Answer:
a. What are the company's capital structure weights on a book value basis?
common stocks' book value = 4,000,000 x $7 = $28,000,000
first bond = $105,000,000
second bond = $90,000,000
total book value = $223,000,000
capital structure:
common stocks = $28 / $223 = 0.1256
debt = $195 / $223 = 0.8744
b. What are the company’s capital structure weights on a market value basis?
common stocks' market value = 4,000,000 x $76 = $304,000,000
first bond = $99,750,000
second bond = $96,300,000
total book value = $500,050,000
capital structure:
common stocks = $304 / $500.05 = 0.6079
debt = $196.05 / $500.05 = 0.3921
c. Which are more relevant, the book or market value weights?
The market value is always more relevant and it is used to calculate the company's WACC.
C&A sells 600 bottles of a dietary supplement per week at $100 per bottle. The supplement is ordered from a supplier who charges C&A $30 per order and $50 per bottle. C&A's annual holding cost percentage is 40%. Assume C&A operates 50 weeks in a year. What is C&A's total ordering and holding cost per year if C&A orders 500 bottles at a time? $11,800 $5036 $6800 $10,036
Answer: c---$6,800
Explanation:
Annual Demand = Weekly Demand x Number of weeks in operation
= 600bottles x 50 = 30,000 Bottles
a)Annual ordering cost = (Annual Demand /Quantity) X Ordering cost= (30000/500)*30 = $1,800
B) Holding cost per unit = Purchase Price per bottle x Holding cost percentage
= $50 x 40% = $20 per unit
Annual Holding cost = Average Inventory x Holding cost per unit per annum
But Average Inventory = Size of order / 2 = 500 / 2 = 250 Bottles
Annual Holding cost =250 x $20 = $5,000
Therefore, total ordering and holding cost per year
= $1,800 + $5,000
= $6,800
Suppose that the pound is pegged to gold at 6 pounds per ounce, whereas the franc is pegged to gold at 12 francs per ounce. This, of course, implies that the equilibrium exchange rate should be two francs per pound. If the current market exchange rate is 2.2 francs per pound, how would you take advantage of this situ-ation
Answer:
we can look at this problem from 2 different point of views:
if you have francs and wish to buy pounds: then you take 12 francs and purchase 1 ounce of gold, and then you sell it for 6 pounds. This way you will only spend 2 francs per each pound instead of 2.2.
if you have pounds and want to make a gain: you take 6 pounds and purchase 13.2 francs and you then buy 1.1 ounces of gold. Then you sell the 1.1 ounces of gold in exchange for 6.6 pounds.
Any of the scenarios does not include any transaction prices nor shipping costs, it is only theoretical.
Yappy Company is considering a capital investment of $320,000 in additional equipment. The new equipment is expected to have a useful life of 8 years with no salvage value. Depreciation is computed by the straight line method. During the life of the investment, annual net income and cash inflows are expected to be $25,000 and $65,000 respectively. Yappy Company requires a 10% return on all new investments.
Compute each of the following:
1. Payback period
2. Net present value
3. Profitability index
4. internal rate of return
5. Accounting rate of return
Indicate whether the investment should be accepted or rejected.
Answer:
a. 4.92 years
b. NPV = $26,770.20
c. 1.0837
d. IRR = 12.26%
e. 15.6%
the project should be accepted
Explanation:
Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows
Payback period = Amount invested / cash flow = $320,000 / $65,000 = 4.92 years
Net present value is the present value of after tax cash flows from an investment less the amount invested.
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested
NPV and IRR can be calculated using a financial calculator
Cash flow in year 0 = $-320,000
Cash flow each year from year 1 to 8 = $65,000
I = 10%
NPV = $26,770.20
IRR = 12.26%
profitability index = 1 + (NPV / Initial investment) = 1 + ($26,770.20 / $320,000 ) = 1.0837
The project should be accepted because the NPV and profitability index are positive. the IRR is greater than the discount rate. this means that the project is profitable. Accounting rate of return = Average net income / Average book value
Average book value = (cost of equipment - salvage value) / 2 = $320,000 / 2 = $160,000
$25,000 / $160,000 = 0.156 = 15.6%
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
Capital Investment=$320,000
Expected useful life=8 years
Annual Net income=$25,000
Cash inflows=$65,000
Required Rate of Return=10%
The required whole solution is below;
Based on the NPV rule this investment should be accepted. Because this investment has got positive net present value, therefore this investment should be accepted.
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Whats the total Late Fee Interest charged to the customers based on the policy below? Vittorla's Furniture Bazaar Accounts Receivable Aging Summary As of June 30, 2015 Customer Current 1-30 Days 31-60 Days 61-90 Days 90 Days Total Bull and Bear Café $750 $750 Eckhardt Design $1,000 $1,000 Halifax Sporting Goods $500 $500Walker Studios $1,500 $1,500TOTAL $2,250 $500 $1,000 $0 $0 $3,750 Late Fee Interest Policy Age Interest Current 0%1-30 Days 0%31-60 Days 5% 61-90 Days 10% >90 Days 20% a. $0 b. $50 c. $75 d. $100 e. $200
Answer:
b. $50
Explanation:
Vittorla's Furniture Bazaar Accounts Receivable
Aging Summary As of June 30, 2015
Customer Current/1-30 Days/31-60 Days/61-90 Days/>90 Days
Total B&B Café $750
Eckhardt Design $1,000
Halifax Sporting $500
Walker Studios $1,500
Late Fee Interest Policy
Age Interest
Current 0% x ($750 + $1,500) = $0
1-30 Days 0% x $500 = $0
31-60 Days 5% x $1,000 = $50
61-90 Days 10%
>90 Days 20%
total interest charged = $0 + $0 + $50 = $50
It may be easier to think of the present value of operating the solar panels for 1 hour per year first. Approximately how many hours per year will the solar panels need to operate to enable this project to break even
Complete Question:
A university spent $1.6 million to install solar panels atop a parking garage. These panels will have a capacity of 900 kilowatts (kw) and have a life expectancy of 20 years, suppose that the discount rate is 10%, that electricity can be purchased at S0.20 per kilowatt hour (kWh), and that the marginal cost of electricity production using the solar panels is zero. Hint: It may be easier to think of the present value of operating the solar panels for 1 hour per year first.
Approximately how many hours per year will the solar panels need to operate to enable this project to break even?
A. 1,670
B. 1,044.09
C. 1,148.50
D. 730.86
Answer:
Option B. 1,044.09
Explanation:
To calculate the breakeven point, simply calculate the future value of investment that equals the present value (Investment of $1.6 million).
Mathematically,
Present Value = Future value * Annuity at 10% rate for 20 years
Here
Present Value of investment is $1.6 million
Annuity Factor at 10% for 20 years = [1 - 1/(1 + 10%)^20 years] / 10%
= 8.5136
Future value for 20 years = Hourly rate of electricity consumption * Maximum capacity * Number of electricity units in annual consumption
Hourly rate is $0.2 per KWH
Maximum capacity is 900 KWH
and
Number of electricity units is "X"
By putting values, we have:
$1.6 million = ($0.2 per KWH * 900 KWH * X) * 8.5136
$1,600,000 = X * 180 x 8.5136
$1,600,000 = X * 1,532.45
X = $1,600,000 / 1,532.45 = 1044.09 KWH
"A customer subscribes to a $100,000 limited partnership interest. The commission is $10,000. The up-front costs are $500 for legal expenditures, and $500 for organization costs. What is the customer's beginning tax basis?"
Answer:
$100,000
Explanation:
Based on the information given we were told that the customer subscribes for a limited partnership interest for the amount of $100,000, this means that the amount of $100,000 will be the customer's beginning tax basis because the amount that was used when the customer subscribed to the limited partnership interest is the initial cost.
Therefore the beginning tax basis will be $100,000
Data related to the inventories of Kimzey Medical Supply are presented below:
Surgical Surgical Rehab Rehab
Equipment Supplies Equipment Supplies
Selling price $ 335 $195 $415 $240
Cost 245 165 325 237
Replacement cost 315 155 310 233
Costs to sell 60 20 40 40
Normal gross profit ratio 30 % 30 % 30 % 20 %
In applying the lower of cost or market rule, the inventory of surgical supplies would be valued at:______.
a. $175.
b. $165.
c. $155.
d. $135.
Answer:
c. $155.
Explanation:
Kimzey Medical Supply's merchandise inventory:
Surgical equip. Surgical supplies Rehab equip. Rehab supplies
Selling price $335 $195 $415 $240
Cost $245 $165 $325 $237
Replacement $315 $155 $310 $233
cost
Net RV $275 $175 $375 $200
If we apply the lower of cost or market rule for determining the value of surgical equipment, its value would be: $155 because the replacement cost (or market price) is lower than the historical cost or the net realizable value.
When we use the lower of cost or market rule, we should value our inventory at the lowest value between original purchase cost, replacement (or market) price or net realizable value.
Following are the transactions of a new company called Pose-for-Pics.
Aug. 1 Madison Harris, the owner, invested $5,500 cash and $23,650 of photography equipment in the company in exchange for common stock.
2 The company paid $3,800 cash for an insurance policy covering the next 24 months.
5 The company purchased office supplies for $1,045 cash.
20 The company received $2,150 cash in photography fees earned.
31 The company paid $884 cash for August utilities.
Required:
Prepare an August 31 trial balance for Pose-for-Pics.
Answer and Explanation:
The preparation of the August 31 trial balance for Pose for pics is presented below:
Particulars Debit Credit
Cash
($5,500 - $3,800 - $1050
+ $2,150 - $884) $1,921
Office Supplies $1,045
Prepaid Insurance $3,800
Photography Equipment $23,650
Common Stock
($5,500 + $23,650) $29,150
Photography Fees Earned $2,150
Utilities Expense $884
Totals $31,300 $31,300
W. L. Gore & Associates is the inventor of path-breaking new products such as breathable GORE-TEX fabrics, Glide dental floss, and Elixir guitar strings. Which of the following would be most likely to hinder its intention of fostering employee satisfaction, retention, and creativity?
A. An extremely formalized organizational structure
B. A highly organic organizational structure
C. A low degree of centralization
D. A flat organization structure
Answer: An extremely formalized organizational structure
Explanation:
From the question, we are informed that W.L. Gore & Associates is the inventor of path-breaking new products such as breathable GORE-TEX fabrics, Glide dental floss, and Elixir guitar strings.
The most likely to hinder its intention of fostering employee satisfaction, retention, and creativity will be an extremely formalized organizational structure. This is because the top level managers and those at the helm of affair typically make decisions.
Answer: A. An extremely formalized organizational structure
Neptune Rentals operates a boat rental service. Consider the following costs of the company over the relevant range of 5,000 to 8,000 hours of operating time for its boats:
Hours of Operating Time
5,000 6,000 7,000 8,000
Total costs:
Variable costs ............... $ 20,000 $ ? $ ? $ ?
Fixed costs ................... 168,000 ? ? ?
Total costs ....................... $188,000 $ ? $ ? $ ?
Cost per hour:
Variable cost ................. $ ? $ ? $ ? $ ?
Fixed cost ..................... ? ? ? ?
Total cost per hour ........... $ ? $ ? $ ? $ ?
Required:
Compute the missing amounts, assuming that cost behavior patterns remain unchanged within the relevant
range of 5,000 to 8,000 hours.
Answer and Explanation:
The computation of the missing amount is shown below:
Operating hours
Particulars 5,000 6,000 7,000 8,000
Total cost:
Variable cost $20,000 $24,000 $28,000 $32,000
($20,000 × 6 ÷ 5) ($20,000 × 7 ÷ 5) ($20,000 × 8 ÷ 5)
Fixed cost $168,000 $168,000 $168,000 $168,000
Total cost $188,000 $192,000 $196,000 $200,000
Cost per hour:
Variable cost $4 $4 $4 $4
($20,000 ÷ 5,000) ($24,000 ÷ 6,000) ($28,000 ÷ 7,000) ($32,000 ÷ 8,000)
Fixed cost $33.60 $28 $24 $21
($168,000 ÷ 5,000) ($168,000 ÷ 6,000) ($168,000 ÷ 7,000) ($168,000 ÷ 8,000)
Total cost per hour $37.60 $32 $28 $25
Which of the following is designed to partially remedy the problem of excessive insurance? Baumol’s cost disease
Answer:
The Cadillac tax
Explanation:
The benefit for health case sponsored by the employer in the case when the defined limits that should be legal will be 40% of excise tax also the taxes are paid by the insurance companies but the same is to be borne by an individual also it determines who has to receive the benefit of the insurance. It also restricts the limit of private health insurance
So here in the given situation, it is a Cadillac tax
hen considering whether a holder took the negotiable instrument in good faith, the court looks only at the
Answer:
Explanation:
nsei kkkkkkkkkkkkkkkkkkkkkkkkkkao
Answer:
holder's preceding claims
Explanation:
The Canadian government decides to offer tax concessions to foreign companies that agree to build a manufacturing facility in Canada. This tax concession is a way to
a. encourage inward FDI.
b. discourage inward FDI.
c. encourage outward FDI.
d. discourage outward MNE.
e. discourage inward MNE.
Answer: a. encourage inward FDI.
Explanation:
Foreign Direct Investment (FDI) refers to a situation where a foreign company invests in a country by establishing or buying a business and then maintaining direct control over it.
The Canadian Governments is offering tax concessions ( reduced taxes) to foreign companies for them to establish facilities in Canada which means that they are encouraging the inflow of FDI into the country at the promise of less taxes.
During 2017, Kew Company, a service organization, had $200,000 in cash sales and $3,000,000 in credit sales. The accounts receivable balances were $400,000 and $485,000 at December 31, 2016 and 2017, respectively.
Required:
What was Kew Company’s cash receipts from sales in 2017?
Answer:
$ 3,115,000
Explanation:
Calculation for Kew Company’s cash receipts from sales in 2017
Beginning accounts receivable balance $ 400,000
Add Total credit sales $ 3,000,000
Total accounts receivable $ 3,400,000
Less: Ending accounts receivable balance $ 485,000
Cash received from receivables $ 2,915,000
Add Cash sales 200,000
Cash receipts from sales $ 3,115,000
Therefore Kew Company’s cash receipts from sales in 2017 will be $ 3,115,000
Without the cost concept, accounting reports would become unstable and unreliable.
a. true
b. false
Without the cost concept, accounting reports would become unstable and unreliable. It is true. Thus option (a) is correct.
What are accounting reports ?Accounting reports are financial documents that provide information about the financial performance and position of a business. These reports summarize the financial transactions that have taken place within a given period, typically a fiscal year or a quarter.
Accounting reports are essential tools for businesses of all sizes. They provide a detailed view of a company's financial performance, helping stakeholders make informed decisions about investments, credit, and other financial matters.
It is true to say that without the cost concept, accounting reports would become unstable and unreliable. Thus option (a) is correct.
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Last year, when the stock of Waldo, Inc., was selling for $28 a share, the dividend yield was 3.5 percent. Today, the stock is selling for $35 a share. What is the required return on this stock if the company maintains a constant dividend growth rate of 5 percent?
Answer:
The required rate of return on the stock is 8.087%
Explanation:
The constant growth model of DDM is used to calculate the price of a stock whose dividends are expected to grow at a constant rate forever. The DDM values a stock based on the present value of the expected future dividends from the stock. The price of the stock under this model can be calculated as,
P0 = D0 * (1+g) / (r - g)
Where,
P0 is price of the stock todayD0 * (1+g) is the dividend expected from the stock for the next periodr is the required rate of returng is the constant growth rate in dividendsTo calculate the r or required rate of return, we first need to determine the dividend that was paid last year. Then we will apply the constant growth rate to that dividend to calculate the dividend today or D0. We will them input the value of stock price, the current dividend and the dividend growth rate in the formula above to calculate the required rate of return.
Dividend per share - Last year
Dividend yield = Dividend per share / Price per share
0.035 = Dividend per share / 28
0.035 * 28 = Dividend per share
Dividend per share = $0.98
The dividend per share today (D0) is,
D0 = 0.98 * (1+0.05)
D0 = $1.029
35 = 1.029 * (1+0.05) / (r - 0.05)
35 * (r - 0.05) = 1.08045
35r - 1.75 = 1.08045
35r = 1.08045 + 1.75
r = 2.83045 / 35
r = 0.08087 or 8.087%
During the year, ABC had the following cash flows: receipt from customers, $10,000; receipt from the bank for long-term borrowing, $6,000; payment to suppliers, $5,000; payment of dividends, $1,000, payment to workers, $2,000; payment for machinery, $8,000. What amount would be reported for net financing cash flows on the Statement of Cash Flows?
Answer:
$5,000
Explanation:
The computation of the amount that should be reported for net financing cash flows is shown below:
Cash flows from financing activities
Receipt from the bank for long-term borrowing $6,000
Less: dividend paid -$1,000
Net cash flows from financing activities $5,000
The positive amount represents the cash inflow and the negative amount represent the cash outflow and the same is to be considered
Suppose that in 1984 the total output in a single-good economy was 10,000 buckets of chicken. Also assume that in 1984 each bucket of chicken was priced at $10. Finally, assume that in 2005 the price per bucket of chicken was $16 and that 22,000 buckets were produced.
Required:
a. What is the GDP price index for 1994, using 2005 as the base year?
b. By what percentage did the price level, as measured by this index rise between 1984 and 2005?
c. What were the amounts of real GDP in 1984 and 2005?
Answer:
a. 62.5
b. 60%
c. $160,000; $352,000
Explanation:
a. Price Index = (Price in year of interest/ Price in Base year) * 100
= (10/16) * 100
= 62.5
b. Rose from 62.5 in 1984 to 100 in 2005
= (100 - 62.5)/62.5
= 60%
c. Using 2005 as the Base year means that the Real GDP will be based on 2005 prices.
Real GDP 1984
= 10,000 buckets * 16
= $160,000
Real GDP 2005
= 22,000 * 16
= $352,000
Milton Industries expects free cash flows of $14 million each year. Milton's corporate tax rate is 21%, and its unlevered cost of capital is 15%. Milton also has outstanding debt of $23.44 million, and it expects to maintain this level of debt permanently. a) What is the value of Milton
Answer:
A.$93 million
B.$97.92million
Explanation:
a. Calculation for the value of Milton Industries without leverage
Using this formula
Value without leverage unlevered=Free cash flow/unlevered cost of capital
Let plug in the formula
Value without leverage unlevered=$14 million/15%
Value without leverage unlevered=$93 million
B. Calculation for the value of Milton Industries with leverage
Using this formula
Value with leverage Levered= Unlevered value + Tax rate x Debt
Let plug in the formula
Value with leverage Levered=$93 million + 21% x $23.44 million
Value with leverage Levered=$93 million + $4.92 million
Value with leverage Levered=$97.92million
Therefore Value without leverage unlevered will be $93 million while Value with leverage Levered will be $97.92million.
An operating budget is a prediction of expected revenues and expenses and other operating and financing transactions for a future period. true or false
Answer:
True
Explanation:
An operating budget is a budget that forecasted the expected revenues, expenses, and other operating & financing transactions for a future period so that the company get to know how much revenues to be earned and how much the expenses to be incurred during the particular year
Hence, the given statement is true
Which of the following priority rule will minimize the average flow time of jobs and also perform well in other measures such as average lateness
A) STR
B) CR
C) SOT
D) LCFS
E) EDD
CR always minimizes mean job flow times.
What priority rule is being used when jobs are processed according to the lowest ratio of the due date to the remaining processing time?A priority index is computed using the components: CR = (due date—cutting-edge date)/(production lead time final). Jobs with a smaller crucial ratio are given precedence over people with larger critical ratios. FOR(fewest operations ultimate). that is a version of the SPT rule.
What's the minimum Cr for the primary task in the sequence?If this rule is used for sequencing, the activity with the lowest CR is scheduled first. A CR less than 1 indicates that the task will be overdue, and a CR greater than 1 shows that the process may be finished beforehand of the due date if no unexpected postponement occurs.
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Which of the following statements is correct?a. Strategic situations are more likely to arise when the number of decision-makers is very large rather than very small.b. Strategic situations are more likely to arise in monopolistically competitive markets than in oligopolistic markets.c. Game theory is useful in understanding certain business decisions, but it is not really applicable to ordinary games such as chess or tic-tac-toe.d. Game theory is not necessary for understanding competitive or monopoly markets.
Answer: d. Game theory is not necessary for understanding competitive or monopoly markets.
Explanation:
Game Theory in Business is applied to see the options available to competitors in the market if they engage in certain actions because the outcome of one party's decision is affected by the decision of the other party. In the context of business it is often used to calculate how much profit or loss companies will make if they engage in certain actions based on the decisions of the other party.
It is therefore not necessary in Perfect Completions because the market sets the price and the participants follow. There is not need to analyse what will happen if one party picks a certain method and the other as well. It will be irrelevant because the same price will be imposed regardless.
It is also unnecessary in Monopoly markets simply because a monopoly has market control and Game theory is for situations where at least 2 parties are fighting for market control.
Southport industries company has current assests of $610000 and a current ratio is 4.1. Assume that the company prepays rent for 9 months in the amount of $34,000. The current ratio after this transaction is closest to:_____.
A) 5.03.
B) 3.90.
C) 3.68.
D) 4.12.
Answer: D. 4.12
Explanation:
From the question, we are informed that Southport industries company has current assests of $610000 and a current ratio is 4.1 and that the company prepays rent for 9 months in the amount of $34,000.
It should be noted that the current ratio is calculated as:
= Current assets/Current liabilities
4.1 = $610,000/current liabilities
Current liabilities = $610,000/4.1
= $148,781
The current ratio will still be close.to 4.1 based on the above analysis.
Which of the following statements about W.L.Gore & Associates best supports the fact that it is organized in an informal and decentralized manner?
A) W. L. Gore & Associates' employees are organized by their seniors into teams that are led by sponsors, not bosses.
B) W. L. Gore & Associates prefers e-mail communication to face-to-face communication.
C) W. L. Gore & Associates is characterized by a vertical organizational form.
D) W. L. Gore & Associates refers to its employees as associates rather than employees.
Answer: D. ) W. L. Gore & Associates refers to its employees as associates rather than employees.
Explanation:
A decentralized organization is an organization whereby the decisions are
usually given by the lower-level managers, and not always by those at the helm of affairs.
The option about W.L.Gore & Associates best supports the fact that it is organized in an informal and decentralized manner is W. L. Gore & Associates refers to its employees as associates rather than employees.
An investor has 15 thousand dollars to invest among 3 possible investments A, B, C. Each investment must be in units of a thousand dollars. Not all the money need be invested. He must invest at least 3 thousand dollars on the investment A and at least 5 thounsand dollars on the investment B. How many different investment strategies are possible
Answer:
36 ways
Explanation:
There are 3 possible investments A, B and C.
If x represents the amount of money to be invested in the ith opportunity, it is given as:
[tex]x_1+x_2+x_3=15 \\[/tex]
Let y be the minimum investment to be made, therefore:
[tex]y_1=x_1-3\\y_2=x_2-5\\y_3=x_3\\\\Therefore:\\\\y_1+y_2+y_3+3+5=15\\\\y_1+y_2+y_3+8=15\\\\y_1+y_2+y_3=7\\[/tex]
The number of possible combinations is:
C(n + k - 1, k - 1)
Where k is the number of investment = 3 and n = 7. Therefore:
The number of possible combinations is = C(n + k - 1, n - 1) = C(7 + 3 -1, 3 - 1) = C(9, 2) = [tex]\frac{9!}{(9-2)!2!}=\frac{9!}{7!2!}=36\ ways[/tex]
What should the firm do if there is no possible output where the price would at least be equal to average variable costs
Answer:
Since the average variable cost curve lies below the average total cost curve, this implies that the average variable cost is the lowest price at which the producer can sell.
If there is no possible output where the price would be at least equal to the average variable costs, the firm should cease production, because it is not going to recover its costs, not to talk about making a profit.
Explanation:
A firm's average variable cost is the total variable cost divided by the total output. For example, if the total variable cost for a particular product is $4,500 with a total output of 450 units, then the average variable cost is $10 ($4,500/450).
Suppose a firm is the exclusive supplier of Painite, the world's rarest gemstone. Output is sold in two markets, A and B. Assume consumers in the markets are unable to sell gemstones to one another and can only purchase directly from the firm. Market A has a more inelastic demand than market B. What can be said about the prices the firm charges in each market?
Answer:
d. Market A will have a higher price than market B
Explanation:
As we know that in the non elastic market, the seller could charge the high price while on the other hand in the elastic market it can charge a smaller price
as if there is an inelastic demand than it would leads to 1% rise in price that decrease the quantity demanded by smaller than 1%. Also if the price increased the total revenue also rises
And if there is an elastic demand than it would leads to 1% rise in price that decrease the quantity demanded by more than 1% and the price increased the total revenue is decreased
As it is given that the Market A contains more inelastic demand than market B so the seller charged a high price in market A than in Market B
Hence, the last option is correct
Vernon signed a contract with Cameron allowing Cameron to deal cocaine on Vernon's property. This contract is ____ because neither party can legally enforce it.
Answer: invalid
Explanation: The contract written and signed between Cameron and Vernon which allows the former to deal cocaine on the property of the latter is invalid due to the fact that neither of both parties can enforce it legally. The reason is because the contract was written and signed for an illegal purpose.
Chris purchased a 10 year 100 par value bond where 6% coupons are paid semiannually. Cheryl purchased a 100 par value bond where 6% coupons are paid semiannually. There is no maturity date or redemption value for Cheryl’s bond. Cheryl paid $100 for her bond. The yield for Chris’s bond is 80% of the yield for Cheryl’s bond. How much did Chris pay for his bond?
Answer:
Chris paid $109.68 for his bond. Since he paid a premium for the bond, the YTM is lower than the coupon rate.
Explanation:
yield of Cheryl's bond is 6% since she purchased it at par and the bond's coupon is 6%
if Chris's bond yields 80% of Cheryl's, it will yield 6% x 0.8 = 4.8%
we can use the approximate yield to maturity formula to find the market price of Chris's bond:
2.4%(semiannual) = {3 + [(100 - MV)/20]} / [(100 + MV)/2]
0.024 x [(100 + MV)/2] = 3 + [(100 - MV)/20]
0.024 x (50 + 0.5MV) = 3 + 5 - 0.05MV
1.2 + 0.012MV = 8 - 0.05MV
0.062MV = 6.8
MV = 6.8 / 0.062 = 109.68
Explain the shift from artisan to factory worker, and discuss the factory system. What were the advantages and disadvantages
Answer:
The Shift from Artisan to Factory Worker and the Factory System
a) The Shift from Artisan to Factory Worker: Earlier, people produced everything they needed by their own hands. Food production was limited to subsistence level as every household owned farms on which they cultivated the food the family required. The artisan worked alone to handcraft tools and other ornamental works.
But, all this changed with the invention of the steam engine. Following the improved systems of transportation with steamboats, travelling was enhanced. Gradually, production processes were mechanized. Factories started springing up in concentrated areas near water channels. People left their rural areas to live near the factories in towns and cities. With the birth of the factory system, goods were mass-produced and could be sold in markets farther from the factory towns.
It was the age of industrialization, trade unionization, assembly line production, scientific management, and now complete automation of processes with robots replacing manual labor. It has been a long way.
b) Advantages of the Factory System:
Hunger was reduced as more food items were produced and processed into finer products on a large scale.Exports of goods were encouraged and more markets outside the domestic markets were explored.The world became a global village with the pursuit of the common good of man, thereby levelling human beings to a common humanity and experience.More sophisticated goods and equipment can now be produced as a result of the factory system. Manual labor has been eased greatly.The factory system introduced scientific management, which has ensured production innovations and encouraged skills development.c) Disadvantages of the Factory System:
The artisan was rendered jobless by the factory system as some of the tools and goods which only the artisan could produced was commonalized to the extent that unskilled laborers could produce them, just by each concentrating on a part through the principle of division of labor.The factory system created urbanization with its attendant problems, especially sanitation problems and pollution of the environment. People's health has been jeopardized as a result.The factory system also created the consumerism culture.It widened wealth-inequality as wealth creation became concentrated in the hands of a few people.Explanation:
The factory system encourages a method of manufacturing through the use of machines, automation, and division of labour. It gave rise to urbanization, transportation efficiency, and globalization.