Answer:
True
Explanation:
When payments are made from debit or ATM card, the amount is directly deducted from the saving account of the user.
However, in case of credit card, the money spent is a loan taken from banks which is to be paid at the end of every month. In case of delay of payment, fine is also imposed.
Hence, the given statement is true
impact on the dispatch rules on the operation performance and
relate back to Operations Strategy
Dispatch rules in operations management refer to the set of guidelines or algorithms used to allocate resources, schedule tasks, or prioritize orders within a production system.
The choice of dispatch rules can have a significant impact on operational performance and align with the broader operations strategy of a company. Here are some key points to consider:
Efficiency and Utilization: Dispatch rules influence how effectively and efficiently resources are utilized within the production system. Different rules may prioritize tasks based on factors such as due dates, setup times, or order size. By selecting dispatch rules that optimize resource allocation, companies can improve efficiency, reduce idle time, and enhance overall operational performance.Throughput and Lead Time: Dispatch rules can affect the flow of work and impact throughput and lead time. Some rules prioritize tasks with shorter processing times or minimize setup/changeover times, aiming to reduce lead time and increase the speed of order fulfillment. By considering factors such as task sequencing and priority, companies can streamline operations and improve customer satisfaction through shorter lead times.Quality and Variability: Dispatch rules can also impact quality control and the handling of variability in operations. For example, some rules may prioritize tasks that require specific equipment or skills, reducing the risk of errors or defects. By implementing dispatch rules that consider the variability of tasks and allocate resources accordingly, companies can enhance quality control and minimize the likelihood of mistakes.Flexibility and Adaptability: Dispatch rules can be tailored to reflect the operations strategy of a company, which may prioritize flexibility and adaptability to meet changing customer demands or market conditions. Flexible dispatch rules allow for the adjustment of resource allocation in response to disruptions or changes in priority. This adaptability supports agile operations and can help companies maintain a competitive edge.Customer Satisfaction: Dispatch rules play a crucial role in meeting customer expectations and delivering products or services on time. By selecting rules that prioritize tasks based on customer due dates or service level agreements, companies can enhance customer satisfaction and build customer loyalty. This aligns with an operations strategy focused on customer-centricity and responsiveness.In summary, dispatch rules have a direct impact on operational performance by influencing efficiency, throughput, lead time, quality control, flexibility, and customer satisfaction. The selection of dispatch rules should align with the broader operations strategy, considering factors such as resource utilization, responsiveness to changing demands, and the overall customer experience. By optimizing dispatch rules, companies can improve operational performance and gain a competitive advantage in the market.
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Nizzero Corporation is a newly created company and noted the following cash related transaction for the first month ended April 2022: 1. According to the bank statement received for the month of April 2022, the balance in Nizzero's bank account on April 30 was $11,356.69. 2. The balance in the company's Cash account in the general ledger on April 30, 2022 was $13,211.76. 3. The last deposit of the month, for $867.91, was made as a night deposit on April 30. 4. One of Nizzero's customers paid its account by making an EFT from its bank into Nizzero's bank account in the amount of $616.09. 5. The bank subtracted a service charge of $42.00 from the company's bank account for April. 6. Cheque number 001 for $603.44, cheque number 009 for $531.00, and cheque number 010 for $78.49 were still outstanding at the end of April. 7. The bank statement showed that $750.00 was deducted from Nizzero's account by the bank as payment of loan principal. 8. The bank returned a cheque from one of Nizzero's customers marked NSF for $206.80 that a customer used to pay off their account. 9. The bank statement showed that cheque number 004 (which Nizzero had issued to pay for utilities expense) was recorded by the bank as $784.65, while the company incorrectly recorded this cheque as $874.65. 10. The bank deducted a cheque written by Nizarri Company (a different company) from Nizzero Company's account. The amount of the cheque was $1,907.38. Requirement 1: Prepare the bank reconciliation for April 30, 2022. Enter values in each section in order of highest to lowest dollar value. Add: Deduct: Reconciled Balance Nizerro Corporation Bank Reconciliation as at April 30, 2022 a 46 4 $ Add: Deduct: Reconciled Balance 45 47 Time left 1:10:31 Prepare all necessary journal entries to balance the cash ledger. Prepare the entries in order of highest to lowest dollar value. <>
The bank reconciliation of Nizzero Corporation as at April 30, 2022:Add: Outstanding cheques (Cheque number 001 for $603.44, cheque number 009 for $531.00, and cheque number 010 for $78.49) = $1,212.93Add: Deposit in transit (Night deposit on April 30) = $867.91Add: EFT from customer = $616.09
Deduct: Bank service charge = $42.00
Deduct: NSF cheque from customer = $206.80
Deduct: Error in recording cheque number 004 = $90.00
Deduct: Deducted cheque from Nizarri Company = $1,907.38
Bank balance according to the bank statement = $11,356.69
Cash balance according to the company's records = $13,211.76
Calculated balance = Bank balance + Add - Deduct
$11,356.69 + $1,696.00 - $2,246.18 = $10,806.51
Reconciled Balance = $10,806.51
The reconciled balance for Nizzero Corporation as at April 30, 2022 is $10,806.51. The company needs to adjust its Cash account to reflect the reconciled balance. The necessary journal entries are as follows:Journal entries:
1. To adjust for outstanding cheques:
Debit: Cash = $1,212.93
Credit: Outstanding Cheques = $1,212.93
2. To adjust for the EFT from the customer:
Debit: Cash = $616.09
Credit: Accounts Receivable = $616.09
3. To adjust for the NSF cheque from the customer:
Debit: Accounts Receivable = $206.80
Credit: Cash = $206.80
4. To adjust for the error in recording cheque number 004:
Debit: Utilities Expense = $90.00
Credit: Cash = $90.00
5. To adjust for the deducted cheque from Nizarri Company:
Debit: Cash = $1,907.38
Credit: Miscellaneous Expense = $1,907.38
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21) Your company needs a quick infusion of cash. You decide to put $10,000 of your own money into the business checking account. On QuickBooks’ Bank Deposit page, you select Checking in the Account field and enter the date. What do you do next?
A In the "Add Funds to this Deposit" section, choose Owner in the Received From column, and choose Checking from the drop-down list in the Account column.
B In the "Add Funds to this Deposit" section, skip the Received From column, and choose Owner’s Draw from the drop-down list in the Account column.
C In the "Add Funds to this Deposit" section, skip the Received From column, and choose Owner’s Equity from the drop-down list in the Account column.
D In the "Add Funds to this Deposit" section, choose Owner in the Received From column, and choose Cash from the drop-down list in the Account column.
19) Which of the following statements about converting a sub-customer to a project in QuickBooks is true?
A Once a sub-customer is converted to a project, the process is not reversible.
B A project can be converted to a sub-customer but not the other way around.
C Financial information will remain with the sub-customer while transaction information will convert to the project format.
D QuickBooks recommends using sub-customers rather than projects to track transactions.
17) Which account balances are transferred to Retained Earnings during the closing process?
A Accounts Receivable
B Liabilities
C Revenues and Expenses
D Assets
16) There are several valuable reports you can run to evaluate your business performance. Intuit has grouped these reports for easy access in the Management reports tab. Which two reports are grouped in Company Overview?
A Profit and Loss, A/R Aging Detail.
B Profit and Loss, Expenses by Vendor Summary.
C Profit and Loss, Sales by Customer Summary.
D Profit and Loss, Balance Sheet.
21) In the "Add Funds to this Deposit" section, choose Owner in the Received From column, and choose Checking from the drop-down list in the Account column. This is what you would do next.
19) Once a sub-customer is converted to a project, the process is not reversible. This statement is true.17) Which account balances are transferred to Retained . Revenues and Expenses are the account balances that are transferred to Retained Earnings during the closing process. This is the right answer.
16) There are several valuable reports you can run to evaluate your business performance. Intuit has grouped these reports for easy access in the Management reports tab. The Profit and Loss and the Balance Sheet are grouped in Company Overview. This is the correct answer.
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A Sad Tale: The Demise of Arthur Andersen
In January 2002, there were five major public accounting firms: Arthur Andersen, Deloitte Touche, KPMG, Price Waterhouse-Coopers, and Ernst & Young. By late fall of that year, the number had been reduced to four. Arthur Andersen became the first major public accounting firm to be found guilty of a felony (a conviction later overturned), and as a result it virtually ceased to exist.
That such a fate could befall Andersen is especially sad given its early history. When Andersen and Company was established in 1918, it was led by Arthur Andersen, an acknowledged man of principle, and the company had a credo that became firmly embedded in the culture: "Think Straight and Talk Straight." Andersen became an industry leader partly based on high ethical principles and integrity.
How did a one-time industry leader find itself in a position where it received a corporate death penalty over ethical issues? First, the market changed. During the 1980s, a boom in mergers and acquisitions and the emergence of information technology fueled the growth of an extremely profitable consulting practice at Andersen. The profits from consulting contracts soon exceeded the profits from auditing,
removed him from auditing responsibilities at Enron-in response to a request from Enron management.
Playing Hardball and Losing
The SEC was determined to make an example of Andersen. The U.S. Justice Department began a criminal investigation, but investigators were willing to explore some "settlement options" in return for Andersen's cooperation. However, Andersen's senior management appeared arrogant and failed to grasp the political mood in Congress and in the country after a series of business scandals that had brought more than one large company to bankruptcy.
After several months of sparring with the Andersen senior management team, the Justice Department charged Andersen with a felony offense-obstruction of justice. Andersen was found guilty in 2002 of illegally instructing its employees to destroy documents relating to Enron, even as the government was conducting inquiries into Enron's finances. During the trial, government lawyers argued that by instructing its staff to "undertake an unprecedented campaign of document destruction," Andersen had obstructed the government's investigation.
Since a firm convicted of a felony cannot audit a publicly held company, the conviction spelled the end for Andersen. But even before the guilty verdict, there had been a massive defection of Andersen clients to other accounting firms. The evidence presented at trial showed a breakdown in Andersen's internal controls, a lack of leadership, and an environment in Andersen's Houston office that fostered recklessness and unethical behavior by some partners.
In 2005, the United States Supreme Court unanimously overturned the Andersen conviction on the grounds that the jury was given overly broad instructions by the federal judge who presided over the case. But by then it was too late. Most of the Andersen partners had either retired or gone to work for former competitors, and the company had all but ceased to exist.
Can the demise of Andersen be blamed on the fact that the market began rewarding consulting services of the kind Andersen could provide?
The demise of Arthur Andersen cannot be solely blamed on the market rewarding consulting services. While the growth of the consulting practice at Andersen played a role in the firm's success during the 1980s, it was a combination of factors that led to its downfall.
One major factor was the ethical issues surrounding Andersen's involvement in the Enron scandal. Andersen's auditors were accused of not properly reporting Enron's fraudulent accounting practices, which eventually led to Enron's collapse. The subsequent criminal investigation and charges of obstruction of justice against Andersen tarnished its reputation and resulted in the loss of trust from clients and the public.Andersen's senior management's handling of the situation also contributed to its demise.
The guilty verdict of obstruction of justice sealed Andersen's fate, as a felony conviction prohibited the firm from auditing publicly held companies. However, even before the verdict, many clients had already defected to other accounting firms due to the breakdown in Andersen's internal controls, lack of leadership, and the unethical behavior of some partners in the Houston office. Although the United States Supreme Court later overturned the conviction based on the jury's broad instructions, by that time, Andersen had already suffered irreparable damage. Most partners had retired or joined rival firms, and the company effectively ceased to exist.
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Which of the following is not one of the sources of natural market power? O A. Controlling a key resource. OB. Having individual expertise in a field. OC. Network externalities. D. Owning a firm in a small community.
Owning a firm in a small community is not one of the sources of natural market power. Option D is the correct answer.
A natural monopoly constitutes a monopoly in an industry when high infrastructure costs and other obstacles to entry compared to the size of the market provide the biggest vendor in an industry, frequently the first provider in an industry, with a substantial advantage over potential rivals. Option D is the correct answer.
Particularly if the overall cost of one firm producing the entire production is lower than the total cost of multiple businesses generating the exact same quantity of output, the sector is considered to possess a natural monopoly. If so, it is likely that one company (a monopoly) or a few companies (an oligopoly) will arise and offer all or the bulk of the pertinent goods and/or services.
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Professor Wendy Smith has been offered the following deal: A law firm would like to retain her for an up-front payment of $50,000. In return, for the next year the firm would have access to eight hours of her time every month. Smith's rate is $550 per hour and her opportunity cost of capital is 15% per year. What does the IRR rule advise regarding this opportunity? What about the NPV rule? Complete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To copy/paste a formula across a row or down a column, an absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be used, the directions will specify the use of that function. Do not type in numerical data into a cell or function. Instead, make a reference to the cell in which the data is found. Make your computations only in the blue cells highlighted below. In all cases, unless otherwise directed, use the earliest appearance of the data in your formulas, usually the Given Data section.
The NPV is $4,855.34, which is positive. So, based on the NPV rule, Professor Wendy Smith should accept the opportunity is the answer.
Internal Rate of Return (IRR) is the rate of return at which the NPV of an investment is zero. NPV is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. If the NPV is positive, then the investment will produce a profit, but if it is negative, then the investment will result in a loss. The IRR rule advises that an investment is acceptable if the IRR is greater than the required rate of return. In this case, the opportunity cost of capital is 15% per year, which serves as the required rate of return. Therefore, if the IRR is greater than 15%, then Professor Wendy Smith should accept the opportunity. The NPV rule advises that an investment is acceptable if the NPV is positive.
The formula to calculate NPV is: NPV = -Initial Investment + Cash Flow1 / (1 + Discount Rate) ^ 1 + Cash Flow2 / (1 + Discount Rate) ^ 2 + ... + Cash Flown / (1 + Discount Rate) ^ n.
In this case, the initial investment is $50,000 and there are 8 hours of access per month for a year at a rate of $550 per hour.
The NPV calculation will be: NPV = -$50,000 + ($550 x 8 x 12) / (1 + 0.15) ^ 1 + ($550 x 8 x 12) / (1 + 0.15) ^ 2 + ... + ($550 x 8 x 12) / (1 + 0.15) ^ 12.
The NPV is $4,855.34, which is positive.
Therefore, based on the NPV rule, Professor Wendy Smith should accept the opportunity.
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The spot exchange rate is 1.57 dollars per pound. The 30-day
forward exchange rate is 1.61 dollars per pound. Compute the
percent per annum premium or discount.
The spot exchange rate is 1.57 dollars per pound. The 30-day percent per annum premium or discount. What is spot exchange rate?
The spot exchange rate is the rate at which a currency may be traded for immediate delivery. It is the present exchange rate of one currency in terms of another currency. The rate at which currencies are exchanged on the spot market is known as the spot exchange rate.
What is a premium or discount? A premium is the amount by which the forward rate exceeds the spot rate. This can happen when there is an increased demand for a currency. A discount occurs when the forward rate is less than the spot rate. This can happen when there is a reduced demand for a currency.What is percent per annum?The term “percent per annum” refers to the interest rate charged over a year's time frame. In other words, it is the percentage of the original amount of money borrowed or invested that is paid out over a year. It is expressed as a percentage.The 30-day percent per annum premium or discount can be calculated using the following formula:Premium/discount = (Forward rate - Spot rate)/Spot rate x (360/t)Where:t = number of days in the period of the forward contract. In this case, t = 30 days.Substituting the given values into the formula:Premium/discount = (Forward rate - Spot rate)/Spot rate x (360/t) = (x - 1.57)/1.57 x (360/30) = 0.085x - 10.44%.Thus, the 30-day percent per annum premium or discount is 0.085x - 10.44%.
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Angela makes a material misstatement of fact to Frances, which Frances relies on when she signs Angela's contract. Fraud exists if Angela made the misstatement____ 1. Intentionally 2. Recklessly 3. Carelessly 4. Both A & B 5. A & and B & C 4. Both A & B O 5. A & and B&C 2. Recklessly O 1. Intentionally 3. Carelessly
Fraud exists if Angela made the misstatement intentionally or recklessly. Here is why:When Angela makes a material misstatement of fact to Frances, which Frances relies on when she signs Angela's contract, Angela is committing fraud.
However, the question wants to know whether the misstatement is fraudulent or not depending on how it was made.There are different ways to make a misstatement, and not all of them are fraudulent. A misstatement may be made intentionally, recklessly, or carelessly. When a misstatement is made intentionally, it is fraudulent.
Similarly, when it is made recklessly, it is also fraudulent since recklessness is a conscious disregard of a known risk. However, when a misstatement is made carelessly, it is not fraudulent. Carelessness is not enough to constitute fraud. Therefore, the answer to this question is 4. Both A and B, meaning Angela committed fraud if she made the misstatement intentionally or recklessly.
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Stella Liebeck, an elderly grandmother, received third-degree burns when she spilled coffee purchased at a McDonald's drive-through. At trial, experts testified that McDonald's coffee was too hot to be consumed at the point of purchase, was hotter than any other restaurant's coffee or coffee brewed at home, and was so hot that third-degree burns would result within three to five seconds of coming into contact with the skin. McDonald's also conceded that the coffee was brewed extremely hot for commercial (profit) reasons, because most customers wanted coffee to be hot throughout their commute. After finding the company liable, the jury awarded Mrs. Liebeck two days' worth of coffee sales at McDonald's, an amount equivalent to $2.7 million, in punitive damages. The award, although reduced to much less than that, set off a firestorm of criticism that has not died down to this day. Hence, now why your coffee cups say "Caution Hot". Do you believe that it's possible for coffee to be unreasonably dangerous? Find this information through the internet and write your answers and cite your sources. • What was the tort committed here? . Was there duty owed? • Do you believe that the jury's award of $2.7 million for third-degree burns was excessive? Why do you believe that such an award is necessary? Can you identify any standards which have changed in the industry based upon this case? • What ethical issues come to mind when you think of this case?
The tort committed in the given case is negligence.
A tort is a legal term that refers to an action that causes harm to another person resulting in the violation of another person's rights. In this case, the tort committed by McDonald's was negligence. The McDonald's owes a duty of care to its customers, and it is essential to determine if there was a breach of that duty in this case. The issue of whether a duty of care existed was central to the case, and the jury ultimately concluded that it did. McDonald's was responsible for ensuring that its coffee was reasonably safe for its customers to consume. The temperature of the coffee was far too hot, making it unreasonably dangerous and capable of causing severe burns.
The jury's award of $2.7 million for third-degree burns was not excessive because it was necessary to hold McDonald's accountable for its negligence. The jury found that the temperature of the coffee was unreasonably hot and that it posed a significant risk to the safety of McDonald's customers. The award was necessary to hold McDonald's accountable for its negligence and to compensate the plaintiff for the harm she suffered. Ethical issues that come to mind when thinking of this case include corporate responsibility, consumer protection, and the role of government in regulating businesses that provide goods and services to the public. Companies have an ethical obligation to ensure that their products are safe and do not pose unreasonable risks to the public.
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If the University Chamber Music Society decides to raise ticket prices to acquire more funds to finance concerts, the Society is assuming that the demand for tickets is: A. parallel to the horizontal axis B. shifting to the left C. unit-elastic D. inelastic
"If the University Chamber Music Society decides to raise ticket prices to acquire more funds to finance concerts, the Society is assuming that the demand for tickets is inelastic. The correct answer is D.
A shift in demand for a good or service occurs when, for whatever reason, people purchase a different quantity of that good or service at each price point. The demand curve is a visual representation of the relationship between the quantity demanded and the price.
If a firm increases its price, the quantity demanded will decrease, which will be reflected by a movement along the demand curve, known as a change in quantity demanded. On the other hand, a shift in demand is represented by a shift in the entire curve.
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Problem Walk Through M Carlsbad Corporation's sales are expected to increase from $5 million in 2021 to $6 million in 2022, or by 20%. Its assets totaled $2 million at the end of 2021 Carlsbad capacity, it must grow in proportion to projected sales. At the end of 2021, current abilities are $1 million, consisting of $250,000 of accounts payable, $500,000 ofe payable, and $350,000 of accrued abilities. Its profit margin is forecasted to be 4%, and the forecasted retention ratio is 45%. Use the APN equation to forment the additional fun Cartabed will need for the coming year. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest d 6
APN = ($2,400,000 / $5,000,000) x $1,000,000 - ($1,100,000 / $5,000,000) x $1,000,000 - (0.04 x 0.45 x $1,000,000)APN = 0.48 x $1,000,000 - 0.22 x $1,000,000 - $18,000APN = $260,000 - $220,000 - $18,000APN = $22,000Therefore, the Additional funds needed for Carlsbad Corporation will be $22,000.
The assets that the Carlsbad Corporation has are valued at $2 million at the end of 2021. Therefore, to project the amount of assets needed to cater for the increase in sales, we can use the formulaAssets = Sales / Asset Turnover Ratio Asset Turnover Ratio = Sales / AssetsThe Asset Turnover Ratio formula is used to calculate how efficiently a company utilizes its assets to generate revenue. So we can rearrange the formula to determine the sales figures and use this figure to calculate the assets needed.Sales = Asset Turnover Ratio * Assets
Therefore, we can use the sales figure projected for 2022 to determine the Asset Turnover Ratio for 2022.Asset Turnover Ratio = Sales / Assets = $5,000,000 / $2,000,000 = 2.5Similarly, the projected sales for 2022 is $6,000,000. Hence the assets needed can be calculated as:Assets = Sales / Asset Turnover Ratio = $6,000,000 / 2.5 = $2,400,000
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Budget planners for a certain community have determined that $8,463,000 will be required to provide all government services next year. The total assessed property value in the community is $130,000,000. What tax rate is required to meet the budgetary demands? (Express your answer as a tax rate per $100 to two decimal places rounded up.)
Calculate the assessed value (in $) and the property tax due (in $) on the property. (Round your answers to the nearest cent.)
Fair Market value Assessment rate Assessed Value Property Tax Rate Property Tax Due
$342,900 79 5.7%
For a property with a fair market value of $342,900 and an assessment rate of 79, the assessed value would be $270,471, and the property tax due would be $15,424.79.
To calculate the tax rate required to meet the budgetary demands, we can use the following formula:
Tax Rate = (Budget / Assessed Property Value) * 100
In this case, the budget is $8,463,000, and the assessed property value is $130,000,000. Plugging these values into the formula, we get:
Tax Rate = ($8,463,000 / $130,000,000) * 100 ≈ 6.51%
Therefore, the tax rate required to meet the budgetary demands is approximately 6.51% per $100.
To calculate the assessed value and the property tax due on a property, we need to multiply the fair market value by the assessment rate to get the assessed value. Then, we multiply the assessed value by the property tax rate to get the property tax due.
Let's say we have a property with a fair market value of $342,900 and an assessment rate of 79. The assessment rate represents the percentage of the fair market value used to determine the assessed value.
Assessed Value = Fair Market Value * (Assessment Rate / 100)
Assessed Value = $342,900 * (79 / 100) ≈ $270,471
Next, we need to calculate the property tax due using the property tax rate, which is 5.7%:
Property Tax Due = Assessed Value * (Property Tax Rate / 100)
Property Tax Due = $270,471 * (5.7 / 100) ≈ $15,424.79
Therefore, for a property with a fair market value of $342,900 and an assessment rate of 79, the assessed value would be approximately $270,471, and the property tax due would be approximately $15,424.79.
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Journalize the entries to record the following selected equity Investment transactions completed by Yerbury during a recent year:
Feb. 2 Purchased for cash 1,300 shares of Wong Inc. stock for $49 per share plus a $650 brokerage commission. Received dividends of $0.30 per share on Wong Inc. stock. Mar. 16 June 7 Purchased 900 shares of Wong Inc. stock for $59 per share plus a $450 brokerage commission. July 26 Sold 1,500 shares of Wong Inc. stock for $63 per share less a $750 brokerage commission. Yerbury assumes that the first investments purchased are the first investments sold. Sept. 25 Received dividends of $0.40 per share on Wong Inc. stock.
Feb. 2: Debit Investment in Wong Inc. Stock $64,350, Debit Brokerage Commission Expense $650, Credit Cash $64,000 | Feb. 2 (dividend received): Debit Cash $390, Credit Dividend Income $390 | Mar. 16: Debit Investment in Wong Inc. Stock $53,550, Debit Brokerage Commission Expense $450, Credit Cash $53,100 | June 7 (dividend received): Debit Cash $270, Credit Dividend Income $270 | July 26: Debit Cash $93,750, Debit Brokerage Commission Expense $750, Debit Investment in Wong Inc. Stock $10,600, Credit Gain on Sale of Investments $83,150 | Sept. 25 (dividend received): Debit Cash $520, Credit Dividend Income $520
What Is "first-in, first-out" (FIFO) Method? How We Calculated Debit Investment Etc"First-in, first-out" (FIFO) is a cost flow assumption where the oldest inventory items are assumed to be sold or used first, resulting in the cost of goods sold (COGS) being based on the earliest inventory purchases.
To record the selected equity investment transactions completed by Yerbury, the following journal entries can be made:
Feb. 2:
- Cash: 1,300 shares x $49 = $63,700
- Investment in Wong Inc. Stock: $63,700
- Brokerage Commission Expense: $650
Feb. 2 (dividend received):
- Cash: 1,300 shares x $0.30 = $390
- Dividend Income: $390
Mar. 16:
- Cash: 900 shares x $59 = $53,100
- Investment in Wong Inc. Stock: $53,100
- Brokerage Commission Expense: $450
June 7 (dividend received):
- Cash: 900 shares x $0.30 = $270
- Dividend Income: $270
July 26:
- Cash: 1,500 shares x $63 = $94,500
- Brokerage Commission Expense: $750
- Investment in Wong Inc. Stock: $63,700 - $53,100 = $10,600 (cost of shares sold)
- Gain on Sale of Investments: $94,500 - $10,600 - $750 = $83,150
Sept. 25 (dividend received):
- Cash: 1,300 shares x $0.40 = $520
- Dividend Income: $520
Note: The assumption made is that the first investments purchased are the first investments sold, following the "first-in, first-out" (FIFO) method for determining the cost of shares sold.
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Q3. a) MM Ltd is a British sports-fashion retail company based in Bury, Greater Manchester, England. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. MM Ltd currently has £60 million in debt outstanding. In addition to 7% interest, it plans to repay 10% of the remaining balance each year. If MM Ltd has a marginal corporate tax rate of 19%, and if the interest tax shields have the same risk as the loan, what is the present value of the interest tax shield from the debt?
The present value of the interest tax shield from the debt for MM Ltd is approximately £744,462.86.
To calculate the present value of the interest tax shield from the debt, we need to consider the tax shield effect of the interest payments. The tax shield arises from the tax deduction a company receives on the interest payments it makes on its debt.
Here's how you can calculate the present value of the interest tax shield from the debt for MM Ltd:
Calculate the annual interest expense: Multiply the outstanding debt (£60 million) by the interest rate (7%) to get the annual interest expense.
Annual interest expense = £60 million * 7% = £4.2 million
Calculate the tax shield from the interest expense: Multiply the annual interest expense by the corporate tax rate (19%) to determine the tax shield.
Tax shield = Annual interest expense * Tax rate = £4.2 million * 19% = £798,000
Calculate the present value of the tax shield: Since MM Ltd plans to repay 10% of the remaining balance each year, we can calculate the present value of an annuity that decreases by 10% each year. We'll assume a discount rate (cost of debt) of 7% to match the interest rate.
Using the formula for the present value of an annuity:
Present value of tax shield = Tax shield * [1 - (1 + r)^(-n)] / r
Where:
r = discount rate = 7% = 0.07
n = number of years (assuming a perpetuity, where MM Ltd repays 10% each year indefinitely)
Present value of tax shield = £798,000 * [1 - (1 + 0.07)^(-1)] / 0.07
Present value of tax shield ≈ £798,000 * [1 - (1.07)^(-1)] / 0.07
Present value of tax shield ≈ £798,000 * [1 - 0.9346] / 0.07
Present value of tax shield ≈ £798,000 * 0.0654 / 0.07
Present value of tax shield ≈ £744,462.86
Therefore, the present value of the interest tax shield from the debt for MM Ltd is approximately £744,462.86.
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Dolphin Foods offers 7.5 percent coupon bonds with a yield to maturity of 7.68 percent. The 15 year bonds mature in 8 years. What is the market price per bond?
The market price per bond for a 15 year bond maturing in 8 years with a coupon rate of 7.5% and YTM of 7.68% will be $939.84.
In order to calculate the market price per bond, we need to use the formula:
V = PVIFA * PMT * n + FV * PVIF
Where,
V = Market value of the bondn = number of periods = 15-8 = 7 yearsPMT = Interest paymentFV = Face valuePVIFA = Present Value Interest Factor for an annuityPVIF = Present Value Interest FactorFrom the given details, we can find out:
Interest rate (YTM) = 7.68%Annual coupon rate = 7.5%Face Value (FV) = $1,000Number of years to maturity = 15 yearsNumber of years to next call date = 8 yearsNumber of years between next call date and maturity = 7 yearsThus,Annual interest payment (PMT) = (7.5 / 100) * 1000 = $75
Next, we calculate PVIF and PVIFA.
PVIF = 1 / (1 + r)n
PVIFA = (1 - 1 / (1 + r)n) / r
where,
r = Interest rate per periodn = number of periodsWe need to find the present value of an annuity for 7 years.
PVIFA = (1 - 1 / (1 + r)n) / r= (1 - 1 / (1 + 0.0768 / 2)14) / (0.0768 / 2)= 5.0139
Next, we calculate PVIF for 7 years.
PVIF = 1 / (1 + r)n= 1 / (1 + 0.0768 / 2)14= 0.5580
Now, we can calculate the market value of the bond.
V = PVIFA * PMT * n + FV * PVIF= 5.0139 * 75 * 7 + 1000 * 0.5580= $939.84
Hence, the market price per bond is $939.84.
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SinTell has USD $78 million in excess cash that it has invested in China at an annual interest rate of 14 percent. The U.S. interest rate is 6 percent. By how much would the Chinese yuan have to depreciate to cause such a strategy to backfire? Give your answer in decimal point, rounding up to 4 decimal places ?
SinTell's investment strategy is safe from currency risk. Rounding off the answer to 4 decimal places, the answer is 1.1818.
SinTell has USD $78 million invested in China at an annual interest rate of 14 percent. The U.S. interest rate is 6 percent. In this situation, the investment strategy would backfire if the value of the Chinese yuan depreciates, causing SinTell to lose money. We can calculate how much the yuan would need to depreciate by using the following formula:
Depreciation percentage = (Foreign interest rate - Domestic interest rate) / (1 + Domestic interest rate) × 100%
Using the formula, we can plug in the values given in the question and solve for the depreciation percentage: Depreciation percentage = (14 - 6) / (1 + 6) × 100% = 1.1818 × 100% = 118.18%
Therefore, the Chinese yuan would need to depreciate by 118.18% for SinTell's investment strategy to backfire. This is equivalent to the yuan losing all of its value and then some. Since this is not a realistic scenario, we can conclude that SinTell's investment strategy is safe from currency risk. Rounding off the answer to 4 decimal places, the answer is 1.1818.
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At the begining of the year, Myrna corporation (a calendar year taxpayer) has E&P of $75,250. The corporation generates no additional E&P during the year. On December 31, the corporation distributes $112,875 to its sole shareholder, Abby, whose stock basis is $22,575.
As a result the distribution abby has dividend income of $______ and a taxable capital gain of $_______. Abby's stock basis is $_______ after the distribution.
Dividend income of $75,250, Taxable capital gain of $37,625, Stock basis of $10,000 after the distribution
As per the given information, the distribution of $112,875 is greater than the corporation's current and accumulated earnings and profits (E&P) of $75,250. Hence, the distribution must be allocated between a dividend and a return of capital, or a taxable capital gain.
Abbey's stock basis before the distribution is $22,575. Therefore, the distribution in excess of the corporation's current and accumulated E&P of $75,250 ($112,875 − $75,250 = $37,625) will be treated as a capital gain. Their dividend income of Abbey is $75,250, which is the maximum amount of the distribution that can be considered as a dividend. The remaining amount of $37,625 will be treated as a taxable capital gain. The stock basis of Abbey will be adjusted by the sum of the distributions' taxable amounts.
The amount of dividend income is $75,250. The amount of taxable capital gain is $37,625. The stock basis of Abbey after the distribution is $10,000.
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in panel (a), which of the following statements is not correct? a. at e1, the economy is in full employment. b. at e2, unemployment rate rises and jobs are scarce. c. at e2, the economy faces a stagflation crisis. d. at e1, the actual unemployment rate is equal to the natural rate of unemployment.
The statement that is not correct in panel (a) is d. At e₁, the actual unemployment rate is equal to the natural rate of unemployment.
In panel (a), point e₁ represents full employment where the economy is operating at its potential output and the unemployment rate is equal to the natural rate of unemployment. Therefore, statement d is incorrect because at e₁, the actual unemployment rate is not necessarily equal to the natural rate of unemployment.
Statements a, b, and c are correct. At e₁, the economy is in full employment (statement a). At e₂, the unemployment rate rises and jobs are scarce (statement b). At e₂, the economy faces a stagflation crisis, which is a combination of high inflation and high unemployment (statement c).
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Which of the following is NOT true concerning the deworming study in Kenya?
a. Deworming is more cost-effective than free school uniforms.
b. Deworming increased attendance.
c. Deworming increased student learning as measured by test scores at the time of treatment.
d. Deworming increased student concentration levels when they were in school.
The option that is NOT true concerning the deworming study in Kenya is that d. Deworming increased student concentration levels when they were in school.
Deworming increased student attendance rates and increased their future earnings, according to the deworming study conducted in Kenya. The study looked at the impact of deworming on the attendance rates, concentration levels, and future earnings of children in rural Kenya. Deworming had no effect on student concentration levels while they were in school, which is why option d is incorrect. The study found that by increasing attendance rates, deworming was able to improve the future earnings potential of children. Additionally, the study demonstrated that deworming was a cost-effective way to increase attendance rates and improve children's future economic prospects.
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List and describe four reasons why the Theft of intellectual property is a problem everywhere? And What should be HR’s role regarding intellectual property?
Theft of intellectual property is a global problem due to economic, competitive, security, and reputation concerns. HR should establish policies, train employees, enforce rights, and collaborate with other departments.
The theft of intellectual property is a problem everywhere due to several reasons:
1. Economic Impact: Intellectual property theft undermines innovation and economic growth. When companies' ideas, inventions, and creative works are stolen, it hampers their ability to profit from their investments, discourages further research and development, and harms the overall economy.
2. Competitive Disadvantage: Theft of intellectual property gives unauthorized parties access to valuable knowledge, trade secrets, and proprietary technologies. This allows them to replicate and sell counterfeit products, giving them an unfair advantage in the market, while the original creators suffer from lost sales and market share.
3. National Security Concerns: Intellectual property theft poses national security risks as it can involve sensitive technologies and information. Stolen intellectual property can be used to develop weapons, disrupt critical infrastructure, or compromise defense systems, jeopardizing a country's security and sovereignty.
4. Reputation and Trust: Intellectual property theft damages the reputation and trust of companies. Counterfeit products or plagiarized content can tarnish a brand's image and lead to customer dissatisfaction, eroding consumer trust and loyalty.
Regarding intellectual property, HR's role should involve creating and implementing policies that protect the organization's intellectual assets. This includes educating employees about the importance of intellectual property, confidentiality, and non-disclosure agreements. HR should also ensure that employees are aware of the legal and ethical consequences of intellectual property theft and enforce appropriate disciplinary measures for violations.
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a sales manager collected the following data on annual sales for new customer accounts and the number of years of experience for a sample of salespersons.
The sales manager collected data on annual sales for new customer accounts and the number of years of experience for a sample of salespersons.
The sales manager gathered information on two variables: annual sales for new customer accounts and the number of years of experience of salespersons. This data collection is aimed at analyzing the relationship between sales performance and salesperson experience.
By collecting data on annual sales, the sales manager can assess the sales performance of the salespersons, specifically in acquiring new customer accounts. This metric provides insights into the effectiveness of the sales team in generating revenue from new customers.
The second variable, the number of years of experience, is a measure of the salespersons' tenure in the sales profession. It serves as an indicator of their accumulated knowledge, skills, and familiarity with sales strategies and customer relationship management.
The purpose of collecting these data is likely to analyze whether there is a correlation between salesperson experience and annual sales. By examining the relationship between these variables, the sales manager can gain insights into the impact of experience on sales performance and make informed decisions regarding training, mentoring, or other strategies to enhance sales effectiveness.
The sales manager collected data on annual sales for new customer accounts and the number of years of experience for a sample of salespersons. This data collection enables the analysis of the relationship between sales performance and salesperson experience, providing valuable insights for improving sales effectiveness and guiding managerial decisions.
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If instead, government chose to use the income tax to close the output gap rather than changes in spending, calculate the change in tax revenue the government would need to close the gap. Assume the same figures as part (d. 1. What is one possible automatic stabilizer in the economy that would contribute to closing this output gap? g. Assume that instead of intervening, the government allowed the economy to self-adjust in the long run. On your graph from part), llustrate how the economy would self- adjust in the long run hat the GDP deflator is 110 in the year that the output gap is identified, and three years later it is 105, does this means the recessionary gap is biely gone or as it? Explain Answer 1 of 1 Done a. Prices LRAS SRAS PRICES PL AD GDP -OUTPUT LEVEL The level of output would be less than the full- employment output level Yf because of cyclical unemployment. Thus, the short-run equilibrium with the crossing of AD and the SRAS curve will be to the left side of the full-employment output level. The graph is presented in the explanation section. b. Spain's current output Y1 with high unemployment will be inside the production possibility curve. c. The inflation rate will be low as the rate of unemployment is high as per the Phillips curve. d. If MPC=0.9 Multiplier = 1/1-MPC = 1/1-0.9 = 10 If the output gap is $100 billion, then there will be a rise in government disbursements to cover this gap. Change in government spending = output gap/multiplier 100/10 = 105 billion Therefore, government spending will increase by 105 billion to cover the output gap of 100$ billion. **As per Chegg Guidelines, I am liable to answer the first four sub-parts of the question. Do post the rest separately.
To close the output gap using income tax changes, the government would need to decrease tax revenue by an amount equal to the output gap divided by the marginal propensity to consume (MPC). If the output gap is $100 billion and the MPC is 0.9, the change in tax revenue needed would be $100 billion divided by 0.9, which is approximately $111.11 billion.
In this scenario, instead of increasing government spending, the government would use changes in income tax to close the output gap. The change in tax revenue required can be calculated by dividing the output gap by the MPC. The MPC represents the fraction of additional income that individuals spend, so by reducing taxes, people have more disposable income, which increases consumption and stimulates demand in the economy. In this case, the change in tax revenue needed would be $100 billion divided by 0.9 (MPC), resulting in approximately $111.11 billion. This tax cut would provide individuals with additional funds to spend, helping to close the output gap.
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Which of these cities would you recommend to a traveler looking
for Entertainment and Recreational Activities?
a.
Ottawa
b.
New England
c.
Nova Scotia
d.
California
California is the best city to visit. Option D.
California is the most populous state in the United States and is well known for its tourist attractions and excellent weather.What are some recreational activities that can be found in California?
California is well known for its national parks, which offer a variety of recreational activities such as camping, hiking, and mountain climbing. California is home to Yosemite National Park, which is a world-famous tourist destination that attracts millions of visitors each year.
The park is known for its stunning scenery, including waterfalls, granite cliffs, and wildlife. Visitors can also go rock climbing, camping, and horseback riding in the park. San Francisco is a popular tourist destination in California that offers a wide variety of entertainment options such as museums, galleries, and theaters.
San Francisco is also home to some of the best restaurants and bars in the country. Visitors can enjoy a variety of international cuisines in the city. The city is also home to some of the best shopping centers, nightclubs, and casinos in the country.
Conclusion: If you are looking for entertainment and recreational activities, California is the best city to visit. California offers a wide variety of tourist attractions such as national parks, museums, galleries, and theaters.
The state is also home to some of the best restaurants, bars, and shopping centers in the country. So Option D is correct.
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Explain how Consensus Theories of Crime have been used to
explain the sex trade and prostitution and then B) Compare and
contrast Consensus Theories of Crime with Critical Criminological
Theories and
Consensus theories of crime view criminal behavior as a result of a social agreement between individuals and communities regarding what is permissible and what is not. They propose that criminal behavior is a product of social integration and is critical in the functioning of a healthy society. Sex trade and prostitution are frequently linked with organized crime and viewed as societal problems. Consensus theories have been used to explain the sex trade and prostitution by stating that these illegal activities have taken place due to the lack of social control and regulation on the sex trade industry.
Furthermore, they suggest that when society fails to control an industry like prostitution, then such an industry becomes a source of conflict and disorder.Consensus theories of crime contrast sharply with Critical Criminological Theories. Critical Criminological Theories are a group of theories that are concerned with challenging and changing the status quo, questioning the legitimacy of existing criminal justice systems, and identifying and addressing societal inequalities that influence criminal behavior. The theories argue that crime is a result of social inequality, racism, and structural injustices. In contrast, consensus theories of crime assume that the criminal justice system is fair, unbiased, and provides an objective response to crime. In conclusion, consensus theories of crime have been used to explain the sex trade and prostitution by suggesting that these illegal activities occur due to a lack of social control and regulation. Critical Criminological Theories, on the other hand, argue that crime is a result of social inequality, racism, and structural injustices, and calls for changing the status quo.
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Conducting your own investigation, discuss and analyse ONE of the following issues (choose one only):
a. A financial market heavily affected by imperfect information. Identify a specific real- world market (e.g. current lending market conditions in Greece) as your case study. Carefully identify and explain the key problems arising from asymmetric information and uncertainty in that market. Support your analysis with evidence, including data. Analyse existing policies and discuss policy alternatives to improve economic efficiency. Support your analysis with data.
b. A negative externality. Find a real world example of a substantial negative externality. Present your case very carefully explaining the key issue using evidence. Discuss policy alternatives for bringing a Pareto-improvement into the economy. Compare your policy alternatives with the actual policy being used (if any). Compare it with policies used in other parts of the world. Conclude on the best policy option, or the cost-benefit of each.
c. A positive externality. Find a real world example of a substantial positive externality. Present your case very carefully explaining the key issue using evidence. Discuss policy alternatives for bringing a Pareto-improvement into the economy. Compare your policy alternatives with the actual policy being used (if any). Compare it with policies used in other parts of the world. Conclude on the best policy option, or the cost-benefit of each
d. A case in which the provision of a (non-existent) public good could be justified. Identify specific real-world case in space-time (e.g. the current need of providing a bridge in Margaret River, WA). Carefully present your case, explaining why the public good is inexistent and the economic efficiency implications of its provision. Discuss a method for obtaining information to conclusively confirm that the public good should be provided. Propose a detailed plan for providing the public good; discuss alternative policies that can be used for it and how alike public goods have been provided in other locations.
We can see here that the issue we will choose and discuss is c. A positive externality.
What is a positive externality?A Real-World Example of a Positive Externality: Education
Education is often cited as a significant positive externality. When individuals acquire education and knowledge, the benefits extend beyond the individual learner and spill over to society as a whole.
The positive externalities of education can manifest in various ways, including increased productivity, improved public health, reduced crime rates, and enhanced civic engagement.
Positive externalities of education can be observed in multiple contexts worldwide. Let's take the example of investing in early childhood education programs.
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Human Resources: Motivating Employees through compensation
Explain the motivation theories in relation to compensation.
The motivation theories in relation to compensation are the main focus of Human Resources in motivating employees. The theories that are related to compensation include the following:
Maslow’s Hierarchy of Needs Theory: This theory says that people have basic physiological needs that must be met before they can move on to other higher-level needs, such as safety, love and belonging, esteem, and self-actualization. Compensation can meet physiological needs and higher-level needs as well.
Herzberg’s Two-Factor Theory: This theory proposes that there are two categories of factors that affect job satisfaction and dissatisfaction: hygiene factors and motivators. Compensation falls under hygiene factors because if it is inadequate, employees can be dissatisfied, but it does not actually motivate them.
Expectancy Theory: This theory suggests that employees are motivated by the belief that if they work hard and perform well, they will be rewarded with compensation and other incentives. Employees must perceive that there is a link between their effort, performance, and rewards.
Equity Theory: This theory proposes that employees compare their compensation and rewards to those of their colleagues and others in the industry. They strive to achieve equity or fairness in terms of pay and other rewards.
Therefore, compensation plays an important role in motivating employees and these theories show how it can impact an employee's motivation levels.
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Another name for a capitalist economy is a a. fascist economy. b. communist economy. c. socialist economy. d. market economy.
Another name for a capitalist economy is a market economy, which is represented by option d. In a market economy, the means of production and distribution of goods and services are predominantly owned and controlled by private individuals and businesses. The operation of the economy is primarily driven by market forces of supply and demand, with prices determined through interactions between buyers and sellers in various markets.
In a market economy, individuals and businesses have the freedom to make economic decisions based on their own self-interest and pursue profits. There is a strong emphasis on competition, entrepreneurship, and the pursuit of individual goals. The role of the government in a capitalist or market economy is typically limited to ensuring the functioning of the market, protecting property rights, enforcing contracts, and providing a legal framework.
The distinguishing feature of a capitalist or market economy is the presence of a decentralized market mechanism that coordinates economic activities. Prices serve as signals, guiding producers and consumers in their decision-making processes. Market forces influence resource allocation, production levels, and consumption patterns. The goal of a market economy is to maximize efficiency, productivity, and overall economic welfare by allowing individuals and businesses to freely engage in trade and exchange.
It is worth noting that while capitalist economies are characterized by market mechanisms and private ownership, they can also have varying degrees of government intervention and regulation. The extent of government involvement can vary across countries and depend on factors such as social policies, economic stability objectives, and public interest considerations.
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Which is considered the most sensitive short term interest rate?
The most sensitive short-term interest rate is the Federal Funds Rate.
The Federal Funds Rate is the interest rate at which depository institutions lend reserve balances to other depository institutions overnight. It is set by the Federal Reserve as a tool to manage monetary policy and influence economic conditions. This interest rate is considered the most sensitive because it directly impacts the borrowing costs for banks and has a ripple effect on other short-term interest rates in the financial system.
Changes in the Federal Funds Rate can have a significant impact on various sectors of the economy, including consumer loans, mortgages, credit cards, and business borrowing, making it a crucial indicator of monetary policy and overall economic conditions.
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Brinker International operates restaurants in several different segments of the casual dining
market. This is
a. a relatively high level of diversification.
b. an example of product diversification.
c. unlikely to reduce variability in the firm's profitability since the restaurants are all in the
casual dining category.
d. an example of related linked diversification.
Brinker International runs restaurants in a variety of casual dining market sectors. This is a b. product diversification example.
Product diversification is a business strategy that involves developing and launching a new line of products, a service, or a product division that employs the same or completely different sets of information, skills, machinery, and so on, usually to ensure survival or development and expansion.
Businesses must keep a close watch on current market trends and product success in order to remain relevant and profitable.
When a company sees an opportunity to broaden its product lines for increased marketability, it typically engages in a process known as product diversification.
Product diversification can help businesses expand their brand's presence by broadening a product's current market.
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DETAILS ASWMSCI15 16.E.007. MY NOTES ASK YOUR TEACHER PRACTICE ANOTHER Data collected from selected major metropolitan areas in the eastern United States show that 3% of individuals living within the city limits move to the suburbs during a one-year period, while 2% of individuals living in the suburbs move to the city during a one-year period. Answer the following questions assuming that this process is modeled by a Markov process with two states: city and suburbs. (a) Prepare the matrix of transition probabilities. City Suburbs City Suburbs (b) Compute the steady-state probabilities. City Suburbs 2 (c) In a particular metropolitan area, 45% of the population lives in the city, and 55% of the population lives in the suburbs, What population changes do your steady-state probabilities project for this metropolitan area? The area will show ---Select- vin the city population and -Select-- Yin the suburb population
(a) Preparation of matrix of transition probabilities: City SuburbsCity 0.970.03Suburbs 0.020.98( b) Computation of steady-state probabilities: CitySuburbsCity0.67. Suburbs0.33
Explanation: Markov Chain: A Markov chain is a model for a stochastic process in which the probability distribution of future states depends only on the present state and not on any of the past states. In this model, the state is changed randomly according to a set of transition probabilities.
The process is named after the Russian mathematician Andrey Markov.The given problem can be solved using the Markov Chain Model. The given Markov Chain has two states; City and Suburbs. The probability of moving from City to Suburbs is 3%, while the probability of moving from Suburbs to City is 2%. Using these probabilities, a transition probability matrix is formed, as shown below.
Transition Probability Matrix: CitySuburbsCity0.970.03Suburbs0.020.98Using the matrix, the steady-state probabilities of City and Suburbs can be calculated as shown below. Calculation of Steady State Probabilities:City = (0.02) / (0.02 + 0.03) = 0.4Suburbs = (0.03) / (0.02 + 0.03) = 0.6Therefore, the steady-state probabilities of City and Suburbs are 0.4 and 0.6, respectively.
The result of the steady-state probabilities signifies that the long-term proportion of people in the suburbs is higher than the long-term proportion of people in the city.
Now, to find the population changes of a metropolitan area, let's consider a particular area where 45% of the population lives in the city, and 55% of the population lives in the suburbs. If we apply these population percentages to the steady-state probabilities of City and Suburbs, we can find the expected population changes in the city and suburbs for that metropolitan area as follows.
Calculation of population changes:City population change = (0.4) × (0.45) + (0.02) × (0.55) = 0.2025 or 20.25%Suburb population change = (0.6) × (0.55) + (0.03) × (0.45) = 0.3675 or 36.75%
Therefore, the steady-state probabilities project that the metropolitan area will experience a 20.25% decrease in the city population and a 36.75% increase in the suburb population.
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