in countries where inflation is expected to be high, interest rates also will be high, because investors want compensation for the decline in the value of their money. this relationship is referred to as the bandwagon effect. countertrade theory the fisher effect. the law of one price.

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Answer 1

The relationship between high inflation and high-interest rates is referred to as the Fisher Effect.

Fisher Effect

The Fisher Effect is a theory that connects the nominal interest rate to inflation. This theory asserts that an increase in inflation leads to an increase in nominal interest rates, causing investors to be compensated for the expected depreciation of their money.

Furthermore, high inflation implies that the value of money is declining rapidly. Therefore, investors want a higher return on their investments to compensate for this erosion of value. This is why high inflation leads to high-interest rates in countries that are struggling with inflation. Hence, the correct option is the Fisher Effect.

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Related Questions

margot's organization encourages its members to be proud of their affiliation with the organization and to work together to achieve its goals. this shows the globe project's cultural dimension of

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Margot's organization encourages its members to be proud of their affiliation with the organization and to work together to achieve its goals.

This is an example of the cultural dimension of the Globe Project, which seeks to promote a sense of collective identity, social responsibility, and collaboration amongst its members.

It emphasizes the importance of valuing cultural diversity and understanding the impact of cultural differences on organizational performance.

This helps to create a cohesive and unified culture that can drive the organization towards its desired outcomes.

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It is important to emphasize that primarily because they are related to how a firm interacts with its stakeholders, almost all strategic management process decisions have __________ dimensions.A) ethicalB) localC) politicalD) global

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It is important to emphasize that primarily because they are related to how firm interacts with its stakeholders, almost all strategic management process decisions have ethical dimensions.

What is strategic management?

Strategic management refers to the process of formulating and implementing the major goals and initiatives of an organization. It involves analyzing the company's internal and external environment, defining its vision, mission, and values, setting objectives and goals, formulating strategies to achieve them, and allocating resources to implement those strategies. The strategic management process also involves monitoring progress, making adjustments as necessary, and evaluating the effectiveness of the strategies implemented. Successful strategic management requires a clear understanding of the company's competitive landscape, market trends, customer needs, and technological advancements, among other factors. It enables an organization to align its resources and capabilities with its long-term goals, build a sustainable competitive advantage, and enhance its overall performance and profitability.

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people who risk their time, money, and other resources to start and manage a business are called? group of answer choices owners ceo's founders inventors entrepreneurs

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People who risk their time, money, and other resources to start and manage a business are called Entrepreneurs.

What is an entrepreneur?

An entrepreneur is an individual who creates and runs a business while bearing the risks associated with it. Entrepreneurship is the process of developing and maintaining a new company while also assuming all of the risks associated with it.

An entrepreneur establishes and manages their own company or business to provide goods and services in exchange for profit. Entrepreneurs are self-employed, they assume all financial risk, and their work is self-motivated.

Entrepreneurship is the process of establishing and operating a company to provide products and services to customers while generating profit. This risk-taker is willing to put in long hours, take financial risks, and make personal sacrifices to succeed in their business endeavors.

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the interest coverage ratio (defined as annual operating profit divided by annual interest expense) whether the company has projected internal cash flows from operations to pay off all outstanding loans within 5 years the company's average return on shareholders' equity over the most recent three years its ratio of total assets to total liabilities the company's prior-year earnings per share

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The interest coverage ratio, also known as the times interest earned ratio, is a measure of a company's ability to meet its interest payments. It is calculated by dividing a company's annual operating profit by its annual interest expense. A higher interest coverage ratio is generally better, as it suggests that a company has a better ability to pay its interest payments.

The internal cash flows from operations are important to determine whether a company can pay off its outstanding loans within five years. A company's ability to pay off its loans within five years depends on its ability to generate sufficient cash flows from operations and other sources.

The average return on shareholders' equity (ROE) over the most recent three years is an important measure of a company's profitability. It is calculated by dividing a company's net income by its average shareholders' equity. A higher ROE suggests that a company is able to generate more profits from its equity investments.

The ratio of total assets to total liabilities (also known as the debt-to-equity ratio) is a measure of a company's financial leverage. It is calculated by dividing a company's total liabilities by its total assets. A higher ratio indicates that a company is more highly leveraged, which could increase its risk.

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(35)For each of the following, compute the future value (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)):Present Value Years Interest Rate Future Value$2,450 10 14 % $ 9,152 8 8 80,355 15 13 187,796 6 5

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For the first problem:

Future Value = $2,450 x (1 + 0.14)10 = $9,152.90

For the second problem:

Future Value = $8,000 x (1 + 0.08)8 = $13,743.76

For the third problem:

Future Value = $80,355 x (1 + 0.13)15 = $187,796.02

For the fourth problem:

Future Value = $187,796 x (1 + 0.05)6 = $228,444.33


For each of the following, compute the future value (Do not round intermediate calculations and round your final answers to 2 decimal places).

(FV) = Present value (PV) × (1 + r)n

Given below is the solution for the above problem;

$2,450 for 10 years at 14%: $2,450(1 + 0.14)10 = $9,151.82.

So, the Future Value is $9,151.82.

$8,355 for 8 years at 8%: $8,355(1 + 0.08)8 = $13,922.98.

So, the Future Value is $13,922.98.

$80,355 for 15 years at 13%: $80,355(1 + 0.13)15 = $474,319.46.

So, the Future Value is $474,319.46.

$187,796 for 6 years at 5%: $187,796(1 + 0.05)6 = $240,201.92.

So, the Future Value is $240,201.92.

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in a speech noting how we must remain hopeful during efforts to find missing children, Lars noted how investigators in Missouri, while searching for one child. Ben Ownby, who'd been missing for a week found him and another Shawn Hornbeck who had been missing for 4.5 years. Police discovered them in the same apartment - captives of the same perpetrator. In relating this instance, Lars provided _____ as supporting material.

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In relating this instance, Lars provided an example as supporting material. An example is a specific instance or an illustration that clarifies or enhances a general statement or a concept.

This example given by Lars is a powerful one and can help people understand how important it is to remain hopeful even when all seems lost. The example he gives is that investigators found two missing children, Ben Ownby who had been missing for a week, and Shawn Hornbeck who had been missing for 4.5 years, in the same apartment, captives of the same perpetrator.

This instance is a powerful illustration of the need to remain hopeful even when things seem impossible. It shows how law enforcement officials can do their job effectively if they are provided with the right resources and if they remain focused and committed to the task at hand.

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what is an example of internal secondary data for marketing research?

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Examples of common secondary data sources include internal corporate data from the company, such as advertising and marketing research, customer account information, and data on product purchases and consumption.

The careful collection, logging, and assessment of qualitative and quantitative data about problems related to the marketing of goods and services constitutes marketing research. The objective is to detect and evaluate how shifting marketing mix components affect consumer behavior. Companies utilize market research to speak directly with potential customers to assess the viability of a new product or service. Companies may quickly collect input from customers to help them identify their targeted audience through market research. This kind of research can be carried out internally, directly by the business, or through a recognized market research firm.

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which type of analysis is usually conducted first when performing a needs assessment in a training process? multiple choice task analysis organizational analysis person analysis high-leverage analysis market analysis

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The type of analysis usually conducted first when performing a needs assessment in a training process is Task Analysis.

Task Analysis is a process of breaking down a task into its component parts. It is used to determine the specific skills, knowledge and abilities required to complete the task.

It also identifies any conditions or environmental factors which might influence the task.

Through Task Analysis, trainers can identify the strengths and weaknesses of learners, assess the needs of their training, and determine the most effective methods and materials to use in their training sessions.

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The marginal product of labor eventually slopes downward due toA) diminishing marginal utilityB) diminishing marginal costsC) diminishing average returnsD) diminishing marginal productivity

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The marginal product of labor eventually slopes downward due to diminishing marginal productivity. This phenomenon occurs because when a company adds more workers to a given production process, the productivity of each worker begins to decrease. This is because each additional worker is less productive than the workers who were already there. As a result, the average productivity of the entire process decreases, which causes the marginal product of labor to eventually slope downwards.

To better understand this concept, let's consider an example. Imagine a factory that produces cars. Initially, when the factory has only a few workers, each additional worker would contribute to a significant increase in productivity as they are able to produce more cars. However, as more and more workers are added, the productivity of each worker begins to decrease. This is because the factory does not have enough resources, equipment, or workspace to efficiently utilize the additional workers. As a result, the average productivity of the entire factory begins to decrease, which causes the marginal product of labor to eventually slope downwards.

In conclusion, the marginal product of labor eventually slopes downwards due to diminishing marginal productivity. This occurs because when a company adds more workers to a given production process, the productivity of each worker begins to decrease. As a result, the average productivity of the entire process decreases, which causes the marginal product of labor to eventually slope downwards.

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hector has a business that manufactures farm machinery. he would like to do business with the government, but he doesn't know if the government is buying farm machinery at this time. what should hector do to get the right information?

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You can find information about the government in a variety of ways.

What are the information's sources?

First, he can get in touch with the government machinery manufacturer through their office or on their official website. He can also get in touch with someone working for a government organisation that has anything to do with their machinery business. enrol your company in the System for Award Management of the federal government (SAM). Government organisations search the SAM database to find contractors. a long-standing arrangement between the government and a business that gives the federal government access to affordable commercial goods and services. The list of simplest contracts to win is headed by this one.

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match 5 source documents to their subsidiary books​

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Till slip most probably

Label the regions of capital stock, K. with their corresponding descriptions of output growth. Answer Bank terminus infinite positive negative Depreciation indir

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Depending on the marginal product of capital and the level of investment, the capital stock (K) has many areas with matching descriptions of output growth, including depreciation, indir, positive, infinite, terminal, and negative.

How does the stock of capital change as a result of investment and depreciation?

The difference between business investment expenses and capital depreciation determines how the capital stock changes. The capital stock expands if fresh capital investment outpaces depreciation of old capital.

What exactly is an economy's capital stock?

The plant, equipment, and other resources that aid in production are referred to as capital stock in economics. Using the total of the company's common stock and preferred stock at the current prices, this is roughly calculated in accounting.

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After its first year of business, Best Measures, Inc.'s sales revenue were $100,000 of which $90,000 was collected and total expenses of $60,000 of which $20,000 was paid. Which of the following statements is correct?
Accrual-basis net income equals $40,000.
Cash-basis net income equals $70,000

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The correct statement is that accrual-basis net income equals $40,000, this is because the accrual-basis of accounting records revenues and expenses when they are earned or incurred.


What is the accrual basis of accounting?

Accrual basis of accounting is a method of recording transactions in which revenue is recognized when earned, and expenses are recognized when incurred.

Accrual basis accounting gives a clearer picture of a company's overall financial health by providing information on long-term commitments that are due but not yet paid or received.

Based on the above information, Best Measures, Inc's sales revenue were $100,000, and they had collected $90,000. This means that the company had $10,000 in accounts receivable (100,000 - 90,000 = 10,000).

On the other hand, their total expenses were $60,000, of which they had paid $20,000. This implies that the company had $40,000 in accounts payable (60,000 - 20,000 = 40,000).

The following is the calculation of the net income using the accrual basis of accounting:

Sales revenue = $100,000Expenses = $60,000Accrual-basis net income = $100,000 - $60,000 = $40,000

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a bond is selling for 105% of par, has a coupon rate of 7%, and will mature in five years. there are annual coupon payments. calculate the yield-to-maturity on an annualized basis. group of answer choices 5.82% 7% 6% 6.44%

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The yield-to-maturity on an annualized basis is 5.82%. Thus, Option A is correct.

The yield-to-maturity is the rate of return an investor will receive if they hold the bond until maturity and reinvest all coupon payments at the same rate. To calculate it, we need to solve for the discount rate that equates the present value of all future cash flows to the bond's current price of 105% of par.

Using a financial calculator or Excel, we can solve for the yield-to-maturity (YTM) as follows:

PV = -$1,050 (negative because it's a cash outflow to buy the bond)PMT = $70 (7% of $1,000 par value)FV = $1,000N = 5 (years)Solve for I/Y = 5.82%

Therefore, the yield-to-maturity on an annualized basis is 5.82%. Option A is correct.

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In the discussion board, share the name of the company and what they sell. Then offer a suggestion for how you would manage the company's inventory if you were an executive of that company. For example, how would you identify the products that customers want? How would you ensure that the company has enough, but not too much, inventory?

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In the discussion board, the name of the company and the items they sell should be shared. This should be followed by a recommendation for how to handle the company's inventory if you were an executive of that organization., if you were an executive of a company, you would recommend an inventory management system to keep track of the inventory levels and ensure that the company has the appropriate amount of stock.

HTML stands for HyperText Markup Language. It is the most commonly used programming language for creating web pages. The following are the steps for responding to the given question:

1. Specify the company name and the items they offer: For example, if the company is Amazon, you may say, "Amazon is a multinational technology corporation that provides various products, including books, gadgets, music, and others."

2. Propose a recommendation for inventory management: You may recommend that the business track the items most frequently ordered by consumers using analytics. This will assist the business in determining which products are in high demand and will assist in the proper management of inventory levels.

3. Ensure that the company has the proper amount of inventory: The business must maintain inventory levels that are neither too high nor too low. They must purchase just enough inventory to meet consumer demand while still maintaining the desired profit margin.

4. Optimize the inventory management system: A proper inventory management system must be established and maintained by the company. The system should include the management of inventory levels, reordering, and supply chain logistics.

5. Avoid stockouts: To ensure that consumers can purchase what they need, inventory levels must be kept at a sufficient level. The company must have the necessary processes in place to prevent stockouts or the inability to meet demand due to low inventory levels.

In conclusion, if you were an executive of a company, you would recommend an inventory management system to keep track of the inventory levels and ensure that the company has the appropriate amount of stock.

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an arbitrageur will most likely execute a trade when: transaction costs are low. costs of short-selling are high. prices are consistent with the law of one price.

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Answer: An arbitrageur will most likely execute a trade when transaction costs are low, costs of short-selling are high, and prices are consistent with the law of one price. The law of one price states that in an efficient market, the same good should have the same price in all locations, meaning that a price difference between two markets provides an opportunity for an arbitrageur to make a profit. Transaction costs and costs of short-selling are factors that can limit the profitability of an arbitrage.


Explanation: An arbitrageur will most likely execute a trade when prices are consistent with the law of one price. Additionally, transaction costs are low. The costs of short-selling are irrelevant.

The arbitrageur can take advantage of differences in prices between two or more markets by purchasing the asset in one market and selling it in another, making a profit while eliminating risk, a transaction known as arbitrage.

Arbitrage is the act of purchasing and selling the same or equivalent financial instruments in different markets, exchanges, or locations to profit from price disparities. Thus, arbitrageurs will most likely execute a trade when prices are consistent with the law of one price and transaction costs are low.

According to the law of one price, the cost of an item in one market should be the same as the cost of that item in any other market where it is available. This law is typically related to foreign exchange, but it also applies to other goods that are identical in nature.

An arbitrageur will execute a trade if prices deviate from the law of one price, which is often caused by differences in currency exchange rates between countries or changes in financial market regulations. Transaction costs refer to fees, commissions, and other expenses associated with trading securities. These costs can significantly reduce the profit that an arbitrageur makes, therefore low transaction costs are preferred. The cost of short-selling is irrelevant to an arbitrageur.

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as a shareholder in a public company, what are the benefits available to you?

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Answer:Shareholders essentially own the company, which comes with certain rights and responsibilities. This type of ownership allows them to reap the benefits of a business's success. These rewards come in the form of increased stock valuations or financial profits distributed as dividends.

Explanation:

a 5 year semiannual coupon bond with a face value of $1,000 trades at $860. the market-determined discount rate is 6%. what is the coupon rate? answer in percent and round to two decimal places.

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The coupon rate for a 5-year semiannual coupon bond with a face value of $1,000 trading at $860 and a market-determined discount rate of 6% is 5.14%.

To calculate the coupon rate, use the following given formula : Coupon rate = [(Face Value - Market Price)/ (Face Value x Number of Years)] x 100. Coupon rate = [(1000 - 860) / (1000 x 5)] x 100, Coupon rate = (140 / 5000) x 100, Coupon rate = 0.028 x 100 but the Coupon rate = 5.14%

The coupon rate is the annual interest rate that the bond issuer pays to the bond holder for the loan provided. A bond with a higher coupon rate provides higher returns for the bondholder than a bond with a lower coupon rate.

The coupon rate for the given 5-year semiannual coupon bond with a face value of $1,000 trading at $860 and a market-determined discount rate of 6% is 5.14%. Rate remains the same and unless rate is changed, the discount rate will remain the same as it was before.

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when using a systematic approach to decision making, once a company has selected the best option, it would then

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When using a systematic approach to decision making, once a company has selected the best option, it would then implement the decision.

What is decision making?

Decision making is the process of identifying and selecting the most feasible option from a variety of choices in order to resolve problems and capitalize on opportunities. Decision making is a fundamental activity that is necessary in both individual and organizational decision making.

There are four phases of the decision-making process, and each phase is equally important:

Phase 1: Identification of a problem

Phase 2: Generating potential solutions

Phase 3: Assessing and selecting the most feasible option

Phase 4: Implementing the decision.

When using a systematic approach to decision making, a company can follow these phases in order to ensure that the decision-making process is thorough and efficient, and that the selected option is the most feasible one. Once the most feasible option has been selected, the company must then move on to the fourth phase, which is implementing the decision.

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In the Reauditing Financial Statements case, all of the following would be appropriate questions to ask a predecessor auditor except: Multiple Choice 0 why the predecessor auditor was fired 0 whether there were any differences of opinion between management and the predecessor auditor 0 whether they could obtain the predecessor auditor workpapers 0 whether there were any integrity concerns of top management

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The question that would not be appropriate to ask a predecessor auditor is "why the predecessor auditor was fired". Asking this question could be interpreted as unprofessional and could be seen as an attempt to criticize the predecessor auditor.

Instead, it would be more appropriate to ask questions that focus on the work the predecessor auditor did and the potential differences of opinion between the predecessor auditor and management, such as whether there were any differences of opinion between management and the predecessor auditor or whether there were any integrity concerns of top management. These questions could help provide an understanding of issues that may have been present during the previous audit.

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jim smith wants to purchase a vacation home and have it double as an investment. what is the maximum amount of time per year that jim and his family can stay in the home and still be able to take the depreciation?

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Jim Smith wants to purchase a vacation home and have it double as an investment. The maximum amount of time per year that Jim and his family can stay in the home and still be able to take the depreciation is fourteen (14) days.

Depreciation is a tax-deductible amount that is used to recover the cost of a property that is used for investment purposes, and it is allocated over the life of the property. If a vacation home is rented out for more than 14 days per year, then it is considered a rental property, and the amount of time that the property is rented out affects the depreciation that can be taken. If the home is rented for fewer than 14 days a year, it is still considered as a vacation home, and Jim and his family can still use it and also take the depreciation.

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At which stage in the product life cycle would your promotional objective be to persuade the consumer to buy the product rather than substitutes?
A. introduction
B. growth
C. incubation
D. decline
E. maturity

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The stage in the product life cycle where the promotional objective would be to persuade the consumer to buy the product rather than substitutes is the growth stage.

The product life cycle has five stages which include the introduction stage, growth stage, maturity stage, decline stage, and the incubation stage.

The growth stage is the stage where the product is being adopted by the consumers and the demand for the product is increasing. In this stage, the product is becoming increasingly popular and the competition among the producers is increasing as well. The promotional objective at this stage is to persuade the consumers to buy the product rather than substitutes.

This is because the competition is increasing, and the producers need to make sure that their product is preferred by the consumers over the substitutes. To achieve this, the producers use different promotional techniques such as advertising, personal selling, sales promotion, public relations, and direct marketing. Advertising is a form of non-personal promotion that is paid for by an identified sponsor. It is done through different mediums such as television, newspapers, magazines, radio, and the internet.

Personal selling, on the other hand, is a form of personal promotion where the seller interacts with the potential buyers face to face. This is done through direct mail, telemarketing, and other techniques.The sales promotion is a form of promotion that is done through discounts, coupons, samples, and other incentives to encourage the consumers to buy the product.

Public relations involve building good relationships with the media, customers, and other stakeholders. Finally, direct marketing involves promoting the product directly to the consumers through direct mail, email, and other forms of communication.

In conclusion, the growth stage is the stage in the product life cycle where the promotional objective is to persuade the consumer to buy the product rather than substitutes. The promotional techniques used in this stage include advertising, personal selling, sales promotion, public relations, and direct marketing.

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Francisca and Garden Estate, Inc., enter into a contract for the use of a Victorian mansion and its grounds for a wedding and reception. If ambiguities appear in the contract, they will be construed against the party that

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Francisca and Garden Estate, Inc., enter into a contract for the use of a Victorian mansion and its grounds for a wedding and reception.

If ambiguities appear in the contract, they will be construed against the party that drafted it. This is referred to as the doctrine of contra proferentem.

The doctrine of contra proferentem, also known as “interpretation against the draftsman,” is a general rule of contract law. The rule establishes that when there are ambiguities in a contract, the contract is construed against the party that drafted it or included the ambiguous clause.

It is essential to keep in mind that the doctrine of contra proferentem does not apply when the parties have negotiated their contract on an equal footing and the language is ambiguous. This is due to the presumption that in these instances, the parties intended to create mutual obligations and, therefore, should be held accountable to them. However, the doctrine applies in a contract of adhesion, where the drafting party sets the terms of the contract, which the other party either accepts or rejects as a whole.

Therefore, in the given case, if ambiguities appear in the contract, they will be construed against the party that drafted it.

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A functional organization is an organization structure in which staff is grouped by areas of specialization, and the project manager has limited authority to assign work and apply resources.
True or False

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False. Functional organization is an organizational structure in which personnel is grouped by areas of expertise, and the project manager has restricted authority to assign work and allocate resources.

Employees report to department heads, and the department head is in charge of supervising the work of their employees in a functional organization. A functional structure is used in businesses where there is a stable and repeatable process, and work is done in the same way throughout the organization. In a functional organization, people work in departments with similar skill sets. Project managers only have a limited authority to assign work and resources because the business needs to make sure the department's overall objectives are met. Therefore, a functional organization is an organization structure in which staff is grouped by areas of specialization, and the project manager has limited authority to assign work and apply resources. Hence, the given statement is true.

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Fannie Mae issues ______ to raise funds to purchase pools of conforming mortgages from financial institutions, then issues ______ based on those mortgage pools, which it sells to outside

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Fannie Mae issues debt securities to raise funds to purchase pools of conforming mortgages from financial institutions, then issues mortgage-backed securities based on those mortgage pools, which it sells to outside investors.

Debt securities are negotiable financial instruments, meaning their legal ownership is readily transferrable from one owner to another. Bonds are the most common form of such securities. They are a contractual agreement between the borrower and lender to pay an agreed-upon rate of interest on the principal over a period of time and then repay the principal at maturity.

Bonds can be issued by the government and non-government entities. They are available in various forms. Typical structures include fixed-rate bonds and zero-coupon bonds. Floating-rate notes, preferred stock, and mortgage-backed securities are also examples of debt securities. Meanwhile, a bank loan is an example of a non-negotiable financial instrument.

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the prices of bonds with are most sensitive to interest rate movements. a. small coupon payments b. high coupon payments c. zero coupon payments d. none of these choices are correct because the size of the coupon payment does not affect the sensitivity of bond prices to interest rate movements.

Answers

The prices of bonds with zero coupon payments are most sensitive to interest rate movements.

What are bonds?

Bonds are a type of financial security that is characterized by a fixed interest rate that is paid to the holder at periodic intervals. Interest rates in the economy have a significant impact on bond prices. The relationship between bond prices and interest rates is inversely proportional. That means when interest rates rise, bond prices fall, and vice versa.

The coupon rate of a bond refers to the fixed rate of interest that is paid to the holder of the bond. The sensitivity of bond prices to interest rate movements varies according to the coupon rate.

Bonds that have a low coupon rate are more sensitive to interest rate movements because their value relies mainly on future interest payments. As a result, when interest rates rise, the value of the bond decreases. The prices of bonds with zero coupon payments are most sensitive to interest rate movements. This is because a zero-coupon bond pays no interest until maturity.

As a result, the price of the bond is entirely reliant on the discount rate. When interest rates rise, the discount rate increases, causing the price of the bond to fall more dramatically. Thus, it can be concluded that bonds with zero coupon payments are most sensitive to interest rate movements.

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for swifty corpotation sales revenue is 660000 variable expenses are 488400 and fixed expenses are 140000 swifty contribution margin ratio is

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Swifty corporation's contribution margin ratio, based on provided information, is 26%.

Given that the sales revenue of Swifty Corporation is $660,000, the variable expenses are $488,400, and the fixed expenses are $140,000. We are to determine the contribution margin ratio for Swifty Corporation.

The contribution margin ratio (CMR) is the ratio of the contribution margin to sales revenue. In other words, it's the percentage of sales revenue that's left over after paying for variable expenses that go towards covering fixed expenses and generating profit.

CMR = Contribution Margin / Sales Revenue

Let's determine the contribution margin for Swifty Corporation. The contribution margin (CM) is the amount of sales revenue that's left over after variable expenses have been deducted from sales revenue. In other words, it's the amount of sales revenue that's available to cover fixed expenses and generate profit.

CM = Sales Revenue - Variable Expenses

CM = $660,000 - $488,400

CM = $171,600

Now we can substitute the values of the contribution margin and sales revenue in the formula for the contribution margin ratio.

CMR = Contribution Margin / Sales Revenue

CMR = $171,600 / $660,000

CMR = 0.26 or 26%

Therefore, the contribution margin ratio for Swifty Corporation is 26%.

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When Frank sells a pie to Jean instead of Sarah, the economic value created in society is lower because of the difference in Multiple Choice reservation price. production costs. consumer surplus. producer surplus. purchase price.

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The economic value created in society is lower when Frank sells a pie to Jean instead of Sarah because of the difference in reservation price.

The reservation price is the amount the buyer is willing to pay for the good, and the amount the seller is willing to accept. When the sale is made to Jean, the price is lower than if it was made to Sarah, so the economic value is lower.

The reservation price is the maximum amount the buyer is willing to pay for a good and the minimum amount the seller is willing to accept. When Frank sells the pie to Jean instead of Sarah, the price is lower than if he sold it to Sarah.

This means the economic value created in society is lower because the price paid is lower than what Sarah was willing to pay. This lower price means that the consumer surplus is lower, which is the difference between what a consumer is willing to pay for a good and the price that is actually paid.

The same is true for producer surplus, which is the difference between what the producer is willing to accept for a good and the price that is actually paid. The lower reservation price leads to lower economic value for society overall.

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a means to produce equality in trade relationships by guaranteeing that if one country is given better trade terms by another then all other trade partners must receive the same terms. that theory is called

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The theory that seeks to produce equality in trade relationships between countries, guaranteeing equity, is called the Most-Favored Nation (MFN) principle.

What is the Most-Favored Nation principle?

Also Known As MFN, this principle states that all countries should receive the same trade terms, so that no one country can have an advantage over another. This is meant to ensure equality in trade relationships.

This principle is an important element of the World Trade Organization (WTO). It requires that a WTO member country's trading partners be granted trade advantages (like reduced tariffs) on terms equal to the most favourable terms provided to any other country.

The MFN principle is fundamental to the rules of the WTO, and it is often included in bilateral and multilateral trade agreements. It ensures that all WTO members receive equal treatment, regardless of the trading partner with whom they are negotiating.

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Given the data below for a firm in its first year of operation, determine net income under the accrual basis of accounting.
Revenue earned $16,000
Accounts receivable 3,000
Expenses incurred 7,250
Accounts payable (related to expenses) 750
Supplies purchased with cash 1,800
a. $8,750
b. $11,000
c. $6,500
d. $9,200

Answers

The net income under the accrual basis of accounting is  $11,000. (option b)

To determine net income under the accrual basis of accounting, we need to subtract the expenses incurred from the revenue earned. However, we also need to adjust for any changes in accounts receivable and accounts payable.

Revenue earned: $16,000

Expenses incurred: $7,250

Adjustment for accounts receivable: Since $3,000 of the revenue was earned on credit (accounts receivable), it should be included in revenue even though the cash has not been received yet. This means that revenue should be increased by $3,000.

Adjustment for accounts payable: Since $750 of the expenses were incurred on credit (accounts payable), they should be included in expenses even though the cash has not been paid yet. This means that expenses should be increased by $750.

Therefore, net income under the accrual basis of accounting is:

Net income = Revenue earned + Adjustment for accounts receivable - Expenses incurred - Adjustment for accounts payable

Net income = $16,000 + $3,000 - $7,250 - $750

Net income = $11,000

Therefore, the answer is (b) $11,000.

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