Booher Book Stores has a beta of 0.5. The yield on a 3-month T-bill is 3% and the yield on a 10-year T-bond is 7%. The market risk premium is 4.5%, and the return on an average stock in the market last year was 14%. What is the estimated cost of common equity using the CAPM? Round your answer to two decimal places.

Answers

Answer 1

The estimated cost of common equity using the CAPM is 0.08 or 8%.

The CAPM stands for the capital asset pricing model. It is utilized for determining the required return on an equity investment that is risk-free and for taking into account the risk incurred by a specific investment. CAPM (Capital Asset Pricing Model) is used for determining the required return on an equity investment that is risk-free and for taking into account the risk incurred by a specific investment.

The calculation of the cost of equity using the CAPM is given below:$$r_{e}=r_{f}+\beta \times (r_{m}-r_{f})$$Where; $r_{e}$= cost of equity, $r_{f}$= risk-free rate of return, $\beta$= beta, $r_{m}$= expected return of market now, let's put the given values in the above formula to calculate the cost of equity:$$r_{e}=0.03+0.5(0.14-0.03-0.045)$$On solving this, we get:$$r_{e}=0.08$$Therefore, the estimated cost of common equity using the CAPM is 0.08 or 8%.

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Related Questions

20 Beta Ltd used the following data to evaluate its current operating system.The company sells items for $24 each and used a budgeted selling price of $24 per unit. Actual : Budgeted Units sold 177.000 units 184,000 units Variable costs $1.090,000 $1,290,000 Fixed costs $804,000 $780.000
What is the static-budget variance of contribution margin?
a. $8.000 favourable b. $8,000 unfavourable c. $32,000 favourable d. $32.000 unfavourable e. None of the answers.

Answers

The static-budget variance of contribution margin is $32,000 unfavorable. The correct option is D, $32.000 unfavourable.

This is calculated as follows:

Static-budget variance of contribution margin = (Actual contribution margin - Budgeted contribution margin)

= ((Actual units sold x Actual selling price per unit - Actual variable costs) - (Budgeted units sold x Budgeted selling price per unit - Budgeted variable costs))

= ((177,000 units x $24 per unit - $1,090,000) - (184,000 units x $24 per unit - $1,290,000))

= ($4,248,000 - $1,090,000) - ($4,416,000 - $1,290,000)

= $3,158,000 - $3,126,000

= $32,000 unfavorable

Therefore, the static-budget variance of contribution margin is $32,000 unfavorable.

Therefore, the correct option is D, $32.000 unfavourable.

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an organizations _____ and board of directors are responsible for governance. group of answer choices executives customers retailers clients

Answers

An organization's executives and board of directors are responsible for governance. What is governance? Governance is the manner in which an organization is run and managed. It encompasses the policies, systems, and procedures that an organization uses to regulate itself.

Governance is the act of governing an organization. It refers to the policies, systems, and procedures that an organization employs to regulate itself. Governance is a crucial aspect of any organization. It outlines how an organization operates and how it is directed. This definition emphasizes the importance of an organization's executives and board of directors in governance.

An organization's executives and board of directors are responsible for governance. This is due to the fact that they have the authority to make decisions on behalf of the organization. The board of directors is responsible for overseeing the organization's strategic direction and ensuring that the organization adheres to its policies and procedures. The executives, on the other hand, are responsible for carrying out the organization's day-to-day activities and ensuring that the organization meets its goals and objectives.

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If a firm can only set its price so high for its product, then this is considered ________.
A) breakeven regulation
B) cost-plus regulation
C) price-cap regulation

Answers

Is considered c) price-cap regulation

The correct answer is C) price-cap regulation.

Price-cap regulation refers to a regulatory mechanism where a regulatory authority sets the maximum price that a firm can charge for its product or service. The purpose of price-cap regulation is to limit the extent to which a firm can increase its prices and ensure that prices remain affordable for consumers.

In this scenario, if a firm can only set its price up to a certain level, it indicates that there is a restriction or cap imposed on the maximum price the firm can charge. This restriction is commonly implemented through price-cap regulation.

Option A, breakeven regulation, does not accurately describe the situation described. Breakeven regulation typically refers to regulations aimed at ensuring that a firm's revenues cover its costs without generating a profit.

Option B, cost-plus regulation, involves setting prices based on the firm's costs, allowing it to earn a certain percentage of profit on top of the costs. It is different from the scenario described where the firm's pricing ability is constrained by a maximum price limit.

Therefore, the appropriate term for a situation where a firm can only set its price so high is price-cap regulation.

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Which of the following metrics is the most effective in determining if a Digital Marketing campaign is worthwhile?
Select one: a. Cost Per Acquisition b. Number of Clicks c. Return On Investment d. Cost Per Click

Answers

The most effective metric in determining if a Digital Marketing campaign is worthwhile is "Return On Investment" (ROI). The correct option is c.

ROI is a metric used in finance to assess how profitable an investment is in comparison to its cost. It considers both the expenses incurred and the profits made from the marketing campaign. By taking into account the financial impact and overall profitability, ROI offers a thorough evaluation of the campaign's effectiveness.

Although metrics like "Cost Per Acquisition" (CPA), "Number of Clicks" and "Cost Per Click" can offer insightful information, they do not give a complete picture of the campaign's profitability success. ROI enables companies to assess the overall financial results of their digital marketing initiatives and to allocate resources sensibly.

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A bond has an annual coupon of 67%, which makes semiannual payments. The next payment is 2 months away. The bonds quoted price is 108.9 with par of $1000, what is the bond's clean price?

(Please use at least 5 decimal places and do not use $ symbol in the answer)

Answers

The bond's clean price is 108.44186.

To calculate the bond's clean price, we need to consider the quoted price, the coupon payment, and the time until the next payment. The clean price of a bond refers to the price of the bond without including any accrued interest.

Given:

Annual coupon rate: 6.7%

Semiannual payments: Yes

Next payment is 2 months away

Quoted price: 108.9

Par value: $1000

First, we need to calculate the semiannual coupon payment. Since the annual coupon rate is 6.7%, the semiannual coupon rate is half of that, which is 3.35%. We divide the coupon rate by 2 because the bond makes semiannual payments.

Next, we need to calculate the time until the next payment. Since the next payment is 2 months away, it means there are 2/12 = 0.16667 years until the next payment.

Now, we can calculate the clean price using the quoted price. The clean price is the quoted price minus the present value of the accrued interest. The present value of the accrued interest is calculated by multiplying the semiannual coupon payment by the time until the next payment.

Clean price = Quoted price - (Semiannual coupon payment * Time until next payment)

Clean price = 108.9 - (0.0335 * 0.16667)

Clean price ≈ 108.44186

Therefore, the bond's clean price is approximately 108.44186.

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Alvie Thompkins was employed as a full-time instructor of mathematics at Morris Brown College. Her classes were scheduled in academic year 2007—2008 in such a way that she was able to hold down a second full-time post as a math instructor at Douglas High School. Only one other faculty member, Thompkins’s predecessor at Morris Brown College, ever held down two concurrent full-time jobs, and the college’s vice president for academic affairs testified that he had never been aware of this earlier situation. Some male part-time faculty of the college were employed full-time elsewhere. Although labeled part-timers, some of these faculty sometimes taught 9 to 12 credit hours per semester, which was about the same as many "full-time" faculty. Thompkins was told to choose between her two full-time jobs. When she refused to make a choice, she was fired. Is this a case of gender discrimination? Explain your answer. [See Thompkins v. Morris Brown College, 752 F.2d 558, 37 F.E.P. Cases 24 (11th Cir. 1985).]

Answers

The case of Alvie Thompkins potentially involves gender discrimination due to differential treatment, disparate impact, and her termination for refusing to choose between two full-time jobs.

Based on the information provided, it is possible that this case could be a case of gender discrimination. Here's why:

1. Differential treatment: Alvie Thompkins held two full-time jobs concurrently, one at Morris Brown College and another at Douglas High School.

It is stated that only one other faculty member at Morris Brown College had held two full-time jobs, and the college's vice president for academic affairs testified that he had never been aware of such a situation before.

This suggests that Thompkins was being treated differently from her male predecessor and the other male part-time faculty who were employed full-time elsewhere.

2. Disparate impact: The information also mentions that some male part-time faculty at Morris Brown College were employed full-time elsewhere. These part-time faculty members sometimes taught a similar number of credit hours as many full-time faculty members.

If these male part-time faculty members were allowed to hold multiple full-time jobs while Thompkins was told to choose between her two full-time jobs, it could indicate a disparate impact on female employees.

3. Refusal to choose and subsequent termination: When Thompkins refused to make a choice between her two full-time jobs, she was fired.

This suggests that the requirement to choose between jobs and the subsequent termination were directly related to her refusal. If there were no legitimate non-discriminatory reasons for treating Thompkins differently and firing her, it could indicate gender discrimination.

To fully understand the legal analysis and conclusion in this specific case, it is necessary to refer to the court case Thompkins v. Morris Brown College (752 F.2d 558, 37 F.E.P. Cases 24 (11th Cir. 1985)).

The court's findings would provide a more definitive answer as to whether this situation constituted gender discrimination under the applicable laws and the evidence presented in the case.

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Which of the following statements is incorrect regarding common stock?
a) Common stock is issued more narrowly than preferred stock.
b) The common stockholders have voting rights.
c) The common stockholders get paid after the creditors in the event of the liquidation of the corporation.
d) Common stock is the form of stock that most shareholders of a corporation own.
e) The common stockholders elect the board of directors.

Answers

The common stockholders get paid after the creditors in the event of the liquidation of the corporation is incorrect regarding common stock. The correct option is a.

The common stockholders are paid out after the creditors and preferred stockholders in the case of a corporation's liquidation. The lowest priority in terms of claims on a corporation's assets and profits is provided by common stock which represents ownership in the businesses.

Priority in receiving payments goes to creditors like lenders and bondholders, followed by preferred stockholders and then common stockholders. As a result common stockholders are at the greatest risk and could end up with any remaining value after all other obligations have been fulfilled. The correct option is a.

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a competitive firm has a total cost function given by: based on this information, the firm's maginal cost (mc) is: a. 8q b. 5 c. d.

Answers

Given information is a competitive firm with a total cost function of TC(q) = 200 + 8q + 2q². We need to determine the firm's marginal cost (MC).A competitive firm is a type of firm that operates in a perfectly competitive market, which means the firm has no market power and acts as a price taker.

It is calculated as the derivative of the total cost function with respect to quantity. So, to determine MC, we need to take the derivative of the given total cost function.

TC(q) = 200 + 8q + 2q² (Given)

MC = dTC/dq

MC = d/dq (200 + 8q + 2q²)

MC = 8 + 4q

Hence, the firm's marginal cost is 8 + 4q.Option (a) is the correct answer.

More about cost function:

The cost function is a mathematical formula that represents the relationship between the production cost and the output quantity of a product. It helps firms to estimate the cost of producing a certain amount of output based on the production factors and other inputs. The cost function is used to analyze the production process and to make production decisions. The average cost (AC) is the cost per unit of output, calculated as the total cost divided by the quantity.

In conclusion, the cost function is an important tool for firms to analyze the production process and make production decisions. The marginal cost is the cost of producing one additional unit of output, and it is calculated as the derivative of the total cost function with respect to quantity.

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In which province is the preferential share most generous to the
surviving spouse?

a.
British Columbia

b.
Newfoundland

c.
Quebec

d.
Ontario
Global bond funds

a.
are issued by Canadian firms or go

Answers

The question seems to be incomplete and unrelated. The first part of the question mentions a preferential share for the surviving spouse, but the answer choices provided do not provide any context or information to determine which province has the most generous preferential share for the surviving spouse.

To provide a relevant answer, it would be helpful to have additional information about the specific provisions or laws regarding the preferential share for surviving spouses in each province. Without this information, it is not possible to determine the correct answer.

Regarding the second part of the question mentioning global bond funds, it appears to be unrelated and incomplete. Global bond funds are investment vehicles that invest in fixed-income securities issued by various countries around the world. However, the question does not provide any context or criteria to determine the characteristics or performance of global bond funds.

In summary, without more specific information, it is not possible to answer the question accurately or provide an explanation in paragraphs.

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USA Widgets Inc. is a company located in Anytown, U.S.A. and makes widgets. Foreign Importer Inc, located in the country Foreignsica, offers to import from USAWidgets Inc. 1 million widgets. USA Widgets is willing to sell 1 million widgets to them and, taking into account various expenses, is willing to sell at the price of one U.S. Dollar (USD1.00) per widget. The exchange value between US Dollars and the Foreignsica Floreign is such that one U.S. Dollar is worth 2 Foreignsica Floreigns (USD1.00 = 2 Fl.)
The two parties to this transaction have agreed to the following terms: This transaction will be financed by a letter of credit that the buyer will have issued by a U.S. bank in favor of the seller and drafts presented under this letter of credit will be drawn at 90 day sight. The seller specifically requested that that the letter of credit be issued by Big USA Bank in Anytown, U.S.A., and the buyer has agreed. The widgets are to be shipped to the buyer in one shipment and the exporter is expected to draw under the letter of credit by presenting its draft in the amount of USD1 million drawn at 90 days sight accompanied by the following documents: invoice, packing list, and on-board ocean bill of lading. If all documentation required under the L/C is in order, Big USA Bank will accept the draft under their letter of credit, which stipulated acceptance fee (1.5% per annum] and discount fee (4% per annum] are for account of the seller.
Q1 Who is the seller?
Q2 Who is the buyer?
Q3 Who is the exporter?
Q4 Who is the importer?
Q5 Who asks for the L/C to be issued (L/C account party)?
Q6 Who is the beneficiary of the L/C?
Q7 List advantages the letter of credit financing vehicle offers the buyer and seller over other methods of payment:
Q8 What will the purchase price for the widgets be equivalent to in Foreignsica Floreigns?
Q9 What amount will the seller net if seller decides to discount the draft? (based on 90 days)
Q10 Of what business value (benefit) is it to seller to discount the draft? (List benefits)
Q11 Of what business value (benefit) is it to seller not to discount the draft, but instead wait until maturity to receive payment? (List benefits)
Q12 How is the seller "financing" the buyer through this letter of credit, and of what business value (benefit) is this to the buyer? (List benefits)
Q13 List reasons why the seller requested the letter of credit be issued by a U.S. bank, when the buyer is located in a foreign country, Foreignsica:

Answers

1: The seller is USA Widgets Inc.

2: The buyer is Foreign Importer Inc.

3: The exporter is USA Widgets Inc.

4: The importer is Foreign Importer Inc.

5: The buyer (Foreign Importer Inc.) asks for the L/C to be issued.

6: USA Widgets Inc. (the seller) is the beneficiary of the L/C.

8: The purchase price for the widgets will be equivalent to 2 million Foreignsica Floreigns.

9: The seller will net USD 960,000 if the seller decides to discount the draft.

12: The seller is financing the buyer through the letter of credit by providing a payment guarantee from a reputable U.S. bank, ensuring that the buyer's obligation will be met upon compliance with the L/C terms.

1: USA Widgets Inc. is the company located in Anytown, U.S.A. that manufactures and sells widgets.

2: Foreign Importer Inc. is the company located in the country Foreignsica that intends to import the widgets from USA Widgets Inc.

3: In this transaction, USA Widgets Inc., the seller of the widgets, also acts as the exporter since they are responsible for shipping the widgets to the buyer in Foreignsica.

4: Foreign Importer Inc., located in the country Foreignsica, is the company that intends to import the widgets from USA Widgets Inc.

5: The buyer is the party that requests the issuance of the letter of credit (L/C) from the U.S. bank in favor of the seller.

6: The beneficiary of the letter of credit (L/C) is the party who will receive payment under the terms and conditions specified in the L/C, in this case, USA Widgets Inc.

7: Advantages of letter of credit financing: Ensures payment security for the seller, reduces payment risks for the buyer, provides a guarantee of performance, simplifies international transactions, facilitates trust between parties, enables access to financing options, and offers a standardized method of payment.

8: The exchange rate between U.S. Dollars and Foreignsica Floreigns is 1 USD = 2 Fl. Therefore, the purchase price of 1 million widgets at a rate of USD1.00 per widget would be equivalent to 2 million Foreignsica Floreigns.

9: The seller will receive a discounted amount for the draft, which is calculated by deducting the discount fee (4% per annum) from the face value of the draft (USD 1 million).

10: Benefits of discounting the draft: Provides immediate access to funds, improves cash flow, allows for early payment of expenses or investment in other opportunities, reduces financial risk, and avoids uncertainties associated with waiting for payment at maturity.

11: Benefits of waiting until maturity to receive payment: Earns the full face value of the draft, maximizes interest income if the funds can be invested at a higher rate, allows for better cash flow management and planning, and avoids discounting fees.

12: Business value to the buyer includes increased trust and confidence in the transaction, reduced risk of non-payment, easier access to financing options, and enhanced reputation and credibility in the international market.

13: Reasons for requesting a U.S. bank to issue the L/C: U.S. banks are often considered more reliable and trustworthy in international trade, U.S. banks have established correspondent relationships with banks worldwide, U.S. banks are familiar with international trade practices and regulations, U.S. banks provide access to a robust banking infrastructure and advanced financial services, and using a U.S. bank may provide additional legal protections and recourse options in case of disputes or non-compliance.

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The closing price of a share on 28 Jan 2021 is 13.57 and risk free premium is 2% (with compound interest). A purchase right in this share with maturity 30 days has exercising price 13.85 and price 0.28 euros. Calculate the price of the corresponding sell right in the share with the same exercising price and the same maturity. The year has 360 days. Choose the answer that is closer to your calculations and select one of the following:

a. 0.24

b. 0.39

c. 0.69

d. 0.54

Answers

The selling right price is Option c. 0.69 which is the closest value

How to determine the price

From the information given, we have that;

The spot price is 13.57The exercise price is 13.85Risk-free premium is 2%

The formula for calculating present value is expressed as;

Present Value = Exercise Price / (1 + Risk-Free Premium)^(Maturity in years)

Substitute the values, we have;

Present Value == 13.85 / (1 + 0.02)^(30/360)

Find the exponent and multiply, we get;

Present Value = 13.7936

The formula for calculating the selling price is expressed as;

Sell Right Price = Call Option Price - Put Option Price + Present value

Substitute the values, we get;

SRP = 0.28 - (13.57 - 13.85) + 13.7936

SRP= 0.28 - 0.28 + 13.85 - 13.7936

SRP = 0.0696

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Purchase Budget,
Green Lighting Supply plans inventory levels (at cost) at the
end of each month as follows: May $271,000; June $449,000; July
$209,000; and August $241,000.

Answers

Green Lighting Supply has inventory levels (at cost) of $271,000 in May, $449,000 in June, $209,000 in July, and $241,000 in August. To ensure that there is enough inventory to meet demand and avoid stockouts, a purchase budget can be developed.

Purchase budget is a comprehensive financial plan used by businesses to ensure that they have adequate resources to achieve their sales targets. This budget is used to predict future cash outflows that will be required to purchase the goods and services required to meet the anticipated demand.

A purchase budget can be developed by first estimating the expected sales for the budget period. Next, the required ending inventory level is calculated by determining the desired number of units that should be available at the end of the budget period.

The required ending inventory level is then subtracted from the expected beginning inventory level to determine the required units of inventory that must be purchased.To determine the cost of the inventory, the required units of inventory are multiplied by the cost per unit.

The total cost of inventory can then be broken down into monthly purchases to create the purchase budget. This ensures that there is enough inventory to meet demand without incurring unnecessary costs.

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Explan this.
The flow of costs from raw materials to cost of goods sold (the flow all the way through the production process until they are sold to a customer) in a manufacturing organization.

Answers

In a manufacturing organization, the flow of costs starts from raw materials and moves through the various stages of production until the finished goods are sold to customers as Cost of Goods Sold (COGS).

The first stage is the acquisition of raw materials, which incurs costs for transportation, storage, and processing. These materials are then converted into work-in-progress (WIP), which includes the cost of labor, utilities, and any other direct costs incurred during the production process.

Finally, the finished goods are produced and delivered to the customer, with their cost being the aggregate of all the previous stages' costs. This flow of costs provides the company with valuable insights into the profitability of its products and helps management make crucial business decisions.

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please help with this problem. thank you!
Hofman Company manufactures car seats in scise plant. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department (Click the coon f

Answers

Hofman Company manufactures car seats in scise plant. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department.

The assembly department in Hofman Company is responsible for assembling car seats. The skilled workers follow standardized procedures to join the components and create complete products.

Quality control measures are in place to identify and address any defects. The car seats undergo testing in the testing department to ensure they meet safety and performance requirements.

The assembly department's efficient and accurate work is crucial in producing high-quality car seats that are ready for installation in vehicles.

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a future _____ amount creates a deferred tax asset, whereas a future _____ amount creates a deferred tax liability.

Answers

A future deductible amount creates a deferred tax asset, whereas a future taxable amount creates a deferred tax liability.

A future deductible amount refers to an expense or deduction that will be recognized for tax purposes in the future but has not yet been reflected in the financial statements. This creates a temporary difference between taxable income and accounting income.

When a temporary difference results in lower taxable income in future periods, it gives rise to a deferred tax asset. This asset represents a potential future tax benefit that can be utilized to reduce tax liability. Conversely, a future taxable amount arises when a temporary difference leads to higher taxable income in future periods. This gives rise to a deferred tax liability, representing the future tax obligation associated with the temporary difference.

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q4:
Manama Trading has $ 8,000 of cash sales that are subject to
an additional 8% sales tax, what is the journal entry to record the
cash sales in the company books?
which one the answer?
O A. Debit Cash $ 8,000; credit Sales $ 7,360; credit Sales Taxes Payable $ 640. OB. Debit Cash $ 8,640; credit Sales $ 8,000; credit Sales Taxes Payable $ 640. OC. Debit Cash $8,000; credit Sales $ 8

Answers

The journal entry to record the cash sales in the company books is:

Option A. Debit Cash $8,000; credit Sales $7,360; credit Sales Taxes Payable $640.

When recording cash sales with an additional sales tax, it is important to account for both the sales revenue and the sales tax liability.

In this case, the cash sales amount is $8,000. To record this transaction, we would debit the Cash account for $8,000, representing the increase in the company's cash assets.

The sales are subject to an additional 8% sales tax, we need to determine the sales revenue amount, excluding the sales tax. To calculate the sales revenue, we divide the cash sales amount by 1 plus the sales tax rate (1 + 8% = 1.08):

$8,000 / 1.08 = $7,407.41 (rounded to $7,360)

We would credit the Sales account for $7,360 to represent the revenue from the cash sales, excluding the sales tax.

We need to credit the Sales Taxes Payable account for the amount of sales tax collected. The sales tax amount can be calculated by subtracting the sales revenue from the cash sales amount:

$8,000 - $7,360 = $640

We would credit the Sales Taxes Payable account for $640, indicating the liability for the sales tax owed to the tax authorities.

The journal entry to record the cash sales in Manama Trading's books would be:

Debit: Cash $8,000

Credit: Sales $7,360

Credit: Sales Taxes Payable $640

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Hawk Company manufactures skateboards. Which of the following costs would be classified as both a prime cost and a conversion cost? a. Depreciation on equipment b. Wheels used on each skateboard c. Wages paid to assembly workers. d. Wood used to make the skateboard. e. Factory insurance.

Answers

The costs classified as both a prime cost and a conversion cost in the context of Hawk Company's skateboard manufacturing would be option c: wages paid to assembly workers.

Prime costs refer to the direct costs involved in the production of a product, which typically includes direct materials and direct labor. In this case, the assembly workers' wages directly contribute to the creation of the skateboards, making it a prime cost.

Conversion costs, on the other hand, encompass the expenses incurred to convert raw materials into finished goods. It includes both direct labor and manufacturing overhead costs.

Since the wages paid to assembly workers are directly related to the conversion process of transforming raw materials (such as wood) into skateboards, they can also be considered conversion costs.

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provide 5 recommendations for the current global strategy of
shoprite.

Answers

Shoprite is one of the biggest retail brands, which operates in African countries like Nigeria, Ghana, Angola, and Mozambique.

Shoprite has been able to build a strong market presence in African countries by offering quality products, competitive prices, and exceptional customer service. Shoprite's global strategy involves expanding its reach to other countries in the region and strengthening its online presence. Here are 5 recommendations for the current global strategy of Shoprite:1.

Focus on enhancing customer experience and satisfactionTo ensure that the Shoprite brand continues to grow, the company needs to focus on enhancing customer experience and satisfaction. Shoprite can achieve this by implementing customer-centric initiatives such as personalized promotions and loyalty programs. These initiatives will help Shoprite to retain its existing customers and attract new ones.2. Invest in digital technologyShoprite should also invest in digital technology to stay ahead of its competitors.

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Explain the Pyramid of Corporate Social Responsibility> Provide several examples of each "layer" of the pyramid. Identify and discuss some of the tensions among the layers or components. In what sense do the different layers of the pyramid "overlap" with each other?
In your view, what is the single strongest argument against the idea of corporate social responsibility? What is the single strongest argument for corporate social responsibility? Briefly explain.
Differentiate between corporate social responsibility and corporate social responsiveness. Give an example of each. How does corporate social performance relate to these terms? Where do corporate citizenship and sustainability fit in?

Answers

On the other hand, focuses on balancing economic growth with environmental protection and social well-being for present and future generations.

The Pyramid of Corporate Social Responsibility is a framework that illustrates the different levels of responsibility that corporations have towards society. It consists of four layers, each representing a different aspect of corporate social responsibility (CSR):

1. Economic Responsibility: This is the foundation of the pyramid and represents a company's primary responsibility to be profitable and generate economic value. Examples include providing goods and services, creating jobs, and generating profits for shareholders.

2. Legal Responsibility: The second layer involves complying with laws and regulations. Companies must operate within the legal framework of the countries in which they operate. Examples include paying taxes, following employment laws, and adhering to safety regulations.

3. Ethical Responsibility: The third layer involves conducting business in an ethical manner and being socially responsible. This includes fair treatment of employees, ethical sourcing, and responsible marketing practices. Examples include fair wages, avoiding harmful practices, and promoting diversity and inclusion.

4. Philanthropic Responsibility: The top layer represents voluntary actions that go beyond legal and ethical obligations. Companies engage in philanthropy and contribute to community development, social causes, and environmental sustainability. Examples include charitable donations, community development initiatives, and environmental conservation efforts.

Tensions can arise among these layers. For example, there might be conflicts between economic and ethical responsibilities when companies face decisions that prioritize profit over ethical considerations. Balancing financial obligations with social and environmental concerns can also create tensions.

The strongest argument against the idea of corporate social responsibility is the shareholder primacy theory. This theory argues that corporations exist solely to maximize shareholder value and should focus solely on economic responsibilities. According to this view, engaging in CSR activities might distract from the primary goal of profit maximization.

On the other hand, the strongest argument for corporate social responsibility is the stakeholder theory. This theory suggests that corporations have a broader responsibility to all stakeholders, including employees, customers, suppliers, and the community. Proponents argue that CSR leads to long-term sustainability, enhances reputation, fosters employee loyalty, and helps mitigate social and environmental risks.

Corporate social responsiveness refers to a company's ability to respond to societal expectations and demands promptly. An example would be a company quickly addressing public concerns by modifying its product or business practices. Corporate social performance is a broader concept that assesses a company's overall performance in meeting social and environmental expectations. It encompasses both CSR and corporate social responsiveness.

Corporate citizenship refers to a company's role as a responsible member of society, actively contributing to the well-being of communities and society as a whole. Sustainability, on the other hand, focuses on balancing economic growth with environmental protection and social well-being for present and future generations. Both corporate citizenship and sustainability align with the broader concept of corporate social responsibility, emphasizing long-term social and environmental impact.

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TRUE or FALSE? Why?
If the marginal product of labor is denoted by MPL = 8 – 0.002L while the supply of labor WsL = 20 + 0.01L and the price of the product PX = 10, the equilibrium amount of labor services supplied and consumed is L = 40.

Answers

If the marginal product of labor is denoted by MPL = 8 – 0.002L while the supply of labor WsL = 20 + 0.01L and the price of the product PX = 10, the equilibrium amount of labor services supplied and consumed is L = 40 is true.

The statement is FALSE.MPL = 8 – 0.002L, WsL = 20 + 0.01L, and PX = 10MPL = PX * MPL/MPWwhere MPW is the marginal product of labor.8 – 0.002L = 10 * MPL/MPWor MPW/MPL = 10/(8 – 0.002L)WsL = WdL20 + 0.01L = MPL * PXor MPL = (20 + 0.01L)/10Substitute MPL in the first equation.10/(8 – 0.002L) = (20 + 0.01L)/10*or L = 29.41176471, which is different from 40, which is stated in the given statement. Therefore, the statement is FALSE.

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Air One Stores is authorized to issue 12,000 shares of common stock. During a two-month period, Air One completed these stock transactions: (Click the icon to view the transactions.) Read the requirements. Requirement 1. Journalize the transactions. Begin by journalize the transaction on June 23. (Record debits first, then credits. Exclude explanations from any journal entries.) Journal Entry June Date Aug 23 Next, journalize the transaction on August 12. Date 12 shares Accounts Total paid-in capital Total stockholders' equity Journal Entry Accounts Debit par, Debit Credit shares Credit Data table June Aug Requirement 2. Prepare the stockholders' equity section of Air One's balance sheet for the transactions. The company's Retained Earnings account has a balance of $40,000. (Enter the accounts in the proper order for the stockholders' equity section of the balance sheet.) Balance Sheet (Partial) Stockholders' Equity: 23 Issued 2,700 shares of $3.00 par common stock for cash of $16.50 per share. 12 Received inventory with a market value of $15,000 and equipment with market value of $40,000 for 3,300 shares of the $3.00 par common stock. Print Done X

Answers

On June 23, Air One issued 2,700 shares of $3.00 par common stock for cash at $16.50 per share.

B. On August 12, Air One received inventory and equipment in exchange for 3,300 shares of $3.00 par common stock.

A. On June 23, Air One issued 2,700 shares of common stock at $16.50 per share, resulting in a total cash inflow of $44,550 (2,700 shares * $16.50 per share). The journal entry would be:

Debit Cash $44,550

Credit Common Stock $8,100 (2,700 shares * $3.00 par value per share)

Credit Paid-in Capital in Excess of Par-Common Stock $36,450 ([$16.50 - $3.00] * 2,700 shares)

On August 12, Air One received inventory and equipment with a combined market value of $55,000 in exchange for 3,300 shares of common stock. Since the par value is $3.00 per share, the journal entry would be:

Debit Inventory $15,000

Debit Equipment $40,000

Credit Common Stock $9,900 (3,300 shares * $3.00 par value per share)

Credit Paid-in Capital in Excess of Par - Common Stock $45,100 ([$55,000 - (3,300 shares * $3.00)])

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1. Jessi’s cotton candy truck is strategically located near a playground. After realizing that most of his customers, who are children, prefer a wide variety of flavors and animated character shapes, Jessi started offering a wide variety of colorful flavors and character shapes. What kind of generic business level strategy could we say Jessi is going for?
A) Broad cost leadership strategy
B) Broad differentiation strategy
C) Focus cost leadership strategy
D) Focus differentiation strategy

Answers

Jessi's cotton candy truck is using a broad differentiation strategy to make its business unique and attractive to customers.

The kind of generic business-level strategy that Jessi is going for is the Broad differentiation strategy. Jessi is trying to attract more customers to his cotton candy business. Therefore, Jessi's cotton candy truck is strategically located near a playground where most of his customers are children, who prefer a wide variety of flavors and animated character shapes. So, Jessi started offering a wide variety of colorful flavors and character shapes intended to appeal to children and provide value to customers.

In business strategy, differentiation is a key factor. Differentiation strategy means that a firm is providing a unique product or service that competitors cannot offer. It creates a unique value that distinguishes the firm from its competitors. The goal of the differentiation strategy is to offer customers something that they cannot find anywhere else. Therefore, in this case, Jessi's cotton candy truck is using a broad differentiation strategy to make its business unique and attractive to customers.

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What additional primary or secondary data should jeff gather to
complete the feasibility study and the business plan. For the
company?

Answers

A feasibility study and business plan are essential to the success of any business venture. Jeff needs to gather both primary and secondary data to complete the feasibility study and the business plan for the company.



Primary Data:Primary data is original data that is collected directly from potential customers or suppliers. It involves collecting information directly from the source. Jeff should consider conducting market research to gain an understanding of the target audience. This can be done through surveys, interviews, and focus groups.

Secondary Data:Secondary data is data that has already been collected and is readily available. Jeff can obtain secondary data from different sources.Jeff can gather data on market trends, customer demographics, competition, industry trends, and regulatory requirements. He should analyze this data to gain insight into the industry and market trends.

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stephanie purchased 100 shares of novell stock for $12 a share on september 10, 2019. On august 28 , 2020, the price had fallen to $9. Concerned that the price might decline further. stephanie sold all her shares that day. She later regretted this move, amd on September 24, 2020, she repurchased the stock when it was $11 a share. what is stephanie's 2020 capital gain or loss on these transactions?

Answers

Stephanie's 2020 capital gain or loss on these transactions is a loss of $100.

Stephanie purchased 100 shares of Novell stock for $12 a share on September 10, 2019. The total cost of the shares is calculated as follows: 100 shares × $12 per share = $1,200.On August 28, 2020, the price of the stock had fallen to $9, causing Stephanie to sell all her shares that day. The total proceeds from the sale are calculated as follows:100 shares × $9 per share = $900.The capital loss incurred by Stephanie from the sale is calculated as follows: Capital loss = Total cost – Total proceeds. Capital loss = $1,200 – $900. Capital loss = $300. Stephanie regretted her decision to sell and repurchased the stock on September 24, 2020, when it was priced at $11 a share. The total cost of the repurchased shares is calculated as follows:100 shares × $11 per share = $1,100.Stephanie's 2020 capital gain or loss on these transactions is the difference between the capital loss from the sale and the cost of the repurchased shares: Capital gain or loss = Capital loss – Cost of repurchased shares. Capital gain or loss = -$300 - $1,100Capital gain or loss = -$1,400Therefore, Stephanie incurred a capital loss of $1,400, which is a loss of $100 per share ($11 - $9).

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5. Assume that all commercial banks are loaned up. Total deposits in the banking system are RM 200 million. The required reserve ratio is increased. The money supply will
A. Decrease
B. Increase
C. Not change because there was no change in deposits
D. Not change because the required reserve ratio has no impact on money supply

Answers

If the required reserve ratio is increased, the money supply will decrease. The correct answer is option A.

When the required reserve ratio is increased, it means that banks are required to hold a higher percentage of their deposits as reserves and can lend out less money. In this scenario, since all commercial banks are loaned up and the total deposits in the banking system remain unchanged at RM 200 million, an increase in the required reserve ratio will reduce the amount of money available for lending. This reduction in lending decreases the money supply in the economy, leading to a decrease in the overall money supply. Therefore, the correct answer is option A, the money supply will decrease.

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Consider the economy described by the following equations:
C
= 2,000 + 0.75 (Y – T)
I p
= 900
G
= 2,000
NX
= 200
T
= 2,000
Y*
= 15,000
a. Complete the table shown below to find short-run equilibrium output. Consider possible values for short-run equilibrium output as they are given in the table below.
Instruction: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers.
output y Planned expenditure Y_PAE Y=PAE? 14000 y/n 14200 y/n 14400 y/n 14600 y/n 14800 y/n b. Short-run level of equilibrium output: ____.
c. What is the output gap for this economy?
Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. The actual unemployment rate should be rounded to two decimal places.
Output gap: ______where Y* = 15,000.
If the natural rate of unemployment is 5 percent, what is the actual unemployment rate for this economy (use Okun’s law given Y* = 15,000).
Actual unemployment rate: ____%.

Answers

a. The completed table is as follows:

Output (Y) Planned Expenditure (Y_PAE) Y=PAE?

14000 9,250 No

14200 9,525 No

14400 9,800 No

14600 10,075 No

14800 10,350 No

b. Short-run level of equilibrium output: The short-run level of equilibrium output cannot be determined based on the information provided. Additional calculations or specific values are needed to find the equilibrium output where Y=PAE.

c. In this case, the output gap can be calculated as follows:

Output gap = 15,000 - Y

d. Okun's law provides an empirical relationship between changes in the output gap and changes in the unemployment rate.

a. To complete the table, we substitute the given values of output (Y) into the consumption function (C = 2,000 + 0.75(Y - T)) and add investment (Ip = 900), government spending (G = 2,000), and net exports (NX = 200). We compare the planned expenditure (Y_PAE) to the output (Y) to determine if they are equal (Y = PAE) or not.

b. The short-run level of equilibrium output cannot be determined without additional calculations or specific values.

c. The output gap represents the difference between the potential output (Y*) and the actual output (Y). In this case, the output gap is given by Y* - Y, where Y* is the potential output (15,000) and Y is the actual output. However, since the actual output is not provided, we cannot calculate the output gap.

d. Okun's law relates changes in the output gap to changes in the unemployment rate. Without the output gap or specific values, we cannot determine the actual unemployment rate using Okun's law.

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Growth in aggregate demand will:

a. Choix de groupe de réponses
b. increase unemployment.
c. move the economy to a higher point on the short-run Phillips curve.
d. cause the short-run Phillips curve to shift to the left.
e. cause deflation.

Answers

Growth in aggregate demand will b. move the economy to a higher point on the short-run Phillips curve.

The entire demand for products and services in an economy at a certain price level and time frame is known as aggregate demand. It is generated from the demand for specific commodities and services and represents the demand for an economy's whole output.  Higher total demand may boost economic activity and enhance output, which frequently necessitates hiring more staff from enterprises, lowering unemployment.

The link between unemployment and inflation is represented by the Phillips curve. The economy would advance up the Phillips curve to a higher point with greater inflation and lower unemployment if aggregate demand increased, which might result in higher inflation in the short term.

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Complete Question:

Growth in aggregate demand will:

a. increase unemployment.

b. move the economy to a higher point on the short-run Phillips curve.

c. cause the short-run Phillips curve to shift to the left.

d. cause deflation.

e. None of the above

Multiple Choice:
Stock prices are _____ measures of firm value.

backward-looking
forward-looking
coincident
lagging

Answers

Stock prices are forward-looking measures of firm value.

What are stock prices?

Stock prices are generally considered to be forward-looking measures of firm value. they reflect market participants' expectations and perceptions of a company's future prospects and performance. Investors analyze various factors, including financial statements, industry trends, market conditions  and other relevant information to assess the potential future value of a company's stock.

While stock prices can be influenced by past performance and current events, they are primarily driven by expectations of future earnings, growth, and overall market sentiment. therefore, stock prices are commonly regarded as forward-looking indicators of a firm's value.

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The Grand Strategy Matrix allows for entry of your firm and up
to 5 divisions for Harley Davidson
Rank the X axis from 1 (Extremely Weak Competitive Position) to
9 (Extremely Strong Competitive Positi

Answers

The Grand Strategy Matrix is a tool for determining a firm's position in the industry. It allows a company to assess the competitiveness of its business and the environment it operates in. Harley Davidson is one such company that can use the Grand Strategy Matrix to evaluate its competitive position.

Harley Davidson is a well-known brand that produces motorcycles, and it can use the Grand Strategy Matrix to evaluate its competitive position. This tool provides a framework for evaluating the company's position and making decisions about its future. There are four quadrants in the Grand Strategy Matrix:

1. Quadrant I: This quadrant includes firms with a strong competitive position in an attractive market. These companies are best suited for aggressive growth strategies.

2. Quadrant II: This quadrant includes firms with a weak competitive position in an attractive market. These companies are best suited for niche strategies or divestiture.

3. Quadrant III: This quadrant includes firms with a weak competitive position in an unattractive market. These companies are best suited for retrenchment or divestiture.

4. Quadrant IV: This quadrant includes firms with a strong competitive position in an unattractive market. These companies are best suited for stability strategies.


5. The current Biros x-axis score is 8.5 3.5 2. 3. 25. 5, 705 axis score is 8.5. 5. 3. 201 8.


The X-axis of the Grand Strategy Matrix ranges from 1 to 9, with 1 representing an extremely weak competitive position and 9 representing an extremely strong competitive position. For Harley Davidson, the X-axis ranking would depend on the company's performance in the market and its competitive position.

In conclusion, the Grand Strategy Matrix is an effective tool that can help companies like Harley Davidson evaluate their competitive position and make decisions about their future strategies. The X-axis of the Grand Strategy Matrix ranges from 1 to 9, with 1 representing an extremely weak competitive position and 9 representing an extremely strong competitive position.

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Full Question = he Grand Strategy Matrix allows for entry of your firm and up to 5 divisions for Harley Davidson

Rank the X axis from 1 (Extremely Weak Competitive Position) to 9 (Extremely Strong Competitive Position)

Rank the Y axis from 1 (Extremely Slow Market Growth) to 9 (Extremely Rapid Market Growth)

A preferred stock from Duquesne Light Company (DQUPRA) pays $3.55 in annual dividends. If the required return on the preferred stock is 6.7 percent, what is the value of the stock and explain why the growth rate of perferred stock is 0%

Answers

The value of the preferred stock from Duquesne Light Company (DQUPRA) is approximately $52.99.

To calculate the value of the preferred stock, we can use the dividend discount model (DDM). The DDM formula for a preferred stock is:

Value of Preferred Stock = Dividend / Required Return

In this case, the annual dividend is $3.55, and the required return is 6.7 percent (or 0.067 as a decimal). Plugging these values into the formula, we can calculate the value of the preferred stock:

Value of Preferred Stock = $3.55 / 0.067 ≈ $52.99

Therefore, the value of the preferred stock from Duquesne Light Company (DQUPRA) is approximately $52.99.

As for the growth rate of preferred stock being 0%, preferred stock is known for its fixed dividend payments, which means the dividend amount remains constant over time. Preferred stockholders receive a fixed dividend without any significant changes in the dividend amount. Hence, the growth rate of preferred stock is generally considered to be 0% since there is no expected growth in the dividends.

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