Due to the assumption that all items produced are sold, it is recommended to use variable costing. This is because all fixed manufacturing costs have been treated as period costs, meaning that they are not assigned to products. This would give a more accurate reflection of the production costs and help AFC to determine the appropriate price for their products.
In order to recommend a costing method that AFC (Assume Free Company) should use, we first need to understand what each method entails. Job-order costing: This is a costing method where production costs are determined for each batch of goods. It is applicable where production is done in batches or orders, for example, a tailor who makes dresses. Process costing:This method is suitable when production is continuous, and costs are incurred for producing homogeneous products in large quantities. In this method, costs are allocated uniformly to the entire batch of goods produced.
Variable costing:This method is based on the concept that only direct costs should be assigned to products. Direct costs include direct materials, direct labor, and variable manufacturing overheads. All other costs are treated as period costs.Activity-based costing: This method allocates overheads to products based on the activities required to produce the product. It is suitable where the production process involves several activities that consume overheads.
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5- Today management-employee relations in Britain more about
involvement, engagement, participation and partnership rather than
collective bargaining and conflict resolution. T/F
True.
In recent years, there has been a shift in management-employee relations in Britain towards a greater emphasis on involvement, engagement, participation, and partnership, rather than relying primarily on collective bargaining and conflict resolution.
This shift reflects a growing recognition of the benefits of collaborative and cooperative approaches to workplace relations. It is believed that involving employees in decision-making processes, fostering engagement and participation, and establishing partnerships between management and employees can lead to improved productivity, employee satisfaction, and overall organizational performance. This trend aligns with the broader movement towards more employee-centric and collaborative models of management and reflects a changing landscape of workplace dynamics.
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To reduce the use of fossil fuel, one government decides to subsidise the suppliers of electric vehicles with a subsidy of $2 for every car they sell. Prior to the subsidy, the supply curve for electric cars is given by: p = 12 + Q. The demand curve is given by the following: p = 50 – Q.
8. After the subsidy is imposed, the new supply curve is:
a) p = 52 - Q
b) p = 14 + Q
c) None of the other answers is correct.
d) p = 48 - Q
e) p = 10 + Q
9. After the subsidy is imposed, how much is the total cost of the subsidy to the government?
a) 36
b) 18
c) 40
d) None of the other answers is correct.
e) 42
The answer to question 8 is option b) p = 14 + Q. When a subsidy is given to the suppliers, their cost of production reduces. In this case, the subsidy is $2 per car, so the new supply curve will be the old supply curve shifted up by $2. Hence, the new supply curve will be p = 12 + Q + 2, which simplifies to p = 14 + Q.
The answer to question 9 is option e) 42. The total cost of the subsidy to the government can be calculated by multiplying the subsidy per car with the number of cars sold. The subsidy per car is $2, and the quantity demanded can be found by equating the new supply curve with the demand curve: 14 + Q = 50 - Q, which gives Q = 18. Therefore, the total cost of the subsidy will be $2 x 18 = $36.
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QUESTION 4 4.1 Differentiate between breakdown maintenance and preventive maintenance. 4.2 Calculate the overall reliability of the system shown below, given the individual reliabilities. (6) Component A B с D E F Reliability 0.90 0.80 0.99 0.90 0.85 0.90 ||| E
4.1 Breakdown maintenance involves repairing equipment after it has failed, whereas preventive maintenance involves scheduled inspections and maintenance to prevent failures before they occur. Preventive maintenance is more proactive and can help extend the life of equipment, while breakdown maintenance can result in more downtime and higher repair costs.
4.2 To calculate the overall reliability of the system, we need to use the formula: R_total = R_A x R_B x R_C x R_D x R_E x R_F. Plugging in the given reliabilities, we get: R_total = 0.90 x 0.80 x 0.99 x 0.90 x 0.85 x 0.90 = 0.45. Therefore, the overall reliability of the system is 0.45.
Breakdown maintenance is a reactive approach to equipment maintenance that involves fixing equipment only after it has failed. This can result in higher costs and more downtime, as repairs are made on an emergency basis. Preventive maintenance, on the other hand, involves scheduled inspections and maintenance to prevent equipment failures before they occur. This approach is more proactive and can help extend the life of equipment, as well as minimize downtime and repair costs. In order to calculate the overall reliability of a system, we need to multiply the reliabilities of each individual component together. This gives us an idea of how reliable the entire system is, and can help identify areas where improvements may be needed.
In conclusion, breakdown maintenance and preventive maintenance are two different approaches to equipment maintenance. Preventive maintenance is more proactive and can help extend the life of equipment, while breakdown maintenance can result in more downtime and higher repair costs. To calculate the overall reliability of a system, we need to multiply the reliabilities of each individual component together. This can help identify areas where improvements may be needed to improve the overall reliability of the system.
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Dagwood conveyed property to Blondie by a deed dated June 1. Blondie did not record the deed or take possession of the property. Dagwood then conveyed the property to Dithers who promptly recorded the deed and took possession of the property. Blondie claimed ownership based on her earlier deed. Would her claim be recognized?
Yes, because priority is given to the deed with the earlier date
Yes, because Dagwood’s conveyance to Dithers constitutes fraud
No because priority is given to the deed with the later date
No, because Blondie did not provide constructive or actual notice of her ownership
Blondie's claim to ownership would likely not be recognized. The key issue here is that Blondie neither recorded the deed nor took possession of the property, failing to provide either constructive or actual notice of her ownership.
Property conveyance refers to the legal process of transferring the ownership or rights of real estate or property from one party to another. It involves the transfer of title, possession, and any associated interests or rights associated with the property. The conveyancing process typically includes various steps, such as conducting title searches, preparing legal documents (such as deeds and contracts), reviewing and resolving any issues or encumbrances on the property, and registering the transfer with the relevant authorities. Property conveyance ensures a clear and lawful transfer of ownership, providing protection and establishing legal rights and responsibilities for both the buyer and the seller.
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Problem 2: Product Pricing for Remington Manufacturing
Remington Manufacturing is planning its next production cycle. The company can produce three products, each of which must undergo machining, grinding, and assembly operations. The company needs to determine the number of each product to produce to maximize its profit in the next quarter. The following table summarizes the hours of machining, grinding, and assembly required by each unit of each product, and the total hours of capacity available for each operation.
Operation
Machining Grinding Assembly
Product 1 2
4
5
Hours Required By Product 2
3 3 5
Product 3 6
4
2
Total Hours Available per Quarter
500
300
400
The costs of manufacturing products 1, 2 and 3 are $500, $600, and $700 per unit, respectively.
Having established a reputation for high quality and reliability, the company believes it can increase profits by increasing the prices of the products. However, a price increase might have a detrimental effect on demand, so the company has engaged a marketing research firm to estimate the level of demand for its products at various prices. The marketing research firm used the technique of regression analysis to develop a model of the relationship between the prices and demand for the products. After analyzing the situation, the marketing research firm concluded that the company can expect the demand for the products in the next quarter to vary with price in the following way:
Demand for Product 1 = 400 – 0.22 × price of Product 1 Demand for Product 2 = 350 – 0.15 × price of Product 2 Demand for Product 3 = 550 – 0.18 × price of Product 3
The company also needs to determine the number of each product to produce. Apparently, he cannot sell more than the anticipated demand for a product. For example, suppose Product 1 is priced at $920 each, the demand will be 400-(0.22)(920)=197.6. That means the company can sell at most 197.6 products. Let’s assume the demand can be fractional. How many products should the company produce and how much should they be priced for the company to maximize its quarterly profit? Remember the company can only produce integer number of products.
Please provide a mathematical formulation for this problem (defining decision variables, objective function and constraints). You do NOT need to solve it.
Suppose there is a setup cost of $1,000 to produce any number of product 1. That is, the cost will be incurred as long as any product 1 is produced, and the cost is $1,000 regardless of the number of products produced. How would you revise your formulation to incorporate this change?
(Not a continuum of part 2) If the company chooses to produce Product 2, it needs to produce at least 300 of it. How would you revise your formulation to incorporate this change?
(Not a continuum of parts 2 and 3) The production manager of the factory realized that their facility is not designed for production of large volume. As a result, they can produce more than 300 units for at most one of the three products. How would you revise your formulation to incorporate this change?
To incorporate the change that the facility is not designed for the production of large volume, we can add a constraint that limits the maximum number of products that can be produced by the company for at most one of the three products:X1 + X2 + X3 - max(X1, X2, X3) <= 300.
Decision Variables:X1, X2, and X3: the number of products of type 1, 2, and 3 to produce respectively.Objective Function:
We need to maximize the quarterly profit of the company, which can be represented by the following equation:Z = (Revenue - Cost)Revenue:R1 = P1 * min(400 – 0.22P1, X1)R2 = P2 * min(350 – 0.15P2, X2)R3 = P3 * min(550 – 0.18P3, X3)Cost:C = 500X1 + 600X2 + 700X3 + 1000 if X1 > 0 and 0 if X1 = 0.
Constraints:The manufacturing process can’t exceed the maximum capacity available for each operation.
Therefore:2X1 + 3X2 + 5X3 <= 500 (machining)3X1 + 2X2 + 4X3 <= 300 (grinding)5X1 + 4X2 + 2X3 <= 400 (assembly).
The company can only sell products up to the demand predicted by the regression equation:0 <= X1 <= min(400 – 0.22P1)0 <= X2 <= min(350 – 0.15P2)0 <= X3 <= min(550 – 0.18P3).
To incorporate the change that there is a setup cost of $1,000 to produce any number of product 1, we can modify the objective function by subtracting $1,000 from the total profit when we produce any amount of product 1:Z = (Revenue - Cost) - $1,000.
To incorporate the change that the company needs to produce at least 300 units of Product 2 if it chooses to produce it, we can add a constraint that ensures the production of at least 300 units:X2 >= 300
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"22. The slope of a simple regression is determined by
a. t value
b. the coefficient
c. the error term
d. the Intercept
23. A scholarly journal published 4 issues in a year. Now it publishes 6 issues in a year.
The economic theory and empirical research show that
a. Its average cost has no change
b. Its variable cost increases
c. Its total cost decreases
d. It variable cost decreases
"
22. The slope of a simple regression is determined by the economies coefficient. A simple regression is a statistical technique used to establish a relationship between two variables.
It is commonly used to identify a linear relationship between two variables. A regression model is a mathematical expression that summarizes the relationship between a dependent variable and one or more independent variables. The coefficient, also known as the regression coefficient, measures the rate of change of the dependent variable with respect to changes in the independent variable. The coefficient is used to predict changes in the dependent variable in response to changes in the independent variable. The coefficient is typically represented by the letter "b" in the regression equation: Y = a + bX Where Y is the dependent variable, X is the independent variable, a is the intercept, and b is the coefficient.23. The economic theory and empirical research show that the variable cost increases when a scholarly journal publishes six issues in a year compared to publishing four issues in a year. Variable cost is a cost that varies with the level of output. The more output is produced, the higher the variable cost will be. The reason why variable cost increases when the scholarly journal publishes six issues in a year compared to publishing four issues in a year is that the cost of producing each additional issue will be higher due to economies of scale. The cost of printing, shipping, and handling each additional issue will be higher due to the increased production volume. The total cost will also increase, but it will not increase as fast as the variable cost. This is because some of the costs, such as the fixed costs, will remain constant regardless of the number of issues produced. Therefore, the correct answer is B. Its variable cost increases.
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Assume a company purchases a piece of new production equipment (a fixed asset) and the equipment seller provides a 5-year loan to finance the purchase. After the equipment is purchased, but before it has any impact on production volume, sales, or operating expenses, what is the impact on Total Current Assets? A. Increase B. Decrease C. Cannot Be Determined D. No Change
The impact on Total Current Assets when a company purchases a piece of new production equipment and receives a loan from the equipment seller is "Cannot Be Determined."
The purchase of the equipment and the accompanying loan do not directly impact Total Current Assets. Total Current Assets typically include cash, accounts receivable, inventory, and other short-term assets that are expected to be converted into cash within a year or the operating cycle of the business.
The purchase of equipment is considered a long-term asset and would be classified under Property, Plant, and Equipment (PP&E) on the balance sheet. The loan received would be recorded as a liability, not as an asset affecting Total Current Assets. Therefore, the impact on Total Current Assets cannot be determined solely based on the equipment purchase and loan transaction.
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Discuss more the cause and affect diagram by Ishikawa to improve
quality in an organization. (Total Quality Management)
The cause and effect diagram, also known as the Ishikawa diagram or fishbone diagram, is a powerful tool used in Total Quality Management (TQM) to identify and analyze the potential causes of a specific problem.
Purpose and Structure: The cause and effect diagram provides a structured approach to problem-solving by visually representing the potential causes of a problem. It consists of a horizontal line (the backbone) with branches extending from it like the bones of a fish. Each branch represents a category of potential causes, typically classified into six main categories: Manpower, Methods, Materials, Machinery, Measurement, and Environment (known as the 5 Ms and 1 E).
Identifying Causes: The diagram facilitates brainstorming sessions or discussions with cross-functional teams to identify potential causes related to each category. Causes are identified and added as sub-branches under the relevant category. This process encourages a comprehensive analysis and ensures that various perspectives and knowledge from different team members are considered.
Analyzing Relationships: The cause and effect diagram helps to establish relationships between the identified causes and the problem or quality issue being addressed. It allows the team to visualize and understand the interdependencies and interactions among different factors. By identifying the root causes, the organization can focus on addressing the underlying issues rather than treating symptoms.
Problem Solving and Improvement: Once the causes are identified, the team can prioritize them based on their significance and potential impact on the problem. This prioritization helps in allocating resources and efforts effectively to address the most critical causes first. By implementing targeted solutions for each cause, the organization can work towards improving quality and resolving the identified problem.
The cause and effect diagram is a valuable tool in Total Quality Management as it provides a structured approach to problem-solving and quality improvement. By visually representing the potential causes and their relationships, organizations can identify root causes, prioritize actions, and implement targeted solutions.
It promotes cross-functional collaboration, enhances understanding of complex problems, and facilitates effective decision-making. By using the cause and effect diagram, organizations can improve quality, enhance customer satisfaction, and drive continuous improvement initiatives.
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is target increasing or decreasing its investment in property
and equipment in 2017
Target was increasing its investment in property and equipment in 2017 to support its growth strategy.
In 2017, Target was increasing its investment in property and equipment. The company's capital expenditure increased by 1.5 billion dollars in 2017 compared to 2016. Target Corporation is an American retail company that is known for its brick-and-mortar retail stores. It also offers online shopping services. The company has a wide range of products that includes clothing, electronics, home goods, and groceries among others. The company invests in properties such as land, buildings, and equipment to support its growth strategy. The investment in property and equipment helps Target to enhance its customer experience and remain competitive in the market. In 2017, the company made significant investments in technology and supply chain, and remodeling of stores to improve the customer experience. For instance, Target invested in store remodels and new small-format stores, which were designed to fit into urban neighborhoods. Additionally, the company made significant investments in digital platforms such as mobile and online channels to enhance the customer experience and increase its online sales. In conclusion, Target was increasing its investment in property and equipment in 2017 to support its growth strategy.
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Consider the following supply and demand functions 9D=8-p 9s=-4+2p Assuming the market is distortion free, what is the total welfare level? W = 3 W = 6 W = 9 OW=12
The total welfare level is W = 16/9.
To determine the total welfare level, we need to find the equilibrium price and quantity, and then calculate the consumer and producer surplus.
Given the supply and demand functions:
Demand: 9D = 8 - p
Supply: 9S = -4 + 2p
To find the equilibrium price, we set the demand equal to the supply:
8 - p = -4 + 2p
Simplifying the equation:
3p = 12
p = 4
Substituting the equilibrium price (p = 4) into either the demand or supply function, we can find the equilibrium quantity:
9D = 8 - p
9D = 8 - 4
9D = 4
D = 4/9
Now, we can calculate the consumer surplus and producer surplus.
Consumer Surplus:
To calculate consumer surplus, we need to find the area between the demand curve and the equilibrium price. The formula for consumer surplus is:
Consumer Surplus = 0.5 * (Equilibrium Quantity) * (Equilibrium Price - Minimum Price)
Consumer Surplus = 0.5 * (4/9) * (4 - 0)
Consumer Surplus = 0.5 * (4/9) * 4
Consumer Surplus = 0.5 * (16/9)
Consumer Surplus = 8/9
Producer Surplus:
To calculate producer surplus, we need to find the area between the supply curve and the equilibrium price. The formula for producer surplus is:
Producer Surplus = 0.5 * (Equilibrium Quantity) * (Maximum Price - Equilibrium Price)
Producer Surplus = 0.5 * (4/9) * (8 - 4)
Producer Surplus = 0.5 * (4/9) * 4
Producer Surplus = 0.5 * (16/9)
Producer Surplus = 8/9
Total Welfare Level:
The total welfare level is the sum of consumer surplus and producer surplus:
Total Welfare Level = Consumer Surplus + Producer Surplus
Total Welfare Level = (8/9) + (8/9)
Total Welfare Level = 16/9
Therefore, the total welfare level is W = 16/9.
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c) In addition to the NPV gain, fineness is a criterion that can be used to compare information partitions. Explain the notion of fineness by means of the above example, including Δ₁ and Δ₂ from b) as well as additional information partitions. (8 marks)
Fineness refers to the level of detail or granularity in an information partition. In the given example, let's consider two additional information partitions: Δ₃ and Δ₄.
Δ₃ is a finer partition compared to Δ₁ and Δ₂. It provides more detailed information about the cash flows and their associated probabilities. For instance, instead of simply categorizing cash flows as "high" or "low," Δ₃ may further classify them as "very high," "high," "medium," or "low." Similarly, the probabilities associated with each cash flow category may be more granular, such as 0.9, 0.8, 0.7, and so on. A finer partition like Δ₃ allows for a more nuanced analysis and evaluation of the project's cash flows.
On the other hand, Δ₄ is a coarser partition compared to Δ₁ and Δ₂. It provides less detailed information by grouping cash flows into broader categories. For example, instead of categorizing cash flows as "high" or "low," Δ₄ may only have two categories: "positive" or "negative." The associated probabilities may also be simplified as 0.8 for positive cash flows and 0.2 for negative cash flows. A coarser partition like Δ₄ simplifies the analysis and may overlook certain nuances or variations in cash flows.
In conclusion, fineness in information partitions refers to the level of detail or granularity in classifying and categorizing data. A finer partition provides more detailed information, allowing for a more nuanced analysis, while a coarser partition simplifies the analysis by grouping data into broader categories. The choice of fineness depends on the specific needs and objectives of the analysis process.
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Use the table below to complete the question. This table represents the demand for peaches in Hoboken, a town in New Jersey.
Demand for Peaches
Price (dollars) Quantity Demanded (pounds)
$20 2
14 14
8 26
2 38
a. Graph the information presented in the table.
Instructions: Use the tool provided 'Demand' to plot the line point by point (4 points total).
b. If the market price for peaches is $8 per pound, what is the quantity of peaches demanded in Hoboken?
a. To graph the information presented in the table, we can plot the points using the given price and quantity demanded values:
Price (dollars) | Quantity Demanded (pounds)
$20 | 2
$14 | 14
$8 | 26
$2 | 38
Using this data, we can plot the points on a graph where the price is on the vertical axis (y-axis) and the quantity demanded is on the horizontal axis (x-axis). Connecting the points will give us the demand curve for peaches in Hoboken.
b. If the market price for peaches is $8 per pound, according to the demand table, the quantity of peaches demanded in Hoboken is 26 pounds.
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1.Secondary reserves are held by banks in excess of those mandated by reserve requirements. These reserves are held in the form of assets that can be quickly and easily converted to cash and they are used to meet unanticipated withdrawal of funds by depositors. (T/F)
2.Typically, the largest portion of bank profits stems from fees for services provided to business and household customers and profits from foreign exchange trading.(T/F)
3.In 2008 the Federal Reserve began paying interest on the reserve accounts held by depository institutions (banks) at the Federal Reserve.(T/F)
4.Concerning check processing and collection, the Federal Reserve handles all of the checks processed and cleared in the United States. (T/F)
No, secondary reserves are not held in the form of easily convertible assets to meet unanticipated withdrawal of funds by depositors.
Are secondary reserves held by banks in the form of easily convertible assets to meet unanticipated withdrawal of funds by depositors?
1. False. Secondary reserves are not held in the form of assets that can be quickly and easily converted to cash. They are typically invested in longer-term, income-generating assets such as government securities or loans.
2. False. While fees for services provided and profits from foreign exchange trading can contribute to bank profits, the largest portion of bank profits often comes from interest income earned on loans and investments.
3. True. In 2008, the Federal Reserve implemented a policy of paying interest on the reserve accounts held by depository institutions, which was a response to the financial crisis and aimed at providing additional liquidity to the banking system.
4. False. The Federal Reserve does not handle all checks processed and cleared in the United States. Check processing and collection are mostly handled by private sector clearinghouses and banks, with the Federal Reserve playing a supporting role through its check processing services, such as check image exchange and settlement.
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if bondholders expect the fed to raise interest rates, what action might they take? how would this affect the fed’s goal?
When bondholders expect the Fed to raise interest rates, they will likely sell their bonds, causing bond prices to fall and interest rates to rise. This is because when interest rates rise, the price of existing bonds falls in order to make them competitive with newly issued bonds that have higher interest rates. This effect is particularly pronounced for long-term bonds because they are more sensitive to changes in interest rates than short-term bonds.
The impact of bondholders' actions on the Fed's goal will depend on the reason why they expect the Fed to raise interest rates. If bondholders expect the Fed to raise interest rates in order to combat inflation, then their actions could be seen as supportive of the Fed's goal of maintaining price stability. On the other hand, if bondholders expect the Fed to raise interest rates in response to a stronger-than-expected economy, then their actions could be seen as challenging the Fed's goal of promoting maximum employment.
In either case, the Fed will need to carefully consider the impact of its actions on the broader economy. If it raises interest rates too quickly, it could stifle economic growth and prevent the labor market from fully recovering from the pandemic. On the other hand, if it waits too long to raise interest rates, it could allow inflation to spiral out of control and undermine the purchasing power of American households.
Overall, the main answer is that bondholders are likely to sell their bonds if they expect the Fed to raise interest rates. This will cause bond prices to fall and interest rates to rise, which could have a significant impact on the broader economy. As a result, the Fed will need to carefully balance its dual mandate of promoting maximum employment and maintaining price stability in order to achieve its goals.
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Assume a flight capacity is 100 seats and there are three nested fare classes 1, 2 and 3 from the highest to lowest fares. The optimal protection levels for classes 1 and 2 are:
Protection 1= 20
Protection 2= 50
Which of the following choices are correct?
a. Bkg Limits for classes 3, 2, 1 in the same order = 50, 70, 100
b. Bkg Limits for classes 3, 2, 1 in the same order = 30, 50, 20
c. Bkg Limits for classes 3, 2, 1 in the same order = 50, 20, 30
d. Bkg Limits for classes 3, 2, 1 in the same order 30, 80, 100
The correct choice for the booking limits for classes 3, 2, and 1, in the given order, is option (c): 50, 20, 30.
The booking limits determine the maximum number of seats allocated to each fare class. In this case, the optimal protection levels for classes 1 and 2 are given as Protection 1 = 20 and Protection 2 = 50. The booking limits should be set in a way that satisfies these protection levels while considering the total flight capacity of 100 seats. Since Protection 1 is 20, it means that class 1 should have a minimum of 20 seats reserved. Therefore, the booking limit for class 1 should be 20.
For Protection 2, which is 50, it indicates that classes 1 and 2 combined should have a minimum of 50 seats reserved. Since class 1 has already reserved 20 seats, the remaining 30 seats should be allocated to class 2. Therefore, the booking limit for class 2 should be 30. The remaining seats (100 - 20 - 30 = 50) are allocated to class 3. Therefore, the booking limit for class 3 should be 50. Thus, the correct choice for the booking limits for classes 3, 2, and 1, in the given order, is option (c): 50, 20, 30.
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On January 1, Kennard Corp. had 5 million shares of common stock and 240,000 shares of preferred stock outstanding. On April 1, Kennard repurchased 460,000 shares of common stock for cash. On October 1, Kennard issued a 4-for-1 stock split on its common stock. During the year, Kennard reported $48 million of net income and in December paid dividends of $0.80 per common share and $6.00 per preferred share. What is Kennard's basic earnings per share? 1.91
Kennard Corp.'s basic earnings per share is $1.91.
To calculate the basic earnings per share, we divide the net income by the weighted average number of shares outstanding. First, we calculate the weighted average number of common shares outstanding. The beginning shares of 5 million are reduced by the repurchased shares of 460,000, resulting in 4.54 million shares. Then, we account for the stock split, multiplying the shares by 4 to get 18.16 million shares. Finally, we divide the net income of $48 million by the weighted average number of shares (18.16 million), resulting in basic earnings per share of $1.91.
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In a decentralized organization, cultural values should promote while in a centralized organization, values should promote innovation, obedience stability, accountability "tallness","flatness" predictability, flexibility morale. Job satisfaction
In a decentralized organization, cultural values should promote while in a centralized organization, values should promote innovation, obedience stability, accountability "tallness"," flatness" predictability, flexibility morale. Job satisfaction.
Decentralized organization A decentralized organization is an organization in which decision-making is pushed to all levels of the organization. In a decentralized organization, cultural values should be promoted. This is because the employees are closer to the customers and can interact with them directly.
The employees can, therefore, understand the culture of the customers better. In a decentralized organization, tallness may lead to a lack of communication, and thus, poor decision-making. The flatness structure, on the other hand, may lead to many decision-makers, making the decision-making process slow and inefficient.
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i). What is leasing? ii). Discuss five important benefits of leasing. iii). Discuss five important rationales for mergers in recent times.
i) Leasing is a contractual arrangement between a lessor (owner of the asset) and a lessee (user of the asset) in which the lessor grants the lessee the right to use the asset for a specified period in exchange for periodic lease payments.
Leasing involves the temporary transfer of the right to use an asset, such as equipment, vehicles, or property, from the owner (lessor) to another party (lessee). The lessee pays regular lease payments to the lessor for the use of the asset during the lease term. At the end of the lease term, the lessee typically has the option to return the asset or purchase it at a predetermined price.
ii) Five important benefits of leasing:
Flexibility: Leasing provides businesses with flexibility to access and use assets without committing to their full purchase. It allows for short-term or medium-term use of assets without tying up significant capital or long-term obligations.Cash Flow Management: Leasing enables businesses to conserve cash flow by spreading the cost of asset acquisition over regular lease payments. This preserves capital for other essential business activities and reduces the upfront financial burden.Up-to-Date Equipment: Leasing allows businesses to access and utilize the latest and most technologically advanced equipment. It enables companies to stay competitive by using state-of-the-art assets without incurring the full cost of purchasing them.Maintenance and Support: In many leasing agreements, the lessor assumes responsibility for maintenance, repairs, and support of the leased assets. This relieves the lessee from the burden of managing and maintaining the equipment, reducing operational costs and downtime.Tax and Accounting Advantages: Depending on the jurisdiction, leasing may provide tax benefits such as deductibility of lease payments as operating expenses. Leasing can also offer accounting advantages, such as off-balance-sheet financing, which may improve financial ratios and borrowing capacity.iii) Five important rationales for mergers in recent times:
Synergy and Value Creation: Mergers allow companies to combine their strengths, resources, and capabilities to achieve synergies that create value greater than the sum of their individual parts. Synergistic benefits can include cost savings, increased market power, expanded customer base, and enhanced product offerings.Market Expansion: Mergers can provide access to new markets, geographies, or customer segments. By combining forces, companies can penetrate new markets more efficiently, leverage distribution networks, and expand their customer reach.Diversification: Mergers enable companies to diversify their business portfolios, reducing dependence on a single product, market, or industry. Diversification helps mitigate risks and exposure to economic downturns, regulatory changes, or shifts in consumer preferences.Innovation and Research and Development (R&D): Mergers can facilitate increased investment in R&D activities and foster innovation. By combining research capabilities and expertise, companies can pool resources and knowledge to accelerate product development, introduce new technologies, or enhance their competitive advantage.Competitive Positioning: Mergers allow companies to strengthen their competitive position and defend against industry rivals. By consolidating market share, combining complementary strengths, or acquiring key competitors, companies can gain a stronger foothold in the market and enhance their ability to compete effectively.It's important to note that the specific rationales for mergers can vary depending on the industry, market conditions, and strategic objectives of the companies involved.
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T/F: wer and clearly indicate that this is what you believe the correct answer is. You can communicate that to me via ail. V Question 1 4 pts A firm's EV/EBIT(1-T) ratio will always be greater than the same firm's EV/EBIT ratio.
The EV/EBIT(1-T) ratio of a firm will not always be greater than the same firm's EV/EBIT ratio. So, the statement is False.
The EV/EBIT(1-T) ratio is calculated by dividing the enterprise value (EV) by the earnings before interest and taxes (EBIT) adjusted for taxes. This ratio takes into account the tax savings resulting from the tax-deductible interest expense.
On the other hand, the EV/EBIT ratio is calculated by dividing the enterprise value (EV) by the earnings before interest and taxes (EBIT) without any adjustment for taxes.
The EV/EBIT(1-T) ratio is higher than the EV/EBIT ratio only when the tax rate (T) is greater than zero. This is because the adjustment for taxes in the EV/EBIT(1-T) ratio increases the denominator, resulting in a higher ratio.
However, if the tax rate is zero or negligible, there would be no difference between the two ratios, and they would be equal.
Therefore, it is not always true that the EV/EBIT(1-T) ratio will be greater than the EV/EBIT ratio. The relationship between these ratios depends on the tax rate applied to the firm's earnings.
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In economics, the law of stable supply that Select one: or to As the price of an item decreases, the quantity supplied remains the same. or b. As the price of an item decreases, the quantity supplied increases or c. As the price of an item increases, the quantity supplied increases or d. As the price of an item increases, the quantity supplied decreases.
The correct answer is (b) As the price of an item decreases, the quantity supplied increases. This relationship is known as the law of supply in economics. According to this law, there is a positive correlation between the price of a good or service and the quantity that suppliers are willing to produce and offer for sale in the market.
When the price of a product decreases, suppliers generally find it less profitable to produce and sell the item. As a result, they may reduce their production levels or choose to exit the market. Conversely, when the price of a product increases, suppliers are motivated to increase their production as it becomes more profitable to do so.
The law of supply is based on the fundamental economic principle of profit maximization. Suppliers aim to maximize their profits by supplying goods or services at higher prices and adjusting their production levels accordingly. However, it's important to note that the law of supply assumes other factors, such as input costs and technological constraints, remain constant.
In summary, the law of supply states that as the price of an item decreases, the quantity supplied increases, reflecting the positive relationship between price and the willingness of suppliers to offer their goods or services in the market.
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The Rainwater Brewery produces beer, which it sells to distributors in barrels. The brewery incursa monthly fixed cost of $12,000, and the variable cost per barrel is $17. The brewery has developed the following profit function and demand constraint: maximize Z = vp - $12,000 - 17v subject to v=800 - 15p Solution maximize z = OP - $10 - SO = ♡ - So az dP ab 12000 – 170 subject to - doo- 15P Z = 1800- isp)(0) - $ 1000 - 17(860-15P) doop-15P2 _ $12000 - 13600 + 2550 = 1055P-15P2- $ 25600 1055 – 30P ? 1055 - 30 P = 0 at the Paintcef 3OP= 1055 maxima P= 1055 2/ -35.1667 30 = lose X 35.1667 - 15(35-1667) - $25600 = 37101 - 25600- 18550 = 3711 - 44150 = - 70 49 Zmax = $ - 7049 = = so I max - So
Based on the given profit function and demand constraint, the maximum profit (Z) and the optimal values for the price (p) and quantity (v) can be determined as follows:
The profit function is: Z = vp - $12,000 - 17v
The demand constraint is: v = 800 - 15p
To maximize Z, we substitute the demand constraint into the profit function:
Z = p(800 - 15p) - $12,000 - 17(800 - 15p)
Z = 800p - 15p^2 - $12,000 - 13,600 + 255p
Z = -15p^2 + 1055p - $25,600
To find the optimal price (p) that maximizes Z, we take the derivative of Z with respect to p and set it equal to zero:
dZ/dp = -30p + 1055 = 0
30p = 1055
p = 1055/30 ≈ 35.1667
Substituting this value of p back into the demand constraint, we can find the optimal quantity (v):
v = 800 - 15(35.1667)
v ≈ 371.1
Therefore, the optimal price (p) that maximizes profit is approximately $35.17, and the optimal quantity (v) is approximately 371.1 barrels. To find the maximum profit (Zmax), we substitute these values back into the profit function:
Zmax = 35.1667(371.1) - $12,000 - 17(371.1)
Zmax ≈ -$7,049
Hence, the maximum profit achievable by the Rainwater Brewery is approximately -$7,049, indicating a loss.
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At December 31, 2020, the available-for-sale debt portfolio for Nash, Inc. is as follows. Unrealized Gain (Loss) Security Cost Fair Value A $27,125 $23,250 $(3,875) B 19,375 21,700 2,325 с 35,650 39,
At December 31, 2020, the available-for-sale debt portfolio for Nash, Inc. is as follows. The Unrealized Gain (Loss) for the securities are: A $27,125 $23,250 $(3,875) B 19,375 21,700 2,325 C 35,650 39,000 3,350
The total fair value of the securities is the sum of the fair value of A, B and C which is $84,950. Now, let's calculate the total cost of the securities. The total cost of the securities is the sum of the cost of A, B and C which is $82,150. The detailed answer to the question is as follows:
Calculation of Gain or Loss for each security
:To determine the gain or loss, we need to subtract the fair value from the cost of the securities. The result will be the gain or loss for that security. The calculations are as follows:
A: Gain (loss) = Cost - Fair Value = $27,125 - $23,250 = $(3,875)
B: Gain (loss) = Cost - Fair Value = $19,375 - $21,700 = $2,325
C: Gain (loss) = Cost - Fair Value = $35,650 - $39,000 = $3,350
Calculation of Total Unrealized Gain or LossThe sum of the unrealized gain or loss is the total unrealized gain or loss for the available-for-sale debt portfolio. The calculation is as follows:
Total Unrealized Gain (Loss) = Unrealized Gain (Loss) of A + Unrealized Gain (Loss) of B + Unrealized Gain (Loss) of C= $(3,875) + $2,325 + $3,350 = $1,800
Since the total unrealized gain is a gain, we can say that the available-for-sale debt portfolio has a net unrealized gain. The main answer to the question is:
Net Unrealized Gain = $1,800
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Berry is selling a kayak at an auction advertised as without The highest bid was $250. Barry had hoped to get a bid of $400 or more. Can Barry refuse to sell to the highest bidder? Why or why not?
Barry cannot refuse to sell to the highest bidder. In an auction, when the seller announces that the item is without reserve, they are obligated to sell the item to the highest bidder regardless of the bid price.
Barry must sell the kayak to the highest bidder at the price of $250.Key points to remember about the auctions. Auctions are a public sale where goods are sold to the highest bidder. The items sold in the auction can be either new or used. Auctioning without reserve means that the seller is obligated to sell the item to the highest bidder regardless of the bid price. The buyer should be careful while placing the bid, because once the bid has been made, it cannot be withdrawn unless the auctioneer accepts it.
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how will the firm make money on the product and/or services offered, and 2) how will the firm be positioned in the marketplace
it is important to consider the competition in the marketplace. If there are already many companies offering similar products or services, then it will be more difficult for a new company to establish themselves. In order to be successful, the new company will need to differentiate themselves from the competition in some way, whether it be through price, quality, or marketing.
When considering how a company will make money and how they will be positioned in the marketplace, there are a number of key factors to consider. One of the most important is the product or service that they offer. If the product or service is in high demand, then the company is more likely to be successful. Additionally, the pricing strategy used by the company will also play a role in their ability to generate revenue.The second factor to consider when determining how a company will make money and how they will be positioned in the marketplace is their marketing strategy. A company that is able to effectively market their product or service will be able to reach a larger audience and generate more revenue as a result.Finally, it is important to consider the competition in the marketplace. If there are already many companies offering similar products or services, then it will be more difficult for a new company to establish themselves. In order to be successful, the new company will need to differentiate themselves from the competition in some way, whether it be through price, quality, or marketing.
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Suppose that a large percentage of Country A’s exports go to
Country B. Country B is currently experiencing a recession.
How do you think this might affect the bond market in the
Country A?
Do you e
The bond market in Country A may face challenges due to reduced demand for its exports, which could lead to economic slowdown, lower investor confidence, and potential shifts in capital flows.
When Country B experiences a recession, it typically indicates a decline in its economic activity and overall demand. As a result, the demand for Country A's exports to Country B may decrease, which can have negative implications for Country A's economy.
This decline in export demand can potentially lead to a decrease in revenue for businesses in Country A, lower economic growth, and potential job losses. These factors can weaken investor sentiment and confidence in Country A's bond market.
In response to the economic downturn in Country B, investors may become more risk-averse and seek safer investment options, such as government bonds or other low-risk assets.
This increased demand for safe-haven investments could lead to a shift in capital flows away from riskier assets in Country A, including corporate bonds or higher-yield securities. As a result, the bond market in Country A may experience reduced liquidity and higher borrowing costs for businesses and the government.
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1) Consider the following statements about the Alternative Minimum Tax (AMT):
1) It was a way of giving some of the public a tax reduction.
2) It was a way of calculating taxes without exemptions and deductions.
3) It was intended to require some individuals to pay more tax.
Which of these statements is correct?
a. Both 2) and 3)
b. 3) only
c. Both 1) and 2)
d. 2) only
e. 1) only
2)Within OECD (Developed) countries as a whole, which of the following types of tax raises the most revenue?
a. individual income tax
b. consumption tax
c. wealth taxes (various types combined)
d. payroll tax
e. corporate income tax
1. The correct statement about the Alternative Minimum Tax (AMT) is it was intended to require some individuals to pay more tax.
The Alternative Minimum Tax (AMT) was introduced to ensure that individuals with high incomes and various tax deductions and exemptions still pay a minimum amount of tax. Therefore, statement 3) is correct as the AMT was intended to require some individuals to pay more tax. Statements 1) and 2) are incorrect because the AMT was not specifically designed to give tax reductions or to calculate taxes without exemptions and deductions.
2. Within OECD (Developed) countries as a whole, the type of tax that raises the most revenue is individual income tax.
Among the listed options, individual income tax generally raises the most revenue within OECD countries. Individual income tax is levied on the income earned by individuals, including wages, salaries, and other sources of personal income. It is often the largest revenue source for governments in developed countries. Consumption tax, wealth taxes, payroll tax, and corporate income tax also contribute to government revenue, but individual income tax tends to generate the highest amount of revenue overall.
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compute the future value of a $180 cash flow for the following combinations of rates and times. (do not round intermediate calculations. round your answers to 2 decimal places.)
To compute the future value of a $180 cash flow for the given combination of rates and times, we get the future value as $198.28
Here are the calculations you would need to make to compute the future value of a $180 cash flow for the following combinations of rates and times:
1. 5% annual rate, 10 years:
Future Value = $180 x (1 + 0.05)^10 = $295.85
2. 8% annual rate, 5 years:
Future Value = $180 x (1 + 0.08)^5 = $249.57
3. 6% semi-annual rate, 6 years (12 periods):
Future Value = $180 x (1 + 0.06/2)^(6*2) = $267.10
4. 4% quarterly rate, 2 years (8 periods):
Future Value = $180 x (1 + 0.04/4)^(2*4) = $198.28
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Should the United States today follow a strategy of simple,
full openness to international trade, or a more protectionist
strategy that tries to support American firms in international
trade?
be sure
The United States today should adopt a strategy of balanced openness to international trade rather than leaning towards extreme protectionism or complete free trade.
A balanced approach considers the benefits of international trade while also addressing the potential challenges and protecting domestic industries. International trade offers various advantages such as increased consumer choices, access to foreign markets for American firms, and opportunities for economic growth through specialization. However, it is crucial to recognize that certain industries may face competition from foreign companies, potentially leading to job displacement or negative economic impacts in specific regions.
By promoting free trade, the United States can benefit from global economic integration and tap into the advantages of specialization and comparative advantage. However, it is also essential to implement measures to protect American industries and workers, such as investing in workforce development and supporting domestic firms to remain competitive in the global market.
A balanced approach recognizes the importance of international trade for economic growth and consumer welfare while taking steps to mitigate negative consequences. This strategy involves maintaining open trade relations, negotiating fair trade agreements, protecting intellectual property rights, enforcing trade laws, and providing support to domestic industries when needed.
Ultimately, finding the right balance between openness and protectionism is a complex task that requires considering both domestic and international factors, as well as the long-term interests of the United States and its citizens.
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Selected 2021 balance sheet and income statement information for two manufacturing companies, Mammoth, Inc. and Glacier Corporation, follows:
Mammoth
(in $ millions)
Glacier
(in $ millions)
Cash
$ 30,000
$ 3,600
Marketable securities
500
100
Accounts receivable
35,000
6,500
All other current assets
50,000
8,500
Total current liabilities
65,000
25,000
Total liabilities
236,000
15,100
Total equity
75,000
22,000
Pre-tax income
3,900
6,200
Interest expense
1,800
100
Calculate the current ratio and quick ratio for both companies. Show all calculations.
Which company is more liquid? Answer in a complete sentence.
Calculate the times interest earned and debt-to-equity ratio for both companies. Show all calculations.
Which company is more solvent? Answer in a complete sentence.
All of these are balance sheet-based ratios, which means that they are based on information of one date. What is an inherent weakness in the use of such information? Answer in complete sentences.
It is important to note that these ratios only provide a snapshot of the company's financial position at a specific point in time. Based on the calculations, Mammoth, Inc. has higher current and quick ratios, indicating better liquidity compared to Glacier Corporation.
To calculate the current ratio, divide current assets by current liabilities. For Mammoth, Inc., the current ratio is
($30,000 + $500 + $35,000 + $50,000) / $65,000 = 2.23.
For Glacier Corporation, the current ratio is
($3,600 + $100 + $6,500 + $8,500) / $25,000 = 0.78.
To calculate the quick ratio, subtract inventories from current assets and then divide by current liabilities. As inventories are not provided, it is assumed to be zero for both companies.
Therefore, the quick ratio for Mammoth, Inc. is
($30,000 + $500 + $35,000 + $50,000 - $0) / $65,000 = 2.23, and for Glacier Corporation, it is
($3,600 + $100 + $6,500 + $8,500 - $0) / $25,000 = 0.78.
The times interest earned ratio is calculated by dividing pre-tax income by interest expense.
For Mammoth, Inc., the ratio is
$3,900 / $1,800 = 2.17.
For Glacier Corporation, it is
$6,200 / $100 = 62.
The debt-to-equity ratio is obtained by dividing total liabilities by total equity.
For Mammoth, Inc., the ratio is $236,000 / $75,000 = 3.15,
and for Glacier Corporation, it is $15,100 / $22,000 = 0.69.
Based on the calculations, Mammoth, Inc. has higher current and quick ratios, indicating better liquidity compared to Glacier Corporation. However, Glacier Corporation has a significantly higher times interest earned ratio, suggesting a stronger ability to cover interest expenses. In terms of solvency, Glacier Corporation has a lower debt-to-equity ratio, indicating a lower level of financial leverage.
One inherent weakness in using balance sheet-based ratios is that they provide a snapshot of the company's financial position at a specific point in time. Financial conditions may change over time, and the ratios may not reflect the company's current situation accurately. Additionally, the ratios do not consider qualitative factors or market conditions that can affect the company's performance and financial stability. It is important to analyze these ratios in conjunction with other financial indicators and information to gain a comprehensive understanding of a company's financial health.
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Question 2: Calculation and analysis (8 Marks)
a. The store manager of an ice-cream shop in the Melbourne CBD experimented in changing the price of its vanilla ice-cream. He reduced the price of his vanilla ice-cream from $4.00 to $3.70 per cup. With the price reduction, the number of cups sold per week increased from 950 units to 1,100 units. Calculate the price elasticity of demand for the vanilla ice-cream using the information given. Display your working. Is the consumer demand for the vanilla ice-cream relatively price elastic or inelastic? Provide a reason for your selection
The consumer demand for vanilla ice-cream is relatively price elastic as a decrease in price led to a significant increase in quantity demanded, indicating consumer sensitivity to price changes.
To calculate the price elasticity of demand, we can use the formula:
Price Elasticity of Demand = (% Change in Quantity Demanded) / (% Change in Price)
First, let's calculate the percentage change in quantity demanded:
Change in Quantity Demanded = New Quantity Demanded - Old Quantity Demanded
Change in Quantity Demanded = 1,100 - 950
Change in Quantity Demanded = 150
Percentage Change in Quantity Demanded = (Change in Quantity Demanded / Old Quantity Demanded) * 100
Percentage Change in Quantity Demanded = (150 / 950) * 100
Percentage Change in Quantity Demanded = 15.79%
Next, let's calculate the percentage change in price:
Change in Price = New Price - Old Price
Change in Price = $3.70 - $4.00
Change in Price = -$0.30
Percentage Change in Price = (Change in Price / Old Price) * 100
Percentage Change in Price = (-0.30 / $4.00) * 100
Percentage Change in Price = -7.5%
Now, we can plug these values into the price elasticity of demand formula:
Price Elasticity of Demand = (15.79% / -7.5%)
The price elasticity of demand for the vanilla ice-cream is approximately -2.106, which indicates that the demand is relatively price elastic. This means that a decrease in price of 1% leads to a 2.106% increase in the quantity demanded. The elasticity value being greater than 1 indicates that the demand is responsive to price changes. In this case, the price reduction of the vanilla ice-cream resulted in a significant increase in the number of cups sold per week. Consumers are sensitive to price changes and are willing to purchase more ice-cream at a lower price, suggesting that the demand for vanilla ice-cream is relatively price elastic.
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