The collapse of the housing market was caused by the burst of the housing bubble that was created when the real estate market became overpriced, leading to high demand for houses and a large number of subprime mortgages being issued.
The housing bubble was fueled by easy credit and low interest rates. In the years leading up to the housing market collapse, banks were lending money to anyone who could sign their name, regardless of whether they could afford the mortgage or not. Subprime mortgages were mortgages issued to people with poor credit scores who would not typically qualify for a mortgage.In the early 2000s, mortgage lenders began issuing adjustable-rate mortgages with teaser rates.
These were loans with very low-interest rates for the first few years, which then increased significantly after that. As a result, people could buy homes they couldn't afford with low initial payments, only to be hit with huge payments when their interest rates rose. When they couldn't afford these payments, they defaulted on their loans. This triggered a domino effect, with the number of foreclosures rising, which led to a decrease in housing prices.
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The lack of competition is part of the free enterprise system.
O True
O False
Answer:
I think its true
Explanation:
A firm operates in a perfectly competitive market and is producing at the profit-maximizing output. It is incurring economic losses. Based on this information, which of the following must be true?
Average total cost = price; marginal cost > marginal revenue
Average total cost = price; marginal cost = marginal revenue
Average total cost > price; marginal cost = marginal revenue
Average total cost > price; marginal cost > marginal revenue
Average total cost < price; marginal cost > marginal revenue
A firm operating in a perfectly competitive market and producing at the profit-maximizing output is incurring economic losses; the following statement must be true: Average total cost > price; marginal cost = marginal revenue
In a perfectly competitive market, the price is equal to marginal revenue because the firm is a price taker. Therefore, the firm’s marginal revenue curve is horizontal. To achieve the profit-maximizing output level, the firm will produce where the marginal cost (MC) curve intersects the marginal revenue (MR) curve, which is also equal to the marginal cost curve (MC). Therefore, MC = MR = P (price).In a situation where the firm is incurring economic losses, the price is less than the average total cost (ATC). Thus, the intersection point of the MC and MR curve is below the ATC curve. The firm is producing at a level where P < ATC. To recover from the losses, the firm should produce at a level where P = ATC.
If it is not possible to reach this level, the firm should minimize its losses by producing at the point where MC = MR = P, and the price is greater than the variable cost (VC) of producing the output.
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1. Name 3 ways the media plays a role in political campaigns. Which role, in your opinion has had the largest influence on American politics?
2. Name 3 ways the media influences voters. In your opinion, does the media positively or negatively affect voters and their opinions?
3. Does the government have more influence over the media, or do the media have more influence over the government?
1. Three ways that the media plays a role in political campaigns are:
i) Media coverage.
ii) Political advertising
iii) Debates
2. Three ways that the media influences voters are:
i) Agenda-setting
ii) Framing
iii) Endorsements
3. The government does not have more influence over the media than the media has over the government.
1. Three ways that the media plays a role in political campaigns are:
i) Media coverage - The media coverage of political campaigns plays a huge role in shaping the public's perception of candidates and their policies. It can highlight or ignore certain issues, present information in a biased way, and frame the narrative of the election.
ii) Political advertising - Political advertising is a way for candidates to reach a large number of people and promote their message. It can be used to attack opponents or promote a candidate's positive attributes.
iii) Debates - Debates are an opportunity for candidates to directly engage with each other and present their views to the public. They are often highly publicized and can have a significant impact on how voters view the candidates.
The role that has had the largest influence on American politics, in my opinion, is media coverage. This is because it has the ability to shape the narrative of the election and influence the public's perception of the candidates.
2. Three ways that the media influences voters are:
i) Agenda-setting - The media has the ability to set the agenda for what issues are important in an election. They can highlight certain issues or ignore others, which can influence what voters believe are the most important issues.
ii) Framing - The media can frame information in a way that influences how voters perceive it. For example, they can use certain language or focus on certain aspects of an issue to make it seem more positive or negative.
iii) Endorsements - When the media endorses a candidate, it can have a significant impact on how voters view that candidate.
Whether the media positively or negatively affects voters and their opinions is subjective and varies from person to person.
3. The government does not have more influence over the media than the media has over the government. The media is meant to serve as a watchdog of the government, holding elected officials accountable and providing the public with information about their actions. While the government may attempt to influence the media through policies and regulations, the media's independence and freedom of speech protect it from undue government influence.
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which of the following statements is true of internal secondary data? which of the following statements is true of internal secondary data? internal secondary data cannot be used by decision makers in planning new-product introductions. they can be easily obtained from scholarly and government sources. internal secondary data are the most readily available. it is expensive to access the sources of internal secondary data. internal sources of secondary data are accessed only after obtaining useful information from external sources of secondary data.
Internal secondary data refers to data that is collected and stored within an organization for purposes other than the current research or analysis. The correct answer is option 2.
This data is readily available to decision-makers as it is generated from the organization's own records, databases, and systems. It is considered the most easily accessible type of secondary data since the organization has direct control over its collection and storage.
In contrast, accessing external sources of secondary data, such as scholarly articles or government reports, may involve costs such as purchasing or licensing fees, or it may require more effort to obtain the data from external sources. Therefore, statement 2 accurately reflects the nature of internal secondary data.
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--The complete Question is, Which of the following statements is true of internal secondary data?
1. internal secondary data cannot be used by decision-makers in planning new-product introductions. they can be easily obtained from scholarly and government sources.
2. internal secondary data are the most readily available. it is expensive to access the sources of internal secondary data.
3. internal sources of secondary data are accessed only after obtaining useful information from external sources of secondary data. --
Discuss the Big Push Theory of development and its applicability
to a developing country. (15 Marks)
The Big Push Theory is a development theory that proposes that a massive, concerted effort is required for a developing country to transition from a stagnant economy to a developed economy. The theory was popularized by Paul Rosenstein-Rodan in the 1940s.
According to this theory, developing countries must embark on a large-scale investment program in which the country's economy is directed towards industrialization. The program must have four main characteristics: development must occur in several sectors simultaneously, the investment must be substantial, investment must be made in basic infrastructure and large-scale productive enterprises, and the investment must be directed by the government or an international agency. This model emphasizes the importance of intersectoral linkages, coordination, and cooperation. The Big Push theory is applicable to developing countries because they face an extensive range of difficulties, such as poor infrastructure, limited education, inadequate healthcare facilities, lack of technological innovation, low productivity, low economic growth, and a dependence on primary commodities. Developing countries must, therefore, undertake a series of big pushes to overcome these challenges and to achieve economic development. In conclusion, the Big Push theory is relevant to developing countries because it stresses the importance of a coordinated and comprehensive approach to development. It recognizes that a country cannot achieve significant growth by investing in one sector alone but rather requires a broader strategy that focuses on strengthening intersectoral linkages.
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In unconstraining demand using Expected Maximization method, what is the expected chang in the mean and standard deviation of demand before and after unconstraining? The mean and standard deviation will NOT decrease O The mean and standard deviation will increase. Mean will increase but standard deviation may decrease Both mean and standard deviation will decrease.
The expected change is that the mean and standard deviation will increase.The Option B.
Will the mean and standard deviation of demand increase after unconstraining using the Expected Maximization method?When using the Expected Maximization method to unconstrain demand, the mean and standard deviation of demand are expected to increase. This is because the method aims to estimate the underlying distribution of demand by iteratively updating the parameters such as the mean and standard deviation.
By removing constraints, the method allows for a more accurate representation of the true demand distribution which often results in higher mean and standard deviation values. Therefore, the mean and standard deviation of demand are expected to increase after unconstraining.
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currently, dollar bills in the united states are an example of:
Currently, dollar bills in the United States are an example of fiat money.
Fiat money is a type of currency that has value because the government declares it to be legal tender, meaning it is accepted as a form of payment within the country. The value of fiat money is not backed by a physical commodity like gold or silver but is based on the trust and confidence placed in the government and the economy.
In the case of dollar bills in the United States, they are issued by the Federal Reserve, which is the central bank of the country. The U.S. government declares these dollar bills to be legal tender, and they are widely accepted for transactions within the United States. The value of the U.S. dollar is primarily determined by factors such as supply and demand, monetary policy, and the overall health of the U.S. economy.
Therefore, dollar bills in the United States represent fiat money, which is the prevailing form of currency in many modern economies around the world.
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For the four scenarios described below, indicate the business structure each one is likely to adopt - sole trader, partnership or company (public or proprietary) and why. (4x1 = 4 marks) (i) lan has commenced a hairdressing business by himself. (ii) Four industrial engineers with established careers wish to set up a business developing recycling techniques to reduce business waste to near zero. They want to be able to raise capital by issuing shares to the public. (iii) Evonne and Ben wish to start a donut business. They are concerned about the legal issues (for example, their personal liabilities) for this business once they start trading. (iv) Luke, John and Chelsea have been running separate agricultural businesses but are finding the costs and hours are very high for one person and are only just keeping their individual businesses operational. They have decided to combine their businesses so they can share resources and have more time off to spend with their families.
Lan has commenced a hairdressing business by himself. - Sole Trader Lan has commenced a hairdressing business by himself. In this case, he is responsible for making all the decisions related to the business and takes all the risks associated with it.
In the given scenarios, the business structure each one is likely to adopt are as follows:
(i) Lan has commenced a hairdressing business by himself. - Sole Trader Lan has commenced a hairdressing business by himself. In this case, he is responsible for making all the decisions related to the business and takes all the risks associated with it. He has complete control over the business and all the profits and losses are his alone. Therefore, the business structure he is likely to adopt is a Sole Trader.
(ii) Four industrial engineers with established careers wish to set up a business developing recycling techniques to reduce business waste to near zero. They want to be able to raise capital by issuing shares to the public. - Public CompanyFour industrial engineers with established careers wish to set up a business developing recycling techniques to reduce business waste to near zero. They want to be able to raise capital by issuing shares to the public. In this case, they need to raise capital by issuing shares to the public. Therefore, the business structure they are likely to adopt is a Public Company.
(iii) Evonne and Ben wish to start a donut business. They are concerned about the legal issues (for example, their personal liabilities) for this business once they start trading. - Proprietary CompanyEvonne and Ben wish to start a donut business. They are concerned about the legal issues (for example, their personal liabilities) for this business once they start trading. In this case, they are concerned about the legal issues for the business once they start trading. Therefore, the business structure they are likely to adopt is a Proprietary Company.
(iv) Luke, John, and Chelsea have been running separate agricultural businesses but are finding the costs and hours are very high for one person and are only just keeping their individual businesses operational. They have decided to combine their businesses so they can share resources and have more time off to spend with their families. - PartnershipLuke, John, and Chelsea have been running separate agricultural businesses but are finding the costs and hours are very high for one person and are only just keeping their individual businesses operational. They have decided to combine their businesses so they can share resources and have more time off to spend with their families. In this case, they have decided to combine their businesses. Therefore, the business structure they are likely to adopt is a Partnership.
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Benz Incorporated has 600,000 shares of common stock outstanding on December 31, 2017. An additional 100,000 shares of common stock were issued on April 1, 2018, and 50,000 more on July 1, 2018. On October 1, 2018, Benz declared a 10% common stock dividend. On November 1, Benz purchased 12,000 of its own stock.
What was the number of shares to be used in computing basic earnings per share?
If net income is $950,000 and preferred dividends paid is $90,000, compute EPS to the nearest penny.
The basic earnings per share (EPS) is approximately $1.06.
To compute the number of shares used in computing basic earnings per share (EPS), we need to track the changes in the number of shares outstanding throughout the given period.
Starting with 600,000 shares on December 31, 2017, we have the following changes:
April 1, 2018: Additional 100,000 shares issued. Total shares: 600,000 + 100,000 = 700,000 shares.
July 1, 2018: Additional 50,000 shares issued. Total shares: 700,000 + 50,000 = 750,000 shares.
October 1, 2018: 10% common stock dividend declared. This means an additional 10% of the outstanding shares are issued as dividends. Total shares: 750,000 + (10% * 750,000) = 825,000 shares.
November 1, 2018: 12,000 shares repurchased. Total shares: 825,000 - 12,000 = 813,000 shares.
Therefore, the number of shares to be used in computing basic EPS is 813,000.
To calculate EPS, we divide the net income by the weighted average number of common shares outstanding during the period. Since the given period is not specified, we'll assume it's for the entire year.
EPS = (Net Income - Preferred Dividends) / Weighted Average Number of Common Shares
= ($950,000 - $90,000) / 813,000
= $860,000 / 813,000
≈ $1.06 (to the nearest penny)
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In 2020 Klusic LLC purchased and placed into service two assets, furniture (7-year property) on April 24 with a basis of $11,000 and computer equipment (5-year property) on November 18 with a basis of $15,000. Calculate the maximum depreciation expense for 2021, (ignoring §179 and bonus depreciation).) (Round final answer to the nearest whole number.)
a. $2,714.
b. $7,494.
c. $4,572
d. $8,282.
e. None of the choices are correct.
As Klusic LLC has purchased and placed two assets in the service with a basis of $11,000 and $15,000 respectively, we are to calculate the maximum depreciation expense for 2021, ignoring §179 and bonus depreciation.
Let us calculate the maximum depreciation for furniture and computer equipment respectively.Furniture:The maximum depreciation expense for furniture will be:Maximum Depreciation expense = (Cost basis – Residual value) / Recovery period.For the furniture, the Recovery period is 7 years.Cost Basis of Furniture = $11,000.Residual Value of Furniture = 0. Maximum Depreciation expense for Furniture = (Cost basis – Residual value) / Recovery period= ($11,000 – 0) / 7= $1,571.43.Therefore, the maximum depreciation expense for Furniture is $1,571.43.Computer Equipment:The maximum depreciation expense for computer equipment will be:Maximum Depreciation expense = (Cost basis – Residual value) / Recovery period. For the Computer Equipment, the Recovery period is 5 years.Cost Basis of Computer Equipment = $15,000. Residual Value of Computer Equipment = 0. Maximum Depreciation expense for Computer Equipment = (Cost basis – Residual value) / Recovery period= ($15,000 – 0) / 5= $3,000. Therefore, the maximum depreciation expense for Computer Equipment is $3,000.
We have calculated the maximum depreciation expenses for both furniture and computer equipment to be $1,571.43 and $3,000 respectively. Therefore, the total depreciation expense for 2021 would be:$1,571.43 + $3,000 = $4,571.43 ≈ $4,572 (rounded to the nearest whole number). Therefore, the correct option is $4,572.
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Johnny Lee Incorporated produces a line of small gasoline-powered engines that can be used in a variety of residential machines, ranging from different types of lawnmowers, to snowblowers, to garden t
Managing financial risk is crucial for Johnny Lee Incorporated's growth and sustainability. Factors such as debt level, cash flow, financing options, market conditions, competition, and resource availability must be considered to mitigate risks effectively.
Johnny Lee Incorporated produces a line of small gasoline-powered engines that can be used in a variety of residential machines, ranging from different types of lawnmowers to snowblowers, to garden tillers, and so on. The company is experiencing strong growth and has had to take on significant debt to finance this growth.
Therefore, in order to manage the company's financial risk, the management of Johnny Lee Incorporated needs to consider several factors such as its current level of debt, its ability to generate sufficient cash flow to meet its obligations, its ability to access additional financing if needed, and the potential impact of economic and market conditions on its operations.
In addition, the company may need to consider other factors such as the level of competition in the industry, the cost of raw materials, and the availability of skilled labor in order to manage its financial risk effectively.
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You run a construction firm. You just won a contract to build in our office complex. building it will require an investment of 10.2 million today and 4.5 million in one year. The government will pay you 21.4 million in one year upon the buildings completion. Supposed to interest rate is 10.9%. What is the NPV of this proposal rounded to two decimal places?
The NPV of this proposal rounded to two decimal places is 5.88 million.
Net Present Value (NPV) of the given proposal:
NPV = Present Value of Cash Inflows - Present Value of Cash Outflows
Present Value of Cash Outflows:
Cash Outflows = 10.2 million today + 4.5 million in one year
Cash Outflows = 10.2 + (4.5 / (1 + 0.109)) [since interest rate is given as 10.9%]
Cash Outflows = 13.47 million
Present Value of Cash Inflows:
The government will pay 21.4 million in one year upon the building’s completion.
Present Value of Cash Inflows = Future Value of Cash Inflows / (1 + r)^n
Where, r = rate of interest
n = number of years
Future Value of Cash Inflows = 21.4 million
n = 1 year
PV of Cash Inflows = 21.4 million / (1 + 0.109)^1 = 19.35 million
NPV of the proposal = Present Value of Cash Inflows - Present Value of Cash Outflows= 19.35 - 13.47= 5.88
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3. Suppose the following demand schedule for compact discs. Price Quantity demanded Income = $10,000 40 Quantity demanded Income = $12,000 8 50 10 32 45 12 24 30 14 16 20 16 8 12 a) Calculate the price elasticity of demand as the price of a compact disc increases from $8 to $10 if (i) your income is $10,000 and (ii) your income is $12,000 b) Calculate your income elasticity of demand as your income increases from $10,000 to $12,000 if (i) the price is $12 and (ii) the price is $16. 4. Two drivers - Tom and Jerry-cach drive up to a petrol station. Before looking at the price and starting to pump petrol, Tom says: I will buy 10 litres of petrol. Jerry says: I will buy $10 of petrol. Comment on each driver's price elasticity of demand. 5. To get some practise in calculating elasticity using the mid-point formula, you should try and fill out the following table. Price ($) QD (units) Ed 10 10,000 13,000 17,000 22,000 25,000 2987 6
The following demand schedule for compact discs. Price Quantity demanded Income = $10,000 40 Quantity demanded Income = $12,000 8 50 10 32 45 12 24 30 14 16 20 16 8 12.
a) Calculation of price elasticity of demand (PEoD) using the mid-point formula PEoD = [(Q2 - Q1) / (Q2 + Q1) / 2] ÷ [(P2 - P1) / (P2 + P1) / 2]
(i) Income = $10,000[(40 - 50) / ((40 + 50) / 2)] ÷ [(10 - 8) / ((10 + 8) / 2)] = -2.22 (ii) Income = $12,000[(32 - 45) / ((32 + 45) / 2)] ÷ [(10 - 8) / ((10 + 8) / 2)]=-4.293
b) Calculation of income elasticity of demand:-
(IEoD)IEoD = [(Q2 - Q1) / (Q2 + Q1) / 2] ÷ [(I2 - I1) / (I2 + I1) / 2]
Where: (i) = $10,000I2 = $12,000(i) P = $12Q1 = 32Q2 = 24[(24 - 32) / ((24 + 32) / 2)] ÷ [(12,000 - 10,000) / ((12,000 + 10,000) / 2)] = -1.33
(ii) P = $16Q1 = 16Q2 = 12[(12 - 16) / ((12 + 16) / 2)] ÷ [(12,000 - 10,000) / ((12,000 + 10,000) / 2)] = -0.67
4) Tom and Jerry are the two drivers. Tom has an inelastic demand for petrol because, irrespective of the price, he is willing to buy 10 litres of petrol. Jerry's demand is price elastic because he has a fixed budget of $10, meaning he will buy more petrol when prices are low and less petrol when prices are high.
5) The completed table is shown below:-
Price ($) QD (units) Ed (mid-point formula)
10 10,000 -0.33 (inelastic)
10 13,000 -0.48 (inelastic)
10 17,000 -0.58 (inelastic)
10 22,000 -0.67 (inelastic)
10 25,000 -0.69 (inelastic)
10 29,987 -0.83 (inelastic)
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According to Rogelberg (2019), on average, managers spend 23 hours per week in meetings. How many hours each week that a manager spends in team meeting are unproductive? a.24 b.15 c.10 d.8 e.6
According to Rogelberg (2019), on average, managers spend 23 hours per week in meetings. 15 hours each week that a manager spends in team meeting are unproductive. So the right option is (b)15.
Explanation:There are different reasons why meetings become unproductive. For example, poor planning, lack of structure, and lack of focus are some of the reasons why meetings become unproductive. When meetings are unproductive, they are a waste of time and resources.
Meetings become unproductive when they do not achieve their objectives. In this case, the objective of the meeting is to discuss team matters and make decisions. If the meeting does not achieve these objectives, then it is unproductive.According to a study by Harvard Business Review, unproductive meetings cost companies $37 billion each year.
Therefore, it is important for managers to find ways to make meetings more productive. Some of the ways managers can make meetings more productive include setting clear objectives, inviting only relevant people, and using an agenda. Additionally, managers should also ensure that meetings start and end on time and that there are action items at the end of each meeting.
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McGraw Company uses 5,000 units of Part X each year as a component in the assembly of one of its medical equipment. The company is presently producing Part X internally at a total cost of $300,000, computed as follows:
Direct materials $ 45,000
Direct labor 90,000
Variable manufacturing overhead 30,000
Fixed manufacturing overhead 135,000
Total costs $300,000
An outside supplier has offered to provide Part X at a price of $54 per unit. Assume that direct labor is a variable cost. If McGraw Company stops producing the part internally, one-third of the fixed manufacturing overhead would be eliminated. REQUIRED: The accountant suggested that the manufacturing of part X should be outsourced as the price offered is cheaper than the manufacturing cost per unit of $60 ($300,000/5,000 units).
Do you agree with the accountant’s suggestion? Why?
Yes, I agree with the accountant's suggestion because outsourcing the production of Part X will save the McGraw Company a significant amount of money.
The calculation is as follows:
The present total cost of manufacturing Part X internally:
Direct materials = $45,000
Direct labor = $90,000
Variable manufacturing overhead = $30,000
Fixed manufacturing overhead = $135,000
Total costs = $300,000
Manufacturing cost per unit of Part X is $60 ($300,000 ÷ 5,000 units)
An outside supplier is offering to supply Part X for $54 per unit.
To determine the amount of fixed manufacturing overhead that will be eliminated, we must first calculate the total amount of fixed overhead per unit.
Fixed manufacturing overhead = $135,000
Fixed overhead per unit = $135,000 ÷ 5,000 units = $27 per Unit
Elimination of fixed manufacturing overhead = $27 x 5,000 units ÷ 3 = $45,000 per year
The cost of purchasing Part X from an outside supplier is $54 per unit, so the annual cost of purchasing 5,000 units of Part X is $54 x 5,000 = $270,000.
The total annual cost of outsourcing the production of Part X will be $270,000.
This is $30,000 less than the total cost of manufacturing Part X internally.
Therefore, the company should outsource the production of Part X.
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Tsangoni CC is a company which manufactures, sells and services mountain bikes in Cape Town, South Africa. The financial director of the company, Ingiphile, is struggling with the preparation of the financial statements for the year ended 31 August 2021 and has asked for your assistance.
Bicycle frames:
Tsangoni CC imports the majority of its bicycles and the parts required for maintenance from Europe. On 1 February 2021, an order for the shipment of bicycle frames was placed by Ingiphile. The terms of the order were as follows:
Date of order 1/2/2021
Supplier Sensa Bicycles Ltd (Netherlands)
Customer Tsangoni CC
Product 10 "Sensa Romagna" frames
Shipping date 1/3/2021
Price R5 000 per frame
Payment terms Full payment to be made on 1/3/2022
Shipping terms FOB shipping point
The shipment was made on 1 March 2021, and the inventory was received on 27 May 2021.
A fair interest rate of 12% applies.
Property, Plant and Equipment (PPE):
PPE is comprised of two assets: a servicing machine and a delivery vehicle.
Tsangoni CC purchased the servicing machine for the servicing of bicycles for R110 000 on 1 September 2019. Ingiphile felt that the consumption of future economic benefits would be best represented by the number of bicycles it serviced, which was estimated to be 750 bicycles. The servicing machine serviced 34 bicycles from 1 September 2019 to 31 August 2020 (the previous financial year) and 43 bicycles from 1 September 2020 to 31 August 2021 (the current financial year). The machine could be sold at the end of its useful life for R4 000
Tsangoni CC purchased the delivery vehicle for R120 000 on 1 October 2020. Ingiphile estimated the useful life to be 5
years. The vehicle can be sold at the end of its useful life for R12 000 if costs of R2 000 are incurred to have it serviced.
1.1
Discuss when and at what amount the bicycle frames should be initially recorded in the financial statements of Tsangoni CC. You should apply the relevant definition and recognition criteria as per the Conceptual Framework in your discussion.
The bicycle frames should be initially recorded in the financial statements of Tangoing CC at their cost as per the relevant definition and recognition criteria in the Conceptual Framework.
Cost refers to the amount of cash or cash equivalents paid, or the fair value of other consideration given to acquire an asset at the time of its acquisition or construct an asset at the time of its construction, plus any costs directly attributable to making the asset capable of operating as intended. It should be noted that the costs of an item of property, plant, and equipment include all expenses incurred to bring the asset to the location and condition necessary for it to be capable of operating as intended (for example, site preparation, delivery and handling, installation, assembly, and testing).As such, the bicycle frames' cost, which includes all expenses incurred to bring them to the location and condition necessary for them to be capable of operating as intended, should be initially recorded in the financial statements of Tangoing CC as per the relevant definition and recognition criteria in the Conceptual Framework.
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Burgandy Manufacturing produces a single product that sells for $100. Variable costs per unit equal $40. The company expects total fixed costs to be $80,000 for the next month at the projected sales level of 2300 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately. What is the current breakeven point in terms of number of units?
The current breakeven point in terms of the number of units is approximately 1,333.33 units.
To calculate the current breakeven point in terms of the number of units, we need to determine the sales volume at which the company's total revenue equals its total costs, resulting in zero profit. This can be found using the formula:
Breakeven Point (in units) = Fixed Costs / (Selling Price per unit - Variable Costs per unit)
As mentioned, following information:
Selling Price per unit = $100
Variable Costs per unit = $40
Fixed Costs = $80,000
Breakeven Point (in units) = $80,000 / ($100 - $40)
Breakeven Point (in units) = $80,000 / $60
Breakeven Point (in units) = 1,333.33 units
Therefore, the current breakeven point in terms of the number of units is approximately 1,333.33 units.
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An investment with cash inflow of $120 million in year 5 and a cash outflow of $50 million in year 0. Given the cost of capital is 10%, which of the following is correct? It has a present value of $26.42 million. It has a net present value of $24.51 million. It has a net present value of $27.259 million. It has a net present value of $70 million.
An investment with a $120 million cash inflow in year 5 and a $50 million cash outflow in year 6 It has a $24.51 million net present value. Therefore, choice (B) is right.
A company's value and position, for example, may be determined by converting investment cash flows into the following measures:
to estimate the rate of return or worth of a project. Financial models like net present value and internal rate of return use the timing of cash flows into and out of projects as inputs cash inflow.
help identify liquidity issues with a company. Profitability does not always equate to liquidity. Even if a business is prosperous, cash flow problems can still cause it to collapse.
when it is felt that accrual accounting principles do not accurately reflect economic reality, as a substitute assessment of a company's earnings.
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Economics (FoolProof)
Which a debit or ATM card, you are spending your own money. With a credit card, you are always borrowing money.
True or False
Answer:
True
Explanation:
When payments are made from debit or ATM card, the amount is directly deducted from the saving account of the user.
However, in case of credit card, the money spent is a loan taken from banks which is to be paid at the end of every month. In case of delay of payment, fine is also imposed.
Hence, the given statement is true
Design a Multi- cultural forum with the theme "Diversity creates Dimension in the world". about the country QATAR speaking on pressing issues in Organizational culture from the perspectives of:
Cultural Practices in Organizations
Power Struggle/Tensions & Conflict Resolution
Interpersonal Relationships,
Negative and Positive Perceptions
Cultural influence on Gender and Occupation
Concerns of international chains that employ foreigners
Generally, the cultural diversity brings dimension by fostering a rich tapestry of practices, resolving power struggles through inclusive conflict resolution, nurturing strong interpersonal relationships, challenging negative perceptions etc.
How does cultural diversity impact organizational culture in Qatar?In Qatar, the cultural diversity in Qatar's organizational culture adds dimension and richness by incorporating a wide range of cultural practices, fostering inclusive power dynamics, promoting positive perceptions, nurturing healthy interpersonal relationships and acknowledging the influence of culture on gender and occupation.
But, it also raises concerns for international chains employing foreign workers requiring effective conflict resolution strategies to address power struggles and tensions.
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an enrichment program for economically disadvantaged preschoolers is an example of a public policy initiative aimed at building __________________.
An enrichment program for economically disadvantaged preschoolers is an example of a public policy initiative aimed at building human capital.
What is human capital?Human capital refers to the economic value of an employee's skill set. Human capital is an intangible asset that may not appear on the balance sheet of a company but has a significant impact on its productivity and growth.
An enrichment program for economically disadvantaged preschoolers is an example of a public policy initiative aimed at building human capital. It aims to provide a better future for economically disadvantaged preschoolers by allowing them access to educational resources, which will help them achieve higher education in the future.
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T/F. when sales receipts are sent monthly to a customer for fixed amounts and descriptions (and for any unbilled charges as well)
False.
The statement is not entirely clear, but it seems to describe a situation where sales receipts are sent monthly to a customer for fixed amounts and descriptions, including any unbilled charges. In such a case, the statement would be false. Sales receipts are typically used to document the completion of a sale and provide a record of the transaction to the customer. They are usually issued at the time of sale or shortly after, not on a monthly basis. Invoices or billing statements are more commonly used to provide customers with a summary of charges, including fixed amounts and descriptions, on a recurring monthly basis.
When sales receipts are sent monthly to a customer for fixed amounts and descriptions, it ensures that the customer receives a comprehensive record of their transactions with the business. This practice is particularly common in subscription-based services or businesses that provide regular recurring services.
By sending sales receipts on a monthly basis, the business provides a clear breakdown of the charges incurred during that period. The receipt includes details such as the date of the transaction, the description of the products or services purchased, the quantity or duration of the purchase, and the corresponding cost. This level of detail helps the customer understand what they are being billed for and allows them to verify the accuracy of the charges.
Including any unbilled charges in the sales receipts ensures that all transactions, even those that may have been missed or not previously billed, are accounted for. This helps in capturing any additional charges or adjustments that may arise during the billing cycle.
Sending regular sales receipts promotes transparency and trust between the business and the customer. It allows the customer to keep track of their expenses, reconcile their records, and ensure that they are being charged correctly. It also provides an opportunity for the customer to raise any concerns or questions about the charges in a timely manner.
Additionally, regular sales receipts contribute to effective financial management for both the business and the customer. The business can maintain accurate and up-to-date records of transactions, facilitating bookkeeping, financial reporting, and analysis. For the customer, having detailed receipts simplifies expense tracking and budgeting, as they have a clear overview of their financial commitments.
Overall, the practice of sending monthly sales receipts with fixed amounts and descriptions, including any unbilled charges, enhances transparency, accuracy, and accountability in the customer-business relationship. It fosters a sense of confidence and satisfaction for the customer, knowing that they have a comprehensive record of their transactions and can trust the billing process of the business.
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Saraya Inc. provides its employees two weeks of paid vacation per year. As of December 31,65 employees have se average weekly salary for these employees is €475, what is the required journal entry at the end of the year? A. Debit Salaries and Wages Expense for €123,500 and credit Salaries and Wages Payable for €125.500 B. Debit Salaries and Wages Expense for €61,750 and credit Salaries and Wages Payable for 81,750 C. Debit Salaries and Wages Payable for €123,000 and credit Salaries and Wages Expense for 125,000 D. No entry is required
No entry is required in the required journal entry at the end of the year. Option d is correct.
The provided information states that Saraya Inc. provides its employees two weeks of paid vacation per year, and as of December 31, 65 employees have used their vacation time. However, the question does not mention anything about the employees being paid for their unused vacation time at the end of the year.
Without any indication that the employees are being compensated for their unused vacation days, there is no need for a journal entry.
If the employees were to be compensated for their unused vacation time, a journal entry would be required to record the accrued vacation expense and the corresponding liability. However, since the question does not mention such compensation, no entry is necessary.
Therefore, d is correct.
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Did Volkswagen respond to the crisis well enough? Discuss the model of crisis management.
Discuss the differences between German and Anglo-American Corporate Governance Structures. Comment on the corporate governance structures of Volkswagen Group.
What were the causes of corporate misbehavior at VW? What should it do to prevent similar crises in the future?
What should Corporate Social Responsibility truly mean? How can the VW Group integrate CSR throughout the company?
Why woulda leading corporation which was awarded several social responsibility recognition engage in such a scam?
The Volkswagen Group creates and oversees a wide range of CSR activities globally, all of which are inspired by the following fundamental principles: The initiatives address a particular regional issue while adhering to the group's core beliefs. The objective of this program is to provide an integrated and long-term strategy to environmental management that combines a special blend of social, technological, and financial approaches. The project would provide the community as a whole the ability to start and sustain resources like watering the land.
The defeat gadget basically had a setup that permitted their Adolf Hitler got engaged in 1934, while many of the ideas mentioned above were still in the planning or development Volkswagen phases, and he ordered the creation of a basic vehicle that could carry two adults and three children at a speed of 100 km/h (62 mph). He desired a vehicle that environmental would be affordable for every German household.
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Match the value chain activity in the left column with the scenario in the right column.
Value Chain Activity Scenario
1. Service activities 2. Inbound logistics 3. Marketing and sales activities 4. Firm Infrastructure 5. Human resource management 6. Technology 7. Procurement 8. Outbound logistics 9. Operations Choose from:
Assembly line, Buying (sourcing) raw materials, CEO and CFO, Delivery to the firm's customer, New-product development, Receiving dock and raw materials, Surveys for prospect customers, Warranty work, Worker recruitment
The correct value chain activity is Service activities - Warranty work, Inbound logistics - Receiving dock and raw materials, Marketing and sales activities - Surveys for prospect customers, Firm Infrastructure - CEO and CFO, Human resource management - Worker recruitment, Technology - New-product development, Procurement - Buying (sourcing) raw materials, Outbound logistics - Delivery to the firm's customer, Operations - Assembly line.
Here is a matching of the value chain activities with the corresponding scenarios:
Service activities - Warranty work
Service activities involve providing support and assistance to customers after the sale. In this scenario, warranty work is a specific service activity where the firm addresses any issues or repairs covered under the warranty for its products.
Inbound logistics - Receiving dock and raw materials
Inbound logistics refers to the activities involved in receiving, storing, and distributing raw materials within the organization. The scenario of receiving dock and raw materials aligns with this activity, as it involves the physical handling and storage of materials upon their arrival.
Marketing and sales activities - Surveys for prospect customers
Marketing and sales activities are focused on promoting products or services and generating sales. Conducting surveys for prospect customers is part of the marketing and sales process, as it helps gather feedback, understand customer preferences, and identify potential leads.
Firm Infrastructure - CEO and CFO
Firm infrastructure refers to the overall organizational structure and management. The CEO (Chief Executive Officer) and CFO (Chief Financial Officer) are key positions in the firm's infrastructure, responsible for strategic decision-making and financial management.
Human resource management - Worker recruitment
Human resource management involves activities related to employee recruitment, training, and development. Worker recruitment specifically falls under this category, as it involves sourcing and hiring suitable candidates for various roles within the organization.
Technology - New-product development
Technology plays a crucial role in developing new products or improving existing ones. New-product development involves utilizing technology to research, design, and create innovative products that meet customer demands and enhance competitiveness.
Procurement - Buying (sourcing) raw materials
Procurement refers to the process of sourcing and acquiring necessary materials, goods, or services for the organization. Buying (sourcing) raw materials is a procurement activity, involving the selection and purchase of materials from suppliers.
Outbound logistics - Delivery to the firm's customer
Outbound logistics encompasses the activities involved in delivering finished products to customers. Delivery to the firm's customer is an outbound logistics scenario, where the organization ensures timely and efficient transportation of products to the end-users.
Operations - Assembly line
Operations refer to the core activities involved in producing goods or delivering services. The assembly line is a specific operation scenario where products are manufactured or assembled using a sequential process.
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Sunk and opportunity cash flows Dave and Ann Stone have been living at their current home for the past 6 years. During that time, they have replaced the water heater for $365, replaced the dishwasher for $611, and have had to make miscellaneous repair and maintenance expenditures of approximately $1,500. They have decided to move out and rent the house for $962 per month. Newspaper advertising will cost $71. Dave and Ann intend to paint the interior of the home and powerwash the exterior. They estimate that will run about $909. The house should be ready to rent after that. In reviewing the financial situation, Dave views all the expenditures as being relevant, and so he plans to net out the estimated expenditures discussed above from the rental income. a. Do Dave and Ann understand the difference between sunk costs and opportunity costs? Explain the two concepts to them. b. Which of the expenditures should be classified as sunk costs and which should be viewed as opportunity costs? a. Do Dave and Ann understand the difference between sunk costs and opportunity costs? Explain the two concepts to them. (Select the best answer below.) A. Sunk costs are any added costs necessary to get an asset into operation. Opportunity costs are cash flows that could be realized from the next best alternative use of an owned asset. B. Sunk costs are costs that have already been incurred and thus the money has already been spent. Opportunity costs are any added costs necessary to get an asset into operation. C. Sunk costs are costs that have already been incurred and thus the money has already been spent. Opportunity costs are cash flows that could be realized from the next best alternative use of an owned asset. D. Sunk costs are cash flows that could be realized from the next best alternative use of an owned asset. Opportunity costs are costs that have already been incurred and thus the money has already been spent.
The correct answer is C. Sunk costs are costs that have already been incurred and thus the money has already been spent. Opportunity costs are cash flows that could be realized from the next best alternative use of an owned asset.
a. Dave and Ann need to understand the difference between sunk costs and opportunity costs, as these terms are important in any financial situation. Sunk costs are past costs that cannot be recovered and are irrelevant in future decision-making. An example of a sunk cost is the $1,500 spent on maintenance and repair expenditures, as this cost has already been incurred and cannot be recovered. On the other hand, opportunity costs are costs that are incurred when choosing one alternative over another. Opportunity costs are usually associated with the benefits foregone by not choosing the next best alternative. In this case, the opportunity cost is the rental income that could be earned if they rented out their home.
b. The expenditures that should be classified as sunk costs are the costs that have already been incurred and cannot be recovered. These include the $365 spent on replacing the water heater and the $611 spent on the dishwasher. On the other hand, the cost of newspaper advertising and the cost of painting the interior and power washing the exterior of the house should be viewed as opportunity costs. These costs are incurred in order to rent out the house, and as a result, represent the benefits foregone by not choosing the next best alternative.
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5 years ago, barton industries issued 25-year noncallable, semiannual bonds with a $1,000 face value and a 6% coupon, semiannual payment ($30 payment every 6 months). the bonds currently sell for $822.87. if the firm's marginal tax rate is 25%, what is the firm's after-tax cost of debt? do not round intermediate calculations. round your answer to two decimal places.
The after-tax cost of debt is 2.81%.
Given Information: 5 years ago, Barton Industries issued 25-year non-callable, semi-annual bonds with a $1,000 face value and a 6% coupon, semi-annual payment.
Calculation of After-tax cost of debt: The formula for the after-tax cost of debt is as follows:
After-tax cost of debt = Pre-tax cost of debt x (1 − Marginal tax rate)
We have to calculate the pre-tax cost of debt first. We can use the following formula to calculate the pre-tax cost of debt.
PV = Pmt [(1 - 1/(1+r)^n)/r] + FV/(1+r)^n
Where,PV = Present value
= $822.87Pmt
= Semi-annual coupon payment
= $30n
= Number of semi-annual periods
= 25 × 2
= 50FV
= Face value
= $1,000
Solving the above equation for r,
we get: r = 0.037405 (3.74%)
The pre-tax cost of debt is 3.74%.
The after-tax cost of debt can now be calculated as follows:
After-tax cost of debt = Pre-tax cost of debt x (1 − Marginal tax rate)
= 0.037405 x (1-0.25)
= 0.028054 or 2.81%
Answer: The after-tax cost of debt is 2.81%.
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What are some of the issues involved in projecting cash flows
for capital budgeting problems?
When projecting cash flows for capital budgeting problems, there are several issues that need to be taken into account.
Some of the issues involved in projecting cash flows for capital budgeting problems are as follows:1. Time value of money: One of the most critical considerations in capital budgeting is the time value of money. Money received in the future is less valuable than money received today. As a result, projections of future cash flows must take into account the time value of money.2. Estimating future cash flows: Estimating future cash flows is always a challenge, particularly when considering long-term capital budgeting projects.
The estimation of future cash flows is complicated by various factors, such as technological innovation, competition, and economic and regulatory changes.3. Uncertainty and risk: There is always some degree of uncertainty and risk when forecasting future cash flows. Unexpected events such as natural disasters, economic downturns, or changes in government regulations can significantly impact cash flow projections. Therefore, it is essential to incorporate risk and uncertainty in the analysis of capital budgeting projects.
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A machine purchased for $1,000,000 with a life of 10 years, generates annual revenues of $300,000 and operating expenses of $100,000. Assume that machine will be depreciated over 10 years using straight-line depreciation with zero balance at the end of the life. The corporate tax rate is 30%.
Calculate annual net cash flow of the project
Calculate project NPV.
Guide:
Annual net cash flow: (Revenue – operating cost – depreciation – Tax + Deprecation)
Profit before tax = Revenue – operating cost – depreciation
Profit after tax = Profit before tax – tax amount
Amount of tax to be paid= profit before tax * tax rate
Depreciation per year = Machine cost / number of year of project
Part B
Describe and discuss concept of "Diversification". Why the diversification is important for risk management? (1 page)
Describe and discuss about the Saudi Stock Exchange in terms of investors participation, liquidity of the markets and investment opportunity (at least a page)
Sure, here is the revised solution with explanations provided line by line:
1. Calculate annual net cash flow of the project:
Annual net cash flow = (Revenue - operating cost - depreciation - Tax + Depreciation)
Given:
Revenue = $300,000
Operating cost = $100,000
Depreciation = Machine cost / number of years of the project = $1,000,000 / 10 = $100,000
Tax rate = 30%
Profit before tax = Revenue - operating cost - depreciation
= $300,000 - $100,000 - $100,000
= $100,000
Tax amount = Profit before tax * tax rate
= $100,000 * 0.30
= $30,000
Net cash flow = Revenue - operating cost - depreciation - Tax + Depreciation
= $300,000 - $100,000 - $100,000 - $30,000 + $100,000
= $170,000
Therefore, the annual net cash flow of the project is $170,000.
2. Calculate project NPV:
Given:
Initial investment (Machine cost) = $1,000,000
Required rate of return = 5% = 0.05
NPV can be calculated using the formula:
NPV = Present value of cash inflows - Present value of cash outflows
In this case, since the net cash flow is constant each year, we can use the perpetuity formula to calculate the present value of cash inflows:
Present value of cash inflows = Net cash flow / Required rate of return
Present value of cash inflows = $170,000 / 0.05
= $3,400,000
Present value of cash outflows (initial investment) = $1,000,000
NPV = Present value of cash inflows - Present value of cash outflows
= $3,400,000 - $1,000,000
= $2,400,000
Therefore, the NPV of the project is $2,400,000.
Part B:
Diversification is the strategy of spreading investments across different assets, sectors, or regions to reduce risk. It involves investing in a variety of assets that are not perfectly correlated with each other. The concept is based on the idea that by diversifying, the impact of a loss from one investment can be mitigated by gains from others.
Diversification is important for risk management because it helps to reduce the overall risk in a portfolio. By investing in a mix of assets, the investor can lower the exposure to any single investment and its associated risks. If one asset or sector underperforms, the investor's portfolio can still generate positive returns if other investments perform well. Diversification helps to smooth out the ups and downs of individual investments and provides a more stable and consistent return over time.
Additionally, diversification allows investors to take advantage of different market conditions and opportunities. By allocating investments across various asset classes and regions, investors can benefit from potential growth in different sectors or countries, while reducing the impact of any localized economic or political events.
In summary, diversification is important for risk management as it helps to reduce the impact of individual investment losses, provides a more stable return over time, and allows investors to take advantage of different market opportunities.
Note: The provided explanations are presented in a structured manner with line breaks to improve readability.
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Automobile industry French carmaker Renault rallied following news that it was expanding its collaboration with US chipmakers Qualcomm. At the Consumer Electronics Show in Las Vegas, Qualcomm said it would be equipping upcoming Renault motors with "the latest connected and intelligent solutions for its next-generation vehicles". Source: Adapted from R. Douglas (2022), "Wall Street", The Financial Times, (6th January 2022). 1. How does the principal-agent problem apply to the Renault-Qualcomm partnership?
In the Renault-Qualcomm collaboration, the principal-agent issue comes into play when there is a divergence of objectives between Renault and Qualcomm.
The principal, Renault, wants the highest quality chipsets at the lowest possible price, which is a clear goal of any profit-seeking company.
The agent, Qualcomm, also aims to earn a profit, but it may prefer to provide lower-quality chips at a higher price to maximize profits rather than providing the highest quality chips at the lowest possible price.
Qualcomm may also choose to prioritize profits over quality in order to satisfy shareholders and senior executives who are more interested in short-term financial gains than in long-term company goals. Renault may also attempt to push Qualcomm to lower its prices even further, which could result in a lower quality chipset than Renault desires.
In order to resolve this conflict, both parties should establish clear goals and expectations for the partnership, as well as an open line of communication to address any issues that arise. They should work together to make sure that their objectives align and that both parties benefit from the partnership.
Additionally, a contract specifying the terms and conditions of the agreement can be drawn up to ensure that both parties are accountable to each other and that their interests are aligned.
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