option with a market price of $80, as the market price of the underlying asset for the first option is lower than the second option.

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Sid's Hardware Store may be liable for breach of implied warranty of merchantability, but Dan's chances of winning are uncertain due to misuse.

For this situation, the suggested guarantee of merchantability would connect to the offer of the screwdriver to Bailey since Sid's Home improvement shop is a trader.

This guarantee ensures that the screwdriver is good for its normal reason and of satisfactory quality. In the event that the screwdriver was deficient or not reasonable for its planned use, Bailey would have a case under this guarantee.

Nonetheless, the guarantee may not stretch out to Dan since he acquired the screwdriver from Bailey and was not the first buyer. Dan's possibilities winning a suit against Sid's Home improvement shop for break of guarantee are unsure as he is an outsider to the first deal.

Sid's Home improvement shop might actually contend the protection of abuse of the item. Dan involved the screwdriver as an etch and exposed it to exorbitant power with a demo hammer, which was not its planned use.

The store might battle that the injury came about because of Dan's carelessness or abuse, as opposed to a deformity in the screwdriver. The result of the claim would rely upon the particular conditions and proof introduced.

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When managers practice 'Management By Waking Around', they are using the concurrent type of operational control. Option b is correct.

Management by Wandering Around (MBWA) is a practice that includes the leader visiting the workplace, meeting employees, asking questions, observing their work, and discussing issues with them. MBWA enables a leader to learn about workplace problems and to get an understanding of how employees feel about their work and the company's overall vision.

This interaction offers the leader the opportunity to motivate and mentor workers, assisting them in achieving their goals. This practice allows a leader to recognize difficulties early on, resulting in a faster solution. MBWA allows for a stronger organizational relationship between the leader and workers, which enhances worker engagement and loyalty.

The practice encourages workers to share their problems with the leader and provides the leader with more opportunities to offer advice.

Therefore, b is correct.

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The economic rent earned by the low-cost producer is $1,275.

To calculate the economic rent earned by the low-cost producer, we need to compare its average total cost (ATC) with the market price.

Given that the low-cost producer's long-run total cost (LTC) is given by LTC = 150Q – 15Q² + 0.4Q², we can find its ATC by dividing LTC by the quantity produced (Q).

ATC = (150Q – 15Q² + 0.4Q³) / Q

= 150 – 15Q + 0.4Q²

The market price is given as $100.

To find the economic rent, we subtract the ATC from the market price and multiply it by the quantity produced (Q).

Economic Rent = (Market Price - ATC) * Q

= (100 - (150 - 15Q + 0.4Q²)) * Q

= (100 - 150 + 15Q - 0.4Q²) * Q

= (-50 + 15Q - 0.4Q²) * Q

= -0.4Q³ + 15Q² - 50Q

Substituting the given quantity (Q = 15) into the equation, we can find the economic rent

Economic Rent = -0.4(15)³ + 15(15)² - 50(15)

= -0.4(3375) + 15(225) - 750

= -1350 + 3375 - 750

= 1275

Therefore, the economic rent is $1,275.

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--The given question is incomplete, the complete question is given below "  In a perfectly competitive industry, there are two types of firms: low-cost producers and high-cost producers. The minimum average total cost of the high-cost producers is $150. The low-cost producers have a long-run total cost curve given by LTC = 150Q –15Q2 + 0.4Q2, where LMC = 150 – 30Q + 1.2Q2. How much economic rent does the low-cost producer earn? p = $100, q = 15"--

The statement that assuming the absence of negative externalities, the long run outcome under conditions of perfect competition will not be allocatively or productively efficient is false.

Perfect competition is an ideal market structure in which the following conditions prevail: many sellers, a standardized product, no barriers to entry or exit, and perfect information.

The following are some of the benefits of perfect competition:

ATC is at its lowest possible level because firms compete with each other, resulting in efficient use of resources.

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If the company has a target profit of $560,000, the selling price per unit using the variable cost method is $420.

To compute the selling price per unit using the variable cost method, we need to consider the variable costs and the target profit.

The variable costs per unit include direct materials, direct labor, variable overhead, and variable selling, general, and administrative costs. Adding these costs together, we get:

Variable costs per unit = Direct materials + Direct labor + Variable overhead + Variable selling, general, and administrative costs

= $150 + $55 + $65 + $30

= $300

Next, we need to determine the total fixed costs. The fixed costs include fixed overhead costs and fixed selling, general, and administrative costs. Adding these costs together, we get:

Total fixed costs = Fixed overhead costs + Fixed selling, general, and administrative costs

= $285,000 + $355,000

= $640,000

Now, we can calculate the total cost per unit by adding the variable costs per unit and the fixed costs per unit:

Total cost per unit = Variable costs per unit + (Total fixed costs / Number of units)

= $300 + ($640,000 / 10,000)

= $300 + $64

= $364

Finally, we can compute the selling price per unit using the formula:

Selling price per unit = Total cost per unit + Target profit per unit

= $364 + ($560,000 / 10,000)

= $364 + $56

= $420

This price covers the variable costs per unit, the fixed costs per unit, and achieves the target profit of $560,000.

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If the production function features increasing returns to scale producing a higher quantity, it reduces the average cost of production.

The correct option is c) . reduces the average cost of production.

The increasing returns to scale imply that an increase in the input leads to a more than proportional increase in output. Thus, as the production level rises, the total cost of production does not increase proportionally, resulting in a decline in average cost of production.

When production increases, it leads to economies of scale. Economies of scale happen when there is an increase in production, and it results in a decrease in the cost of production per unit. This is because the cost of producing each unit of output falls as the number of units produced rises. Thus, the average cost of production falls as production increases with increasing returns to scale.

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The incorrect statement is, Private fleets primarily transport products owned by their organization or are owned by other members of their supply chain. Option D is the answer.

Private carriage refers to the transportation of goods by a company's own fleet or by hiring third-party carriers exclusively for their own use. Private fleets can transport products owned by their organization, but they generally do not transport products owned by other members of their supply chain.

Private carriage is distinct from common carriage, where transportation services are offered to the general public. Private carriage allows companies to have control over their transportation operations and tailor them to their specific needs. It is important to accurately understand the scope of private carriage, which typically involves the organization's products and not products owned by others in the supply chain. Option D is the answer.

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The required answer is $123.08.

Utility function of James is given by

`u(w) = w^0.5`.

We need to find the certainty equivalent for the following lottery.

The given lottery pays James:$2 with a probability 0.2$22 with a probability 0.3$26 otherwise expected value of this lottery is:

`0.2 × 2 + 0.3 × 22 + 0.5 × 26`= 0.4 + 6.6 + 13 = 20

James's Bernoulli utility function is u(w) = w^0.5

Therefore, the expected utility of the lottery is:

`0.2 × (2)^0.5 + 0.3 × (22)^0.5 + 0.5 × (26)^0.5`≈ 1.41 + 4.58 + 5.10 = 11.09

Now we need to find the amount of money that James would be willing to accept in lieu of the lottery. Let this amount be x, then according to the definition of certainty equivalent, we have

`u(x) = E[u(w)]`

Squaring both sides we get

`u(x)^2 = E[u(w)]^2`

Substituting the values of x and E[u(w)]

we get`x^0.5 = 11.09

`Squaring both sides, we get

`x = 11.09^2` = 123.08

Therefore, the certainty equivalent of the given lottery is $123.08 (rounded to two decimal places).

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Increasing your OR ING leverage (increase in Fixed costs) usually involves an investment in fixed assets. One reason is to increase capacity to meet demand.

Another KEY reason to increase leverage is to improve profits.What is leverage?Leverage is the usage of borrowed money or financial instruments to amplify the potential gain or loss of an investment. An investor may utilize leverage to increase a portfolio's earning potential when the market is optimistic, and interest rates are low.

Increasing leverage aims to boost profits. To improve profits, increasing leverage is another KEY reason for the investment in fixed assets and increasing fixed costs. Therefore, the correct option is d. Improve profits.

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The top-level executive task of crafting a diversified company's overall or corporate strategy does not include day-to-day operational management.

Day-to-day operational management is not part of the top-level executive task of crafting a diversified company's overall or corporate strategy. While the executives are responsible for developing and implementing the company's strategic direction, their focus is on long-term goals, vision, and objectives. They analyze market trends, assess opportunities and risks, set performance targets, allocate resources, and make key strategic decisions.

However, the actual management of daily operations, such as overseeing production processes, monitoring employee performance, or managing customer service, is typically delegated to middle or lower-level managers. The top-level executives concentrate on shaping the company's strategic direction rather than engaging in operational details.

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If the finance department is going over budget due to an exigency in the campus event, there are a few potential implications.

First, the unexpected expenses incurred for the event may exceed the allocated budget, leading to a shortfall in available funds. This could result in the need to reallocate funds from other areas or seek additional funding to cover the deficit. Second, the over-budget situation may impact the overall financial performance of the organization, potentially affecting its financial statements and reporting. It is important for the finance department to address the issue promptly, assess the impact on the overall financial picture, and take necessary steps to mitigate any negative consequences. If the finance department is going over budget due to an exigency in the campus event, there are a few potential implications.

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If Dave and Charlotte observe the cat purring, payoff matrix their posterior belief is 0.389 for Nice and 0.611 for Mean.

a. To find the Bayesian-Nash balance, we want to decide the procedures that augment the normal utility for every player, given their convictions about the feline's kind. We should think about the two potential sorts of the feline: Pleasant (N) and Mean (M).

For Dave and Charlotte:

On the off chance that they take on the feline (A), their normal settlements are:

E[Dave(A)] = P(N) * 64 + P(M) * (-58)

E[Charlotte(A)] = P(N) * 5 + P(M) * (-44)

On the off chance that they don't take on the feline (N), their normal adjustments are:

E[Dave(N)] = P(N) * (-34) + P(M) * 18.5

E[Charlotte(N)] = P(N) * (-20) + P(M) * (-26.5)

To find the Bayesian-Nash balance, we want to compute the likelihood dissemination P(N) that makes Dave and Charlotte unconcerned between taking on or not embracing the feline.

Setting E[Dave(A)] = E[Dave(N)] and E[Charlotte(A)] = E[Charlotte(N)], we get:

P(N) * (64-34) + P(M) * (-58) = P(N) * (-20) + P(M) * 18.5

P(N) * (5-20) + P(M) * (-44) = P(N) * (-20) + P(M) * (-26.5)

Improving on the above conditions, we have:

30P(N) - 56P(M) = 0

19P(N) + 17.5P(M) = 0

Addressing these conditions all the while, we find:

P(N) = 0.3889 (around)

P(M) = 0.6111 (around)

Consequently, the Bayesian-Nash balance is:

Dave and Charlotte ought to embrace the feline with likelihood 0.3889 in the event that they notice the feline murmuring and with likelihood 0.6111 assuming they notice the feline murmuring.

b. To compute Dave and Charlotte's back convictions, we utilize Bayes' hypothesis. How about we accept that Dave and Charlotte at first doled out equivalent earlier probabilities to the feline being Great or Mean, i.e., P(N) = P(M) = 0.5.

Assuming Dave and Charlotte see that the feline murmurs, their back conviction that the feline is Pleasant can be determined as follows:

P(N|Purr) = (P(Purr|N) * P(N))/(P(Purr|N) * P(N) + P(Purr|M) * P(M))

P(N|Purr) = (0.3889 * 0.5)/(0.3889 * 0.5 + 0.6111 * 0.5)

P(N|Purr) = 0.3889/1

Consequently, their back conviction that the feline is Great, considering that it murmurs, is 0.3889 or roughly 0.389.

Also, their back conviction that the feline is Mean, considering that it murmurs, is:

P(M|Purr) = 1-P(N|Purr)

P(M|Purr) = 1-0.3889

P(M|Purr) = 0.6111 or roughly 0.611.

In outline, assuming Dave and Charlotte see that the feline murmurs, their back conviction that the feline is Pleasant is roughly 0.389, and their back conviction that it is Mean is around 0.611.

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According to sociologist Max Weber, charisma is a concept used to describe a unique and extraordinary quality possessed by certain individuals that enables them to exert a strong influence over others.

Charismatic leaders are characterized by their exceptional personal qualities, their ability to inspire and motivate others, and their ability to create a sense of devotion and loyalty among their followers.

Five types of behaviors commonly exhibited by charismatic leaders are:

Inspirational Communication: Charismatic leaders have the ability to articulate a compelling vision and communicate it in a way that captivates and inspires their followers.

Self-Confidence: Charismatic leaders exude a high level of self-assurance and belief in their own abilities.

Empathy: Charismatic leaders demonstrate a genuine concern and understanding for the needs and emotions of their followers.

Visionary Thinking: Charismatic leaders possess a clear and compelling vision for the future..

Personal Magnetism: Charismatic leaders possess a magnetic and captivating personality that attracts others to them.

These behaviors collectively contribute to the charismatic leader's ability to rally others around their cause, create a strong sense of identity and purpose.

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In accounting, gross profit is defined as the excess amount between revenue and cost of goods sold. The gross profit rate is calculated by dividing gross profit by revenue.

Gross profit rate can also be used to analyze the efficiency of a business by indicating the percentage of sales that contribute to the profit margin. Content loaded. Financial information is presented below:

The gross profit rate would be 0.34. 0.40. 0.36. 0.64.The given options for the gross profit rate are 0.34, 0.40, 0.36, and 0.64.

The gross profit rate can be calculated by dividing the gross profit by the revenue. There is no information about gross profit or revenue to calculate the gross profit rate.

Therefore, it is impossible to determine the correct answer based on the given information alone. So, the correct answer to the given question is indeterminable, i.e., cannot be determined.

Answer: The correct answer is indeterminable, i.e., cannot be determined.

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d) When P increases, the demand for tickets decreases.When the price of the ticket increases, the demand for tickets decreases. The inverse relationship is given in the demand function.option (d) is the false statement.

The given demand function is as follows :Q = 22328 − 0.41P + 0.5M − 0.33A + 100PDVD.

P = $5.50M = $9,000A = $900PDVD = $3.00.

Now we need to plug these values into the demand function to obtain the value of Q:

Q = 22328 − 0.41(5.5) + 0.5(9000) − 0.33(900) + 100(3)Q = 22328 − 2.255 + 4500 − 297 + 300Q = 27079.745 ≈ 27080.

The estimated monthly demand for tickets is 27080. Now, we will check which of the given statements is false.

a) When M increases, the demand for tickets increases.

b) When A decreases, the demand for tickets increases False. This statement is false. When advertising outlay decreases, the demand for tickets decreases. More advertising makes people aware of new movies and attracts them to the cinema.

c) When PDVD decreases, the demand for tickets increase False. This statement is true. When the price of DVD rental decreases, people tend to prefer DVDs over cinema.

Hence, the demand for tickets decreases.. This statement is false. When the price of the ticket increases, the demand for tickets decreases. The inverse relationship is given in the demand function.

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Benitez Security Systems should order 70 units of camera security systems. The total cost based on EOQ is approximately $121,039.29. If the owner orders 300 units, they can get a 2% discount on the item cost, resulting in a total cost of $118,628.58. The optimal inventory policy is to maintain a stock of 70 units.

To determine the ordering amount based on the Economic Order Quantity (EOQ) model, we need to use the following formula:

EOQ = √((2 * D * S) / H)

Where:

D = Annual demand (1200 units)

S = Ordering cost ($30 per order)

H = Carrying cost rate (15% of the item cost)

Let's calculate the EOQ:

EOQ = √((2 * 1200 * 30) / (0.15 * 100))

EOQ = √(72000 / 15)

EOQ ≈ √4800

EOQ ≈ 69.28

Since we can't order a fraction of a unit, we should round up to the nearest whole number.

Ordering amount based on EOQ: Q = 70 units

Now let's calculate the total costs based on the EOQ.

Total Cost = (D / Q) * S + (Q / 2) * H + D * C

Where:

D = Annual demand (1200 units)

Q = Ordering amount (70 units)

S = Ordering cost ($30 per order)

H = Carrying cost rate (15% of the item cost)

C = Item cost ($100)

Total Cost = (1200 / 70) * 30 + (70 / 2) * 0.15 * 100 + 1200 * 100

= 514.29 + 525 + 120000

= $121039.29

Now let's calculate the total costs if they take the discount.

Discounted item cost = Item cost - (Item cost * Discount rate)

= $100 - ($100 * 0.02)

= $100 - $2

= $98

Total Cost with discount = (D / Q) * S + (Q / 2) * H + D * Discounted item cost

= (1200 / 70) * 30 + (70 / 2) * 0.15 * 98 + 1200 * 98

= 514.29 + 514.29 + 117600

= $118628.58

Therefore, the optimal inventory policy based on the EOQ is:

Q = 70 units

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The complete question is:

Benitez Security Systems has an annual demand for a camera security system of 1200 units. The cost of the camera system is $100. Carrying cost rate is estimated at 15%, and the ordering cost is $30 per order. If the owner orders 300 she can get a 2% discount on the cost of the cameras. The company operates 300 days per year, therefore the daily demand is 4 units per day and

the lead time to receive an order from the supplier is 5 days.

What should be their ordering amount based on EOQ?

What are the total costs based on E0Q?

What are the total costs if they take the discount?

Morelli Electric Motor Corporation manufactures three types of electric motors: standard, deluxe, and heavy-duty.

The company uses a job-order cost-accounting system with manufacturing overhead applied on the basis of direct-labor hours. The system has been in place with little change for 25 years.

The company's annual sales data are as follows:

Standard model: 19,000 units

Deluxe model: 1,500 units

Heavy-duty model: 9,400 units

The product costs for each model are as follows:

Raw material: $18

Direct labor: $10

Manufacturing overhead: $65

The total product cost for each model is as follows:

Standard model: $93

Deluxe model: $183

Heavy-duty model: $196

The predetermined overhead rate is calculated as follows:

Budgeted manufacturing overhead: $3,570,000

Budgeted direct-labor hours: 21,000 hours

Predetermined overhead rate: $170 per hour

The company's target price for each model is as follows:

Standard model: $110

Deluxe model: $220

Heavy-duty model: $232

The company is considering implementing an activity-based costing system. The activity cost pools and their drivers are as follows:

* Activity cost pool Driver

Depreciation, machinery | Machine hours

Maintenance, machinery | Machine hours

Depreciation, taxes, and insurance for factory | Square feet

Engineering | Number of engineering hours

Purchasing, receiving, and shipping | Number of purchase orders

Inspection and repair of defects | Number of defects

Material handling | Number of pounds of material

Miscellaneous manufacturing overhead costs | Number of direct-labor hours

The company is also considering changing its pricing formula to 110% of full product cost.

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Morelli Electric Motor Corporation Manufactures Electric Motors For Commercial Use. The Company Produces Three Models, Designated As Standard, Deluxe, And Heavy-Duty. The Company Uses A Job-Order Cost-Accounting System With Manufacturing Overhead Applied On The Basis Of Direct-Labor Hours. The System Has Been In Place With Little Change For 25 Years. Product

Morelli Electric Motor Corporation manufactures electric motors for commercial use. The company produces three models, designated as standard, deluxe, and heavy-duty. The company uses a job-order cost-accounting system with manufacturing overhead applied on the basis of direct-labor hours. The system has been in place with little change for 25 years. Product costs and annual sales data are as follows:

Standard Model Deluxe Model Heavy-Duty Model

Annual sales (units)  19,000    1,500    9,400  

Product costs:              

Raw material  $ 18    $ 33    $ 46  

Direct labor   10 (0.5 hr. at $20)   20 (1 hr. at $20)   20 (1 hr. at $20)

Manufacturing overhead*   65     130     130  

Total product cost  $ 93    $ 183    $ 196  

*The calculation of the predetermined overhead rate is as follows:

The following statements are true regarding the relevance of information required to make business decisions are:Identifying relevant information requires judgment: Business decisions should be based on a wide range of information from various sources.

It requires the ability to identify relevant information.Qualitative concerns, such as ethical sensitivity, are generally not considered relevant to business decisions: Ethical concerns are important and play a vital role in business decision-making. All the decisions must be made keeping in mind the ethical considerations.

The only information relevant to a particular business decision is that which varies among possible outcomes: The relevant information is the one that is needed for a particular decision. The relevant information that should be considered varies with the specific decision. Relevant financial information focuses primarily upon costs and revenues: Financial information is significant for making business decisions.

It includes information about costs, revenues, profits, losses, etc.Thus, identifying relevant information requires judgment, qualitative concerns such as ethical sensitivity, are generally considered relevant to business decisions, the only information relevant to a particular business decision is that which varies among possible outcomes, and relevant financial information focuses primarily upon costs and revenues.

Therefore,Business decisions should be based on a wide range of information from various sources.

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The statement that "inflation is always and everywhere a fiscal phenomenon" is one of the most famous statements in economics.

The person who made this statement is Milton Friedman. Friedman was a Nobel Memorial Prize-winning economist and a leading advocate of monetarism, the view that a stable and low inflation rate is necessary for economic growth, employment, and prosperity. His statement is often interpreted to mean that inflation is primarily caused by monetary factors such as changes in the money supply, rather than real factors such as changes in the supply and demand for goods and services.  

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The economic order quantity (EOQ) for the manufacturer is 1155 units per order and the manufacturer should supply 1155 units once a month for an optimal period of 0.963 months.

a) EOQ stands for Economic Order Quantity.

EOQ helps in finding the optimum order quantity, thereby minimizing the carrying and ordering costs. The need to compute EOQ is to minimize the total cost of inventory.

Given data:

Order quantity (Q) = 1200 units

Setup cost per run = Rs 1000Cost of carrying inventory = Rs 1.80 per unit on a yearly basis

The formula for calculating EOQ is: EOQ = √(2DS/H)

Where D is the annual demand S is the setup cost, and H is the holding cost per unit per year)

EOQ is calculated using the formula EOQ = √(2DS/H)

Here, Demand (D) = 1200 units Holding cost (H) = Rs. 1.80 per unit

Setup cost (S) = Rs. 1000EOQ = √((2 × 1200 × 1000)/1.8)

EOQ = √(2,400,000/1.8)EOQ = √1,333,333.33EOQ = 1154.7 ~ 1155 units

The economic order quantity (EOQ) for the manufacturer is 1155 units per order.

b) The optimum number of orders and optimum period of supply

The optimum number of orders is calculated by dividing the annual demand by the EOQ.

The optimum number of orders = Annual demand/EOQ= 1200/1155 = 1.04 ≈ 1The optimal period of supply (T) is calculated using the formula: T = EOQ/Annual demand

T = 1155/1200T = 0.963 The optimal period of supply is approximately 0.963 months.

Thus, the manufacturer should supply 1155 units once a month for an optimal period of 0.963 months.

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Adjustment is a personality dimensions that is typically associated with a person being non-depressed, secure, and content. The correct option is B.

The personality dimension typically associated with a person being non-depressed, secure, and content is "adjustment." Adjustment refers to an individual's emotional stability, resilience, and ability to cope with stress. People with high levels of adjustment tend to have a positive outlook, exhibit emotional well-being, and are less prone to experiencing depression or anxiety.

They are secure in themselves and their environment, displaying a sense of contentment. In contrast, individuals with lower levels of adjustment may be more susceptible to negative emotions, insecurity, and dissatisfaction. Therefore, when it comes to being nondepressed, secure, and content, the personality dimension of adjustment plays a significant role.

The correct option is B.

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Spar Company has calculated the Margin and Turnover ratios for one of its investment centers. The Margin ratio is 25%, and the Turnover ratio is 0.5 times. The Return on Investment (ROI) of this investment center can be determined by multiplying the Margin and Turnover ratios.

Let us calculate the ROI for Spar's investment center using the given formula: ROI = Margin × Turnover.ROI = 0.25 × 0.5ROI = 0.125 or 12.5%

Therefore, Spar Company's return on investment for this investment center is 12.5%.

This indicates that for every dollar invested in this investment center, the company is earning a return of 12.5 cents. The higher the ROI, the more efficient the investment center is in generating profits. The ROI of 12.5% is a good ROI, but it depends on the company's standards and expectations. If Spar Company has set higher standards for ROI, then this investment center's ROI is considered below par, and the company needs to take corrective actions.

Therefore, Spar Company has calculated the Margin and Turnover ratios for one of its investment centers. The Margin ratio is 25%, and the Turnover ratio is 0.5 times.

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(i) The endogeneity problem in studying this problem arises because of the potential correlation between the decision to forgive the first-time offender and the likelihood of committing a future crime.

(ii) A suitable econometric method in this setting would be a difference-in-differences (DD) approach.

(iii) In the DD approach, we compare the change in the future crime rate of those who received a warning for a drug-related crime (the treatment group) before and after the warning, with the change in the future crime rate of those who were charged and convicted of the crime (the control group) over the same time period.

(iv) The parallel trends assumption can be tested visually with a graph of the pre-treatment period crime rates for both the treatment and control groups.

For example, if a certain group of minors are more likely to receive a warning instead of being charged, it could be because they live in a wealthier neighbourhood, have parents who are well-connected or for some other reason make it less likely they will commit crimes in the future. Thus, a failure to account for such factors can lead to biased estimates of the effect of forgiveness on future crime rates.

In the DD approach, we compare the change in the future crime rate of those who received a warning for a drug-related crime (the treatment group) before and after the warning, with the change in the future crime rate of those who were charged and convicted of the crime (the control group) over the same time period. The identifying assumption of this method is the parallel trends assumption, which means that in the absence of the warning, the treatment and control groups would have had the same trend in future crime rates.

If the treatment and control groups have similar pre-treatment trends, it provides some evidence in support of the assumption. Additionally, we can estimate the DD model and test for the significance of the interaction term between the treatment indicator and time dummies. If the interaction term is statistically significant, it suggests that the parallel trends assumption may not hold. We can also conduct a placebo test by setting the treatment period to be before the policy change and ensure that there is no significant difference in crime rates between the treatment and control groups during the placebo period.

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