Answer:
Financial account transactions are those that involve capital goods or purchases.
The Current account is for goods and services.
1. Australian company buys steel from a U.S. firm. - Current Account. Payment from foreigners.
This is a purchase of a good being steel and the payment was made by foreigners to a U.S. firm.
2. The Federal Reserve buys $2 billion worth of euros. Financial Account. Payment to foreigners.
This is a capital flow involving the purchase of another currency. It was done by paying foreigners.
3. Profits are earned by a U.S. based mining company operating in Mexico. Current Account. Payment from foreigners.
These profits were made from business operations offering goods and services so is for the current account. The profits was made from Mexico so is a Payment from foreigners.
4. An English company purchases a U.S. confectionery manufacturer. Financial Account. Payment from Foreigners.
The English company invested in owing the confectionery manufacturer so this is a capital transaction. It involved a foreign company paying a U.S. company so is a payment from foreigners.
Answer:
a. If an English company purchases a U.S. confectionary manufacturer, payments from foreigners flow into the U.S. financial account.
b. If profits are earned by a U.S.-based mining company operating in Mexico, payments from foreigners flow into the U.S. current account.
c. If the Federal Reserve buys $2 billion worth of euros, payments to foreigners flow into the U.S. financial account.
d. If an Australian company buys steel from a U.S. firm, payments from foreigners flow into the U.S. current account.
Explanation:
Factor income includes wages, corporate profits, or any payment to owners of capital. An example of this is the profits earned in Mexico by the U.S. mining company. These profits are a payment from foreigners. This transaction is accepted for in the current account.
Sales and purchases of goods and services are often the biggest line item in the current account. The payment from Australia to the United States for steel falls into this account.
Private sales and purchases of assets include the exchange of any assets that create a future liability, such as the purchase of stocks or the purchase of a corporate entity. The English company's purchase of a U.S. confectionary manufacturer falls into the financial account.
Official asset sales and purchases are those purchases of assets, such as currency reserves, made by central banks. The Federal Reserve's purchase of $2 billion worth of euros falls into the financial account.
International transfers include direct monetary transfers into or out of the United States. This includes money sent by immigrants to family members in their native country. This question does not include an example of transfers.
The HBR case you purchased is priced with one price for students (the lowest price), one price for professors, and one price for the general public. What is this an example of?
Answer:
Price discrimination
Explanation:
Price discrimination is defined as the situation where a supplier sells identical or similar products to different markets at different prices.
This strategy is successful because different target customers are willing to pay different prices for the same product.
In the given example the HBR is priced differently for students (the lowest price), professors, and for the general public.
These different target markets pay different notices for the same product
On May 10, Whispering Winds Corp. issues 2,450 shares of $15 par value common stock for cash at $18 per share. Journalize the issuance of the stock.
Answer: Please find answers in the explanation column
Explanation:
Date Account Debit Credit
May 10 cash $44,100
Common stock $36, 750
paid in capital in excess of
------par value common stock $7,350
Calculation
Cash = shares issued x cash per share = 2,450 x 18 =$44,100
Common stock= shares issued x par value common stock = 2,450 x $15=$36, 750
paid in capital in excess of -par value common stock= 2450 x (18-15 = 2450 x $3)= 7,350
Privatization of the public sector jobs can...
A. actually reduce the percentage of union membership.
B. make the service provider directly responsible to the consumers.
C. make it more difficult to avoid or shorten a strike.
D. All the above are true.
Answer:
A. actually reduces the percentage of union membership.
Explanation:
Remember, the term privatizaton simply refers to a transfer of ownership of public sectors like an energy company owned by the government to private individuals.
We can say this because Public sector jobs are often seen as less profit-oriented, but as welfare focused jobs. Thus, in most economies when privatization occurs, management tends to reduce the percentage of union membership by employing certain tactics.
You are managing a portfolio of $1 million. Your target duration is 10 years, and you can choose from two bonds: a zero-coupon bond with maturity five years, and a perpetuity, each currently yielding 5%. a. How much of (i) the zero-coupon bond and (ii) the perpetuity will you hold in your portfolio? (Do not round intermediate calculations. Round your answers to 2 decimal places.) b. How will these fractions change next year if target duration is now nine years? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Answer:
Ai.Zero coupon bonds = 68.75%
Aii. Perpetuity= 0.3125
Bi. Zero coupon bonds = 70.58%
Bii. Perpetuity= 0.2942
Explanation:
ai. Calculation for How much of the zero-coupon bond
Duration of Zero Coupon Bond = 5 years
Duration of Perpetuity = 1.05/0.05 = 21 years
Using this formula
Dp=W×D1 +(1-W)×D2
Let plug in the formula
10 = 5w + (1 - w)21
10 = 5w + 21 - 21w
21w-10w=21-5
11w=16
w=11/16
w = 0.6875*100
w=68.75%
Zero coupon bonds = 68.75%
Therefore How much of the zero-coupon bond
you hold in your portfolio will be 68.75%
aii. Calculation for the perpetuity you will hold in your portfolio
Perpetuity= 1 - 0.6875
Perpetuity= 0.3125
Therefore the perpetuity you will hold in your portfolio will be 0.3125
bi. Calculation for how will these fractions change next year if target duration is now nine years
Duration of Zero Coupon Bond = (5 -1) =4years
Duration of Perpetuity = 1.05/0.05 = 21 years
Using this formula
Dp=W×D1 +(1-W)×D2
Let plug in the formula
9 = 4w + (1 - w)21
9 = 4w + 21 - 21w
21w-9w=21-4
12w=17
w=12/17
w = 0.7058×100
w=70.58%
Zero coupon bonds = 70.58%
Therefore How much of the zero-coupon bond
you hold in your portfolio will be 70.58%
bii. Calculation for the perpetuity you will hold in your portfolio
Perpetuity= 1 - 0.7058
Perpetuity= 0.2942
Therefore the perpetuity you will hold in your portfolio will be 0.2942
A contingent sale collapses because the buyer is unable to sell his own property. At this point, the parties should complete a:
Answer:
rescission agreement
Explanation:
A rescission agreement is a remedy in law that allows parties to cancel a contract.
Usually parties to a contract rescind if there is a misrepresentation, mistake, duress, or undue influence.
Mutual rescission is when there is an agreement between the two parties to cancel the contract before it's performance.
If a contingent sale fails because buyer is unable to meet his obligations bother parties can complete a rescission agreement.
Assume that Cane’s customers would buy a maximum of 96,000 units of Alpha and 76,000 units of Beta. Also assume that the raw material available for production is limited to 246,000 pounds. How many units of each product should Cane produce to maximize its profits?
Answer:
3,000 units of alpha
76,000 units of beta
Explanation:
the question is incomplete, so I looked for a similar question:
"Cane Company manufactures two products called Alpha and Beta that sell for $215 and $160, respectively. Each product uses only one type of raw material that costs $7 per pound. The company has the capacity to annually produce 125,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta $ 21 Direct materials $42 Direct labor 35 28 Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses 23 21 31 34 28 24 Common fixed expenses 31 26 $190 $154 Total cost per unit The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars."
contribution margin per unit:
Alpha = $215 - $128 = $87
Beta = 160 - $94 = $66
pounds of raw materials per unit:
Alpha = $42 / $7 = 6
Beta = $21 / $7 = 3
since the production constraint is the number of pounds of raw materials available, the contribution margin per pound:
Alpha = $87 / 6 = $14.50
Beta = $66 / 3 = $22
so the company should try to produce the largest amount of betas as possible = 76,000 x 3 pounds = 228,000 pounds
remaining production of alphas = (246,000 - 228,000) / 6 = 3,000 units
___________________ occurs when meanings are misinterpreted due to intentional or unintentional problems during the sending or receiving of the message
Answer:
Message distortion.
Explanation:
This term is explained to be a change in signal or is said to occur when message sent by one communicator is misinterpreted by the said receiver. In some cases processes shows that in this study form, their functioning is affected by certain of variables ranging from the objects or events being perceived, the environment in which perception occurs, and the individual doing the perceiving.
In some cases, misinterpretation is seen to play roles that form distortion in messages; thereby hampering the communication process. Also some environmental factors posses constraints of lights, sounds, smell, objects, social, political, cultural, technological environments which govern the human behaviour and stimulate him into action affecting communication too.
Answer: Message Distortion
Explanation:
When a message is sent by one entity with a meaning in mind for it but that message is misinterpreted by the recipient who sees another meaning, message distortion has occurred.
This could have been caused by factors that were either intentional or unintentional during the sending or receiving of the message such as network problems causing messages to be jumbled up.
Message distortion effects can range from harmless to colossal such as a trader getting a distorted message asking them to make a trade that will result in massive losses and acting on it.
Juan Foods pays off a long-term debt in full. Which one of the following statements best describes the appropriate book-keeping for this transaction?
a. Debit cash; credit long-term debt
b. Debit long-term debt; credit owners' equity
c. Debit owners' equity; credit long-term debt
d. Debit long-term debt; credit cash
Answer:
Debit long-term debt; Credit cash.
Explanation:
The Journal Entry is shown below:-
Long term Dr, XXXXXXXX
To Cash
(being long term is recorded)
Long-term debt is a liability which usually has a credit balance. Therefore, until the long-term debt is entirely repaid, the long-term debt account has to be debited to pay it off entirely from the account books. In another hand, the cash account has to be paid, because there is a cash outflow.
During inflationary periods, assets such as TIPS, gold, and real estate are used as _____________ hedges. Money demand will decrease when interest rates, payment technology, inflation risk, and the liquidity of other assets ___________.
Answer:
Inflation; decrease.
Explanation:
An inflation can be defined as the sustained or persistent rise in the prices of goods and services at a specific period of time. Also, an inflation hedge refers to the investment that are used to protect the eroding purchasing power of a currency (money) as a result of a persistent increase in price level due to inflation.
During inflationary periods, assets such as TIPS, gold, and real estate are used as inflation hedges.
Additionally, money demand will decrease when interest rates, payment technology, inflation risk, and the liquidity of other assets decrease. This simply means that, the desired holding of financial assets in the form of money (monetary value) is dependent on factors such as interest rates, inflation risk, payment technology etc.
During inflationary periods, assets such as TIPS, gold, and real estate are used as inflation hedges.
Money demand will decrease when interest rates, payment technology, inflation risk, and the liquidity of other assets increases.
Inflation is when there is a general rise in the value of money. When there is an inflation, more money would be needed to buy goods and services. As a result, the value of currency would decrease.
On the other hand, the value of commodity money increases. As a result, people would prefer to hold commodities during an inflationary period because their value is preserved. These makes commodities good inflation hedges.
When interest rate increases, there would be a decrease in the demand for money. Individuals would prefer to save their money as the interest earned on deposits would be higher.
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Bailey Hill Co. uses the indirect method to determine its net cash flows from operating activities. During the course of the year, the company's Accounts Receivable increased by $28,000 and its Accounts Payable decreased by $14,000. If these are the only two adjustments required to convert net income to net cash provided by operating activities, the combined effect will be a(n):
Answer: d. subtraction of $42,000.
Explanation:
An increase in Current Assets such as Accounts Receivable is considered to be a cash outflow because it means that more assets were not converted to actual cash.
A decrease in Current Liabilities is a cash outflow as well as it means that the company used cash to pay off these liabilities thereby reducing the cash balance.
Combined Effect is therefore = -28,000 - 14,000
= -$42,000
You have deposited $16,167 in a special account that has a guaranteed rate of return. If you withdraw $3,000 at the end of each year for 7 years, you will completely exhaust the balance in the account. The guaranteed rate of return is closest to: (Ignore income taxes.) Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.
Answer:
7%
Explanation:
in order to solve this we can use the present value of an annuity formula:
present value of an annuity = annuity payment x annuity factor
present value of an annuity = $16,167annuity payment = $3,000annuity factor = ? all we know is that it lasts 7 periodsannuity factor = $16,167 / $3,000 = 5.389
using a present value of an annuity table, we can look for the annuity factor that corresponds to 7 periods and is equal to 5.389. In this case, the interest rate is 7% (annuity factor, 7%, 7 periods = 5.389)
A company in NY is buying goods from a Japanese company. The goods are sold FOB San Francisco port:__________
A. The freight from Japan to San Francisco is an asset, the freight from San Francisco to New York is an expense
B. Both the freight from Japan to San Francisco and from San Francisco to New York are assets
C. Both the freight from Japan to San Francisco and from San Francisco to New York are expenses
Answer:
D. The freight from Japan to San Francisco is an expense, the freight from San Francisco to New York is an Asset
Explanation:
In this specific scenario, the freight from Japan to San Francisco would be classified as an expense because they are purchasing the goods from the Japanese company in Japan and thus paying them for the transport. Since the goods are sold FOB this means that once they reach the San Francisco port they are no longer the seller's responsibility and not become the NY company's asset. Thus making the freight from San Francisco to New York an Asset
Dominic and Morgan are partners. Dominic has a capital balance of $360,000 and Morgan has a capital balance of $265,000. Morgan sells $125,000 of his ownership to Lance. Which of the following is true of the items in the balance sheet?
A. Assets will decrease by $125,000.
B. Assets will increase by $125,000.
C. The total equity decreases by $125,000.
D. The total equity remains unchanged.
Answer:
D. The total equity remains unchanged
Explanation:
Two partners are Dominic and Morgan. Their capital are $360,000 and $265,000. Total is $625,000. Now Morgan has decided to sell $125,000 of his ownership to Lance. So Lance will pay this money To Morgan. After admission capital of Morgan will be reduced to $140,000 and new partner Lance's capital is $125,000. Thus there will be no change in asset or total equity. However it has been assumed that new partner will not bring any goodwill.
Department R had 5,000 units in work in process that were 75% completed as to labor and overhead at the beginning of the period; 30,000 units of direct materials were added during the period; 32,000 units were completed during the period; and 3,000 units were 40% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories. The number of equivalent units of production for conversion costs for the period was:_____.
a. 29,450.
b. 31,950.
c. 32,450.
d. 26,000.
Answer:
a. 29,450
Explanation:
Equivalent units under FIFO method are calculated using the following formula: Equivalent units for each cost component = (100% − A) × B + C + D × E . Where a = percentage of completion at the end of last period , b = units in opening work in process , c = units started and completed in current period (30,000 - 3,000 =27,000), d = percentage of completion of units in closing work in process , e = units in closing work in process
Equivalent units for each cost component
= (100% − 75%) × 5000 + 27000 + 40% × 3000
= 29,450
Marigold Corp. has two divisions; Sporting Goods and Sports Gear. The sales mix is 65% for Sporting Goods and 35% for Sports Gear. Marigold incurs $5735000 in fixed costs. The contribution margin ratio for Sporting Goods is 30%, while for Sports Gear it is 50%. The break-even point in dollars is
Answer:
Break-even point (dollars)= $15,500,000
Explanation:
Giving the following information:
The sales mix is 65% for Sporting Goods and 35% for Sports Gear. Marigold incurs $5735000 in fixed costs.
The contribution margin ratio for Sporting Goods is 30%, while for Sports Gear it is 50%
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= Total fixed costs / Weighted average contribution margin ratio
Break-even point (dollars)= 5,735,000 / (0.3*0.65 + 0.5*0.35)
Break-even point (dollars)= $15,500,000
Assess how the leadership team you designate will affect organizational performance in the short-term and the long-term.
Explanation:
A company's leadership team is an essential part of the company's strategic development and decision-making process.
Therefore, the leadership team will directly influence organizational performance in the short and long term, in the sense that this team will be responsible for the strategic planning that will contemplate the long term in the organization and help it to reach its goals and objectives.
The decision-making process, on the other hand, will impact the company in the short term and will be essential for the decisions made to be beneficial for the improvement of organizational processes and the achievement of competitive and financial advantages.
Suppose nominal GDP was $360 billion in 1990 and $450 billion in 2000. The appropriate price index (1985 = 100) was 120 in 1990 and 125 in 2000. Between 1990 and 2000, real GDP:____________
Answer:
Real GDP increased by 20% between 1990 and 2000
Explanation:
Real GDP (RGDP) = (Nominal GDP (NGDP) / Price level) x 100
RGDP, 1990 ($ Billion) = (360 / 120) x 100 = 300
RGDP, 2000 ($ Billion) = (450 / 125) x 100 = 360
Therefore, between 1990 and 2000, Real GDP
= (360 / 300) - 1
= 1.2 - 1
= 0.2
= 20%
Thus, the Real GDP increased by 20% between 1990 and 2000
A registered publicly traded issuer has 10,000,000 shares outstanding. If a wealthy investor buys 6,000,000 shares and intends to exercise control:
Answer:
the investor must file a 13D report with the SEC.
Explanation:
Any investor that holds more than 5% of the outstanding stocks of a publicly traded corporation must file a 13D report. The investor is classified as a beneficial owner by the Securities and Exchange Commission (SEC) since their influence and voting power in the corporation are very large. It must be filed within 10 days of the transaction that resulted in more than 5% in the corporation.
If the FOMC directs the Federal Reserve trading desk to loosen credit, which of the following will happen?
А) The trading desk will engage in repurchase agreements with banks and cash reserves will be injected into the banking system
B) The trading desk will engage in reverse repurchase agreements with banks and cash reserves will be injected into the banking system
C) The trading desk will engage in repurchase agreements with banks and cash reserves will be drained from the banking system
D) The trading desk will engage in reverse repurchase agreements with banks and cash reserves will be drained from the banking system
Answer: If the FOMC directs the Federal Reserve trading desk to loosen credit, the trading desk will engage in repo's with banks, injecting reserves into the banking system. This should lower the Fed Funds Rate between banks since there are more reserves available.
Explanation: During prolonged periods of economic recession, interest rates can be expected to. Decrease.
Jobs, Inc. has recently started the manufacture of Tri-Robo, a three-wheeled robot that can scan a home for fires and gas leaks and then transmit this information to a smartphone. The cost structure to manufacture 19,000 Tri-Robos is as follows. Cost Direct materials ($48 per robot) $912,000 Direct labor ($38 per robot) 722,000 Variable overhead ($5 per robot) 95,000 Allocated fixed overhead ($32 per robot) 608,000 Total $2,337,000 Jobs is approached by Tienh Inc., which offers to make Tri-Robo for $111 per unit or $2,109,000. Following are independent assumptions. 1) Assume that $405,000 of the fixed overhead cost can be avoided. Using incremental analysis, determine whether Jobs should accept this offer 2) Assume that none of the fixed overhead can be avoided. However, if the robots are purchased from Tienh Inc., Jobs can use the released productive resources to generate additional income of $375,000. 3) Based on the above assumptions, indicate whether the offer should be accepted or rejected?
Answer:
1) the offer should be accepted because its results in a financial advantage of $25,000
2) the offer should not be accepted because its results in a financial disadvantage of $5,000
3) depending on whether 1) or 2) is true, the offer should be accepted or rejected. If 1) applies, then the offer should be accepted. If 2) applies, then the offer should be rejected.
Explanation:
19,000 robots produced:
Cost Direct materials ($48 per robot) $912,000 Direct labor ($38 per robot) $722,000 Variable overhead ($5 per robot) $95,000 Allocated fixed overhead ($32 per robot) $608,000 ($405,000 are avoidable)Total $2,337,000average total production cost per unit = $123
avoidable costs per unit = $112.3158
total avoidable costs if units are purchased from outside vendor = $2,134,000
total purchase costs from outside vendor = $2,109,000
financial advantage of purchasing robots = $25,000
if no allocated fixed costs are avoidable, but the facilities can generate $375,000 in additional income:
total avoidable production costs + additional income = $2,104,000
total purchase costs from outside vendor = $2,109,000
financial disadvantage of purchasing robots = $5,000
jet costs and is expected to fly miles during its -year life. Residual value is expected to be zero because the plane was used when acquired. If the plane travels miles the first year, how much depreciation should record under the units-of-production method?
Answer: c. $3,960,000
Explanation:
Using the units-of-production method of depreciation, depreciation is done per unit used.
With a residual value of zero, the formula is;
= Cost x Millage used / Useful life mileage
= 55,000,000 x 36,000,000/500,000,000
= $3,960,000
discuss how Continuous Improvement is impacting healthcare, banking, retail and/or government (choose one area). Merger of Lean and Six Sigma are interesting topics you can explore here
Answer:
Explanation:
How Continuous Improvement is impacting Healthcare
1. There is now a greater availability of consultancy services
2. Community health awareness programs are instilling health consciousness and care in members of remote communities
3. The presence of NGOs (Non-governmental Organizations) and NPOs (Non-profit Organizations) is increasing the availability of free medicines, equipment and healthcare infrastructure in low-income countries or states
4. Technological revolution has affected the health sector as well. Medical services and interactions between patients and doctors, has gone digital. Software applications were doctors and patients can meet, are now in vogue. This has reduced the stress, costs and risks involved in migrating from one place to another to deliver or receive healthcare. It also helps proffer immediate (temporary or permanent) solutions to emergency cases.
5. Apart from making good use of technology and philanthropy, regular scientific research impacts healthcare positively; by serving better ways to treat certain ailments and searching out the cures to new ailments or pandemics.
Which of the following will cause an increase in ROI? An increase in controllable fixed costs. An increase in average operating assets. An increase in sales. An increase in variable costs.
Answer:
3. An increase in sales.
Explanation:
This is true due to the effect it would have on the product in question which would lead to return on the investment. For example, a particular product sells 400pcs each month. In subsequent month, it started selling 900pcs each month. This increase in sales will lead to great return in the investment made by the company regarding to that particular product.
The organizational environment is a set of forces and conditions that operate within an organization's boundaries. true false
Answer:
False.
Explanation:
The organizational environment is a set of forces and conditions that operate outside an organization's boundaries and has the potential or capability of affecting its operations, resources and performance, either fully or in parts.
Some examples of an organizational environment are competitors or rivals, government policies, regulatory agencies, suppliers, customers etc.
You sell a stock for $50.00 that was held for 10 years. You earned a return of 8%. What was the original cost of the stock?
Answer:
Original cost of the stock = $23.16
Explanation:
Original cost of the stock = Selling price of stock / ( 1 + r )^n
Original cost of the stock = $50 / (1+8%)^10
Original cost of the stock = $50 / (1.08)^10
Original cost of the stock = $23.16
At her current level of consumption, Jess gets half as much marginal utility from an additional bagel as from an additional muffin. If the price of muffin is $2 each, then Jess is maximizing her utility if the price of a bagel is:
Answer: $1
Explanation:
From the question, we are informed that at her current level of consumption, Jess gets half as much marginal utility from an additional bagel as from an additional muffin.
Since we have been informed that the price of muffin is $2 each, then Jess is maximizing her utility if the price of a bagel is:
= $2/2
= $1
It should be noted that utility simply means satisfaction that is gotten when one uses a particular product or service.
Angela deposited her money in a credit union bank. One day, she finds that the bank deposited her paycheck to the wrong account, causing the account to become overdrawn. Which legal responsibility has Angela’s bank failed to uphold?
A.
the responsibility to keep her money safe
B.
the responsibility to reach the correct account upon payment
C.
the responsibility to notify customers regarding the money deposited or withdrawn
D.
the responsibility to issue an account statement listing all transactions over the past year
E.
the responsibility to protect customers’ money
Answer:
The correct answer is the responsibility to notify the customers regarding the money deposited or withdrawn by which this could have been prevented if the bank were able to provide the details that the money she had deposited were safely placed on her account and not on someone else’s. So, the answer is c.
Answer:
It's C. the responsibility to notify customers regarding the money deposited or withdrawn
Explanation:
the difference between the actual quanity and the standard quanity, multiplied by the standard price is the
Answer: Direct materials quantity variance.
Explanation:
Direct Material quantity variance is the difference between the actual quantity of materials used in production and the standard quantity that was supposed to be used, multiplied by the standard price of the material.
It is a method that checks the company's efficiency is being able to use raw materials to produce goods. If the Actual quantity needed is greater than the Standard quantity, this will be considered an Unfavorable Variance and mean that the company was not efficient in using the materials.
Causes of this can be low quality of materials and inadequate employee training.
Consider the following work breakdown structure:What is the probability that this project will be completed within 210 days AND after 195 days? Time Estimates (days) Activity Precedes Optimistic Most Likely Pessimistic Start A,B,C - - - A D 38 50 62 B E 90 99 108 C E 70 80 90 D E,F 19 25 31 E End 91 100 115 F End 62 65 68
a) 0.815.
b) 0.8413.
c) 0.95.
d) 0.9772.
Answer: 0.8186
Explanation:
Given that;
activity To Tm Tp Te (V)^0.5 v
A 38 50 62 50 4 16
B 90 99 108 99 3 9
C 70 80 90 80 3.333333 11.11111
D 19 25 31 25 2 4
E 91 100 115 101 4 16
F 62 65 68 65 1 1
Expected duration Te = (4 × Tm + To + Tp ) / 6
Variance = ( Tp-To/6]²
variance of the critical path = 9+16 =25
SD of the critical path = ( var)^0.5 = 5
probability that the project will be completed within 210 days is given by
z = (210-200) / 5 = 2
which gives probability of 0.97725
Probability that the project will be completed within 195 days
z = (195-200) / 5 = -1
which corresponds to probability of 0.1586
Now required probability that project completes within 210 but before 195 days is given by
0.97725 - 0.1586 = 0.8186
Why is the identification of favorable and unfavorable variances so important to a company? How can the identification of the variances help management control costs?