To calculate the Economic Value Added (EVA) for Masterson Corporation, we need to determine the company's Operating Income After Tax (OIAT) and subtract the company's Total Cost of Capital (TCC).
First, we calculate the OIAT:
Operating Income = Sales - Operating Costs including Depreciation
Operating Income = $22 million - $19 million
Operating Income = $3 million
Operating Income Before Tax (OIBT) = Operating Income / (1 - Tax Rate)
OIBT = $3 million / (1 - 0.25)
OIBT = $4 million
OIAT = OIBT - (Tax Rate x OIBT)
OIAT = $4 million - (0.25 x $4 million)
OIAT = $3 million
Next, we calculate the Total Cost of Capital (TCC):
Weighted Average Cost of Capital (WACC) = Cost of Equity x % Equity + Cost of Debt x % Debt x (1 - Tax Rate)
Since there is no debt, the WACC is equal to the cost of equity.
Cost of Equity = (Dividends per Share / Current Stock Price) + Growth Rate
Dividends per Share = 0 (assumed)
Current Stock Price = $28 per share
Growth Rate = 7% (given in the problem as the average increase in dividends for Wilshire 5000 firms)
Cost of Equity = (0 / $28) + 0.07
Cost of Equity = 0.07
TCC = Total Invested Capital x WACC
TCC = $15 million x 0.07
TCC = $1.05 million
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A new company purchased three merchandise inventory items: first purchase $60; second purchase $40; third purchase $50. Using FIFO costing, if the company sells two units for $200, what is the gross profit for the period
Using the FIFO (First-In-First-Out) method, the first two units sold will be from the first and second purchases, respectively.
The cost of the first unit sold will be $60 and the cost of the second unit sold will be $40, for a total cost of $100. The gross profit on these two units will be $200 (selling price) - $100 (cost) = $100.
The third unit remaining in inventory will have a cost of $50.
Therefore, the gross profit for the period will be $100.
Note that in the FIFO ethod, the cost of goods sold is based on the assumption that the first goods purchased are also the first goods sold.
A new company purchased three merchandise inventory items: first purchase $60; second purchase $40; third purchase $50.
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_______ is the term for contracts within the statute of frauds involving promises to pay a debt of another if the initial party fails to pay.
The term for contracts within the statute of frauds involving promises to pay a debt of another if the initial party fails to pay is called "suretyship" or "guarantor" agreements.
In a suretyship contract, one party (the surety or guarantor) agrees to assume responsibility for the debt of another (the principal debtor) in case the principal debtor fails to pay the owed amount.
These contracts are subject to the statute of frauds, which means they must be in writing and signed by the party to be charged to be enforceable. The purpose of these agreements is to provide a level of protection and assurance for the creditor in the event the principal debtor defaults on their payment obligations.
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An effective procedure to test the existence objective for sales is to vouch sales journal entries to copies of sales orders, shipping documents, and sales invoices. Group of answer choices True False
True. One of the most effective procedures to test the existence objective for sales is to vouch sales journal entries to copies of sales orders, shipping documents, and sales invoices.
This process involves verifying that the sales transactions recorded in the sales journal actually occurred and that the goods or services were delivered to customers as stated in the sales orders and shipping documents. By examining copies of the sales invoices, auditors can confirm that the transactions were properly recorded and that they correspond to the amounts recorded in the sales journal. This procedure also helps auditors to detect any potential errors or fraud in the sales process, such as fictitious sales or unrecorded sales. Additionally, vouching can be used to test other transaction-related audit objectives, such as completeness and accuracy. Therefore, it is an important procedure in the audit of sales and should be performed in conjunction with other audit procedures to provide sufficient and appropriate evidence.
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ou have just purchased a 7-year zero-coupon bond with a yield to maturity of 11% and a par value of $1,000. What would your rate of return at the end of the year be if you sell the bond
if you sell the bond after one year, your rate of return would be 18.07%. However, if market interest rates have changed over the year, the bond's price and your rate of return would be affected accordingly.
If you sell a 7-year zero-coupon bond with a yield to maturity of 11% and a par value of $1,000 after holding it for one year, your rate of return would depend on the market interest rates prevailing at that time.
If market interest rates have remained constant over the year, you can calculate your rate of return using the bond's current price, which will be lower than its initial purchase price. The bond's price will have declined because it now has 6 years remaining until maturity rather than 7, and investors demand a higher yield for shorter-term bonds.
Assuming the bond's current price after one year is $605.90 (calculated using the bond pricing formula), your rate of return would be:
Rate of return = (Current price - Purchase price) / Purchase price
Rate of return = ($605.90 - $513.16) / $513.16
Rate of return = 18.07%
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You are at a restaurant and you want to determine how much cake and salad you should eat to maximize your utility. If your utility schedule is like the one above, and the price of a piece of cake is $1 and the price of a salad is $3, how many pieces of cake should you eat if you have a budget of $25
To determine how much cake and salad to eat to maximize your utility, you need to calculate the marginal utility per dollar for each item. This means dividing the utility gained from each item by its price.
First, let's look at the marginal utility per dollar for cake. If we divide the utility gained from the first piece of cake (10) by its price ($1), we get 10. This means that for every dollar spent on cake, you gain 10 units of utility. For the second piece of cake, the marginal utility is 8 (16/2), and for the third piece it is 6.
Now let's calculate the marginal utility per dollar for salad. Dividing the utility gained from the first salad (15) by its price ($3), we get 5. This means that for every dollar spent on salad, you gain 5 units of utility. For the second salad, the marginal utility is 4 (12/3), and for the third salad it is 3.
To maximize your utility with a budget of $25, you want to choose the combination of cake and salad that gives you the most marginal utility per dollar. One option would be to buy 3 pieces of cake and 5 salads. This would cost $18 for the cake and $15 for the salads, for a total of $33.
The marginal utility per dollar for the third piece of cake is 6, and the marginal utility per dollar for the fifth salad is also 6. This means that buying this combination would give you the most utility for your money.
1. Calculate the number of salads you can buy with your budget: $25 / $3 = 8 salads (and a remainder of $1)
2. Since the price of a piece of cake is $1, you can use the remainder to buy 1 piece of cake.
3. In this scenario, you would have spent your entire budget ($25) and maximized your utility by purchasing 19 pieces of cake and 8 salads.
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A competitive firm earns positive economic profits when ________. Group of answer choices marginal revenue is above average cost average cost rises above marginal cost marginal cost is decreasing marginal revenue is equal to average cost
A competitive firm earns positive economic profits when marginal revenue is above average cost. In a competitive market, marginal revenue represents the revenue earned from selling one additional unit of the product, while average cost is the cost per unit of production.
When marginal revenue exceeds average cost, it indicates that the firm is earning more revenue per unit sold than the cost incurred in producing it. This difference results in positive economic profits for the firm. Conversely, if average cost rises above marginal revenue or if marginal cost is decreasing, it may not necessarily lead to positive economic profits.
In a competitive market, firms strive to maintain a balance between revenues and costs, aiming for the point where marginal revenue equals average cost to maximize profits.
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True or false: Regardless of the mode used for the growth of a firm, entrepreneurs need to be good negotiators. True false question.
The given following statement is True. Regardless of the mode used for the growth of a firm, entrepreneurs need to be good negotiators.
Negotiation is a critical skill for entrepreneurs, as it is necessary to establish and maintain business relationships with suppliers, employees, partners, investors, and customers. Without effective negotiation skills, entrepreneurs may struggle to secure favorable terms and conditions for contracts, partnerships, and deals, which can limit their growth potential and profitability.
Furthermore, entrepreneurs need to be able to negotiate during times of conflict or disagreement. This skill is crucial when dealing with disputes with customers or partners, as well as when negotiating with suppliers or investors who may be seeking better terms. Effective negotiation can lead to win-win outcomes, where all parties involved benefit, whereas poor negotiation can lead to missed opportunities or even the collapse of a business.
In summary, the ability to negotiate effectively is essential for entrepreneurs, regardless of the mode used for the growth of a firm. It enables them to secure favorable deals, resolve conflicts, and maintain healthy business relationships, all of which are critical for the success and sustainability of their ventures. Therefore, the given statement is true.
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If a country has a GDP of $10,000, consumer spending of $6,000, investment spending of $1,000, government spending of $4,000, and exports of $2,000, then its imports must be: Group of answer choices $1,000. $3,000. $4,000. $2,000.
Therefore, the imports must be $1,000. This means that the country has imported goods and services worth $1,000, which are consumed within the country, and this value is deducted from the GDP to calculate the net domestic product.
The calculation of imports is done by subtracting the sum of consumer spending (C), investment spending (I), government spending (G), and exports (X) from the GDP of the country. This is because imports represent the value of goods and services produced outside of the country that are consumed within the country.
In the given example, the GDP of the country is $10,000. The consumer spending is $6,000, investment spending is $1,000, government spending is $4,000, and exports are $2,000. Substituting these values in the formula for GDP, we get:
GDP = C + I + G + (X - M)
$10,000 = $6,000 + $1,000 + $4,000 + ($2,000 - M)
Simplifying the equation, we get:
M = $2,000 - ($10,000 - $6,000 - $1,000 - $4,000)
M = $2,000 - $1,000
M = $1,000
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Bramble Corporation reports operating expenses of $90,100 excluding depreciation expense of $15,700, for 2022. During the year, prepaid expenses decreased $6,700 and accrued expenses payable increased $4,900. Compute the cash payments for operating expenses in 2022.
To compute the cash payments for operating expenses in 2022, we need to take into account the changes in prepaid expenses and accrued expenses payable, as well as the depreciation expense.
First, let's calculate the total operating expenses for 2022, including depreciation. We can do this by adding the operating expenses of $90,100 and the depreciation expense of $15,700, which gives us a total of $105,800.
Next, we need to adjust this amount for the changes in prepaid expenses and accrued expenses payable. Since prepaid expenses decreased by $6,700, this means that Bramble Corporation paid $6,700 less in cash for those expenses in 2022. On the other hand, since accrued expenses payable increased by $4,900, this means that Bramble Corporation paid $4,900 more in cash for those expenses in 2022.
To calculate the cash payments for operating expenses in 2022, we need to subtract the decrease in prepaid expenses ($6,700) and add the increase in accrued expenses payable ($4,900) to the total operating expenses of $105,800. This gives us a final figure of $104,000 in cash payments for operating expenses in 2022.
In summary, to compute the cash payments for operating expenses in 2022, we need to add the operating expenses and depreciation, adjust for changes in prepaid expenses and accrued expenses payable, and then calculate the final figure.
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During fall 2010, the US national saving rate has steadily climbed to near 10%, thus the MPC for the nation should be ____. According to the simple Keynesian model the value of the expenditure multiplier should be ____, assuming we ignore the impacts from automatic stabilizers
During fall 2010, the US national saving rate has steadily climbed to near 10%, thus the MPC for the nation should be 0.90. According to the simple Keynesian model the value of the expenditure multiplier should be 10, assuming we ignore the impacts from automatic stabilizers
Based on the information provided, we can determine the MPC (marginal propensity to consume) and the value of the expenditure multiplier in the simple Keynesian model. 1. To find the MPC, we need to know the national saving rate, which is given as 10%.
The sum of the marginal propensity to consume (MPC) and the marginal propensity to save (MPS) equals 1. So, we can calculate MPC as follows:
MPC = 1 - MPS
MPC = 1 - 0.10
MPC = 0.90
Thus, the MPC for the nation should be 0.90.
2. According to the simple Keynesian model, the value of the expenditure multiplier (k) is calculated using the following formula:
k = 1 / (1 - MPC)
We already found the MPC to be 0.90, so we can plug that into the formula:
k = 1 / (1 - 0.90)
k = 1 / 0.10
k = 10
Assuming we ignore the impacts from automatic stabilizers, the value of the expenditure multiplier should be 10. In summary, during fall 2010, the MPC for the US nation should be 0.90, and according to the simple Keynesian model, the value of the expenditure multiplier should be 10.
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During the first stage of team development, called ______, members get oriented and acquainted with each other. Multiple choice question.
During the first stage of team development, called forming, members get oriented and acquainted with each other
The "forming" stage is the initial stage of team development, as proposed by Bruce Tuckman's model of group development. During this stage, team members tend to focus on establishing relationships with each other, identifying goals and objectives, and getting to know their roles within the team.
They may also explore the boundaries of acceptable behavior and communication styles. This stage is critical to team success because it sets the foundation for the rest of the team's work.
The team leader plays an important role in helping team members become comfortable with each other and creating a safe and supportive environment for communication and collaboration.
As the team progresses through subsequent stages of development, such as storming, norming, performing, and adjourning, the level of collaboration and productivity increases.
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a. Suppose the firm can produce 5,500 units of output this year by combining its fixed capital with 100 units of labor and 450 units of raw materials. What are the total cost and average total cost of producing the 5,500 units of output
An economy is a network of interconnected production and consuming activities that, in the end, confirm the distribution of resources over time. The production and consumption of goods and services collectively meet.
The term "per-unit cost of production" refers to both the variable and fixed costs associated with producing and delivering one unit of any given product to a final customer. Average total cost per unit is $12,000 / 2,000 units ($20 for 200 labour hours,
$8 for 500 units of raw materials, and $4,000 for capital costs, for a total cost of $12,000).new total cost = (100 labour hours x $20) + (500 units of raw materials x $8) + $4,000 cost of capital = $2,000 x 4. Process innovation results in higher overall productivity and efficiency, which drives down average cost per unit. In this scenario, total costs decline, but even if total costs stay the same, producing more units at the same total cost will result in improved productivity and efficiency. Process innovations, which are typically connected to new technology, are the most
Complete question:
a. Suppose the firm can produce 5,500 units of output this year by combining its fixed capital with 100 units of labor and 450 units of raw materials. What are the total cost and average total cost of producing the 5,500 units of output.
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_____ are a group of separate but integrated human resource (HR) practices that aim to increase employee efficiency and organizational productivity.
Performance management practices are a group of separate but integrated human resource (HR) practices that aim to increase employee efficiency and organizational productivity.
These practices include goal setting, performance evaluation, feedback and coaching, development planning, and performance-related rewards and recognition. The purpose of performance management is to align individual employee goals with organizational goals and to help employees achieve their full potential, while also supporting organizational effectiveness and success.
By establishing clear expectations, providing regular feedback and coaching, and offering opportunities for growth and development, performance management practices can contribute to a positive and productive workplace culture that supports employee engagement and retention.
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Ford uses a(n) ________, whereby the company licenses dealers in North America to sell Ford automobiles subject to various sales and service conditions.
Ford uses a licensing model to sell their automobiles in North America. This model allows Ford to license dealerships to sell their automobiles subject to certain sales and service conditions. The company licenses are important for Ford as they allow them to maintain control over the quality of their products and services. Additionally, this model ensures that Ford's brand image and reputation are protected. The licensing model is a common practice in the automotive industry, and it allows companies like Ford to expand their reach and increase their sales without having to own and operate every dealership themselves. Overall, the licensing model has been a successful strategy for Ford in North America.
Ford uses a dealership licensing model, whereby the company licenses dealers in North America to sell Ford automobiles subject to various sales and service conditions. This model allows Ford to expand its presence across the region, while ensuring that customers receive a consistent experience when purchasing or servicing their vehicles at authorized dealerships. Dealers obtain company licenses to operate within the Ford network and adhere to the brand's standards, enhancing the overall customer experience and contributing to the company's reputation in the North American market.
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Ford uses a dealership model, whereby the company licenses dealers in North America to sell Ford automobiles subject to various sales and service conditions.
This model allows for the distribution of Ford vehicles across a large geographic area while maintaining a consistent customer experience.
The dealership model involves Ford providing support and guidelines to its dealerships, including training, advertising, and inventory management. In turn, the dealerships must meet certain performance standards and adhere to strict sales and service policies set by Ford.
This arrangement benefits both Ford and its dealerships by allowing them to focus on their respective strengths, resulting in a streamlined and efficient distribution network.
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g assume that the government is currently balancing the national budget so that outlays equal tax revenues. then the economy starts to expand, and the government decides to decrease govenrment spending by $50 billion. as a result, the federal budget will
When the government decreases its spending by $50 billion, it reduces its outlays, which are the expenditures made by the government. As a result of this decrease, the federal budget will show a surplus, as tax revenues will now be greater than outlays.
This surplus can be utilized by the government to either reduce the national debt or invest in other sectors of the economy.
However, it is important to note that a decrease in government spending during an economic expansion may slow down the rate of growth. This could lead to lower tax revenues in the future due to reduced economic activity. Therefore, the government should carefully consider the long-term effects of such a decrease in spending on the overall health and growth of the economy.
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The price of product X is $4 and the price of product Y is $2. The income of the consumer is $20.How much will the consumer buy of each product to maximize utility
To maximize utility, the consumer will continue to purchase each product until the ratio of their marginal utilities is equal to the ratio of their prices.
To determine how much of each product the consumer will buy to maximize utility, we need to consider their budget constraint and their preferences. Assuming that the consumer only buys products X and Y and has a fixed income of $20, the budget constraint can be expressed as:
4X + 2Y = 20
Where X is the quantity of product X purchased, and Y is the quantity of product Y purchased.
To maximize utility, the consumer will allocate their budget in such a way that the marginal utility per dollar spent is the same for both products.
For example, if the consumer's marginal utility for X is twice as high as their marginal utility for Y, then they would purchase twice as much Y as X to equalize the marginal utility per dollar spent on both products.
Without additional information about the consumer's preferences and utility function, it is not possible to determine exactly how much of each product they will purchase. However, the consumer will allocate their budget in a way that maximizes their total utility given their preferences and the prices of the products.
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A company that manufactures laptops estimates that 0.7% of their laptops will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $500. If they offer a 2 year extended warranty for $154, what is the company's expected value of each warranty sold
To calculate the company's expected value of each warranty sold, we need to consider the probability of a laptop failing after the original warranty period but within 2 years of the purchase, both with and without the extended warranty.
Without the extended warranty, the probability of a laptop failing is 0.7%, which means that for every 1000 laptops sold, 7 are expected to fail after the original warranty period but within 2 years of the purchase. The replacement cost for each failed laptop is $500, so the company's expected cost of replacing these 7 laptops is:
7 laptops x $500 per laptop = $3500
Now, let's consider the scenario with the extended warranty. If a customer purchases the 2 year extended warranty for $154, they are essentially paying $77 per year for the additional coverage. If we assume that the probability of a laptop failing after the original warranty period but within 2 years of the purchase is constant over those 2 years, then the probability of a failure during the extended warranty period is:
0.7% x 2 years = 1.4%
This means that for every 1000 laptops sold, 14 are expected to fail during the extended warranty period. However, since those customers have purchased the extended warranty, the company will not incur any replacement costs for those laptops. Instead, they will collect $154 from each customer who purchased the extended warranty.
So, the company's expected value of each warranty sold can be calculated as follows:
Expected value = (probability of failure without extended warranty x replacement cost) - (cost of extended warranty x probability of failure with extended warranty)
Expected value = (0.007 x $500) - ($154 x 0.014)
Expected value = $3.50 - $2.16
Expected value = $1.34
Therefore, the company's expected value of each warranty sold is $1.34.
Hi, I'd be happy to help you with your question. To calculate the company's expected value of each 2-year extended warranty sold, we will consider the probability of the laptop failing and the costs involved.
Your question states that a company estimates 0.7% of their laptops will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $500. They offer a 2-year extended warranty for $154.
Step 1: Convert the percentage to a decimal.
0.7% = 0.007
Step 2: Calculate the probability of a laptop not failing within 2 years.
1 - 0.007 = 0.993
Step 3: Calculate the expected value of the warranty.
Expected value = (probability of laptop failing * cost of replacement) - (probability of laptop not failing * cost of extended warranty)
Expected value = (0.007 * $500) - (0.993 * $154)
Step 4: Perform the calculations.
Expected value = ($3.50) - ($152.862) = -$149.362
The company's expected value of each 2-year extended warranty sold is -$149.362. This means the company is expected to lose $149.362 on average for each 2-year extended warranty sold.
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Your division is considering two projects with the following cash flows (in millions): 0 1 2 3 Project A -$17 $8 $8 $3 Project B -$26 $13 $10 $9 What are the projects' NPVs assuming the WACC is 5%
The NPV cash flows of project A is -$14.66 million and the NPV of project B is -$21.78 million.
The NPVs, we need to discount the cash flows of each project to their present values and then sum them up.
For project A:
PV of cash flows = (-17/1.05) + (8/1.05^2) + (8/1.05^3) + (3/1.05^4) = -14.6596
NPV of project A = -14.6596
For project B:
To calculate the NPVs, we must first discount each project's cash flows to their present value, then add them up.
PV of cash flows = (-26/1.05) + (13/1.05^2) + (10/1.05^3) + (9/1.05^4) = -21.7784
NPV of project B = -21.7784
So, the NPV of project A is -$14.66 million and the NPV of project B is -$21.78 million.
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The capital allocation line provided by one-month T-bills and a broad index of common stocks is called the
The Capital Allocation Line (CAL) represents a combination of risk-free assets, such as one-month T-bills, and a risky portfolio, like a broad index of common stocks. In this context, the Market Line refers to the CAL formed by combining a risk-free asset with the broad stock market index as the risk portfolio.
A passive investment strategy using the broad stock market index aims to replicate the performance of the overall market, providing investors with diversified exposure to stocks. This approach eliminates the need to actively select individual securities and manage the portfolio, thereby reducing the costs and time involvement.
The investment opportunity set represented by the Market Line offers investors various combinations of risk and return by adjusting the proportion of the risk-free asset and the broad stock market index in their portfolios. This allows investors to choose their desired level of risk according to their risk tolerance and investment objectives.
In summary, the Market Line is a graphical representation of the investment opportunity set provided by a passive strategy using the broad stock market index and one-month T-bills. It offers investors a range of portfolio options with varying levels of risk and return, enabling them to make informed investment decisions based on their preferences and goals.
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The capital allocation line provided by one-month T-bills and a broad index of common stocks is called the capital _____ line. A passive strategy using the broad stock market index as the risk portfolio generates an investment opportunity set that is represented by this line.
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Sometimes a product needs to be downgraded because it does not meet its specification. The downgrading costs would most likely be classified as
The downgrading costs would most likely be classified as a loss.
When a product does not meet its specification, it becomes defective or of lower quality. The downgrading process involves reducing the quality of the product, which leads to a decrease in its value. As a result, the downgrading costs incurred would be considered a loss to the company. This loss can be calculated as the difference between the cost of producing the product at its original specification and the cost of downgrading it. In accounting, the loss is recorded as an expense and is reflected in the company's income statement. The amount of loss can vary depending on the severity of the downgrade and the cost of producing the product. Overall, downgrading a product can be costly for a company, and it is essential to ensure that the products meet their specifications before being released into the market.
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You go to work to today, but will get your paycheck at the end of the month. This is an example of money serving as a a. standard of deferred payment. b. store of value. c. medium of exchange. d. unit of accounting.
This is an example of money serving as a - standard of deferred payment.
A standard of deferred payment is a function of money that allows it to be used to make transactions where payment is delayed until a future date. In this case, the work is done today but the payment is deferred until the end of the month. Money can also be used as a medium of exchange, a unit of accounting, and a store of value, but in this specific example, it is serving as a standard of deferred payment.
A standard of deferred payment is one of the four functions of money, alongside being a medium of exchange, a unit of accounting, and a store of value.
In addition to the example provided, there are many other examples of money serving as a standard of deferred payment. For instance, when you take out a loan or use a credit card, you are making a transaction where payment is deferred until a future date. Similarly, when you sign a contract to purchase goods or services with payment due at a later date, money is serving as a standard of deferred payment.
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The debris method involves examination of a scene for multiple items such as: (Select all that apply, no partial credit)
The debris method is a technique used in crime scene investigation to gather evidence by examining the scene for multiple items such as broken glass, fibers, hair, and other small fragments.
The method involves meticulously collecting and analyzing any physical materials that could provide clues to the events that occurred at the scene. This includes identifying and collecting soil, gravel, rocks, and other materials that may have been disturbed or displaced during the commission of a crime. The debris method is critical in forensic investigations, as even the smallest piece of evidence can be vital in solving a case. Therefore, crime scene investigators must be meticulous and thorough when applying this method to ensure that no evidence is overlooked or missed. Overall, the debris method is a powerful tool in criminal investigations and can significantly increase the chances of identifying perpetrators and bringing them to justice.
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If the annual sales are 20,000 units per store, determine whether the direct shipping network or milk runs of 2 stores per truck or milk runs of 4 stores per truck are optimal. If the annual sales were 10,000 units per store; what would be your optimal solution
To determine the optimal solution for shipping based on annual sales per store, we need to calculate the total number of truckloads required and compare the total cost of each option.
To compare the costs, we need to consider the cost per truckload and the fixed costs associated with each option. For example, the direct shipping network may have higher fixed costs such as warehouse and distribution center expenses, while the milk runs may have higher variable costs such as fuel and maintenance.
Direct shipping network: 20 x $1,000 = $20,000 per store per year
Milk runs of 2 stores per truck: 10 x $1,200 = $12,000 per store per year
Milk runs of 4 stores per truck: 5 x $1,500 = $7,500 per store per year
Based on these calculations, the milk runs of 4 stores per truck would be the optimal solution for annual sales of 20,000 units per store.
For annual sales of 10,000 units per store:
Direct shipping network: 10 x $1,000 = $10,000 per store per year
Milk runs of 2 stores per truck: 5 x $1,200 = $6,000 per store per year
Milk runs of 4 stores per truck: 2.5 x $1,500 = $3,750 per store per year
Based on these calculations, the milk runs of 4 stores per truck would still be the optimal solution for annual sales of 10,000 units per store.
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Morris Company self-insures its workers compensation loss exposure. The risk manager of Morris Company is concerned about the possible impact of a single catastrophic claim. She decided to set a retention limit of $500,000 per-claim, and to purchase insurance that will be begin to pay once Morris Company has paid $500,000 on a single claim. The insurance the risk manager purchased is called
The insurance the risk manager of Morris Company purchased to cover losses above the $500,000 per-claim retention limit is called Excess of Loss insurance.
This type of insurance begins to pay when the company's self-insured losses reach a specified threshold, in this case, $500,000 for a single claim. The insurance that the risk manager of Morris Company purchased is called excess insurance or stop-loss insurance. This type of insurance provides coverage above and beyond a certain retention limit, in this case, $500,000 per-claim.
Once Morris Company has paid the $500,000 retention limit, the excess insurance will begin to pay for any additional costs associated with the claim, up to the policy limit. This helps to protect Morris Company from the financial impact of a catastrophic claim that exceeds their self-insurance retention limit.
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The implicit exchange rate between two currencies when both are quoted in some third currency is called a(n): open exchange rate. backward rate. cross-rate. forward rate. future rate.
The implicit exchange rate between two currencies when both are quoted in some third currency is called a cross-rate.
A cross-rate is the exchange rate between two currencies that are not commonly traded in the same market or country, but instead are valued against a third currency. It is calculated using the exchange rates of both currencies against the third currency. For example, if the exchange rate between the US dollar and the British pound is known, and the exchange rate between the US dollar and the Japanese yen is known, then the cross-rate between the British pound and the Japanese yen can be calculated using these two exchange rates.
Therefore, the correct answer is:
1. Cross-rate.
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McDonald's restaurants are involved in a long-term, worldwide movement to change consumers' perceptions of its products by selling food that is healthier. McDonald's is engaged in:
McDonald's restaurants are engaged in a long-term, worldwide movement to change consumers' perceptions of its products by selling food that is healthier is an example of Corporate Social Responsibility (CSR).
CSR is a business approach that aims to contribute to sustainable development by taking into account the economic, social, and environmental impacts of a company's operations. In the case of McDonald's, the company has recognized the importance of promoting healthier food options and has taken steps to address this issue. This includes offering a range of healthier menu choices, such as salads, fruit, and yogurt, and reducing the amount of salt, sugar, and saturated fat in its food. By promoting healthier food options, McDonald's is not only addressing consumers' concerns about nutrition and health, but it is also enhancing its reputation as a socially responsible company.
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If the initial equilibrium interest rate was 5 percent and the money supply increased by $100 billion, then the new interest rate would be
It can be concluded that the new interest rate would be lower than the initial equilibrium interest rate of 5 percent due to the increase in the money supply.
If the initial equilibrium interest rate was 5 percent and the money supply increased by $100 billion, then the new interest rate would depend on the demand for money. If the demand for money remains constant, then the new interest rate would decrease. This is because an increase in the money supply leads to an increase in the supply of loanable funds. With a larger supply of loanable funds and a constant demand for them, lenders will compete to lend out their money and will lower interest rates to attract borrowers. This process will continue until a new equilibrium interest rate is reached. The magnitude of the decrease in interest rates will depend on the elasticity of the demand for money. If the demand for money is very elastic, then the decrease in interest rates will be large, and vice versa. Therefore, it is difficult to determine the exact new interest rate without knowing the elasticity of the demand for money.
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____ manufacturing deals with several suppliers in hopes of finding the best price. a.Economic b.Productivity improvement c.Traditional d.Lean
The type of manufacturing that deals with several suppliers in hopes of finding the best price is called economic manufacturing. This approach is often used by companies that are looking to minimize their costs while maintaining quality standards.
By sourcing materials and components from multiple suppliers, economic manufacturing aims to negotiate favorable prices and terms with each supplier, thereby reducing the overall cost of production. This approach is different from traditional manufacturing, which relies on a single supplier for each component, and lean manufacturing, which focuses on reducing waste and maximizing efficiency.
Economic manufacturing can be an effective strategy for companies that operate in highly competitive markets and need to maintain low prices in order to remain competitive. However, it also requires careful management of supplier relationships to ensure quality and timely delivery of materials.
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He decides to take the company public through an IPO, issuing 2 million new shares. Assuming that he successfully completes the IPO, the net income for the next year is estimated to be $8 million. His banker informs him that the price of shares should be set using average price-earnings ratios for similar businesses, which is 14. What share of the company will David own after the IPO?
We can start by using the price-earnings ratio to estimate the value of the company after the IPO.
Price per share = earnings per share x price-earnings ratio
We know that the net income for the next year is estimated to be $8 million, and there will be 2 million new shares issued. So, the earnings per share will be:
Earnings per share = Net income / Number of shares
Earnings per share = $8,000,000 / (2,000,000 + 1,000,000)
Earnings per share = $2
Using the price-earnings ratio of 14, we can calculate the price per share:
Price per share = $2 x 14
Price per share = $28
So, the total value of the company after the IPO will be:
Total value = Price per share x Number of shares
Total value = $28 x 3,000,000
Total value = $84,000,000
Before the IPO, David owns the entire company, which we can assume is worth $40 million.
After the IPO, David will own:
David's ownership percentage = David's equity / Total value
David's equity = $40,000,000
David's ownership percentage = $40,000,000 / $84,000,000
David's ownership percentage = 0.476 (or 47.6%)
Therefore, David will own approximately 47.6% of the company after the IPO.
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productivity relates to producing the same output with more labor hours. working longer over time. working harder over time. producing the same output with fewer labor hours.
Productivity refers to the efficiency with which resources, such as labor hours, are utilized to produce output. Improving productivity means achieving the same output with fewer labor hours, which results in cost savings and increased competitiveness for businesses.
Working longer overtime or harder over time might initially seem like ways to boost productivity. However, these approaches can lead to diminishing returns and potential negative impacts on employees' health and morale. Instead, the key to sustainable productivity growth lies in finding ways to produce the same output with fewer labor hours, thereby improving the overall efficiency of the production process.
There are several methods businesses can implement to achieve higher productivity. These include adopting new technologies, improving processes, investing in employee training, and promoting a positive work environment. By streamlining operations, reducing waste, and enabling workers to perform tasks more effectively, organizations can increase the output generated per labor hour.
In summary, productivity is closely related to producing the same output with fewer labor hours, rather than simply working longer or harder over time. By focusing on efficiency and continuous improvement, businesses can enhance their productivity levels and gain a competitive advantage in the marketplace.
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