Mariam's new capital balance = $50,000 - $29,000 = $21,000.
Fatima's new capital balance = $52,000 - $29,000 = $23,000.
The capital balance for the remaining partners, Mariam and Fatima, after Alia's withdrawal is 21000 23000.
After Alia's withdrawal from the partnership, Mariam and Fatima agreed to pay $58,000 in cash to Alia. As the partners share income and loss equally, the remaining partners need to adjust their capital balances accordingly.
The total capital balance before Alia's withdrawal was $48,000 + $50,000 + $52,000 = $150,000.
Since the remaining partners agreed to pay $58,000 to Alia, they will divide this amount equally between them. Each partner will contribute $58,000 / 2 = $29,000.
To calculate the new capital balances for Mariam and Fatima, we subtract $29,000 from each of their previous capital balances.
Mariam's new capital balance = $50,000 - $29,000 = $21,000.
Fatima's new capital balance = $52,000 - $29,000 = $23,000.
Therefore, the capital balance for the remaining partners, Mariam and Fatima, after Alia's withdrawal is 21000 23000.
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in the partnership form of business, co-ownership of partnership assets means that these assets are owned jointly by all partners. O True O False
True. In the partnership form of business, co-ownership of partnership assets means that these assets are indeed owned jointly by all partners.
When partners enter into a partnership agreement, they agree to pool their resources and contribute capital, assets, or expertise to the partnership. These contributions form the partnership assets.One of the fundamental principles of a partnership is the concept of mutual ownership. Each partner has a share in the ownership of the partnership assets, and these assets are considered to be owned collectively by all partners. The specific ownership shares may vary based on the partnership agreement, but the assets themselves are shared.
Co-ownership of partnership assets implies that partners have equal rights and interests in the assets.Additionally, in the event of dissolution or liquidation of the partnership, the assets are typically sold, and the proceeds are distributed among the partners according to their ownership shares. This distribution reflects the co-ownership aspect of partnership assets.Overall, co-ownership of partnership assets is a fundamental characteristic of the partnership form of business and is an essential element in defining the rights and responsibilities of partners within the partnership structure.
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Interest expense on a note payable is only recorded at maturity
a- True
(b- False
The statement "Interest expense on a note payable is only recorded at maturity" is false.
Interest expense is the amount paid for borrowing money or the amount earned by lending money. It is the amount that a borrower pays to a lender for using their funds for a particular time frame. It is considered a cost of borrowing because the borrower needs to pay interest in addition to the amount borrowed. A note payable is a promissory note that outlines the terms and conditions of the loan and the amount to be repaid. It is a written promise to pay a specific amount of money at a particular date in the future. The borrower must pay the interest and principal amounts to the lender as per the terms and conditions of the note payable.
The statement "Interest expense on a note payable is only recorded at maturity" is false. Interest expense on a note payable is recorded throughout the life of the note payable. It is recorded in the borrower's income statement as an interest expense and in the lender's income statement as an interest income. The amount of interest expense that is recorded depends on the terms of the note payable, such as the interest rate, the principal amount, and the maturity date. Therefore, the given statement is false.
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A bill of material is desired for a bracket (Z 100) that is made up of a base (A springs (B 11) and four clamps (C 20). The base is assembled from one clamp (C two housings (D 21). Each clamp has one handle (E 30) and each housing bearings (F 31) and one shaft (G 32). (a) Design a product structure tree that includes the level coding information. (b) Show the data in the form of an indented bill of material. 1. A bill of material is desired for a bracket (Z 100) that is made up of a base (A 10), two springs (B 11) and four clamps (C 20). The base is assembled from one clamp (C 20) and two housings (D 21). Each clamp has one handle (E 30) and each housing has two bearings (F 31) and one shaft (G 32). (a) Design a product structure tree that includes the level coding information. (b) Show the data in the form of an indented bill of material.
a) Product Structure Tree starts from level 0: Bracket (Z 100) and ends at Level 4: Shaft (G 32). b) The data shows a row of an indented bill of material starting from Z 100A ending at 32.
a) Product Structure Tree with Level Coding Information of a bracket (Z 100):
Level 0: Bracket (Z 100)
Level 1: Base (A 10)
Level 2: Clamp (C 20)
Level 3: Handle (E 30)
Level 3: Housing (D 21)
Level 4: Bearing (F 31)
Level 4: Shaft (G 32)
Level 1: Spring (B 11)
Level 1: Spring (B 11)
Level 1: Clamp (C 20)
Level 3: Handle (E 30)
Level 3: Housing (D 21)
Level 4: Bearing (F 31)
Level 4: Shaft (G 32)
b) Indented Bill of Material:
Z 100A 10C 20E 30D 21F 31G 32B 11B 11C 20E 30D 21F 31G 32C 20E 30D 21F 31G 32C 20E 30D 21F 31G 32C 20E 30D 21F 31G 32
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the entry to record the issuance of 9,000 shares of $5 par value common stock at $9 per share includes a: select one: a. credit to common stock for $81,000 b. credit to common stock for $45,000 c. credit to paid-in capital in excess of par value-common for $45,000 d. debit to paid-in capital in excess of par value-common for $36,000
The entry to record the issuance of 9,000 shares of $5 par value common stock at $9 per share includes "D: debit to paid-in capital in excess of par value-common for $36,000.
When shares of common stock are issued, the entry includes a debit to the cash or accounts receivable account for the total cash received from the issuance. In this case, since 9,000 shares are issued at $9 per share, the total cash received is $81,000 (9,000 shares * $9).
The par value of the common stock is $5 per share, which represents the minimum legal capital that must be maintained. Any amount received above the par value is considered as paid-in capital in excess of par value.
To record the issuance of the shares, we debit the cash or accounts receivable account for $81,000 and credit the common stock account for the par value of the shares issued. In this case, the par value of each share is $5, so the credit to the common stock account is $45,000 (9,000 shares * $5).
The remaining amount of $36,000 ($81,000 - $45,000) represents the excess of the issuance price over the par value. This excess is recorded as a credit to the paid-in capital in excess of par value-common account.
Therefore, the correct entry to record the issuance of 9,000 shares of $5 par value common stock at $9 per share includes D: a debit to paid-in capital in excess of par value-common for $36,000.
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Assume the following: the investor's required rate of return is 13.5 percent, • the expected level of earnings at the end of this year (E₁) is $6, • the retention ratio is 40 percent, • the return on equity (ROE) is 15 percent (that is, it can earn 15 percent on reinvested earnings), and • similar shares of stock sell at multiples of 8.000 times earnings per share. Questions: a. Determine the expected growth rate for dividends. b. Determine the price earnings ratio (P/E₁). c. What is the stock price using the P/E ratio valuation method? d. What is the stock price using the dividend discount model? e. What would happen to the P/E ratio (P/E₁) and stock price if the company increased its retention rate to 75 percent (holding all else constant)? What would happen to the P/E ratio (P/E₁) and stock price if the company paid out all its earnings in the form of dividends? f. What have you learned about the relationship between the retention rate and the P/E ratios
a. The expected growth rate for dividends: 6%
b. Price earnings ratio (P/E₁): 8.000
c. Stock price using the P/E ratio valuation method: $48
d. Stock price using the dividend discount model: $33.33
e. If the company increased its retention rate to 75%, the P/E ratio and stock price would change accordingly.
f. The retention rate (b) affects the expected growth rate (g), P/E ratios, and stock prices. Higher retention rates generally lead to higher growth rates, P/E ratios, and stock prices,while lower retention rates result in lower growth rates, P/E ratios, and stock prices.
How is this so ?To answer the questions, we'll use the given information and formulas
a. The expected growth rate for dividends (g) can be calculated using the retention ratio (b) and return on equity (ROE) as follows:
g = b * ROE
g = 0.40 * 0.15
g = 0.06 or 6%
b. The price-earnings ratio (P/E₁) can be calculated by dividing the stock price by the earnings per share (EPS) -
P/E₁ = Price / EPS
P/E₁ = 8.000
c. The stock price using the P/E ratio valuation method can be calculated by multiplying the earnings per share (EPS) by the P/E ratio -
Stock Price = EPS * P/E₁
Stock Price = $6 * 8.000
Stock Price = $48
d. The stock price using the dividend discount model can be calculated as follows -
Stock Price = Dividends / (Required Rate of Return - Growth Rate)
Dividends = E₁ * b = $6 * 0.40 = $2.40
Stock Price = $2.40 / (0.135 - 0.06)
Stock Price ≈ $33.33
e. If the company increases its retention rate to 75% -
- The expected growth rate for dividends (g) would be -
g = 0.75 * 0.15 = 0.1125 or 11.25%
- The new P/E ratio (P/E₁) and stock price using the dividend discount model would change accordingly.
If the company paid out all its earnings in the form of dividends (b = 1):
- The expected growth rate for dividends (g) would be zero.
- The P/E ratio (P/E₁) and stock price using the dividend discount model would also change accordingly.
f. Based on the calculations in part (e),we can observe that the retention rate (b) affects the expected growth rate (g) and, consequently, the P/E ratio (P/E₁) and stock price.
Higher retention rates lead to higher expected growth rates,which can result in higher P/E ratios and stock prices.
Conversely,lower retention rates can lead to lower growth rates and, consequently, lower P/E ratios and stock prices.
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Assume that the inverse demand function is given by P = 240 − Q. The discount factor is 0.9. Marginal production costs are initially £120.
(a) Calculate the market equilibrium price, output, and profits on the assumption that the market is currently: (i) monopolized, and (ii) a Bertrand duopoly with homogeneous products. Note that in the duopoly case with identical marginal costs, if firms charge the same price, they share the market equally.
(b) Suppose that a research institute develops and obtains a patent for a new technology that reduces the marginal costs to £60. Calculate the new market equilibrium price, output, and profits for (i) the monopolist, and (ii) each duopolist. Note that in the duopoly case, the innovation is made available to only one firm, and if both firms charge the same price, consumers always buy from the most efficient firm.
(a) (i) Monopoly pricing:Equation of the inverse demand curve:P = 240 - QIn order to calculate the equilibrium price and output for a monopolist, we need to begin with the firm's marginal revenue (MR) curve. In a competitive market, MR is equal to price (P), but for a monopolist, this is not true.
The firm must lower the price to sell more output, thus reducing the revenue per unit on all units sold. Therefore, MR is less than P for a monopolist.MR = dTR/dQ = P + Q * dP/dQ = P - Q * (1/240)The firm's profit-maximizing output is determined by the condition MR = MC.120 = P - Q * (1/240) ⇒ Q = 120 * 240 / 481 ⇒ Q = 59.68Price = P = 240 - Q = 240 - 59.68 = 180.32Profit = π = TR - TC = PQ - MC * Q = 180.32 * 59.68 - 120 * 59.68 = £6,460.90
(ii) Bertrand duopoly: If the two firms charge different prices, the one that charges the lowest price will win the entire market. Thus, each firm will choose to charge the lowest price it can while still making zero profits. Under this pricing strategy, each firm will charge a price equal to its marginal cost of production, and the market will be shared equally between the two firms.MC1 = MC2 = 120MR1 = MR2 = P We use the market demand function to determine the output for each firm. P = 240 - Q1 - Q2Q1 + Q2 = Q *P = 240 - QQ = 240 - P Q1 = (240 - P)/2Q2 = (240 - P)/2Price = P = MC = 120Quantity = 60 each Profit = π = TR - TC = PQ - MC * Q = 60 * (180 - 120) = £3,600(b) (i) Monopoly pricing: With the new technology, the firm's marginal cost of production falls from £120 to £60. The firm's marginal revenue curve is the same as before (MR = P - Q/240).
Now, we must determine the new profit-maximizing output level by equating MR with MC.MC = £60MR = £240 - Q/240The firm's profit-maximizing output level is determined by setting MR = MC.60 = 240 - Q/240Q = 3 * 240 / 4 ⇒ Q = 180Price = P = 240 - Q = 240 - 180 = £60Profit = π = PQ - MC * Q = 60 * 180 - 60 * 180 = £6,480(ii) Bertrand duopoly: If the two firms charge different prices, the one that charges the lowest price will win the entire market. Thus, each firm will choose to charge the lowest price it can while still making zero profits.MC1 = MC2 = £60MR1 = MR2 = P We use the market demand function to determine the output for each firm. P = 240 - Q1 - Q2Q1 + Q2 = Q *P = 240 - QQ = 240 - P Q1 = (240 - P)/2Q2 = (240 - P)/2Price = P = MC = £60Quantity = 90 each Profit = π = TR - TC = PQ - MC * Q = 90 * (180 - 60) = £10,800.
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you purchase a bond with a coupon rate of 7.9 percent, a par value of $1,000, semiannual coupons, and a clean price of $895. if the next coupon payment is due in two months, what is the invoice price?
The invoice price of the bond is $908.17.
To calculate the invoice price of the bond, we need to consider the accrued interest up to the settlement date, which is the next coupon payment due in two months.
Given:
Coupon rate: 7.9%
Par value: $1,000
Clean price: $895
Since the bond has semiannual coupons, the coupon payment will be half of the coupon rate. Therefore, the coupon payment will be:
Coupon payment = (Coupon rate / 2) * Par value
Coupon payment = (7.9% / 2) * $1,000
Coupon payment = $39.50
To calculate the accrued interest, we need to determine the number of days between the last coupon payment date and the settlement date. Assuming a 30/360 day-count convention, let's say there are 60 days between the last coupon payment date and the settlement date.
Accrued interest = (Number of days / Total days in a coupon period) * Coupon payment
Accrued interest = (60 / 180) * $39.50
Accrued interest = $13.17
Now, we can calculate the invoice price by adding the clean price and the accrued interest:
Invoice price = Clean price + Accrued interest
Invoice price = $895 + $13.17
Invoice price = $908.17
Therefore, the invoice price of the bond is $908.17.
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"A diplomat's word must have no relation to actions, otherwise what kind of diplomacy is it. Words are one thing, actions another. Good words are a mask for the concealment of bad deeds. Sincere diplomacy is no more possible than dry water and wooden iron."
The above-mentioned quote by Oliver Wendell Holmes, Jr. highlights the importance of action in diplomacy. He argues that if the words spoken by a diplomat are not in accordance with their actions, then the very essence of diplomacy is lost.
Words can be used to mask bad deeds, but true diplomacy requires actions that match the words being spoken.Oliver Wendell Holmes, Jr. believes that sincere diplomacy is impossible because words and actions can often be in conflict with each other. Diplomats can use flowery language and make promises, but unless their actions match their words, they cannot be trusted. Diplomacy is a delicate art that requires both skillful language and careful actions to achieve the desired outcome.
A good diplomat must be able to balance their words and actions to create a strategy that can benefit their country. In conclusion, a diplomat's words must be backed up by actions, or else the very foundation of diplomacy is lost. Diplomats must strive for sincerity in both their words and actions to establish trust and create meaningful relationships.
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oe bay, cfa, wants to test the hypothesis that the variance of returns on energy stocks is equal to the variance of returns on transportation sto
To test the hypothesis that the variance of returns on energy stocks is equal to the variance of returns on transportation stocks.
CFA (Certified Financial Analyst) can conduct a statistical test called the F-test for equality of variances.
The F-test compares the ratio of the variances of two independent samples to determine if they are significantly different. In this case, CFA would gather data on the returns of energy stocks and transportation stocks and calculate the sample variances for both groups.
The null hypothesis (H0) would state that the variance of returns on energy stocks is equal to the variance of returns on transportation stocks, while the alternative hypothesis (Ha) would state that they are not equal.
CFA would then calculate the F-statistic using the formula:
F = Variance of energy stocks / Variance of transportation stocks
CFA would compare the calculated F-statistic to the critical value from the F-distribution at a chosen significance level (e.g., α = 0.05) and degrees of freedom associated with the samples. If the calculated F-statistic is greater than the critical value, CFA would reject the null hypothesis and conclude that the variances are significantly different. If the calculated F-statistic is not greater than the critical value, CFA would fail to reject the null hypothesis, indicating that there is not enough evidence to conclude a significant difference in variances.
It's important to note that conducting the F-test requires proper assumptions, such as normality of the data and independence of observations, among others. CFA should ensure that these assumptions are met before interpreting the results of the test.
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1) When considering the impact of external economies of scale on trade, we should expect that they would lead to:
A) an expansion of trade because more firms would be supported in the relevant industry, and this would be conducive to more trade globally.
B) higher prices for the exporting country because this country could take advantage of its comparative advantage and reap at least some of the benefits from this advantage.
C) trade dominance by the country best able to utilise these economies.
D) a collapse of trade because they would drive prices so low that no firms would be able to make any profit.
E) none of the above.
When considering the impact of external economies of scale on trade, we should expect that they would lead to an expansion of trade because more firms would be supported in the relevant industry, and this would be conducive to more trade globally. This is the correct option.Explanation:External economies of scale are the economies of scale that are spread across an entire industry, not just a single firm.
The cost of manufacturing the product decreases as a result of economies of scale, resulting in lower costs for the firm, increased productivity, and ultimately increased revenue. External economies of scale influence not only the firm but also the entire industry. They occur when the production cost of a good or service decreases as the number of firms in the industry grows. As a result, the entire industry benefits from the reduced cost of production.
Because the cost of production has decreased, this might lead to an increase in the amount of goods produced and exported. It is also likely that firms in other countries will join the industry, resulting in increased global trade. As a result, when considering the impact of external economies of scale on trade, we should expect that they would lead to an expansion of trade because more firms would be supported in the relevant industry, and this would be conducive to more trade globally. Therefore, option A is correct.
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Valentina is single and claims no dependents. Assume that Valentina has only one job or that step 2 of Form W-4 is not checked. Use the Wage Bracket Method Tables for Manual Payroll Systems with Forms W-4 from 2020 or Later available online in Publication 15, Publication 15-T, "Federal Income Tax Withholding Methods." Use the appropriate wage bracket tables for a manual payroll systems. Required: a. If Valentina is paid weekly and her annual wages are $87,360, what is the amount of withholding per paycheck? b. If Valentina is paid monthly with annual wages of $77,280, what is the amount of withholding per paycheck?
a. Wage Bracket Method for Weekly Payroll and Annual Wages of $87,360: $1,679.62 is the amount of withholding per paycheck.
b. Wage Bracket Method for Monthly Payroll and Annual Wages of $77,280: $1,202.08 is the amount of withholding per paycheck.
As per the above solution, the amount of withholding per paycheck is calculated for a given situation. Wage Bracket Method Tables for Manual Payroll Systems with Forms W-4 from 2020 or Later available online in Publication 15, Publication 15-T, "Federal Income Tax Withholding Methods" has been used for the same.
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4. In your opinion, explain the relationship of warehouse management with other departments in contributing to the success of the organization. (5 Marks)
Warehouse management plays a crucial role in contributing to the success of an organization by efficiently managing inventory, optimizing storage space, ensuring timely order fulfillment, and maintaining effective supply chain operations. The relationship of warehouse management with other departments is integral to achieving overall organizational success. Here's how warehouse management interacts with and contributes to other departments:
1. Operations/Production: The warehouse acts as a hub for receiving and storing raw materials, components, and finished goods. Effective coordination between warehouse management and operations/production teams ensures that materials and products are readily available, reducing production delays and optimizing manufacturing processes. Warehouse managers collaborate with production teams to align inventory levels with production schedules, minimizing stockouts and excess inventory.
2. Sales and Marketing: Warehouse management plays a vital role in supporting sales and marketing activities. By maintaining adequate stock levels, the warehouse ensures that sales orders can be fulfilled promptly, enhancing customer satisfaction. Warehouse managers provide accurate inventory information to sales and marketing teams, enabling them to make realistic commitments to customers. Additionally, warehouse data on product movement and trends can help inform marketing strategies and identify opportunities for product promotions or new market segments.
3. Purchasing/Procurement: Close coordination between warehouse management and the purchasing/procurement department is crucial for inventory planning and replenishment. Warehouse managers work closely with procurement teams to determine optimal reorder points, lead times, and order quantities. This collaboration ensures that inventory levels are aligned with demand, minimizing stockouts and excess inventory carrying costs.
4. Logistics and Transportation: Warehouse management is closely tied to logistics and transportation operations. Warehouse managers coordinate with logistics teams to ensure timely receipt and dispatch of goods, optimizing transportation schedules and minimizing transportation costs. Effective collaboration between warehouse management and logistics teams streamlines inbound and outbound logistics processes, resulting in improved overall supply chain efficiency.
5. Finance: Warehouse management directly impacts financial performance through inventory management. Efficient warehouse practices, such as accurate inventory tracking, cycle counting, and minimizing stock obsolescence, contribute to better financial control and reduced carrying costs. Warehouse managers work with finance teams to reconcile inventory records, provide input for financial reporting, and analyze cost-saving opportunities in warehouse operations.
6. Customer Service: Warehouse management plays a vital role in meeting customer expectations. Accurate and efficient order processing, order picking, and timely delivery rely on effective warehouse operations. Warehouse managers collaborate with customer service teams to ensure that customer requirements are met and any issues related to order fulfillment or inventory availability are promptly addressed.
Overall, warehouse management's seamless collaboration with other departments ensures efficient operations, optimized inventory levels, improved customer service, and cost-effective supply chain management. By working in synergy with other departments, warehouse management contributes to the success of the organization by enhancing operational efficiency, customer satisfaction, and financial performance.
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Davis Corporation began the year with a 1,540,000 credit balance in Retained Earnings. During the year, the corporation earned 555,000 in net income and paid 162,000 in dividends. What is ending Retained Earnings? Please round your answers to the nearest whole dollar, use proper commas, and do not use dollar signs.
The ending Retained Earnings for Davis Corporation is $1,933,000.
To calculate the ending Retained Earnings, we need to consider the beginning balance, net income, and dividends paid.
Beginning Retained Earnings: $1,540,000
Net Income: $555,000
Dividends Paid: $162,000
To find the ending Retained Earnings, we start with the beginning balance and add the net income while subtracting the dividends paid:
Ending Retained Earnings = Beginning Retained Earnings + Net Income - Dividends Paid
= $1,540,000 + $555,000 - $162,000
= $1,933,000
Therefore, the ending Retained Earnings for Davis Corporation is $1,933,000.
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A deposit of $1,000 earns a return of 6.0% compounded monthly
for 8 years. The future value is closest to:
Group of answer choices
$268,759.03
$1,614.14
$1,593.85
The future value of the deposit after 8 years, compounded monthly at an interest rate of 6.0%, is closest to $1,593.85.
The future value of the deposit can be calculated using the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = future value
P = principal amount (initial deposit)
r = annual interest rate (in decimal form)
n = number of times interest is compounded per year
t = number of years
In this case, the principal amount (P) is $1,000, the annual interest rate (r) is 6.0% (or 0.06 as a decimal), the number of times interest is compounded per year (n) is 12 (monthly compounding), and the number of years (t) is 8.
Plugging in these values into the formula, we get:
A = $1,000 * (1 + 0.06/12)^(12*8)
Simplifying the equation, we have:
A = $1,000 * (1.005)^96
Calculating this value, we find that A ≈ $1,593.85. Therefore, the future value of the deposit after 8 years, compounded monthly at an interest rate of 6.0%, is closest to $1,593.85.
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Suppose the management of a firm is trying to allocate liquid assets to two accounts, one of which is riskless but pays no interest, while the other offers a risky return. Assume the rate of return r on the second account is uniformly distributed over the range [-0.5, 0.5]. Let R denote the amount currently available for allocation to the two accounts, and S denote the amount invested in the risky asset.
Suppose management would like to make the next period investment value as large as possible but subject to the condition that R + Sr not fall below 95% of the original value of R too often so that if the investment falls below 95% of its original value, it should not do so more than 25% of the time.
Calculate the ratio of investment and the amount available, that is, a = S/R
We first found the minimum value of S/R such that the constraint was satisfied, and then we found the point on the line P(R + Sr ≥ 0.95R) = 0.75 that maximized E(R).
Given the problem, the objective is to maximize the expected value of the total amount invested next period: E(R + S(r)). The constraint is that R + Sr does not fall below 0.95R more than 25% of the time, which can be expressed as P(R + Sr ≥ 0.95R) ≥ 0.75. The expected value of R + S(r) is E(R) + E(S)E(r) since E(a + bX) = a + bE(X) for any constants a and b and any random variable X. Since the risky return r is uniformly distributed over [-0.5, 0.5], E(r) = 0, and E(R + S(r)) = E(R) + 0 = E(R). Thus, we need to find the allocation that maximizes E(R) subject to the constraint P(R + Sr ≥ 0.95R) ≥ 0.75. A ratio of investment can be defined as S/R = a. To solve the problem, we can use linear programming to find the maximum value of E(R) subject to the constraint. This can be done using a two-step process. First, we will find the minimum value of S/R (a) such that the constraint is satisfied. This gives us the minimum level of risk that management is willing to accept while still achieving its investment objective. This is equivalent to finding the highest point on the P(R + Sr ≥ 0.95R) = 0.75 line that intersects the feasible region. Second, we will find the point on the P(R + Sr ≥ 0.95R) = 0.75 line that maximizes E(R). This gives us the optimal allocation of funds that satisfies the constraint and achieves the investment objective. Given the problem, the objective is to maximize the expected value of the total amount invested next period: E(R + S(r)). The constraint is that R + Sr does not fall below 0.95R more than 25% of the time, which can be expressed as P(R + Sr ≥ 0.95R) ≥ 0.75. A ratio of investment can be defined as S/R = a. We will use linear programming to find the maximum value of E(R) subject to the constraint. This can be done using a two-step process. First, we will find the minimum value of S/R (a) such that the constraint is satisfied. This gives us the minimum level of risk that management is willing to accept while still achieving its investment objective. This is equivalent to finding the highest point on the P(R + Sr ≥ 0.95R) = 0.75 line that intersects the feasible region. Let M be the amount invested in the riskless account. Then, the constraint becomes R + SM - 0.95R ≥ 0, or SM ≥ 0.05R, which implies a ≥ 0.05. Second, we will find the point on the P(R + Sr ≥ 0.95R) = 0.75 line that maximizes E(R). Since the objective function is linear, this is equivalent to finding the point on the line that is farthest from the origin. Let Q be the point on the line that maximizes E(R). Then, Q is the point of intersection of the line P(R + Sr ≥ 0.95R) = 0.75 and the line E(R) = k, where k is the maximum possible value of E(R) subject to the constraint. The line E(R) = k is parallel to the P(R + Sr ≥ 0.95R) = 0.75 line, so its slope is also -a. Thus, we can write the equation of line E(R) = k as E(R) = -aP(R + Sr < 0.95R) + b, where b is a constant that depends on the value of k.
We want to find the value of k that maximizes E(R).To find the optimal value of k, we need to determine the feasible range of k. We know that E(R) ≥ R, so the maximum possible value of k is E(R) at the point (R, 0), which is R + SM/2. We also know that E(R) ≥ 0.95R, so the minimum possible value of k is 0.95R + SM/2. Thus, the feasible range of k is [0.95R + SM/2, R + SM/2]. Point Q is the intersection of the lines P(R + Sr ≥ 0.95R) = 0.75 and E(R) = k. The slope of the P(R + Sr ≥ 0.95R) = 0.75 line is -S, so its equation is R + S(r) ≥ 0.95R, or r ≥ (0.95 - S)/S. The slope of line E(R) = k is -a, so its equation is E(R) = -aP(R + Sr < 0.95R) + b. Substituting r = (0.95 - S)/S, we get P(R + Sr < 0.95R) = 1 - P(R + Sr ≥ 0.95R) = 0.25, so the equation of the line becomes E(R) = -0.05a + b. Thus, point Q is the intersection of the lines r = (0.95 - S)/S and E(R) = -0.05a + b.To find the optimal value of k, we need to find the value of a that maximizes E(R). Substituting r = (0.95 - S)/S into E(R) = -0.05a + b, we get E(R) = -0.05a + b = -0.05a + (0.95 - S)/S R. Since b is a constant, the value of a that maximizes E(R) is the same as the value of a that minimizes -0.05a + (0.95 - S)/SR, which is a = 0.05. Thus, the optimal allocation of funds is S/R = a = 0.05, which means that 5% of the total amount should be invested in the risky asset, and 95% should be invested in the riskless asset. Therefore, the optimal allocation of funds is S/R = a = 0.05, which means that 5% of the total amount should be invested in the risky asset, and 95% should be invested in the riskless asset. The problem was solved using linear programming. We first found the minimum value of S/R such that the constraint was satisfied, and then we found the point on the line P(R + Sr ≥ 0.95R) = 0.75 that maximized E(R).
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Which of the below questions does corporate finance not address?
a. What long-term investments should the firm choose?
b. How should the firm raise funds for the selected investment?
c. How to best price a new product?
d. How should short-term assets be managed and financed?
The correct option for the question is (c).Corporate finance is a branch of finance that focuses on how companies use their capital to create value. It involves making decisions about long-term investments, funding sources, and managing short-term assets.
However, there are certain questions that corporate finance does not address.
Below are the answers to the question:The correct answer is option (c) How to best price a new product. Corporate finance does not address questions related to pricing products.
Instead, it focuses on the following questions:a. What long-term investments should the firm choose?This involves deciding which projects or investments to undertake. Corporate finance evaluates each project's risks and returns to determine which one would create the most value for the firm.
b.Corporate finance deals with finding the best sources of funding for the selected investment. This involves deciding between equity and debt financing or a combination of both.
c. Corporate finance determines the best way to manage and finance short-term assets like inventory, accounts receivable, and cash. It focuses on maintaining liquidity to meet the company's day-to-day financial obligations.
Therefore, the correct option for the question is (c) How to best price a new product. Corporate finance is not concerned with pricing decisions.
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In practice, a common way to value a share of stock when a company pays dividends is to value the dividends over the next five years or so, then find the terminal stock price using a benchmark PE ratio. Suppose a company just paid a dividend of $1.70. The dividends are expected to grow at 20 percent over the next five years. In five years, the estimated payout ratio is 34 percent and the benchmark PE ratio is 32. a. What is the target stock price in five years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the stock price today assuming a required return of 11 percent on this stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Stock price in 5 years b. Stock price today
a. Target stock price in five years Dividend growth rate = 20% Dividend payment this year = $1.70 Dividend paid at the end of 1st year = $1.70 × (1 + 20%) = $2.04
Dividend paid at the end of 2nd year = $2.04 × (1 + 20%) = $2.45 Dividend paid at the end of 3rd year = $2.45 × (1 + 20%) = $2.94 Dividend paid at the end of 4th year = $2.94 × (1 + 20%) = $3.53
Dividend paid at the end of 5th year = $3.53 × (1 + 20%) = $4.24
Dividend payout ratio after 5 years = 34%
Benchmark PE ratio = 32
Expected price-to-earnings ratio (P/E) = 1 / (0.11 - 0.20) = -12.50
Ending stock price (in 5 years) = $4.24 × (1 + 34%) / (0.11 - 0.34)
= -$97.94
Given that the expected price-to-earnings ratio is negative, it indicates that the share price is expected to fall. Therefore, we cannot use the above formula for this question.
b. Stock price today
Dividend payment this year = $1.70
Dividend paid at the end of 1st year = $2.04
Dividend paid at the end of 2nd year = $2.45
Dividend paid at the end of 3rd year = $2.94
Dividend paid at the end of 4th year = $3.53
Dividend paid at the end of 5th year = $4.24
Dividend payout ratio after 5 years = 34%
Benchmark PE ratio = 32
Expected price-to-earnings ratio (P/E) = 1 / (0.11 - 0.20) = -12.50
Ending stock price (in 5 years) = $4.24 × (1 + 34%) / (0.11 - 0.34)
= -$97.94
Present value of expected future dividends
= $2.04 / (1 + 0.11) + $2.45 / (1 + 0.11)² + $2.94 / (1 + 0.11)³ + $3.53 / (1 + 0.11)⁴ + $4.24 / (1 + 0.11)⁵
= $10.94
Present value of the ending stock price
= $97.94 / (1 + 0.11)⁵
= $49.26
Present value of the stock
= $10.94 + $49.26
= $60.20
Therefore, the stock price today assuming a required return of 11 percent on this stock is $60.20.
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ined Requirements 1. Compute Skylark Design's direct labor rate and its predetermined overhead allocation rate for 2024. Bar 2. Compute the total cost of each job. 3. If Ginger wants to earn profits e
The direct labor rate is $100 per hour and the service Revenue of White chocolates is $60625.
How to calculate the valueEstimated Direct Labour Costs / Estimated Direct Labour Hours = Direct Labour Rate
= $16,00,000/8,000
=200 per hour
Pre - Determined overhead allocation rate for 2024 = Estimated overhead cost / Direct Labour cost×100
=$320,000 / $16,00,000 × 100
=20%
Estimated Overhead Costs Amount
Support staff salaries $193,000
Computer leases $41,000
Office supplies $23,000
Office Rent $63,000
Total $320,000
2. Computation of the total cost of each job
Skylark Design Inc.
The estimated cost of Food place and White chocolate jobs
Food Place White chocolates
Direct Costs
Direct Labour
800×$200 $160,000
200×$200 $40,000
Software Licensing Costs $2,500 $500
Travel Costs $7,000
Total Direct Costs $169,500 $40,500
Allocation of Indirect Costs
20% of $160,000 $32,000
20% of $40,000 $8,000
Total Costs $201,500 $48,500
3. Desired profit = 20% of Service Revenue
Service Revenue = Cost + Profit
Cost = Service Revenue - Profit
If service Revenue = 100%
Profit = 20%,
Then Cost = 80% Of Service Revenue
Service Revenue of Food Place = Cost /80%
= $201,500/80%
= $251,875
Service Revenue of White chocolates will be = cost /80%
= $48,500 / 80%
=$6062
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Which function in R produces the residuals? Group of answer choices
error()
rstandard()
yhat()
resid()
The function in R that produces the residuals is "resid()", option 4 is correct.
This function calculates the residuals of a linear regression model. Residuals represent the differences between the observed values and the predicted values of the dependent variable in the model. By subtracting the predicted values (obtained using the "predict()" function) from the observed values, "resid()" returns a vector of residuals.
These residuals can be used to assess the model's goodness of fit, identify influential data points, or check for violations of assumptions. The other options mentioned are not specific functions for calculating residuals. "error()" is not a built-in function in R, "rstandard()" is used to compute standardized residuals, and "yhat()" is not a recognized function in R for generating residuals, option 4 is correct.
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The complete question is:
Which function in R produces the residuals? Group of answer choices
1 error()
2 rstandard()
3 yhat()
4 resid()
To maximize profits the business shown on the graph below should produce at MC Price OO qo $5 0 90 91 Quantity of Wheat (bushels per year) q2 they should produce 0, since they are making a loss O We c
In the given graph, the quantity of wheat produced per year (q) is shown on the x-axis and the price of wheat (P) is shown on the y-axis.
The Marginal Cost (MC) curve and the Marginal Revenue (MR) curve are shown in blue and red, respectively. The MC curve intersects the MR curve at point E, which is the profit-maximizing level of output.Point E occurs at a quantity of q1, where the price is $4.50 per bushel. At this quantity, the total cost is $405, total revenue is $450, and profit is $45.
Therefore, to maximize profits, the business shown on the graph below should produce q1, which is 91 bushels of wheat per year. They should not produce 0 since there is a point where the MR=MC which shows the profit-maximizing level of output. At this output level, the firm can maximize profits. At 0 output, there will be no revenue and they will be making a loss. Hence, producing zero quantity of wheat is not the solution to maximize profits.
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Your factory has been offered a contract to produce a part for a new printer. The contract would last for 3 years and your cash flows from the contract would be $5.04 million per year. Your upfront setup costs to be ready to produce the part would be $8.16 million. Your discount rate for this contract is 7.7%. What does the NPV rule say you should do?
If the net present value (NPV) is advantageous, according to the NPV rule, it is recommended to agree to the contract.
Here is the calculation of the NPV:The calculation of NPV involves determining the current value of anticipated cash flows and deducting any initial expenses.
The current worth of the forthcoming monetary receipts amounts to $16. 45 million, which is computed by multiplying the projected amount of $5. 04 million by the factor 3. 276
Hence, the net present value stands at $8. 29 Given that the net present value (NPV) is favorable, it is recommended to proceed with accepting the contract.
NPV = Present Value of Future Cash Flows - Upfront Costs
= $5.04 million * 3.276 - $8.16 million
= $8.29 million
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A zero-coupon bond with face value $1,000 and maturity of six years sells for $745.22. a. What is its yield to maturity? (Round your answer to 2 decimal places.) Yield to maturity % b. What will the yield to maturity be if the price falls to $729? (Round your answer to 2 decimal places.) Yield to maturity % A coupon bond paying semiannual interest is reported as having an ask price of 121% of its $1,000 par value. If the last interest payment was made one month ago and the coupon rate is 7%, what is the invoice price of the bond? Assume that the month has 30 days. (Do not round intermediate calculations. Round your answer to 2 decimal places.) You buy a ten-year bond that has a 7.50% current yield and a 7.50% coupon (paid annually). In one year, promised yields to maturity have risen to 8.50%. What is your holding-period return? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Holding-period return %
The holding-period return for the ten-year bond is 7%.
To calculate the yield to maturity of the zero-coupon bond, we can use the formula:
Yield to maturity = ((Face value / Price) ^ (1 / Number of years)) - 1
In this case, the face value is $1,000, the price is $745.22, and the number of years is 6. Plugging in these values into the formula:
Yield to maturity = (($1,000 / $745.22) ^ (1 / 6)) - 1 ≈ 0.0646 or 6.46%
Therefore, the yield to maturity of the zero-coupon bond is approximately 6.46%.
b. To calculate the yield to maturity if the price falls to $729, we can use the same formula as above:
Yield to maturity = ((Face value / Price) ^ (1 / Number of years)) - 1
In this case, the face value is $1,000 and the price is $729. Plugging in these values into the formula:
Yield to maturity = (($1,000 / $729) ^ (1 / 6)) - 1 ≈ 0.0825 or 8.25%
Therefore, if the price falls to $729, the yield to maturity of the zero-coupon bond would be approximately 8.25%.
c. To calculate the invoice price of the coupon bond, we need to consider the accrued interest since the last interest payment. Since one month has passed since the last payment and the coupon rate is 7%, the accrued interest can be calculated as follows:
Accrued interest = (Coupon rate / Number of days in a year) * Number of days since last payment
In this case, the coupon rate is 7% and the number of days since the last payment is 30. Plugging in these values:
Accrued interest = (0.07 / 365) * 30 ≈ 0.00575 or 0.575%
The invoice price is calculated by adding the accrued interest to the ask price:
Invoice price = Ask price + Accrued interest = 1.21 * $1,000 + 0.575 ≈ $1,210.58
Therefore, the invoice price of the bond is approximately $1,210.58.
d. The holding-period return can be calculated using the formula:
Holding-period return = (Coupon payment + (Face value - Purchase price) / Purchase price) * 100
In this case, the coupon payment is 7% of the face value ($1,000), the purchase price is the face value ($1,000), and the promised yield to maturity after one year is 8.50%. Plugging in these values into the formula:
Holding-period return = (0.07 + ($1,000 - $1,000) / $1,000) * 100 = 7%
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ACold Inc is a frozen food distributor with 10 warehouses across the country. Ivan Tory, one of the warehouse managers, wants to make sure that the inventory policies used by the warehouse are minimizing inventory while still maintaining quick delivery to ACold's customers. Since the warehouse carries hundreds of different products, Ivan decided to study one. He picked Caruso's Frozen Pizza (CFP). Average daily demand for CFPS is normally distributed with a mean of 423 and a standard deviation of 156. Since ACold orders at least one truck from their supplier each day. ACold can essentially order any quantity of CFP it wants each day. In fact, ACold's computer system is designed to implement an order-up-to policy for each product. Ivan notes that any order for CFPS arrives 3 days after the order. Suppose an order-up-to level of 2464 is used. What is the expected on-hand inventory?
Note that where the above conditions are given, the expected on-hand inventory for Caruso's Frozen Pizza at ACold Inc's warehouse is approximately 2097 units.
What is the explanation for the above?
To calculate the expected on-hand inventory for Caruso's Frozen Pizza (CFP), we need to consider the average daily demand, the lead time, and the order-up-to level.
Average daily demand for CFP - 423 units
Standard deviation of daily demand - 156 units
Order-up-to level - 2464 units
Lead time - 3 days
First, we need to calculate the safety stock, which is the buffer inventory needed to account for demand variability during the lead time.
Since demand follows a normal distribution, we can use a service level to determine the appropriate safety stock. Let's assume a service level of 95%, which corresponds to a z-value of 1.645.
Safety stock = z * standard deviation of daily demand * square root of lead time
= 1.645 * 156 * √3
= 366.79 units
Next, we can calculate the expected on-hand inventory using the order-up-to level and subtracting the safety stock.
Expected on-hand inventory = Order-up-to level - Safety stock
= 2464 - 366.79
= 2097.21 units
Therefore, the expected on-hand inventory for Caruso's Frozen Pizza at ACold Inc's warehouse is approximately 2097 units.
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25) When the price of a movie ticket is $13 per ticket, 39,000,000
tickets per year are supplied. When the price is $15 per ticket,
41,000,000 tickets per year are supplied. What is the elasticity of
The elasticity of movie ticket supply is approximately 0.3339.
To calculate the elasticity of movie ticket supply, we need to use the formula:
Elasticity = Percentage change in quantity supplied / Percentage change in price
First, let's calculate the percentage change in quantity supplied:
Change in quantity supplied = New quantity supplied - Initial quantity supplied
Change in quantity supplied = 41,000,000 - 39,000,000 = 2,000,000
Percentage change in quantity supplied = (Change in quantity supplied / Initial quantity supplied) * 100
Percentage change in quantity supplied = (2,000,000 / 39,000,000) * 100 ≈ 5.13%
Next, let's calculate the percentage change in price:
Change in price = New price - Initial price
Change in price = $15 - $13 = $2
Percentage change in price = (Change in price / Initial price) * 100
Percentage change in price = ($2 / $13) * 100 ≈ 15.38%
Now we can calculate the elasticity:
Elasticity = Percentage change in quantity supplied / Percentage change in price
Elasticity = 5.13% / 15.38%
Elasticity ≈ 0.3339
The elasticity of movie ticket supply is approximately 0.3339.
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. Discuss the challenges and provide your recommendation on how to overcome the challenges. (5 marks)
To overcome decision-making challenges, conduct a thorough analysis, engage stakeholders, align decisions with ethical principles, and foster open communication for a balanced approach to sustainable success.
Challenges in decision-making include identifying potential risks, weighing conflicting interests, and balancing short-term gains with long-term sustainability. To overcome these challenges, it is crucial to conduct a thorough analysis of the proposals, considering their potential impacts on the business, employees, and the community. Engaging stakeholders, seeking diverse perspectives, and conducting impact assessments can provide valuable insights. Additionally, setting clear goals and priorities, aligning decisions with ethical and social responsibility principles, and fostering open communication can help navigate challenges. Regular review and adaptation of strategies based on feedback and monitoring outcomes ensure continuous improvement. Ultimately, a balanced approach that addresses both business objectives and social responsibility is recommended for sustainable success.In conclusion, overcoming decision-making challenges requires a comprehensive analysis, stakeholder engagement, ethical alignment, and effective communication, enabling a balanced approach that drives sustainable success.
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(a) Using relevant examples, explain four characteristics of services.
(b) Using examples, evaluate importance of people, process and physical evidence being integrated with other elements of the marketing mix.
A. Any action or advantage that one party can provide to another that is fundamentally intangible and does not lead to the ownership of something is referred to as a service. The nature of services is intangible. It means that until a service is purchased, it cannot be seen, tasted, touched, heard.
Services have the important quality of inseparability. It indicates that whether provided by humans or computers, services are created and used concurrently and cannot be isolated from their suppliers. Another crucial aspect of services is variability, which indicates that the quality of such services can vary substantially depending on who offers them and when, where, and how they are supplied. Services cannot be preserved for sale or use at a later time since they are perishable.
B. As a part of a broad marketing strategy, a marketing mix involves many areas of interest. The term typically references to the categorization known as the four Ps, which originally stood for product, pricing, placement, and promotion. A product is an item or service created to fulfill the requirements and desires of customers. The product's sale price indicates the price that customers are willing to pay for it.
The kind of goods offered should be taken into account while choosing distribution zones. Advertising, marketing for sales, personal selling, and relations with the public are a few examples of promotion activities. The money designated for the marketing mix is an important factor.
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Determine the value of z.
Question 9 options:
A)
53°
B)
121°
C)
57°
D)
239°
Explanation:
Let angle y be the unknown angle inside the triangle.
given
y + 87 + 34 = 180 (sum of angles in a triangle)
[tex]y + 87 + 34 = 180 \\ y + 121 = 180 \\ y = 180 - 121 \\ = 59[/tex]
given y + z = 180 (angles on same straight line)
[tex]y + z = 180 \\ 59 + z = 180 \\ z = 180 - 59 \\ = 121[/tex]
The answer should be 121°
Question 11 The cost of land improvements includes fencing, paving, parking areas, and lighting. O True O False
The statement "The cost of land improvements includes fencing, paving, parking areas, and lighting." is true.
The cost of land improvements includes fencing, paving, parking areas, and lighting. Land improvements are enhancements to the property to increase its overall value. They can include items such as landscaping, paving a parking lot, or building a sidewalk. When a company purchases land, it might require further work before the land is usable or productive.
In this case, the cost of those improvements would be added to the cost of the land, which is the purchase price plus other expenses directly related to the acquisition. This category includes all expenses incurred to make the property suitable for its intended use. This category also includes demolition costs of an old building or other structure if the cost of demolition was included in the purchase price of the land.
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You just joined Luber, a start‑up company (formed by Sammy Simba) that plans to launch a web site offering transportation matching services for pet owners. Luber has registered the web site Luber.com.
The Luber site (LUBER.COM) will offer a service that fills a pressing need of cat owners. Luber drivers ("independent contractors") will pick up your cat, take it to the veterinarian, and drop the cat safely at home after. Cat owners can simply log onto the Luber website, locate a pet‑friendly driver in their neighborhood, type in the vet’s name and address and the time and date of the appointment, and Luber will do the rest.
The Luber web‑site will have a place where cat owners are encouraged to post photos of their cats and reviews of the drivers, and where Luber drivers can post reviews of the cats and the cats’ owners. Sammy said that the pictures of the cute animals will attract business to the site, and can be used in advertising Luber will run on the internet. Sammy also sees a chance to make money selling data about the cats and their owners to Purina and Chewy, two companies in the pet food business.
It all sounds very cool. Simba told you that your first assignment is to draft a memo (no more than 1 ½ pages) delineating the points Luber needs to include in its Terms of Use Agreements protect itself from cranky cat owners.
Please draft the memo. Be organized!!! Stick to the important stuff, Memo-writing format required
A business memo is a short, to-the-point message used within an organization to communicate information efficiently. Below is an example of the business memo with format:
To: Sammy Simba
From: [Your name]
Subject: Points to be included in Luber’s Terms of Use Agreement
Date: [Insert date here]
Introduction
Luber’s website, LUBER.COM, is an innovative start-up company that offers transportation matching services for pet owners. The website allows cat owners to book independent contractors to pick up their cats, take them to the vet, and drop them safely back at home.
Luber is also considering using photos of cute animals on its site to attract business and potentially sell data about cats and their owners to Purina and Chewy. To protect itself from disgruntled cat owners, Luber should include certain points in its Terms of Use Agreement.Important Points to be included
The Terms of Use Agreement should clearly state that Luber is not responsible for the behaviour of its independent contractors.
These contractors will be picked based on the information provided by the cat owners and there are certain factors that are not controllable by Luber.
The agreement should also state that Luber will not be responsible for any damage to property or injury caused to the cat owner or anyone else by the independent contractors.
The agreement should also clearly state that Luber is not responsible for any harm that the cat may sustain during the transportation.
Luber should make it clear that the cat owner is fully responsible for the health and well-being of the cat. If the cat has any medical condition, Luber should require cat owners to provide a certificate of health or veterinary document stating that the cat is in good health and able to travel.
The agreement should state that Luber will not be held responsible for any loss of property or money, damage, injury, or death caused to the cat, its owner, or anyone else as a result of using the services of Luber. This is to protect Luber from any litigation in case of disputes
.Finally, the Terms of Use Agreement should clearly state that the use of the Luber website means that the cat owner agrees to all the terms outlined in the agreement.
Conclusion
The Luber Terms of Use Agreement should be designed to protect Luber from any legal action from disgruntled cat owners. It is important that the agreement is well-written and clearly states Luber’s position on all matters related to the use of the website.
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Mrs. Publinsky and her husband, Xander, are planning their dream house. The lot for the house sits high on a hill with a beautiful view of the White Mountains. The plans show the size of the house to be 2,900 square feet. The average price for a lot and house similar to this one has been $150 per square foot. Fortunately, Xander is a retired plumber and feels he can save money by installing the plumbing himself. Mrs. Publinsky feels she can take care of the interior decorating. The following average cost information is available from a local bank that makes loans to local contractors and dispenses progress payments to contractors when specific tasks are verified as complete.
25 % Excavation and framing complete
8 % Roof and fireplace complete
3 % Wiring roughed in
6 % Plumbing roughed in
5 % Siding on
17 % Windows, insulation, walks, plaster, and garage complete
9 % Furnace installed
4 % Plumbing fixtures installed
5 % Exterior painting complete
4 % Light fixtures installed, finish hardware installed
6 % Carpet and trim installed
4 % Interior decorating
4 % Floors laid and finished
Calculate the estimated cost for the Publinskys' house if they use contractors to complete all of the house. (Round the final answer to the nearest dollar.)
Calculate the estimated cost for the Publinskys’s house if they use their talents to do some of the work themselves (all plumbing, painting and interior decoration). (Round the final answer to the nearest dollar.)
The estimated cost of the Publinskys's house if they use their talents to do some of the work themselves (all plumbing, painting, and interior decoration) is $381,450
Mrs. Publinsky and her husband, Xander, are planning their dream house. The plans show the size of the house to be 2,900 square feet, and the lot for the house sits high on a hill with a beautiful view of the White Mountains. The average price for a lot and house similar to this one has been $150 per square foot. Fortunately, Xander is a retired plumber and feels he can save money by installing the plumbing himself. Mrs. Publinsky feels she can take care of the interior decorating. The estimated cost of the Publinskys' house using contractors to complete all of the house is as follows:Firstly, to calculate the total cost, we need to find the average price of the lot and house which will be 2900 square feet × $150/square foot
= $435,000.
The following is the cost breakdown based on the information available from the local bank. 25% Excavation and framing complete, which would cost
$435,000 × 25%
= $108,750.8%
Roof and fireplace complete would cost
$435,000 × 8%
= $34,800.3%
Wiring roughed in would cost
$435,000 × 3%
= $13,050.6%
Plumbing roughed in would cost
$435,000 × 6%
= $26,100.5%
Siding on would cost
$435,000 × 5%
= $21,750.17%
Windows, insulation, walks, plaster, and garage complete would cost
$435,000 × 17%
= $73,950.9%
Furnace installed would cost
$435,000 × 9%
= $39,150.4%
Plumbing fixtures installed would cost
$435,000 × 4%
= $17,400.5%
Exterior painting complete would cost
$435,000 × 5%
= $21,750.4%
Light fixtures installed, finish hardware installed would cost
$435,000 × 4%
= $17,400.6%
Carpet and trim installed would cost
$435,000 × 6%
= $26,100.4%
Interior decorating would cost
$435,000 × 4%
= $17,400.4%
Floors laid and finished would cost
$435,000 × 4%
= $17,400.
Using contractors to complete all of the work would cost
$108,750 + $34,800 + $13,050 + $26,100 + $21,750 + $73,950 + $39,150 + $17,400 + $21,750 + $17,400 + $26,100 + $17,400 + $17,400
= $446,700
.The estimated cost of the Publinskys's house if they use their talents to do some of the work themselves (all plumbing, painting, and interior decoration) is as follows:We can reduce some of the cost since Xander and Mrs. Publinsky will be doing some of the work themselves. For plumbing, painting, and interior decoration, the cost would be reduced by $26,100 + $21,750 + $17,400
= $65,250.
Using Xander and Mrs. Publinsky to do some of the work themselves (all plumbing, painting, and interior decoration) would cost
$446,700 - $65,250
= $381,450
Thus, the estimated cost of the Publinskys' house if they use contractors to complete all of the work is $446,700. The estimated cost of the Publinskys's house if they use their talents to do some of the work themselves (all plumbing, painting, and interior decoration) is $381,450.
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