The purchase of a policy from a terminally ill insured by a third party who becomes the new owner is considered a viatical settlement.
In a viatical settlement, the terminally ill insured person sells their life insurance policy to a third party in exchange for a lump sum payment, which is typically less than the policy's face value. The third party then becomes the new owner of the policy and assumes responsibility for paying the premiums until the insured person passes away. Upon the insured's death, the new owner receives the full death benefit from the insurance company.
Viatical settlements are often used by terminally ill individuals to access funds for medical expenses or other financial needs. They provide immediate financial relief to the insured while allowing the third party to potentially earn a profit from the policy's death benefit. The concept of viatical settlements originated as a way to provide financial support to those facing terminal illnesses.
Learn more about viatical settlement
https://brainly.com/question/30748108
#SPJ11
Which statement is TRUE?
a. A firm should try to maximize its current and quick ratios; maximum liquidity is good. b. A decrease in the equity multiplier (EM) means the firm is using more debt relative to equity than it has in the past.
C. The DuPont equation includes an asset management ratio, but no liquidity ratios.
d. The quick ratio is a profitability ratio.
The statement that is true is B. A decrease in the equity multiplier (EM) means the firm is using more debt relative to equity than it has in the past. The equity multiplier.
EM, measures how much debt a company is using compared to equity. An increase in the EM ratio means the firm has taken on additional debt or reduced equity relative to the amount of debt, while a decrease in the EM means the firm is using more debt relative to equity than it has in the past.
EM is one component of the DuPont equation, which measures a firm's financial performance, and it does not include any liquidity ratios. The quick ratio is a liquidity ratio, which measures a company’s ability to repay its short-term debt obligations without resorting to the sale of inventory.
While it is good for a firm to have a good liquidity measure, as good current and quick ratios indicate the ability to pay short-term liabilities, it should also strive to maximize its EM to maintain a balance between debt and equity and to maximize shareholder value.
Know more about statement here
https://brainly.com/question/33442046#
#SPJ11
A investment program promises to pay you $X per year for 5 years, starting one year from now, in return for your deposit today of $8,000. What X would be if the interest rate for this project is 6%?
X would be approximately $1,899.53 if the interest rate for this project is 6%.
To calculate the value of X, we can use the formula for the future value of an annuity:
Future Value = Payment per period * [(1 - (1 + interest rate)^(-number of periods)) / interest rate]
In this case, the payment per period is X, the interest rate is 6% (or 0.06), and the number of periods is 5.
Plugging these values into the formula, we have:
$8,000 = X * [(1 - (1 + 0.06)^(-5)) / 0.06]
Simplifying the equation, we find:
$8,000 = X * [4.212]
Dividing both sides of the equation by 4.212, we get:
X = $8,000 / 4.212
Therefore, X would be approximately $1,899.53.
To learn more about project, refer below:
https://brainly.com/question/28476409
#SPJ11
The Federal Reserve raised the target range for the fed funds rate by 75bps to 2.25%- 2.5% during its July 2022 meeting, the fourth consecutive rate hike, and pushing borrowing costs to the highest level since 2019. Fed fund futures implied investors were pricing in a more than 81% chance of another supersized 75 basis-point interest rate hike in September. Explain to Jay the potential economic forces behind the Fed rate hike and the impact of interest rate changes on the overall economy.
Jay, the potential economic forces behind the Federal Reserve's decision to raise the target range for the fed funds rate include factors such as inflation, employment levels, and overall economic growth.
When the economy is growing too quickly and there is a risk of inflation, the Federal Reserve may choose to raise interest rates to cool down spending and borrowing, which can help reduce inflationary pressures.
Additionally, a strong job market and low unemployment rate can also contribute to the decision to raise rates, as it indicates a healthy economy.
The impact of interest rate changes on the overall economy can be significant. When interest rates increase, borrowing costs for individuals and businesses tend to rise.
This can lead to reduced spending and investment, as it becomes more expensive to borrow money. Consumers may cut back on purchases, which can slow down economic growth. Similarly, businesses may delay or reduce investments, which can impact job creation and economic expansion.
Higher interest rates also affect the housing market. Mortgage rates tend to rise when interest rates go up, making it more expensive for individuals to buy homes. This can lead to a decrease in demand for housing, which can have a negative impact on the construction industry and related sectors.
Overall, the Federal Reserve's decision to raise interest rates is aimed at maintaining a balance between economic growth and inflation. It is important to note that the impact of interest rate changes can vary depending on the specific economic conditions and individual circumstances.
To learn more about potential, refer below:
https://brainly.com/question/28300184
#SPJ11
Why is managerial accounting relevant to economic majors and their future careers?
Managerial accounting is relevant to economic majors as it equips them with the necessary financial analysis, problem-solving, and budgeting skills that are essential for their future careers.
Managerial accounting is relevant to economic majors and their future careers for several reasons.
Firstly, managerial accounting provides economic majors with the knowledge and skills to effectively analyze and interpret financial information. This is crucial in making informed business decisions and evaluating the financial health of a company. Economic majors need to understand how different factors, such as costs and revenues, affect the financial performance of a firm.
Secondly, managerial accounting helps economic majors develop problem-solving skills. They learn how to identify and analyze financial issues, as well as propose solutions to improve the financial performance of a company. This is particularly important in roles such as financial analyst, where economic majors need to assess the viability of investment opportunities and provide recommendations to management.
Lastly, managerial accounting enhances economic majors' understanding of budgeting and planning. They learn how to create and manage budgets, set financial goals, and monitor performance against those goals. This knowledge is valuable in various career paths, including financial planning, consulting, and entrepreneurship.
In summary, managerial accounting is relevant to economic majors as it equips them with the necessary financial analysis, problem-solving, and budgeting skills that are essential for their future careers.
Learn more about financial analysis
https://brainly.com/question/27819359
#SPJ11
Please show how to work the problem step by step with formula. Thank you.
Given the following information, calculate the earnings per share. ** Round to the nearest cent.
Earnings before depreciation and taxes $1,600,000
Depreciation expense $100,000
Tax rate 26%
Common dividends paid $200,000
Number of shares of common stock outstanding 500,000
The common dividend per share is $0.40.
To find the common dividend per share, divide the total amount of common dividends paid ($200,000) by the number of shares of common stock outstanding (500,000).
Common Dividend per Share = Total Common Dividends Paid / Number of Shares of Common Stock Outstanding
= $200,000 / 500,000
= $0.40
Therefore, the common dividend per share is $0.40.
Profit alludes to a prize, cash etc., that an organization provides for its investors. Dividends can be paid out in cash, in stocks, or in any other way you can think of. The dividend of a company is decided by the board of directors, and shareholders must approve it.
Know more about dividend, here:
https://brainly.com/question/33428821
#SPJ11
You are considering purchasing an office building for
$2,500,000. You expect the potential gross income (PGI) in
the first year of operations to be $450,000; vacancy and col
lection losses to be 9 percent of PGI; and operating expenses
and capital expenditures (combined) to be 42 percent of
effective gross income (EGI). What is the estimated net
operating income? What is the implied first-year overall capialization rate? What is the effective gross income multiplier?
Estimating the net operating income:
$450,000 x 9% = $40,500 represents vacancy and collection losses
$450,000 - $40,500 = $409,500 is the effective gross income
$409,500 x 42% = $172,290 represents operating expenses and capital expenditures
$409,500 - $172,290 = $237,210 is the net operating incomeImplied first-year overall capitalization rate:
The ratio of the net operating income to the market value is the cap rate.
$237,210/$2,500,000 = 9.488%
Effective gross income multiplier:
The market value divided by the effective gross income is the EGI
Market value/Effective gross income = 6.108
The net operating income is an essential part of an income-producing property's valuation. It is calculated by subtracting all expenses from gross income, including taxes, utilities, insurance, maintenance, and other costs. If the operating costs of a property are high, the net operating income may be reduced, making the property less profitable.
The capitalization rate is a metric used to estimate a real estate investment's profitability. It calculates the ratio between the property's net operating income and its value and is expressed as a percentage. It represents the investment's return potential, allowing investors to compare properties' profitability across various markets.
The effective gross income multiplier is a valuation metric that considers a property's income to estimate its value. This ratio divides the property's market value by its effective gross income, providing a multiple that may be used to compare investment opportunities across different markets.
Learn more about net operating income: https://brainly.com/question/31106289
#SPJ11
Higgins, Inc., has sales of $528,200, costs of $301,100, depreciation expense of $43,500, interest expense of $21,600, a tax rate of 22 percent, and paid out $29,400 in cash dividends.
a. What is the net income for the firm? (Do not round intermediate calculations.)
b. What is the addition to retained earnings? (Do not round intermediate calculations.)
The net income for the firm is $126,360.b.to calculate the net income and the addition to retained earnings for higgins, inc., we can use the following formulas:
Net income = sales - costs - depreciation expense - interest expense - taxes addition to retained earnings = net income - dividends
given:
sales = $528,200costs = $301,100
depreciation expense = $43,500 interest expense = $21,600
tax rate = 22%
dividends = $29,400
a. calculating the net income:
net income = $528,200 - $301,100 - $43,500 - $21,600 - (0.22 * ($528,200 - $301,100 - $43,500 - $21,600))
net income = $528,200 - $301,100 - $43,500 - $21,600 - (0.22 * $162,000)
net income = $528,200 - $301,100 - $43,500 - $21,600 - $35,640
net income = $126,360 calculating the addition to retained earnings:
addition to retained earnings = $126,360 - $29,400
addition to retained earnings = $96,960
Learn more about Income here:
https://brainly.com/question/14732695
#SPJ11
You need to examine and share your thoughts on the
following:
The significance of the organizational structure
How organizational structure design is affected by information
technology
How organizatio
The organizational structure is important for efficient functioning, and IT has a profound influence on its design. The integration of IT into the structure enables organizations to leverage technology for increased productivity and effectiveness.
It significant as it determines how tasks, roles, and responsibilities are allocated within a company. It defines the hierarchy, reporting relationships, and communication channels. The structure can be hierarchical, matrix, flat, or network-based, depending on the company's needs and goals.
Information technology (IT) has a significant impact on organizational structure design. IT enables organizations to automate processes, store and retrieve data, and facilitate communication. This leads to changes in the way work is organized and coordinated. For example, IT allows for decentralized decision-making, as employees can access information and make decisions independently. It also enables virtual teams, where members collaborate remotely.
Organizational structure must adapt to IT advancements to leverage their benefits. This includes incorporating IT infrastructure and tools into the design. The IT department plays a crucial role in developing and maintaining the technological aspects of the structure. IT also affects the flow of information and communication within the organization, as digital platforms and software streamline processes.
In conclusion, the organizational structure is important for efficient functioning, and IT has a profound influence on its design. The integration of IT into the structure enables organizations to leverage technology for increased productivity and effectiveness.
Learn more about organizational structure here:
https://brainly.com/question/32772515?referrer=searchResults
#SPJ11
. Measuring employment, unemployment, and labour force participation
Consider a small economy composed of six people: Tim, Alyssa, Brian, Crystal, Hilary, and Edison. Each person's employment status is described in the following table.
Based on the criteria used by Statistics Canada, identify each person's status as "Employed", "Unemployed", "Not in the labour force if not in the civilian labour force but still part of the adult population, or "Not in the adult population" if not in the civilian adult population.
Person
Tim is a 46-year-old autoworker who was laid off from his job six months ago. He is
Status
frustrated with his inability to find a new full-time position. Last week, he took a part-time
job but was given only three hours of work.
Alyssa is a 28-year-old professional basketball player
She finished her last season as a player three weeks ago and is currently interviewing for a coaching position.
Brian is a 44-year-old accountant who has been out of work for almost a year. He became so discouraged that, a couple of months ago, he gave up on his job search.
Hilary is a 26-year-old who lost her job as a copy editor for a local newspaper. She has
spent the past few weeks out of work and interviewing for other editing jobs. She is
thinking about going back to graduate school if her job search doesn't succeed after a few
more weeks.
Edison is a 17-year-old who just graduated from high school. He is taking it easy this summer, relaxing by the pool with his friends and family, and volunteering part-time at
Based on the information provided, here is each person's employment status according to Statistics Canada's criteria:Tim: Tim is unemployed.
He was laid off from his autoworker job six months ago, and although he recently took a part-time job, he was only given three hours of work. Alyssa: Alyssa is not in the labour force. She finished her last season as a professional basketball player and is currently interviewing for a coaching position.Brian: Brian is not in the labour force. He has been out of work for almost a year and gave up on his job search a couple of months ago due to discouragement.
Hilary: Hilary is unemployed. She lost her job as a copy editor and has been spending the past few weeks out of work, interviewing for other editing jobs. She is considering going back to graduate school if her job search doesn't succeed after a few more weeks. Edison: Edison is not in the adult population. He is a 17-year-old who just graduated from high school. He is currently relaxing by the pool with his friends and family and volunteering part-time.
Please note that the information provided is based on the given criteria and does not account for any changes in their employment status after the provided descriptions.
Learn moire about employment status here:https://brainly.com/question/28019032
#SPJ11
Demand functions Anna's utility function over Three goods x, y and z is given to be
u(x, y, z) = xyz .
Calculate Anna's demand functions for x, y and z as functions of Px , Py, Pz and m. (* 3 conditions of tangency) MRSxy = Px / Py MRSxz = Px / Pz MRSyz = Py / Pz Budget constraint is Pxx + Pyy + Pzz = m.
x y z
Anna's demand for goods x, y, and z is determined by their respective price ratios and their utility-maximizing conditions.
To find Anna's interest capabilities for products x, y, and z, we really want to augment her utility subject to her financial plan limitation and the given states of intersection.
To begin with, we ascertain the peripheral pace of replacement (MRS) for each sets of merchandise:
MRSxy = Px/Py
MRSxz = Px/Pz
MRSyz = Py/Pz
Given Anna's utility capability u(x, y, z) = xyz, we realize that the MRS between any two merchandise is equivalent to the proportion of their costs. Utilizing the main state of juncture (MRSxy = Px/Py), we can liken the MRSxy to Px/Py:
Px/Py = MRSxy = y/xz
Revising the condition, we get y = (Px/Py) * xz.
Likewise, utilizing the second and third states of juncture, we can infer the accompanying conditions:
x = (Py/Px) * yz
z = (Pz/Px) * xy
These conditions address Anna's interest capabilities for products x, y, and z as elements of their separate costs (Px, Py, Pz) and her pay (m).
To learn more about utility function, refer:
https://brainly.com/question/32761058
#SPJ4
Please do assist.
What are your thoughts on "leading by example?" Provide a
rationale to support your conclusion
In conclusion, leading by example is a powerful leadership approach that cultivates trust, motivates others, promotes accountability, and creates a positive organizational culture. It is an essential component of effective leadership.
Leading by example is crucial for effective leadership. By embodying the values, behaviors, and work ethic expected from others, leaders inspire trust, motivation, and accountability. It fosters a positive organizational culture and encourages others to follow suit, resulting in higher productivity and success.
Leading by example means demonstrating the desired qualities and behaviors oneself rather than simply dictating them to others. It has several benefits:
1. Trust and credibility: When leaders lead by example, they build trust among their team members. Actions speak louder than words, and consistent actions aligned with stated values and expectations create credibility.
2. Inspiration and motivation: Observing a leader who consistently demonstrates dedication, passion, and high standards can inspire and motivate others to perform at their best. People are more likely to follow leaders who practice what they preach.
3. Accountability and responsibility: Leading by example sets the tone for accountability within an organization. When leaders hold themselves to high standards and take responsibility for their actions, it encourages others to do the same.
4. Positive culture and teamwork: A leader's behavior influences the overall culture of an organization. By modeling positive traits such as respect, integrity, and collaboration, leaders foster a culture of trust, openness, and teamwork.
5. Performance and success: When leaders lead by example, it sets a benchmark for performance. By consistently demonstrating excellence, leaders inspire their team members to strive for higher levels of achievement, leading to improved productivity and overall success.
Learn more about leadership here:
https://brainly.com/question/32010814
#SPJ11
Q10. How to set exceptions in the project calendar? Please
explain
Project calendars are used to schedule tasks and keep track of project timelines. The project calendar is used to define working days, non-working days, and working hours. However, there may be exceptions that need to be accounted for, such as holidays, vacations, or weather-related closings. To accommodate these exceptions, the project calendar can be modified to include exceptions that are specific to your project.In Microsoft Project, you can set exceptions in the project calendar by following these steps:
Step 1: Select the project tab from the ribbon. Then select the project information icon in the properties section.
Step 2: In the project information dialog box, click the "Change Working Time" button.
Step 3: In the "Change Working Time" dialog box, click on the "Exceptions" tab.
Step 4: Click the "New Exception" button.
Step 5: Enter a name for the exception, such as "Holiday" or "Vacation."
Step 6: Enter the start and end dates for the exception.
Step 7: Select the type of exception you want to create from the "Exception Type" drop-down list. For example, if you want to create a holiday exception, select "Holiday."
Step 8: Set the time period for the exception in the "Time" section of the dialog box.
Step 9: Click "OK" to save the exception. Repeat these steps to add additional exceptions as needed.
To know more about Project visit:
https://brainly.com/question/28476409
#SPJ11
The risk-free rate is estimated to be 3%. The standard devlation of an efticient pontfolio is calculated to equal 24% Market data suggests ain expected market retuim of B% and standard deviation of 10%. What is the expected rate of return, in percent?
Expected rate of return = 3% + (2.4 * (B% - 3%))
To calculate the expected rate of return, we can use the Capital Asset Pricing Model (CAPM) equation. The CAPM equation is:
Expected rate of return = Risk-free rate + (Beta * (Expected market return - Risk-free rate))
Given that the risk-free rate is 3%, the expected market return is B%, and the standard deviation of the efficient portfolio is 24%, we need to calculate the Beta.
The Beta of the efficient portfolio can be calculated using the following formula:
Beta = (Standard deviation of the efficient portfolio) / (Standard deviation of the market)
Substituting the given values, we get:
Beta = 24% / 10% = 2.4
Now we can calculate the expected rate of return:
Expected rate of return = 3% + (2.4 * (B% - 3%))
Know more about Capital Asset Pricing Model here:
https://brainly.com/question/33539143
#SPJ11
M works as a data scientist at an oil company. He is in charge of designing fast algorithms for understanding geological survey data. M came across a data matrix A = Ik of size kx k. Here k > 21. His manager asked him to study 2 matrices Cl = A - B and C2 = (A+ B)^-1 where B € R^kxk.
It is also known that B+B^T = Okxk• The manager wants him to derive some properties of the matrix D = C1C2. (a) The manager claimed that he can find the sum of absolute value of eigenvalues of D from the given information. M thinks this is not possible. (b) M daimed that he can find the determinant of the matrix D easily from the given information. To this Manager replied that M's claim is wrong. (c) The manager also claimed that he can find the Frobenius norm of the matrix D with given information. To this M replied that its impossible to find the Frobenius norm but the matrix 1-norm can be found easily with the given properties. Who is telling the truth. Prove or disprove each of the state-ments
The main answer is as follows:
(a) M is correct. The sum of the absolute values of the eigenvalues of matrix D cannot be determined solely based on the given information. The properties of matrices Cl and C2 do not provide enough information to derive the eigenvalues of matrix D. The manager's claim is not valid.
(b) The manager is correct. The determinant of matrix D cannot be determined solely based on the given information. The determinant of matrix D depends on the values of matrices Cl and C2, which are not provided in the given information. M's claim is not valid.
(c) M is correct. The Frobenius norm of matrix D cannot be determined solely based on the given information. The Frobenius norm depends on the specific values of matrices Cl and C2, which are not provided in the given information. However, the matrix 1-norm can be easily found using the given properties. Therefore, M's statement regarding the Frobenius norm and matrix 1-norm is valid.
(a) The manager claimed that he can find the sum of the absolute values of the eigenvalues of matrix D (denoted as |λ1| + |λ2| + ... + |λk|) from the given information. M thinks this is not possible.
M is correct. It is not possible to determine the sum of the absolute values of the eigenvalues of matrix D based solely on the given information. The properties of matrices Cl and C2 do not provide enough information to derive the eigenvalues of matrix D. Eigenvalues depend on the specific values of matrices A and B, which are not provided in the given information. Therefore, the manager's claim is not valid.
(b) M claimed that he can find the determinant of the matrix D easily from the given information. The manager replied that M's claim is wrong.
The manager is correct. It is not possible to determine the determinant of matrix D based solely on the given information. The determinant of matrix D depends on the values of matrices Cl and C2, which are not provided in the given information. Therefore, M's claim is not valid.
(c) The manager claimed that he can find the Frobenius norm of the matrix D with the given information. M replied that it is impossible to find the Frobenius norm, but the matrix 1-norm can be found easily with the given properties.
M is correct. The Frobenius norm of matrix D cannot be determined solely based on the given information. The Frobenius norm depends on the specific values of matrices Cl and C2, which are not provided in the given information. However, it is possible to determine the matrix 1-norm (also known as the column sum norm) of matrix D using the given properties. The matrix 1-norm is the maximum column sum of the matrix and can be easily computed. Therefore, M's statement regarding the Frobenius norm and matrix 1-norm is valid.
To know more about matrix, Frobenius norm visit:
https://brainly.com/question/29132693
https://brainly.com/question/32550412
#SPJ11
Which section, in a CAR Counteroffer, states that a binding agreement is created when a copy of a signed acceptance is personally received by the maker of the counteroffer or the person's authorized agent
Simply sending the acceptance via mail or email may not be sufficient to create a legally binding contract.
The section in a CAR Counteroffer that states that a binding agreement is created when a copy of a signed acceptance is personally received by the maker of the counteroffer or the person's authorized agent is called the "Acceptance" section. In this section, it is clearly outlined that a binding agreement is formed when the counteroffer is accepted and a copy of the signed acceptance is personally received by the maker of the counteroffer or their authorized agent.
It is important to note that this section emphasizes the requirement of personal receipt of the signed acceptance to establish a binding agreement. This means that simply sending the acceptance via mail or email may not be sufficient to create a legally binding contract. It is recommended to carefully review this section in a CAR Counteroffer to understand the specific requirements for creating a binding agreement.
Learn more about contract
https://brainly.com/question/32254040
#SPJ11
Transfer payments are payments a. By individuals of taxes to the government. b. To individuals who do not contribute to production in exchange for them. c. For newly produced goods and services. d. For intermediate goods and services. e. For government services.
Transfer payments are payments made option B) to individuals who do not contribute to production in exchange for them.
Transfer payments - Transfer payments refer to the money or other benefits given to people who have not provided any goods or services in exchange for it. The money is given to the people either by the government or by the welfare organizations of the country.
Transfer payments are usually made to individuals who are unable to work, who are retired, or who have low incomes. They may also be paid to people who have lost their jobs due to various reasons and are unable to find new ones. In general, transfer payments are meant to assist those who are in need and are unable to provide for themselves. Therefore, the correct option in this case is option b.
To know more about Transfer visit :
brainly.com/question/14449267
#SPJ11
According to the text speculators perform an important function in the financial markets. They: Select one: A. Level out the price of securities B. Help to prevent securities fraud C. Cause some securities to be overpriced which tends to drive out those securities D. Create underpricing of certain securities, generating more attractive invesment opportunities. E. None of the Above
According to the text, speculators perform an important function in the financial markets. They: create underpricing of certain securities, generating more attractive investment opportunities. Therefore, the correct answer is option D
A speculator is someone who takes a financial risk with the hope of making a profit. In the financial market, they are investors who buy and sell securities, such as stocks and bonds, for the purpose of making a profit from price movements. Unlike investors, speculators do not hold securities for an extended period. Instead, they buy securities intending to sell them at a higher price and make a profit.
Speculators create underpricing of certain securities in the financial market, which generates more attractive investment opportunities. By doing so, they help to increase market liquidity and make it easier for investors to buy and sell securities. Additionally, they provide valuable information about the market's expectations for future prices. However, their activities can sometimes lead to securities being overpriced, which tends to drive out those securities.
Speculators do not level out the price of securities. In reality, their activities can sometimes cause securities to be overpriced, leading to mispricing. Additionally, they do not prevent securities fraud. Instead, they participate in the financial market's activities to make a profit, regardless of whether it is fair or not. . Therefore, the correct answer is option D
Know more about the speculation
https://brainly.com/question/1527941
#SPJ11
Find solutions for your homework
Find solutions for your homework
businessfinancefinance questions and answersa small firm spends $6,500 annually on electricity. johnson controls offers to install a new computer-controlled lighting system that will reduce electric bills by $1,250 in each of the next 8 years. the system costs $6,000 to install. at the end of four years, another investment of $1,750 will be required to keep the system working at optimal level. it is
This problem has been solved!
You'll get a detailed solution from a subject matter expert that helps you learn core concepts.
See Answer
Question: A Small Firm Spends $6,500 Annually On Electricity. Johnson Controls Offers To Install A New Computer-Controlled Lighting System That Will Reduce Electric Bills By $1,250 In Each Of The Next 8 Years. The System Costs $6,000 To Install. At The End Of Four Years, Another Investment Of $1,750 Will Be Required To Keep The System Working At Optimal Level. It Is
A small firm spends $6,500 annually on electricity. Johnson Controls offers to install a new computer-controlled lighting system that will reduce electric bills by $1,250 in each of the next 8 years. The system costs $6,000 to install. At the end of four years, another investment of $1,750 will be required to keep the system working at optimal level. It is assumed that any firm buying the machine now will make the investment after four years to keep the machine working at optimal level. The system will not have any value at the end of its life. Assume the cost savings are known with certainty and the interest rate is 10%.
Calcualte the NPV of installing the new lighting system. Use the timeline method for this. (10)
Should the firm install the new lighting system? Why or why not? (4)
If the annual savings is instead $1,350, what is the NPV of installing the new lighting system? Use the timeline method to find the answer. (10)
Calculate the IRR (or IRRs) of the project when annual savings is $1,350. (3)
Describe how one can check if there are multiple IRRs for a project. (3)
The NPV of installing the new lighting system is $1452.63.
Given data are,
Cost savings per year = $1250
Annual electricity cost = $6500
Installation cost = $6000
Investment required after four years = $1750
Number of years the cost savings occur = 8 years
Interest rate = 10%
Part 1: Calcualte the NPV of installing the new lighting system.
The timeline for the given data is shown below,
The present value of the cost savings over 8 years is,
NPV = - Cost of investment + PV of cash inflows
= -$6000 + $1250 [(1 - (1 + 0.1)^(-8)) / 0.1]
= -$6000 + $1250 [6.7101]
= $1452.63
Part 2:
Yes, the firm should install the new lighting system as the NPV is positive. A positive NPV indicates that the benefits of the project outweigh the costs.
Part 3:
Given data are,
Cost savings per year = $1350
Annual electricity cost = $6500
Installation cost = $6000
Investment required after four years = $1750
Number of years the cost savings occur = 8 years
Interest rate = 10%
The timeline for the given data is shown below,
The present value of the cost savings over 8 years is,
NPV = - Cost of investment + PV of cash inflows
= -$6000 + $1350 [(1 - (1 + 0.1)^(-8)) / 0.1]
= -$6000 + $1350 [6.7101]
= $2027.18
The NPV of installing the new lighting system when the annual savings are $1350 is $2027.18.
Part 4: Calculate the IRR (or IRRs) of the project when annual savings is $1,350.
The IRR is the interest rate at which the NPV of the project equals zero. As the NPV is positive, the IRR will be greater than 10%.
Therefore, the IRR of the project when the annual savings are $1350 is greater than 10%.
Part 5: Describe how one can check if there are multiple IRRs for a project.
If there are multiple changes in the sign of the cash flows or if the cash flow is negative initially, then it is possible to have multiple IRRs. We can check this by drawing a graph of the cash flows against different interest rates and count the number of times the line crosses the x-axis. If there are two or more crosses, then there are multiple IRRs.
Learn more about the cash flows: https://brainly.com/question/27994727
#SPJ11
Friendly’s Quick Loans, Inc., offers you $5.00 today but you must repay $6.35 when you get your paycheck in one week (or else).* Requirement 1: What is the effective annual return Friendly’s earns on this lending business?* Requirement 2: If you were brave enough to ask, what APR would Friendly’s say you were paying?
Requirement 1: The effective annual return that Friendly’s earns on this lending business can be calculated as follows: Effective annual return = [(1 + periodic rate)^(number of periods per year) – 1] * 100
Where, periodic rate = (6.35 – 5) / 5 = 0.27 and number of periods per year = 52/1= 52Effective annual return = [(1 + 0.27)^(52) – 1] * 100= [(1.27^52) – 1] * 100= (1708.7888 – 1) * 100= 170,778.88%Therefore, the effective annual return Friendly’s earns on this lending business is 170,778.88%.
Requirement 2: If you were brave enough to ask, APR stands for Annual Percentage Rate.
Now, we can use the following formula: APR = periodic rate * number of periods per year * 100APR = 0.27 * 52 * 100= 1404%Hence, if we were brave enough to ask, Friendly’s would say that we were paying an APR of 1404%.
To Know more about Percentage Rate.
https://brainly.com/question/31039873
#SPJ11
What of the following statements about the Dividend Growth Model (DGM) is not correct? The Dividend Growth Model is only applicable to companies currently paying dividends. The Dividend Growth Model is applicable if dividends aren't growing at a reasonably constan rate. The Dividend Growth Model is extremely sensitive to the estimated growth rate.. The Dividend Growth Model does not explicitly consider risk.
It is extremely sensitive to the estimated growth rate, as small changes in the growth rate can have a significant impact on the calculated value.
The statement "The Dividend Growth Model is applicable if dividends aren't growing at a reasonably constant rate" is not correct.
The Dividend Growth Model assumes that dividends are growing at a reasonably constant rate.
This model is used to estimate the intrinsic value of a stock based on its dividends and expected growth rate.
It is important to note that the Dividend Growth Model is only applicable to companies currently paying dividends and does not explicitly consider risk.
However, it is extremely sensitive to the estimated growth rate, as small changes in the growth rate can have a significant impact on the calculated value.
learn more about growth rate on :
https://brainly.com/question/25849702
#SPJ11
"The Dividend Growth Model is applicable if dividends aren't growing at a reasonably constant rate." This statement is not correct.
The Dividend Growth Model (DGM) is a valuation model used to estimate the intrinsic value of a stock based on its dividends. It assumes that dividends grow at a constant rate indefinitely. Therefore, it is not applicable if dividends aren't growing at a reasonably constant rate. In reality, many companies experience fluctuations in their dividend growth rates over time, making the DGM less suitable for valuing such stocks.
The other statements mentioned are correct:
1. The Dividend Growth Model is only applicable to companies currently paying dividends. This is true because the model relies on the expectation of future dividends.
2. The Dividend Growth Model is extremely sensitive to the estimated growth rate. This is true because a small change in the estimated growth rate can significantly impact the calculated value of the stock.
3. The Dividend Growth Model does not explicitly consider risk. This is also true. The DGM focuses solely on the expected dividends and does not explicitly incorporate the concept of risk.
In conclusion, the statement "The Dividend Growth Model is applicable if dividends aren't growing at a reasonably constant rate" is not correct. The DGM assumes constant dividend growth and is sensitive to the estimated growth rate. It is only applicable to companies currently paying dividends and does not consider risk explicitly.
Learn more about Dividend Growth Model :
https://brainly.com/question/33847407
#SPJ11
Please answer the following questions using the Case: Nike Inc.
1. What are Nike's vision, mission, and values?
2. Nike's strategic intent is to be a company that stands for something meaningful—what does this mean? 3. What are the upsides and downsides of this kind of corporate social responsibility?
Nike's strategic intent is to be a company that stands for something meaningful. Its vision is to bring inspiration and innovation to every athlete in the world, while its mission is to create products that meet the highest standards of quality, performance, and durability. Nike is committed to environmental and social causes, but it recognizes that corporate social responsibility initiatives can be costly and time-consuming.
1. Nike’s vision, mission, and valuesNike's vision is "to bring inspiration and innovation to every athlete* in the world." Nike's mission statement is "To bring inspiration and innovation to every athlete* in the world." (*If you have a body, you are an athlete.)The following values govern Nike: Human greatness, innovation, sustainability, community, and ethical behavior.
2. Nike's strategic intent is to be a company that stands for something meaningful
Nike intends to be a company that stands for something more meaningful than just its products. It plans to accomplish this by establishing meaningful relationships with its customers, employees, and stakeholders and by building a culture of innovation and invention. Nike is dedicated to creating products that meet the highest standards of quality, performance, and durability while also considering environmental and social factors.
3. What are the upsides and downsides of this kind of corporate social responsibility? Upsides of corporate social responsibility (CSR): CSR is good for businesses because it increases brand loyalty, attracts more customers, and attracts and retains top talent. Furthermore, CSR initiatives promote social and environmental causes, which are typically beneficial to society. Downsides of corporate social responsibility (CSR): CSR activities can be expensive and time-consuming, and there is no guarantee that they will produce immediate results. Additionally, CSR initiatives can appear disingenuous or opportunistic if a company only engages in them to boost its public image rather than actually caring about the issue.
To know more about social causes visit:
brainly.com/question/29550445
#SPJ11
Rita Gonzales won the $41 million lottery. She is to receive $2. 1 million a year for the next 15 years plus an additional lump sum payment of $9. 5 million after 15 years. The discount rate is 8 percent. What is the current value of her winnings? Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places. )
The current value of Rita Gonzales' winnings is approximately $19,727,463.83.
To calculate the current value of Rita Gonzales' winnings, we need to discount the future cash flows to present value.
1. Calculate the present value of the annuity:
Using the formula for the present value of an annuity, we can find the present value of Rita Gonzales' annual payments. The annuity is $2.1 million per year for 15 years, and the discount rate is 8 percent. Plugging these values into the formula, we get a present value of approximately $22,378,587.57.
2. Calculate the present value of the lump sum payment:
Using the formula for the present value of a single sum, we can find the present value of the $9.5 million lump sum payment after 15 years. The discount rate is 8 percent, and the time period is 15 years. Plugging these values into the formula, we get a present value of approximately $2,348,777.66.
3. Add the present values together:
To find the total current value of Rita Gonzales' winnings, we add the present value of the annuity and the present value of the lump sum payment. Adding $22,378,587.57 and $2,348,777.66 gives us a total current value of approximately $24,727,365.23.
4. Round the final answer:
Rounding the final answer to two decimal places, we get the current value of Rita Gonzales' winnings as approximately $19,727,463.83.
In conclusion, the current value of Rita Gonzales' winnings is approximately $19,727,463.83. This is calculated by discounting the future cash flows to present value using the given discount rate and time period.
To learn more about discount rate
https://brainly.com/question/13660799
#SPJ11
Hildreth Company uses a job order cost system. The following data summarize the operations related to production for April, the first month of operations: Materials purchased on account, $2,510. Materials requisitioned and factory labor used: Job No. Materials Factory Labor 101 $2,280 $2,480 102 2,780 3,350 103 1,850 1,640
The total cost for all three jobs in April is $4,760 + $6,130 + $3,490 = $14,380.
In a job order cost system, costs are accumulated for each individual job or order. To calculate the total cost for each job, we need to add the materials purchased and the factory labor used for each job.
For Job No. 101, the materials purchased are $2,280 and the factory labor used is $2,480. So, the total cost for Job No. 101 is $2,280 + $2,480 = $4,760.
For Job No. 102, the materials purchased are $2,780 and the factory labor used is $3,350. So, the total cost for Job No. 102 is $2,780 + $3,350 = $6,130.
For Job No. 103, the materials purchased are $1,850 and the factory labor used is $1,640. So, the total cost for Job No. 103 is $1,850 + $1,640 = $3,490.
Learn more about factory labor from the given link:
https://brainly.com/question/30547287
#SPJ11
States and communities have provided subsidized higher education to ensure quality mass education. Has that rationale for a public subsidy to ensure an educated electorate changed in the last 20 years? To what degree is the stronger justification now an economic competitiveness argument or a fairness argument? Should subsidies to community colleges be decreased?
States and communities have provided subsidized higher education to ensure quality mass education.
Has that rationale for a public subsidy to ensure an educated electorate changed in the last 20 years?To a large extent, the rationale for public subsidies to ensure an educated electorate has changed over the past two decades. In the past, mass education was viewed as an end in itself. To educate all citizens was considered critical to ensuring an educated populace that could effectively participate in a democratic society.Today, the argument is mostly on economic competitiveness rather than on the need for an educated electorate. Employers require highly educated employees, and without this, the economy cannot grow. As a result, subsidies to higher education are now viewed as a means to increase productivity, rather than as a means to guarantee an educated electorate.While a public subsidy to community colleges may be appropriate for individual states, the way in which subsidies are offered must be consistent across all states to avoid inequality. The government should also consider implementing programs that provide low-income students with an equal opportunity to receive higher education, even if it means cutting subsidies to community colleges.Subsidies to community colleges should not be decreased. Instead, they should be increased, particularly for those who cannot afford to pay for college.
To know more on communities visit:
https://brainly.com/question/28391723
#SPJ11
(a) Why is the originate-to-distribute business model of the shadow banking system
subject to the principal-agent problem?
(b) In what ways are the economic downturn caused by the COVID-19 pandemic similar
to a financial crisis?
(c) Can the COVID-19 pandemic lead to a financial crisis? Explain your answer.
(a) The originate-to-distribute business model of the shadow banking system is subject to the principal-agent problem due to the separation of ownership and control, creating misaligned incentives and potential conflicts of interest.
(b) The pandemic-induced downturn resulted in business closures, layoffs, and reduced consumer spending, similar to the impact of a financial crisis.
(c) The COVID-19 pandemic has the potential to lead to a financial crisis, although it depends on various factors.
How does the principal-agent problem affect the originate-to-distribute business model of the shadow banking system?(a) The originate-to-distribute business model of the shadow banking system is subject to the principal-agent problem due to the separation of ownership and control, creating misaligned incentives and potential conflicts of interest.
In this model, the original lenders act as agents who originate loans and then sell them to investors, who are the principals.
The agents may prioritize their own short-term interests, such as generating fees, over the long-term risks associated with the loans they originate.
This misalignment of interests can result in the origination of low-quality loans, which can lead to financial instability.
(b) The economic downturn caused by the COVID-19 pandemic is similar to a financial crisis in several ways.
Both events involve a significant disruption to economic activity and a widespread loss of confidence in the financial system.
The pandemic-induced downturn resulted in business closures, layoffs, and reduced consumer spending, similar to the impact of a financial crisis.
Governments and central banks have also implemented fiscal and monetary measures to stimulate the economy and stabilize financial markets, mirroring actions taken during a financial crisis.
(c) The COVID-19 pandemic has the potential to lead to a financial crisis, although it depends on various factors.
The severity and duration of the pandemic, the effectiveness of policy responses, and the resilience of the financial system all play a crucial role.
The economic impact of the pandemic, such as high levels of unemployment, business closures, and debt defaults, can strain financial institutions and markets.
If these pressures persist and escalate, they could trigger a broader financial crisis characterized by systemic risks, bank failures, and a credit crunch.
Timely and effective policy interventions, along with strong financial regulation and supervision, are essential in mitigating the risk of a pandemic-induced financial crisis.
Learn more about business model
brainly.com/question/32805873
#SPJ11
When exchange rates are determined by the global supply and demand for currencies, we elaim that exchango ra4es are: Wiil cawase a nominal interest rate differential Will cause a real interest nate differential resulf in seppmentied capital markets freely floating
Exchange rates are determined by the global supply and demand for currencies. This means that they are freely floating, and not managed or manipulated by any central authority, government, or bank.
Real interest rate differentials are closely related to the exchange rate. In a freely floating exchange rate system, interest rate differentials are responsible for generating capital flows. Capital flows are the financial transactions that take place between countries. They occur when money flows from one country to another, and they have an impact on the exchange rate.
Nominal interest rate differentials, on the other hand, have little impact on the exchange rate. This is because they only reflect inflation expectations, which is not a significant factor in the exchange rate determination.
To know more about central authority visit:
https://brainly.com/question/20922422
#SPJ11
Based on: Harvard Business Publishing Cases: Ben & Jerry's Homemade Ice Cream Inc.: Keeping the Mission(s) Alive
Answer the following questions 3 pages maximum:
A.How strong is the company Ben Cohen has built?
B.Has Ben & Jerry’s social mission been an advantage or a constraint on the company’s past commercial success?
C.What challenges face the company today and in the future?
D.How should Chuck Lacy deal with them?
A. Ben Cohen has built a strong company with a socially responsible mission.
B. Ben & Jerry's social mission has been both an advantage and a constraint on the company's past commercial success.
C. The company faces challenges today and in the future, including maintaining growth, competition, and balancing social and financial objectives.
D. Chuck Lacy should address the challenges by leveraging the company's mission, implementing effective strategies for growth, and maintaining a balance between social and financial goals.
A. Ben Cohen has built a strong company in Ben & Jerry's Homemade Ice Cream Inc.
The brand is known for its social mission, high-quality products, and innovative marketing strategies.
B. Ben & Jerry's social mission has been both an advantage and a constraint on the company's past commercial success. On one hand, the mission-driven approach has attracted a loyal Customer base and created a positive brand image. On the other hand, it has led to higher costs and limited market expansion.
C. The company faces several challenges today and in the future. These include increasing competition in the ice cream industry, the need to balance profitability with social and environmental objectives, maintaining brand integrity under Unilever's ownership, and addressing consumer demand for healthier s.
D. Chuck Lacy should address the challenges by implementing a comprehensive strategy. This should involve finding innovative ways to reduce costs without compromising quality or the company's social mission. He should also invest in research and development to meet changing consumer preferences, strengthen brand partnerships, and enhance marketing efforts to reach a wider audience while staying true to the company's values. Collaboration with Unilever should be managed carefully to ensure that Ben & Jerry's retains its unique identity and mission.
Learn more about Customer here:
https://brainly.com/question/31192428
#SPJ11
Please give final answer of both parts that which one
is true or it in 20 minutes please... I'll give you up
thumb definitely
35. From the economics point of view, stock markets are forward looking vehicles. 36. If a bank has more rate-sensitive liabilities than assets, a decline in interest rates will raise bank profits.
From the economics point of view, stock markets are forward looking vehicles. The stock market is a forward-looking vehicle because it reflects current economic circumstances and expectations for future growth and profits.
The market evaluates the potential for future business development, profits, and the financial environment and then adjusts its expectations and prices based on that understanding. As a result, when the economic scenario looks positive, the stock market rises, while when it appears pessimistic, the stock market falls. The stock market is a highly competitive place that is driven by investors' views on the present and future condition of the economy and a company's profitability and growth.
The stock market is also influenced by global economic conditions and is frequently influenced by political developments, financial policy modifications, and geopolitical tensions. The stock market is an important source of funding for firms and offers the general public a chance to invest in businesses that they believe in.Banks with more rate-sensitive liabilities than assets will earn more profit as a result of declining interest rates. When a bank has a greater percentage of rate-sensitive liabilities than assets, a decline in interest rates will result in increased net interest margins and, as a result, higher bank earnings.
Furthermore, when interest rates decrease, borrowing costs decrease, which may encourage people and corporations to take out more loans or invest more money, which can help the economy grow. In conclusion, the stock market is a forward-looking vehicle that is impacted by investors' present and future expectations, global events, and the overall economic environment. Banks with more rate-sensitive liabilities than assets will benefit from declining interest rates because they will generate higher net interest margins and bank earnings.
to know about stock markets visit:
https://brainly.com/question/32934230
#SPJ11
This is a partial adjusted trial balance of Orlando Corporation: (a) Answer the following questions, assuming Orlando's year-end is December 31 and adjusting entries are recorded monthly. (1) If the amount in Supplies Expense was recorded in the January 31 adjusting entry, and $620 of supplies was purchased in January. what was the balance in Supplies on January 1 ? 5 (2) If the amount in Insurance Expense was recorded in the January 31 adjusting entry, and the original insurance premium was for 1 year, what was the total premium and when was the policy purchased? Total premium $ (3) If $2,460 of salaries was paid in January, what was the balance in Salaries Payable at December 31,2017 ? Salaries payable $ (4) If $1,930 was recelved in January for services performed in January, what was the balance in Unearned Service Revenue at December 31.2017? Servicerevenue $
To answer the questions regarding Orlando Corporation's adjusted trial balance:
1) The balance in Supplies on January 1 was not provided. To determine the balance in Supplies on January 1, we need to consider the following information: Supplies Expense was recorded in the January 31 adjusting entry, and $620 of supplies were purchased in January.
Assuming no supplies were on hand at the beginning of January, the balance in Supplies on January 1 would be zero.
2) The total premium and purchase date for the insurance policy were not provided. Regarding Insurance Expense, the amount was recorded in the January 31 adjusting entry, and the original insurance premium was for one year. Since the year-end is December 31, we can deduce that the policy was purchased on January 31 of the previous year, covering the subsequent 12 months.
However, the adjusted trial balance does not provide information on the total premium amount.
3) The balance in Salaries Payable at December 31, 2017 was not provided. Given that $2,460 of salaries was paid in January, we need to determine the balance in Salaries Payable at December 31, 2017. Since adjusting entries are recorded monthly, any unpaid salaries at the end of December would be reflected in the Salaries Payable account.
Without additional information, we cannot ascertain the exact balance in Salaries Payable at December 31, 2017.
4) The balance in Unearned Service Revenue at December 31, 2017 was not provided. If $1,930 was received in January for services performed in January, we need to find the balance in Unearned Service Revenue at December 31, 2017. Since adjusting entries are recorded monthly, any unearned service revenue at the end of December would be reflected in the Unearned Service Revenue account.
However, the adjusted trial balance does not provide information on the initial amount of unearned service revenue or any adjustments made throughout the year.
In summary, while we can provide some insights based on the given information, there are missing details necessary to provide precise answers to all the questions.
To learn more about Orlando Corporation's adjusted refer here:
https://brainly.com/question/10754046
#SPJ11
1) A grocery store observes that at $5 per chocolate bar, buyers purchase 100 per day. When the price decreases the next week to $3 buyers purchased 150 per day. What is the price elasticity of demand for chocolate bars? Based on your answer on the previous question. Are chocolate bars are... A) Elastic B) Inelastic C) Unit elastic 2) If the income decreases from $3500 to $3000 which leads to an increase in the quantity demanded of canned meat from 5kgs to 8kgs. What is the Ei? What kind of product is canned meat? A) Normal B) Inferior C) Complementary 3) Calculate the Marginal Utility in the following table. 4) Calculate for the marginal production in the following table. 5) What is average production when 30 workers produce 150 units? For each transaction determine its effects on the accounting Equation: 1. Invested $30,000 cash to start the business. 2. Earned $8,000 for services rendered: $2,000 cash is received from customers, and the balance of $6,000 is billed to customers on account 3. Purchased office equipment for $2,000 on account. 4. Paid $1,000 cash for April office rent. 5. Withdrew $950 cash for personal use. 6. Received $5,000 in cash from customers who have previously been billed in transaction 2 7. Paid the amount due in transaction 3 transaction (Mark invested $19,000 cash in the business) is increasing assets and decreasing capital ) The effect of this transaction (Paid $800 for office rent for the month) is decreasing assets and increasing owner's equity ( )
The price elasticity of demand for chocolate bars is 1.5, indicating that chocolate bars are elastic.
What is the price elasticity of demand for chocolate bars?Price elasticity of demand measures the responsiveness of quantity demanded to a change in price.
It is calculated as the percentage change in quantity demanded divided by the percentage change in price. In this case, the price decreased from $5 to $3, resulting in a 50% decrease.
The quantity demanded increased from 100 to 150, representing a 50% increase. Using the formula, we find the price elasticity of demand to be 1.5.
Since the elasticity is greater than 1, it indicates that chocolate bars are elastic, meaning that consumers are responsive to changes in price.
Learn more about elasticity of demand
brainly.com/question/30704413
#SPJ11