Answer:
(1) The preference of the Chinese firms to expand through outright purchase which aides them to retain key positions in order to have a firm control on the business.
(2) Chinese companies are ready to take more risk than American companies
(3) Chinese companies are more interested in opportunities to provide growth and innovation.
Explanation:A Joint venture business is a business organisation owned by two or more persons or organisations who pull resources together in order to achieve a common goal.
The resources pulled together can be in the form of finance, expertise,infrastructures etc, a joint venture business is also another form of merger known commonly with profit making organisations.
Differences in regulation, culture, market access, IP concerns, government support, risk perception, and market maturity influence American joint ventures in China and Chinese acquisitions in the U.S.
Several factors contribute to the difference in market entry strategies between American companies in China and Chinese companies in the United States:
1. Regulatory Environment : China's regulatory environment historically favored joint ventures as a means for foreign companies to enter the market, with the Chinese government often mandating local partnerships for certain industries. Conversely, the U.S. has generally had more open regulations regarding foreign ownership, allowing Chinese firms to acquire companies outright.
2. Cultural Differences : Chinese business culture tends to prioritize relationships and long-term partnerships. Joint ventures can be seen as a way to build trust and establish connections with local partners. On the other hand, American business culture often values independence and control, which may lead U.S. companies to prefer full ownership when expanding abroad.
3. Market Access : China's vast market and potential for growth may incentivize American companies to enter through joint ventures to gain quicker access and local expertise. Conversely, Chinese companies entering the U.S. market may have sufficient resources to directly acquire companies to gain immediate market share.
4. Intellectual Property Concerns : Some American companies may be wary of sharing intellectual property and proprietary technology in joint ventures in China, opting instead to retain full control through acquisitions in the U.S. market where intellectual property protection is generally stronger.
5. Government Support and Subsidies : Chinese government support and subsidies for overseas acquisitions, particularly for strategic industries, may encourage Chinese companies to pursue outright acquisitions in the United States as a means of expanding their global footprint.
6. Risk Management : American companies may perceive joint ventures in China as riskier due to concerns about regulatory changes, intellectual property theft, and potential conflicts with local partners. Acquiring companies outright in the U.S. may be seen as a more straightforward way to mitigate these risks.
7. Market Maturity : The maturity of the market also plays a role. China, being a developing market, might require closer collaboration and knowledge-sharing through joint ventures. In contrast, the U.S. market is more mature, and Chinese companies may find it easier to acquire existing businesses rather than starting from scratch.
These factors, among others, shape the differing strategies employed by American companies in China and Chinese companies in the United States.
When companies adjust their processes to be sure they offer high-quality products and good service at competitive prices they are responding to which external force?
a. The economic environment.
b. The technological environment
c. The competitive environment
Answer:
The correct answer is letter "C": The competitive environment.
Explanation:
Competitive corporate environment refers to the natural rivalry atmosphere companies face while offering a good or service that is similar to one other firm provides. This environment pushes firms to constantly be looking for improvements in product quality, price by reducing their costs, and customer service.
Also, competition is what drives institutions to pursue having a competitive advantage that will allow them to step up.
In the process of reconciling its bank statement for January, Maxi's Clothing's accountant compiles the following information:
Cash balance per company books on January 30 $ 6,125
Deposits in transit at month-end $ 2,080
Outstanding checks at month-end $ 660
Bank service charges $ 39
EFT automatically deducted monthly, not yet recorded by Maxi $ 660
An NSF check returned on a customer account $ 405
Required:
1. The adjusted cash balance per the books on January 31 is _______________.
Answer:
$5,021
Explanation:
The computation of the adjusted cash balance is shown below:
= Cash balance as per company books - bank service charges - EFT automatically deducted monthly, not yet recorded - NSF check returned on a customer account
= $6,125 - $39 - $660 - $405
= $5,021
All the above items should be deducted from the company books cash balance so that the adjusted cash balance could come
A company is 40% financed by risk-free debt. The interest rate is 10%, the expected market risk premium is 8%, and the beta of the company’s common stock is .5. What is the company cost of capital? What is the after-tax WACC, assuming that the company pays tax at a 35% rate?
Answer:
12.4% ; 11%
Explanation:
The computation is shown below:
Cost of capital = (Weightage of debt × cost of debt) + (Weightage of common stock) × (cost of common stock)
= 0.40 × 0.10 + 0.60 × 0.14
= 0.04 + 0.084
= 12.4%
Now the After tax WACC is
= Weightage of debt × cost of debt × ( 1 - tax rate) + (Weightage of common stock) × (cost of common stock)
= {0.40 × 0.10 × (1 - 0.35)} + {0.60 × 0.14}
= 0.026 + 0.084
= 11%
The weightage of equity is
= 100 - 40%
= 0.60
Answer:
12.4%, 11%
Explanation:
Weighed average cost of capital (WACC) represents total cost of capital which is the summation of individual cost of capital of different sources, calculated as the proportion (weights) in total capital structure multiplied by the respective cost of capital.
Risk free rate of interest = 10%
Market risk premium = 8%
Cost of debt = [tex]I\ (1\ -\ t)[/tex] = 10 (1 - .35) = 6.5%
Cost of Equity = [tex]R_{f}\ +\ B\ (Risk\ Premium)[/tex]
where, [tex]R_{f} =[/tex] Risk Free Rate Of Interest
Risk Premium = [tex]R_{m}\ -\ R_{f}[/tex] = 8%
B = Beta or degree of sensitivity of security return with respect to market return
Cost Of Equity = 10 + 0.5 × 8 = 14%
Cost of capital before considering taxes = 10 × 0.4 + 14 × 0.6 = 4 + 8.4 = 12.4%
(1) (2)
Source Weights Cost of Capital (1) × (2)
Debt 0.4 6.5 2.6%
Equity 0.6 14 8.4%
Weighted Average Cost Of Capital 11 %
Curly’s Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $30,000 per year forever. A representative for Curly’s tells you the policy costs $550,000. At what interest rate would this be a fair deal? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Interest rate %
Answer:
r = 5.45%
Explanation:
Given that
30,000 is to be paid per year
550,000 is the policy cost
Therefore
Using present value of perpetuity
PV = D/r
550,000 = 30,000/r
Where
r = interest rate
Dividend = 30,000
PV = 550,000
Thus
r = 30,000 ÷ 550,000
r = 5.45%
The interest rate that would make a perpetual payment of $30,000 per year equivalent to a present value of $550,000 is 5.45%. This is determined by using the formula for the present value of a perpetuity and solving for the interest rate.
The question is asking to calculate the interest rate that would make a perpetual payment of $30,000 per year equal to a present value of $550,000. This can be calculated using the formula for the present value of a perpetuity:
PV = PMT / r
Where PV stands for present value, PMT stands for payment (annuity amount), and r is the annual interest rate.
Rearranging the formula to solve for r gives us:
r = PMT / PV
Plugging in the values:
r = $30,000 / $550,000
r = 0.0545454545
Converting this to a percentage and rounding to two decimal places:
Interest rate = 5.45%
Therefore, the interest rate that would make the investment policy a fair deal is 5.45%.
Which of the following includes managing the movement of raw materials and parts from their sources to production sites; managing the movement of materials, semi-finished, and finished products within and among plants, warehouses, and distribution centers; and the planning and coordinating of the physical distribution of finished goods to intermediaries and final buyers?
a. intermodal transportation
b. contract logistics
c. logistics
d. materials handling
Answer: c. Logistics
Explanation: management of the movement of raw materials and parts from their sources to production sites; the movement of materials, semi-finished, and finished products within and among plants, warehouses, and distribution centers; planning and coordinating of the physical distribution of finished goods to intermediaries and final buyers are all contained in logistics.
Logistics is a part of operations and is defined as the process of planning, implementing, and controlling the efficient, effective flow and storage of raw materials, goods (finished, semi-finished etc), services and related information from their point of origin to point of consumption for the purpose of satisfying customer requirements.
The logistics department is responsible for managing the movement of raw materials from their sources to production sites and other stated functions.
Logistics refers to the process of planning, implementing, and controlling the flow and storage of raw materials, goods and services.
The logistics department is responsible for
managing the movement of raw materials and parts from their sources to production sites.managing the movement of materials, semi-finished, and finished products within and among plants, warehouses, and distribution centers.planning and coordinating of the physical distribution of finished goods to intermediaries and final buyers.Hence, the Option C is correct.
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An incentive compensation scheme includes a. a performance evaluation system b. a disciplinary action committee c. a reward system linked to performance d. Both A&C
Answer:
The correct answer is letter "D": Both A&C.
Explanation:
Incentive compensation schemes are established provided by employers based on the performance of employees. Employers set a reward system that could take the form of bonuses, prizes or recognition, and goals workers should reach or pass so those rewards can be provided.
Incentives are given at work aiming to motivate employees to work efficiently and effectively.
"A cross-hedging strategy is most effective with currencies that are _____; currency diversification is most effective with currencies that are ______."
"A cross-hedging strategy is most effective with currencies that are highly positively correlated; currency diversification is most effective with currencies that are not highly correlated."
Explanation:
Cross hedging is a idea that is used to mange risk. This is done by investing in two securities. Those two securities are correlated and that too positively. Which means their prices goes in the identical direction. It helps in minimizing the risks associated.
So,A cross hedging strategy is most efficient when currencies are positively correlated,
Currency diversification is a strategy where more than one currency is used in investment. It leads to less exchange rate risk. This strategy is most effective with currencies that are not highly correlated. Which means increase in one currency causes no increase in other currency.
Collins Little Company has a staff of 4 employees, each working 8 hours per day at a rate of $20/hour. Their overhead expenses are $200/day. Collins processes and closes on 12 titles each day. They are considering purchasing a computerized title search system that will allow the processing of 20 titles per day. With the new system, they could cut their staff to 2 employees working the same hours at the same pay, but their overhead expenses would double to $400 per day.
a. Compute the labor productivity with the old system (in titles / hour).
b. Compute the labor productivity with the new system (in titles / hour).
c. Compute the multifactor productivity with the old system (in titles / dollar).
d. Compute the multifactor productivity with the new system (in titles / dollar).
Answer:
A. Labor productivity = 12 titles /(4*8)
= 12 /32
0.375 hrs per unit
b. labor productivity = 20 / 16
= 1.25 hrs per unit
c. multi-factor productivity = output/ input
= 12 /( 640 +200)
= 0.0143
d. multi-factor productivity = output/ input
= 20/ (320+400)
= 0.2778
Explanation:
labour =640 = 4*8*20
labour = 320 = 2*8*20
a. Labor productivity with the old system is approximately 0.375 titles per hour, while with the new system, it's approximately 1.25 titles per hour. b. Multifactor productivity with the old system is around 0.015 titles per dollar, and with the new system, it's about 0.03125 titles per dollar.
a. To compute labor productivity with the old system (in titles per hour), you can use the following formula:
Labor Productivity (with old system) = Total Titles Processed / Total Labor Hours
Total Titles Processed = 12 titles per day
Total Labor Hours = 4 employees * 8 hours per day = 32 hours per day
Labor Productivity (with old system) = 12 titles / 32 hours ≈ 0.375 titles per hour
b. To compute labor productivity with the new system (in titles per hour), you can use the same formula:
Labor Productivity (with new system) = Total Titles Processed / Total Labor Hours
Total Titles Processed (with new system) = 20 titles per day
Total Labor Hours (with new system) = 2 employees * 8 hours per day = 16 hours per day
Labor Productivity (with new system) = 20 titles / 16 hours = 1.25 titles per hour
c. To compute multifactor productivity with the old system (in titles per dollar), you can use the following formula:
Multifactor Productivity (with old system) = Total Titles Processed / (Total Labor Cost + Total Overhead Cost)
Total Labor Cost (with old system) = 4 employees * 8 hours per day * $20/hour = $640 per day
Total Overhead Cost (with old system) = $200 per day
Multifactor Productivity (with old system) = 12 titles / ($640 + $200) = 0.015 titles per dollar
d. To compute multifactor productivity with the new system (in titles per dollar), you can use the same formula:
Multifactor Productivity (with new system) = Total Titles Processed / (Total Labor Cost + Total Overhead Cost)
Total Labor Cost (with new system) = 2 employees * 8 hours per day * $20/hour = $320 per day
Total Overhead Cost (with new system) = $400 per day
Multifactor Productivity (with new system) = 20 titles / ($320 + $400) = 0.03125 titles per dollar
So, the labor productivity with the old system is approximately 0.375 titles per hour, and with the new system, it's approximately 1.25 titles per hour. The multifactor productivity with the old system is approximately 0.015 titles per dollar, and with the new system, it's approximately 0.03125 titles per dollar.
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Which of the following is NOT true about an ATM? A. ATM stands for "Access or Transfer Money". B. An ATM is available virtually 24 hours a day. C. You can make a deposit at your bank's ATM. D. You can transfer money between your own accounts.
Answer: A. ATM stands for "Access or Transfer Money"
Explanation:
An ATM stands does not stand for Access or Transfer Money, even though it offers those services.
Nay, it stands for Automated Teller Machine which is to say that it can do the job of a bank Teller, only it can do more and can do it Automatically and outside a bank.
Option A is therefore correct.
Answer:
A. ATM stands for "Access or Transfer Money".
Explanation:
ATM stands for Automated Teller Machine, not "Access or Transfer Money".
ATM is a specialized computer that ease the process of managing money by an individual that an account with a bank.
It is always available 24 hours daily to allow withdrawal of money, transfer of money between different accounts, and many ATMs allow deposits of money.
In your initial post, discuss whether you think a contract existed in this situation. Make sure to include the contract elements that are present. Also, state whether Staley has any recourse in this case. Provide rationale for your answer.
In your initial post, discuss whether you think a contract existed in this situation. Make sure to include the contract elements that are present is given below
Explanation:
Most contracts only need to contain two elements to be legally valid: All parties must be in agreement (after an offer has been made by one party and accepted by the other). Something of value must be exchanged -- such as cash, services, or goods (or a promise to exchange such an item) -- for something else of value.
The requisite elements that must be established to demonstrate the formation of a legally binding contract are (1) offer; (2) acceptance; (3) consideration; (4) mutuality of obligation; (5) competency and capacity; and, in certain circumstances, (6) a written instrument.
A contract is much more than an agreement between two people. There must be an offer and acceptance, intention to create a legally binding agreement, a price paid (not necessarily money), a legal capacity to enter a contract of your own free will, and proper understanding and consent of what is involved.
Identify an offer, acceptance, and consideration.
For a contract to be valid, it must have these three basic elements: a specific offer, acceptance of the terms of the offer, and consideration, which is the agreed-upon exchange of goods or services. A valid offer must be sufficiently definite.
Identify an offer, acceptance, and consideration.
For a contract to be valid, it must have these three basic elements: a specific offer, acceptance of the terms of the offer, and consideration, which is the agreed-upon exchange of goods or services. A valid offer must be sufficiently definite.
National Distributors has $1,000 face value bonds outstanding with a market price of $1,013. The bonds pay interest semiannually, mature in 11 years, and have a yield to maturity of 6.87 percent. What is the current yield
Answer:
Current Yield is 6.94%
Explanation:
Current yield is the ratio of coupon payment of a bond to its current market price.
First we need to calculate the coupon payment by using following formula
YTM = [ C + ( F - P ) / n ] / [ ( F + P ) / 2 ]
6.87% = [ C + ( $1,000 - $1,013 ) / 11 ] / [ ( $1,000 + $1,013 ) / 2 ]
6.87% = [ C + ( $1,000 - $1,013 ) / 11 ] / [ ( $1,000 + $1,013 ) / 2 ]
6.87% = [ C - $1.18 ] / 1006.5
1,006.5 x 6.87% = C - $1.18
69.15 = C - 1.18
C = 69.15 + 1.18 = $70.3 annually
Current Yield = Annual Coupon payment / Current market price
Current Yield = $70.3 / $1,013 = 0.0694 = 6.94%
Suppose that due to a poor economy, 1 million workers lost their jobs, causing the unemployment rate to increase to 10%. After a few months of searching, 300,000 of these unemployed workers give up looking for work. How would the decision by these 300,000 people affect the unemployment rate, all else equal
Answer:
The unemployment rate would decrease.
Explanation:
The unemployment rate only takes into account economically active people, that is, people who are actively searching for a job. This means that if 300,000 people give up looking for work, they are not considered unemployed anymore and only 700,000 of the original 1 million workers who lost their job will be counted towards the unemployment rate. Consequently, the unemployment rate would decrease.
An assembly line has 6 work stations with cycle time of 6 minutes.There are 10 tasks with total work content of 12 minutes. What is approximate efficiency of this line
Approximate efficinecy of line = 33 percent
Explanation:
Given Data:
number of work stations = 6, cycle time = 6 minutes, number of tasks = 10, total work content given = 12 minutes
In order to calculate the efficiency of work line, the following formula will be used
Efficiency of the lines = total work content divide by ( number of work station multiply with cycle time)
putting the figures in the given formula, we get,
efficiency of lines = [tex]12 /(6 * 6)[/tex] = 12 divide by 36
= 0.3333
= 33 percent
Which type of ad agency is most likely to offer its clients an extensive range of marketing, communications, and promotions services, including planning, creating, and producing the advertising; performing research; and selecting media? A. A creative boutiqueB. A full-service agencyC. A media buying serviceD. A collateral agencyE. A switch marketing agency
Answer: B. Full Service Agency
Explanation: The above agency would provide all the necessary services to its clients -an extensive range of marketing, communications, and promotions services, including planning, creating, and producing the advertising; performing research; and selecting media?
At one point, certain U.S. Treasury bonds were callable. Consider the prices in the following three Treasury issues as of May 15, 2017: 05/15/2020 6.50 108.71875 108.78125 − .31250 3.400 05/15/2020 7.55 109.25000 109.31250 − .09375 4.210 05/15/2020 8.05 114.31250 114.50000 − .46875 2.960 The bond in the middle is callable in February 2018. What is the implied value of the call feature? Assume a par value of $1,000. (Hint: Is there a way to combine the two noncallable issues to create an issue that has the same coupon as the callable bond?) (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
The implied value of called feature is $111.49 approx
Explanation:
Detailed step wise solution is given below:
The implied value of the call feature on a callable bond can be estimated by creating a synthetic bond from non-callable issues that mimics the callable bond's cash flows. The value is determined by the price difference between the synthetic bond and the callable bond. However, the calculation requires detailed information not fully provided in the question.
To calculate the implied value of the call feature on a callable bond, we can use the information from non-callable bonds to create a synthetic bond that matches the coupon rate of the callable bond.
The key is to find the correct combination of the two non-callable issues that would replicate the coupon payments of the callable bond. Each non-callable bond has different coupon rates and prices. By creating a portfolio of these bonds that mimics the cash flows of the callable bond, we can infer the value of the call feature by comparing the price of this synthetic bond to the price of the actual callable bond.
However, since the detailed question does not provide the full necessary data and information, such as market interest rates and the exact cash flows of each bond, a definitive calculation cannot be performed. To generally approach such a problem, the following steps are required:
Determine the coupon payments and final par value payment of the callable bond.Create a portfolio of the other two bonds that reproduces these cash flows.Calculate the cost of this portfolio.The difference between the callable bond price and the synthetic bond portfolio price represents the value of the call feature.In practice, the problem requires complex calculations, including interpolation between the prices and cash flows of the non-callable bonds to match the coupon rate of the callable bond.
Deana, a light-complexioned African American is the manager of the cosmetics department at a large retail store. She does not promote Indigo, a brown-complexioned African American who is otherwise eligible for the promotion because she believes that customers prefer lighter skinned cosmetic consultants. Thus, Indigo:
a. Does not have a color discrimination claim under Title VII of the Civil Rights Act of 1964 because Deana was only trying to improve sales of the retail store.
b. Has a discrimination claim under Title VII of the Civil Rights Act of 1964 because color discriminate can occur between members of the same race
c. Does not have a color discrimination claim under Title VII of the Civil Rights Act of 1964 because Deana did not show any pervasive racial discrimination against Indigo
d. Has a discrimination claim under the Title VII of the Civil Rights Act of 1964 because of the BFOQ defense
Answer:
b. Has a discrimination claim under Title VII of the Civil Rights Act of 1964 because color discriminate can occur between members of the same race.
Explanation:
Discrimination is prohibited under the Civil Rights Act of 1964 which states that it is illegal to discriminate against a party based on the color of their skin, country of origin, or racial composition.
Same race discrimination is when the perpetrator is also from the Sam race as the victim.
For example on September 11, 2000, Zeke Wilson a black boxing promoter brought racism charges against a chairman of the state sports commission who was also black. For failing to provide promoter protection when William Pender a white boxing commisioner performed discriminatory acts against Zeke.
Dena is performing same race discrimination by passing over Indigo because of her skin colour.
Final answer:
Color discrimination can occur b. between members of the same race, making Indigo eligible to file a claim under Title VII.
Explanation:
The answer to this question is has a discrimination claim under Title VII of the Civil Rights Act of 1964 because color discrimination can occur between members of the same race. Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based on race, including color discrimination. Even though Deana is also African American, her preference for lighter-skinned cosmetic consultants can still be considered color discrimination.
Thus, the Civil Rights Act of 1964 forbids discrimination, stating that it is unlawful to treat a person unfairly on the basis of their race, national origin, or skin colour. Same-race discrimination occurs when the victim and the offender are members of the same racial group.
On October 1, 2019, Priscilla purchased a business. Of the purchase price, $92,000 is allocated to a patent and $552,000 to goodwill. If required, round your intermediate values to nearest dollar and use in subsequent computations. Calculate Priscilla’s 2019 § 197 amortization deduction. $
Answer:
$10,730
Explanation:
1. Patent: $92,000/15 years = $6,133
$6,133 × 3/12 = $1,533
2.Goodwill: $552,000/15 years= $36,800
$36,800 × 3/12 = $9,200
Total: $1,533 + $9,200= $10,733
Approximately $10,730
A friend wants to borrow money from you. He states that he will pay you $3,900 every 6 months for 7 years with the first payment exactly 7 years and six months from today. The interest rate is an APR of 6.2 percent with semiannual compounding. What is the value of the payments today
The present value of the annuity payments is determined using the present value formula for an ordinary annuity, adjusted for the delay and the semiannual compounding. The payments are $3,900 every six months, with the first payment starting 7.5 years from today and a semiannual interest rate of 3.1%.
Explanation:The value of the payments today, also known as the present value, can be calculated using the formula for the present value of an ordinary annuity. The formula includes the payment amount, the interest rate per period, and the number of periods.
First, let's determine the number of periods (n) and the interest rate per period (r). Since payments are made every 6 months, and the first payment starts 7 years and 6 months from today, the payments will continue for 7 years after the first payment, resulting in n = 14 periods. The semiannual interest rate is half the APR, so r = 6.2% / 2 = 3.1% per period.
Because the payments start 7.5 years from today, we must also discount the value of the annuity an additional half-year to today's value. To find the present value (PV) we use the formula:
PV of annuity due = PV ordinary annuity × (1 + r)
The formula for the PV of an ordinary annuity is:
PV = PMT × [(1 - (1 + r)^-n) / r]
Where PMT is the payment amount ($3,900). The present value can then be found by substituting the values into the formula and solving for PV. Once obtained, it is multiplied by (1 + r) to adjust for the first payment occurring in 7.5 years rather than 7 years.
Find the principal needed now to get the given amount; that is, find the present value.To get $ 90 after 2 and three fourths years at 6% compounded continuouslyThe present value of $ 90 is $ nothing .(Round to the nearest cent as needed.)
Explanation:
For continuous compounding, we use the following formula
[tex]FV_{N} = PVe^{i N}[/tex]
Scenario 1 :
FV = $ 90
N = 2 years
I = 6%
PV= ?
[tex]FV_{N} = PVe^{i N}[/tex]
[tex]90 = PVe^{(0.06) (2)}[/tex]
[tex]\frac{90}{e^{(0.06) (2)}} = PV[/tex]
[tex]PV = 79.8228[/tex]
PV = $ 79.82
Scenario 2:
[tex]FV_{N} = PVe^{i N}[/tex]
[tex]90 = PVe^{(0.06) (3)}[/tex]
PV = $ 75.17
Scenario 3:
[tex]FV_{N} = PVe^{i N}[/tex]
[tex]90 = PVe^{(0.06) (4)}[/tex]
PV = $ 70.80
Starset Machine Shop is considering a 4-year project to improve its production efficiency. Buying a new machine press for $455,000 is estimated to result in $187,000 in annual pretax cost savings. The press falls in the 5-year MACRS class, and it will have a salvage value at the end of the project of $75,000. The press also requires an initial investment in spare parts inventory of $34,000, along with an additional $3,800 in inventory for each succeeding year of the project. The shop’s tax rate is 24 percent and its discount rate is 9 percent. (MACRS schedule)
NPV:
Calculate the NPV of this project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Should the company buy and install the machine press?
a. Yes
b. No
Answer:
NPV: $11,238
a. Yes
Explanation:
Total Investment (PV) = a new machine press for $455,000 + initial investment in spare parts inventory of $34,000 = $489000
Pretax cost saving $187,000 -> After tax saving = $187,000 * (1- tax rate 24%)= $142,120
Cash flow of every year = After tax saving $142,120 - additional $3,800 in inventory for each succeeding year = $138,320
a salvage value at the end of the project of $75,000 is in year 5 => Cash flow of year 5 = $138,320 + $75,000 = $213,320
Discount rate: 9%Cash flow year 1: - 489,000Cash flow year 2: 138,320 Cash flow year 3: 138,320 Cash flow year 4: 138,320 Cash flow year 5: 213,320We use excel to calculate the Net Present Value of Project
= NPB(rate, cash flow of year 1 - year 5)
= NPV(9%, -489000,138320, 138,320, 138,320 , 213,320)
= $11,238
Yes, the company should buy and install the machine because NPV is positive
(Please see excel calculation attached)
Final answer:
The NPV calculation for the machine press includes considering the initial investment, annual savings, depreciation benefits, taxes, additional inventory costs, and the present value of the salvage value. These are all discounted at the shop's rate of 9 percent to determine if the investment is worthwhile.
Explanation:
To calculate the net present value (NPV) of the machine press for Starset Machine Shop, we need to consider the initial investment, the annual pretax cost savings, the salvage value, additional investments in inventory, depreciation from the MACRS schedule, taxes, and the discount rate. The key steps include:
Calculating the after-tax savings each year by subtracting taxes from the pretax cost savings.Adding the tax shield from depreciation by applying the MACRS depreciation rates to the cost of the machine press.Considering the increasing inventory costs each year.Discounting these cash flows at the company's discount rate of 9 percent.Adding the present value of the salvage value at the end of year 4.The calculation will result in the NPV of the investment. If the NPV is positive, it suggests that the investment would add value to the company, implying a recommendation to purchase the machine press. If the NPV is negative, the investment would not be financially beneficial, suggesting the machine press should not be purchased.
Muhammad, a 21-year old computer engineer, is opening an individual retirement account (IRA) at a bank. His goal is to accumulate $2.5 million in the IRA by the time he retires in 46 years. Muhammad expects his IRA to receive 8% nominal annual interest, compounded semiannually, throughout the 46 years. As a computer engineer, Muhammad believes his salary will increase at a constant 4% annual rate during his career. Muhammad wishes to make annual deposits into his IRA account over the 46 years. He wishes to start his IRA with the lowest possible deposit and then increase his deposit amount at a constant 4% rate each year.
Assuming end-of-year deposits, how much should she deposit the first year?
Answer:
The first annual depoisit will be of 3,373.49 dollars
Explanation:
Given the formula for future growing annuity
we need to solve for the yearly payment:
grow rate: 0.04
annual effective rate: 8% compounding semiannually:
[tex](/1+0.08/2)^2-1 = r_e\\[/tex]
r= 0.0816
FV 2,500,000
n 46
Formula for future value fo an ordinary annuity:
[tex]C_0 \times \frac{(1+r)^n-(1+g)^n}{r-g} = FV[/tex]
[tex]C_0 \times \frac{(1+0.0816)^{46}-(1+0.04)^{46}}{0.0816-0.04} = 2,500,000\\C_0 = $3,373.4855[/tex]
The first annual depoisit will be of 3,373.49 dollars
While the examples in this chapter have focused on a single-employer plan, many states operate statewide plans, referred to as Public Employee Retirement Systems (PERS), to which multiple employers contribute. One of the largest PERS plans in the nation is operated in the State of California. Required To answer the following questions, use the website found at www.calpers.ca.gov . The answers to the questions can be found in CalPERS's annual report and by using the "about," "organization." and "facts at a glance" sections Page 348 provided on the site. a. When was CalPERS established? b. How many employers contribute to CalPERS? c. How many members are served by CalPERS? d. What types of programs are administered by CalPERS? e. For the most recent reporting period, what is the value of total net position as listed in the statement of net position? f For the most recent reporting period, what was the total change in pension fund net position as reported in the statement of changes in net position? &.For the most recent reporting period, what was the funded status of pension programs PERF B and PERF C?
Answer:
a. 1932
b. 2,945 employers
c. Over 1.9 million members
d. They include Health Program, Long Term Care Plan, Deferred Compensation Plan and California Employers' Retiree Benefits Trust Fund for Post Retirement Program.
e. Value of total net position as of 30th June 2017 is $588.868 million
f. The total change in pension fund net position for most recent reporting period 30 June, 2017 is $27,984,457 thousands
g. PERF B is Schools and PERF C is Public Agency
Explanation:
a. CalPERS was established in 1932 as the "State Employees' Retirement System" and this name was changed as California Public Employees' Retirement System" (CalPERS) in the year 1992.
B) 2,945 Employers contribute to CalPERS. It includes 1,578 public agencies, 1,366 school districts and 1 the state of california.
C) 1.9 million members are served by CalPERS.
D) Two types of programs are administered by CalPERS:
1) Health Program
2) Other Programs: It includes-Long terms care plan,Deferred Compensation plan and California Employers' Retiree Benefits Trust Fund for post retirement program.
E) Value of total net position as on 30 June 2017 is $588.868 million (588,868,000) and as of June 30 June 2016 it is USD 572.292 million.
F) The total change in pension fund net position for most recent reporting period 30 June, 2017 is $27,984,457 thousands as added $(20,171,011+ 5,085,422 + 2,538,563 + 8,481+183,146 - 2,166).
G) For Most recent reporting period 30 June, 2017 the funded status of pension programs PERF B is Schools and PERF C is Public agency.
Which of the following is a nonmanufacturing business where process costing would most likely be used? An auto body shop. A furniture repair shop. A laboratory that tests water samples for lead A tailoring shop. A beauty shop.
All of them are the non-manufacturing business where process costing would most likely be used.
Explanation:
All are non-manufacturing business which are as follows, An auto body shop. A furniture repair shop. A laboratory that tests water samples for lead A tailoring shop. A beauty shop.Non-manufacturing business costs refers to those business where it is incurred outside the factory or production unitNon-manufacturing costs includes,selling expenses general expenses Selling Expenses It is also called as selling and distribution expenses.Non-manufacturing expenses have no impact on the production cost of the company due to their period costs.
Final answer:
Among the nonmanufacturing businesses listed, a laboratory that tests water samples for lead would be the most likely to use process costing because it produces homogeneous outputs in a continuous flow, similar to chemical plants.
Explanation:
Process costing is a method used in manufacturing and nonmanufacturing businesses where products or services are homogeneous and produced in a continuous flow. This makes it suitable for industries like chemical production or water treatment where many units of a similar product are created. Amongst the nonmanufacturing businesses listed such as an auto body shop, a furniture repair shop, a laboratory that tests water samples for lead, a tailoring shop, and a beauty shop, a laboratory that tests water samples for lead is the most likely to use process costing. This is because, similar to the examples of chemical plants and chemistry labs, the laboratory conducts standardized processing experiments and runs, which result in homogeneous outputs allowing for a more accurate product cost determination.
Process costing enables the calculation of the costs per unit of the product by tracking and averaging the direct and indirect costs involved in the production process. This includes both fixed operating costs, such as the cost of maintaining the facility, and variable costs that change with the level of production - all of which are key to understanding and managing costs effectively in businesses with a significant degree of operating leverage or those pursuing economies of scale.
Cash is King!Good cash management is an essential job of the financial manager! You own a small auto sales business called King Kars. You stock up on inventory in February, April, June, and September. Your annual cash budget indicates that your MONTHLY NET CASH for the year will be the following:JAN $5,000FEB -$30,000MAR $20,000APRIL -$35,000MAY $25,000JUNE -$10,000JULY $25,000AUG $25,000SEPT -$30,000OCT $15,000NOV $15,000DEC $25,000You begin the year with a cash balance of $50,000, and the minimum cash balance desired must be $50,000 every month. Prepare a cash flow summary and external financing summary as noted in the Excel spreadsheet assigned to this submission.
1. Do you believe that the company needs outside financing?
2. What is the minimum line of credit to request from a lender?
3. Do you think you are a good candidate for the line of credit? Why?
Answer:
The solution to the given problem is given below.
Explanation:
1. Do you believe that the company needs outside financing?
Yes, Company needs outside finance total $ 40,000 as $25,000 in month of Feb and $15,000 in month of Apr il.
2. What is the minimum line of credit to request from a lender?
Minimum line of credit needed is $40,000
3. Do you think you are a good candidate for the line of credit? Why?
Yes, we are good candidate for line of credit because we can start repayment by May and repay by July and after repayment we will have ending March Cash balance $100,000 .
Detailed calculations are attached with the image.
Blue Seas Cruiseline offers two types of dinner cruises: Regular and Executive. The contribution margin per ticket sold is $30 for the regular cruise, and $90 for the executive. Fixed costs are $210,000. It expects to sell four regular dinner cruises for every one executive dinner cruise. What is the total number of regular cruises Blue Seas must sell in order to breakeven? A. 1,750 B. 5,000 C. 4,000 D. 1,000
Answer: A - 1,750
Explanation:From the above question, The contribution margin per ticket sold is $30 for the regular cruise and $90 for the executive. Fixed costs are $210,000.
What is the total number of regular cruises Blue Seas must sell in order to breakeven?
BEP in units = fixed cost/ contribution margin.
= $210,000/($30 * 4) = 1,750
Answer:
C. 4,000 regular cruises
Explanation:
The Break-even point is where the operating income is zero that is, the firm pay theri variable and fixed cost related to opperations.
[tex]\frac{Fixed\:Cost}{Contribution \:Margin} = Break\: Even\: Point_{units}[/tex]
Where:
[tex]Sales \: Revenue - Variable \: Cost = Contribution \: Margin[/tex]
As the company has multple product we must solve for the contribution of the mix:
regular: 30
executive: 90
the ratio of sales is 4:1
Thus 30 x 4/5 + 90 x 1/5 = contribution mix
contribution mix:42
At the current sales ratio we expect to make 42 dollar per seat
Now we calcualte for the BEP of the mix:
[tex]\frac{210,000}{42} = Break\: Even\: Point_{units}[/tex]
BEP 5000
Now, we solve for the ratio of sales wich is 4/5 for regular cruises:
5,000 x 4/5 = 4,000
Discounting refers directly to a. calculations that ignore the phenomenon of compounding for the sake of ease and simplicity. b. decreases in interest rates over time, while compounding refers to increases in interest rates over time. c. finding the future value of a present sum of money. d. finding the present value of a future sum of money.
Answer:
The correct answer is letter "D": finding the present value of a future sum of money.
Explanation:
The Discount Rate is the interest rate that you need to earn on a given amount of money today to eventually end up with a given amount of money in a certain period in the future. The concept is associated with the present value of money that estates having a dollar today will be worth more than having a dollar tomorrow.
In investing, typically the higher the interest rate, the higher the risk involved with the investment and its future cash flows.
Final answer:
Discounting refers to the computation of the present value of a future sum of money, which is option d. It plays a vital role in financial and investment decisions, reflecting the preference of current consumption over future benefits.
Explanation:
The concept of discounting pertains to the technique of determining the present value of a future sum of money. The option that correctly defines discounting is d. finding the present value of a future sum of money. In financial decision-making, the discount rate is a crucial factor because it reflects how much value is placed on future benefits today. The higher the discount rate, the smaller the present value of future amounts, indicating a preference for immediate consumption over future benefits. This notion underpins various economic decisions, including investment in stocks and bonds, where future earnings and interest payments are factored into their present valuation. Two aspects to remember about discounting include the following: First, a high-interest rate results in a lower present value for future sums compared to a lower interest rate. Second, amounts to be received in the distant future are significantly discounted and thus have a much lower present value than amounts to be received sooner.
If she spends all of her income on uglifruits and breadfruits, Maria can just afford 11 uglifruits and 4 breadfruits per day. She could also use her entire budget to buy 3 uglifruits and 8 breadfruits per day. The price of uglifruits is 6 pesos each. How much is Maria's income per day?
(a) 115 pesos;
(b) 105 pesos;
(c) 114 pesos;
(d) 119 pesos;
(e) None of the above.
Answer:
(c) 114 pesos;
Explanation:
Let u = price of uglifruits and b = breadfruits
Her budget constraints are :
11u + 4b = income
3u + 8b = income
Equate both equations together since they're both equal to income.
11u + 4b = 3u + 8b
U = 6 pesos
66 +4b = 18 +8b
48 = 4b
b = 12 pesos
Replace the price for and breadfruits into the initial equation to derive income
66 + 48 = 114 pesos
I hope my answer helps you
Find at least three implicit modelling assumptions or other qualitative factors which are relevant but not covered by the model. (e.g., all workers are assumed to have the same efficiency – Do not reuse this!)
Home Improvement Store (ACME)
Employee
Scheduling Problem
(
Answer and Explanation:
For Home Improvement Store (Acme) following are the implicit modelling assumptions or other qualitative factors which are relevant but not covered by the model:
1)Average customer footfall is considered at all times.
2)Seasonal effects are not considered. For example, boost in sales during festival times.
3)Employee absenteeism is not considered. i.e. all employees are expected to be present always.
4)Location is not considered to affect the change in scheduling activity.
5)Wages are considered to be uniform throughout and not affect employee performance.
According to the concept of organizational demography, if team members have dissimilar experiences, it will lead to ________. higher team efficacy higher employee turnover increased employee satisfaction decreased level of conflicts higher employee motivation
Answer: Higher employee turnover
Explanation:
There are different aspect of organizations. According to the concept of organizational demography, if team members have dissimilar experiences, it will lead to higher employee turnover.
Organizational demography is simply known to be the study of the makeup of a social entity when looking at its members' attributes.
This demography means the act or method which one measures the employee of the organization shares of a common place of work not looking at their caste, sex, religion, etc.
Learn more about Organizational demography from
https://brainly.com/question/17753589
Assume that direct labor is paid at a rate of $ 25 per hour and Job 456 used $ 2 comma 350 of direct materials. What was the total manufacturing cost of Job 456?
Answer:
Total manufacturing cost will be $17,500
Explanation:per hour of direct labour is $25 and
350 of direct materials was used at $2 which is 2*350=700
then to get the total manufacturing cost is $25 multiplied by 700 = $17,500
Answer:
Direct Materials. 2350
Direct labour(25*1) 25
Total Manufacturing cost= 2350+25=2375
Explanation:
Note: In the absence of total working hours, we assume 1hr as working hour.