The Ting Hai effect suggests a violation of market efficiency in the Hong Kong stock market, as investors were able to exploit the consistent decline in stock prices coinciding with the release of movies or TV shows featuring Adam Cheng for abnormal profits. However, as a financial advisor, it is not recommended to base investment decisions on speculative patterns, such as selling positions based on the release of an Adam Cheng film.
(a) The Ting Hai effect in the Hong Kong stock market suggests the presence of market inefficiency, specifically the weak form of market efficiency. Market efficiency implies that all publicly available information is quickly and accurately reflected in stock prices, making it impossible to consistently generate abnormal profits.
However, the observed pattern of stock market decline coinciding with the release of movies or TV shows featuring Adam Cheng indicates that investors were able to anticipate and exploit this phenomenon for abnormal profits. This suggests that there is some predictability in stock price movements based on non-financial factors, violating the weak form of market efficiency.
(b) As a financial advisor, it is important to base investment decisions on rational and sound principles rather than relying on speculative patterns such as the Ting Hai effect. While Alice may be a fan of Adam Cheng, it is not advisable to make investment decisions solely based on the release of his new film. Investment decisions should be driven by factors such as individual risk tolerance, investment goals, and diversification.
It is crucial to consider a well-diversified portfolio aligned with Alice's long-term financial objectives, rather than making short-term trading decisions based on non-financial events or speculative patterns in the stock market.
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Intel Corporation reported the following on its 2016 income statement (in millions): Sales revenue $59,387 Gross profit $36,191 Total expenses $23,317 What did Intel report for cost of goods sold during 2016
The Intel Corporation reported a cost of goods sold of $12,874 million during 2016.
the cost of goods sold (COGS) for Intel Corporation in 2016, we can use the formula:
COGS = Gross Profit - Total Expenses
the Gross Profit is reported as $36,191 million and the Total Expenses are reported as $23,317 million, we can substitute these values into the formula:
COGS = $36,191 million - $23,317 million
Now, we can subtract the Total Expenses from the Gross Profit to find the COGS:
COGS = $12,874 million
Therefore, Intel Corporation reported a cost of goods sold of $12,874 million during 2016.
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Q5. (5pts) If the real return on government bonds is 3 percents and the expected rate of inflation is 4 percents, then the cost of holding money is percent. (a) 1 (b) 3 (c) 4 (d) 7
Q2. (5pts) Suppose fed makes an open market sale of 4 million assume the money multiplier is 2. what is the change in money supply? a. money supplier has increased by 2 million , b. money supplier has increased by 8 million , c. money supplier has decreased by 2 million , d. money supplier has decreased by 8 million.
Q5: The cost of holding money is 1 percent. Q2: The change in money supply is an increase of 8 million.
Q5: The cost of holding money can be calculated as the difference between the expected rate of inflation and the real return on government bonds. In this case, it would be 4 percent (expected rate of inflation) minus 3 percent (real return on government bonds), which equals 1 percent. Therefore, the answer is (a) 1 percent.
Q2: The change in money supply can be calculated by multiplying the open market sale amount by the money multiplier. In this case, the open market sale is 4 million and the money multiplier is 2. Therefore, the change in money supply would be 4 million multiplied by 2, which equals 8 million. So, the answer is (b) the money supply has increased by 8 million.
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The only capital investment required for a small project is investment in inventory, Profits this year were. \( \$ 10,000 \), and inventory increased from \( \$ 4,000 \) to \( \$ 5,000 \). What was the cash flow from the project?
The cash flow from the project can be calculated by considering the change in inventory and profits. The cash flow is equal to the profits earned plus the decrease in inventory.
In this case, the profits earned were $10,000, and the inventory increased from $4,000 to $5,000. Therefore, the change in inventory is $5,000 - $4,000 = $1,000. The cash flow from the project is the sum of the profits and the change in inventory, which is $10,000 + $1,000 = $11,000.
The cash flow from a project represents the net amount of cash generated or consumed as a result of the project. It takes into account the profits earned and any changes in the project's assets and liabilities.
In this scenario, the profits earned from the project were $10,000. This represents the positive cash flow generated from the project. Additionally, the inventory increased from $4,000 to $5,000, indicating an increase in the project's assets. Since an increase in inventory represents a use of cash, the change in inventory of $1,000 is subtracted from the profits to calculate the cash flow from the project.
Therefore, the cash flow from the project is $11,000, which reflects the net cash generated by the project considering both profits and changes in inventory.
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Freddy buys a block of land which has a garage bolted into the ground on the land. Explain whether the garage would be considered as being included in the sale of the land.
The garage would typically be considered as being included in the sale of the land.
When a property is sold, it is important to determine what is included in the sale. Generally, when a buyer purchases a block of land, any permanent structures or fixtures attached to the land are considered part of the sale. In this case, the garage is bolted into the ground on the land, indicating that it is a permanent fixture and not easily removable. Therefore, it is likely that the garage would be considered part of the sale of the land.
The inclusion of the garage in the sale can have implications for the value and legal rights associated with the property. It may affect the overall price negotiated for the land and can also determine ownership and responsibilities regarding the maintenance and use of the garage. It is important for both the buyer and seller to clearly understand and agree upon the inclusion of any structures or fixtures in the sale to avoid any potential disputes or misunderstandings. Hence, in most cases, the garage would be considered as being included in the sale of the land.
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What does B.I. stand for on "MRP explosion for all parts"?
B.I. stands for "Backflush Indicator" on "MRP explosion for all parts." Backflush Indicator (B.I.) is a tag that is used to check if all raw materials used to produce a finished product have been added to the inventory.
During the manufacturing process, a manufacturer uses raw materials to create a product that must be recorded in an inventory database. The manufacturer might choose to backflush the materials to record a final product's material usage in the inventory. Backflushing will mark raw material inventory records as used for the final product, indicating that raw material inventory levels should decrease.
A Backflush Indicator (B.I.) is used in the production process to indicate that a finished product was produced and that materials should be backflushed from inventory databases. B.I. is used in the manufacturing process of a finished product as a key indicator. It is a signal to the software to backflush the material used to produce the finished product and reduce the raw material inventory level of the organization accordingly. It assists organizations in monitoring their inventory levels while also providing a high degree of automation to their manufacturing processes.
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Nike's strength is in designing and marketing athletic shoes and Apple's is in marketing innovative electronics. These are examples of each company's:
Nike's strength in designing and marketing athletic shoes and Apple's strength in marketing innovative electronics are examples of each company's core competencies or core capabilities.
A core competency refers to a unique set of skills, knowledge, and resources that a company possesses and can leverage to gain a competitive advantage in the market. It represents an area in which a company excels and distinguishes itself from competitors.
In the case of Nike, its core competency lies in designing and marketing athletic shoes. Nike has a long history of innovation and expertise in creating high-quality and stylish athletic footwear that appeals to athletes and consumers worldwide. This core competency allows Nike to maintain a strong position in the athletic footwear market.
For Apple, its core competency is in marketing innovative electronics. Apple is renowned for its ability to create groundbreaking and user-friendly electronic devices, such as iPhones, iPads, and Mac computers. Apple's marketing strategies, combined with its focus on design and technological innovation, have enabled the company to establish a strong brand and a loyal customer base.
These core competencies contribute significantly to the success and competitive advantage of both Nike and Apple in their respective industries. They differentiate the companies from their competitors and are key factors behind their market leadership and brand recognition.
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In What Ways Do The Objectives Of Services Communications Differ Substantially From Those Of Goods Marketing? Describe Four Common Educational And Promotional Objectives In Service Settings And Provide A Specific Example For Each Of The Services That You List.
The objectives of service communications differ substantially from those of goods marketing in several ways.
Here are four common educational and promotional objectives in service settings:
1. Building awareness: In service settings, the objective is to create awareness about the service being offered. For example, a healthcare provider may aim to increase awareness about their specialized services, such as orthopedic surgery.
2. Enhancing understanding: Services often require a higher level of understanding compared to goods. The objective here is to educate potential customers about the features and benefits of the service. For instance, a software training company may aim to enhance understanding of their training programs and how they can help individuals gain new skills.
3. Establishing trust: Trust plays a crucial role in service marketing. The objective is to build trust among customers by showcasing the expertise and credibility of the service provider. A financial advisory firm, for example, may aim to establish trust by highlighting their experienced team of certified financial planners.
4. Encouraging trial or usage: Service marketing often focuses on getting customers to try or use the service. The objective is to encourage potential customers to experience the service firsthand. A ride-sharing platform may offer discounted rides to new users, aiming to encourage trial and usage.
These objectives highlight some key differences between service communications and goods marketing. Services require more education, trust-building, and trial encouragement due to their intangible nature.
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Many publicly listed companies include some segment information in their annual report. Usually this information can found in their forms 10−K under Item 6: Selected Financial Data (however, item #6 has become optional since 2021) and Item 7: Management's Discussion and Analysis. Please pick any company of your choice, find their most recent form 10−K on the internet and summarize the type of segment data they publish. Also provide us with the most important findings you discovered when reading the segment information of your company. Please include the link to the 10−K report at the end of your post. Min. length for original post: 200 words. Please post at least two or more
I chose Ford Motor Company as my company of choice, and its most recent Form 10-K can be found here: https://www.sec.gov/Archives/edgar/data/37996/000037996210000018/f15020exv99w1.htm.
Ford's 10-K report shows segment information for several key business categories. For example, Ford's report states that its Automotive segment "designs, manufactures, and sells Ford cars, trucks, and SUVs, as well as parts, accessories, and services related to these products," while its Mobility segment "invests in, and partners, with companies focused on smart mobility solutions and services in connectivity, autonomous vehicles, and more." In addition to Automotive and Mobility, Ford's other main operating segments include Credit and Ford Smart Mobility.
The 10-K report also provides a range of financial information for each of its operating segments. For instance, Ford's Automotive segment reported a Revenue of $130,3 billion and a Cost of Revenue of $122,3 billion for the fiscal year 2020, and its Mobility segment reported a Revenue of $1,9 billion and a Cost of Revenue of $1,8 billion for the same period.
Overall, the segment information in Ford's 10-K report provides us with key insights into the company's operations. It shows us how much revenue each of its main operating segments is generating, and how much they are spending to do so. This data is especially important for gaining a better understanding of Ford's overall financial standing, as it allows us to see how its segments are performing compared to each other.
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Provide a basic understanding of employee retention, employee engagement and Human resource policies and practices in the global and Malaysian context from the perspectives of employers, employees, and research. (Definitions, importance, and examples).
Employee Retention (Global and Malaysian Context):
Employee retention refers to an organization's ability to retain its employees over a specified period of time. It is crucial for both global and Malaysian employers as it fosters stability, continuity, and productivity within the workforce. High employee retention rates indicate employee satisfaction and commitment, reducing recruitment and training costs. In a global context, organizations implement strategies like competitive compensation, career development programs, and a positive work culture to retain talent. In Malaysia, employee retention is influenced by factors such as work-life balance, employee benefits, and recognition programs. For instance, companies in Malaysia may offer flexible working hours, attractive remuneration packages, and initiatives to enhance work-life balance to improve employee retention.
Employee Engagement (Global and Malaysian Context):
Employee engagement refers to the emotional commitment and involvement employees have towards their work, organization, and goals. In the global and Malaysian context, employee engagement is crucial for organizational success and employee satisfaction. Engaged employees are more likely to be productive, innovative, and loyal to their employers. Global companies focus on fostering employee engagement through initiatives such as open communication channels, inclusive decision-making, and opportunities for growth and development. In Malaysia, organizations emphasize employee engagement by promoting teamwork, providing training and development opportunities, and recognizing employees' contributions. For example, companies may organize team-building activities, provide regular feedback and coaching, and create platforms for employees to share their ideas and opinions.
Human Resource Policies and Practices (Global and Malaysian Context):
Human resource (HR) policies and practices encompass the guidelines, procedures, and systems that organizations implement to manage their employees effectively. In the global context, HR policies and practices aim to align with international labor laws, promote diversity and inclusion, and ensure fair treatment of employees. This includes policies related to recruitment, compensation, performance management, and employee development. In Malaysia, HR policies and practices are designed to comply with local employment laws and regulations, promote Malaysian culture, and cater to the specific needs and expectations of employees. For instance, HR policies in Malaysia may include provisions for annual leave, maternity and paternity benefits, and mandatory retirement age. Additionally, organizations in Malaysia may adopt flexible work arrangements, emphasize employee well-being, and provide opportunities for upskilling and reskilling to enhance their HR practices.
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Sweet Sue Foods has bonds outstanding with a coupon rate of 5.17 percent paid semiannually and sell for $2,063.84. The bonds have a par value of $2.000 and 17 yeas to maturity. What is the current yield for these bonds?
The bonds have a par value of $2.000 and 17 yeas to maturity. The current yield for these bonds is approximately 5.01%.
To calculate the current yield for the bonds, we need to divide the annual coupon payment by the current market price of the bonds.
Current yield is a financial ratio that measures the annual income or interest generated by an investment relative to its current market price. It is typically used to assess the yield of fixed-income securities such as bonds or dividend-paying stocks.
Sweet Sue Foods has bonds outstanding with a coupon rate of 5.17 percent paid semiannually and sell for $2,063.84.
First, we need to determine the annual coupon payment. The coupon rate is 5.17 percent, and the bonds have a par value of $2,000. Since the coupon is paid semiannually, the annual coupon payment is calculated as:
Annual Coupon Payment = Coupon Rate * Par Value = 5.17% * $2,000 = $103.40
Next, we divide the annual coupon payment by the current market price of the bonds to get the current yield:
Current Yield = Annual Coupon Payment / Market Price = $103.40 / $2,063.84 ≈ 0.0501 or 5.01%
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Your investment portfolio consists of $16,000 invested in only one stock-Microsoft. Suppose the risk-free rate is 4%, Microsoft stock has an expected return of 14% and a volatility of 38%, and the market portfolio has an expected return of 12% and a volatility of 17%. Under the CAPM assumptions,
a. What alternative investment has the lowest possible volatility while having the same expected return as Microsoft? What is the volatility of this investment? b. What investment has the highest possible expected return while having the same volatility as Microsoft? What is the expected return of this investment? Hint: Make sure to round all intermediate calculations to at least five decimal places.
a. What alternative investment has the lowest possible volatility while having the same expected return as Microsoft?
To create an alternative investment that has the lowest possible volatility while having the same expected return as Microsoft, we use the following strategy:
Sell:
worth of Microsoft stock. (Round to the nearest dollar.)
Borrow:
at the risk-free rate. (Round to the nearest dollar.)
Buy:
worth of the market portfolio. (Round to the nearest dollar.)
Buy:
$
worth of the risk-free investment. (Round to the nearest dollar.)
a. Given Data: Investment in Microsoft Stock = $16,000Risk-free Rate = 4%Expected Return of Microsoft Stock = 14%Volatility of Microsoft Stock = 38%Expected Return of Market Portfolio = 12%Volatility of Market Portfolio = 17%
As per CAPM, the expected return of a security is given by: Expected return of security = Risk-free rate + Beta × (Expected return of market portfolio − Risk-free rate)where, Beta = Covariance of Security with the Market Portfolio / Variance of Market Portfolio
We can find Beta for Microsoft Stock as follows: Covariance of Microsoft Stock with Market Portfolio = βMS = Correlation of MS with Market Portfolio × σMS × σMarket PortfolioβMS = ρMSM × σMS × σMarket PortfolioβMS = (Covariance of MS with Market Portfolio) / Variance of Market PortfolioβMS = Covariance of MS with Market Portfolio / σ²Market PortfolioβMS = (0.72) × (0.38) × (0.17)βMS = 0.046736
Variance of Market Portfolio = σ²Market Portfolio = (0.17)² = 0.0289Beta of Microsoft Stock = βMS = 0.046736Expected Return of Microsoft Stock = Rm = 14%Risk-free rate = rf = 4%
By using the CAPM formula, we can calculate the Expected Return of the Market Portfolio as follows: Expected Return of the Market Portfolio = Risk-free rate + Beta × (Expected return of market portfolio − Risk-free rate)Rm = rf + βMS × (Rm − rf)Rm = 0.04 + 0.046736 × (0.12 - 0.04)Rm = 7.1382%.
Borrow: $0.46 worth at the risk-free rate. Buy: $17,967.68 worth of the Market Portfolio. Buy: $15,536.86 worth of the Risk-free Investment.
The volatility of this portfolio can be calculated as follows:σPortfolio² = (Weight of Microsoft Stock × σMicrosoft Stock)² + (Weight of Market Portfolio × σMarket Portfolio)² + (Weight of Risk-free Investment × σRisk-free Investment)² + 2 × (Weight of Microsoft Stock × Weight of Market Portfolio × Covariance of Microsoft Stock with Market Portfolio)σPortfolio² = (−1 × 0.38)² + (0.84 × 0.17)² + (0.16 × 0)² + 2 × (−1 × 0.84 × 0.38 × 0.17)σPortfolio² = 0.002784σPortfolio = 0.052763 or 5.28% (approx.).
b. The highest possible expected return while having the same volatility as Microsoft can be found by creating a portfolio that is a combination of Microsoft Stock and the Market Portfolio with the following proportions: Sell: $16,000 worth of Microsoft Stock.
Buy: $37,181 worth of the Market Portfolio. The expected return of this portfolio can be calculated as follows: Expected Return of Portfolio = Weight of Microsoft Stock × Expected Return of Microsoft Stock + Weight of Market Portfolio × Expected Return of Market Portfolio Expected Return of Portfolio = (−1) × 0.14 + 1 × 0.12Expected Return of Portfolio = 0.98%.
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Ilumina Corp is trying to determine its optimal capital structure. The company’s capital structure consists of debt and common stock. In order to estimate the cost of debt, the company has produced the following table: Percent financed with debt (wd) Percent financed with equity (wc) Debt-to-equity ratio (D/S) After-tax cost of debt (%) 0.25 0.75 0.25/0.75 = 0.33 5.0% 0.35 0.65 0.35/0.65 = 0.5385 5.9% 0.50 0.50 0.50/0.50 = 1.00 7.7% The company uses the CAPM to estimate its cost of common equity, rs. The risk-free rate is 5% and the market risk premium is 6%. Ilumina estimates that its beta with 10% debt is 1.2. The company’s tax rate, T, is 40%. On the basis of this information, what is the company’s optimal capital structure, and what is the firm’s cost of capital at this optimal capital structure?
Alumina Corp is a company that deals with determining its optimal capital structure. The company capital structure comprises of common stock and debt.
This company has produced a table for determining the cost of debt, which is shown below:
Percent financed with debt (wd) Percent financed with equity (wk.) Debt-to-equity ratio (D/S) After-tax cost of debt (%)0.25 0.75 0.25/0.75 = 0.33 5.0%0.35 0.65 0.35/0.65 = 0.5385 5.9%0.50 0.50 0.50/0.50 = 1.00 7.7%The CAPM is used by the company to estimate the cost of common equity (Rs). The risk-free rate is 5%, and the market risk premium is 6%.
The formula to calculate the optimal capital structure is as follows: Optimal debt ratio (D/S) = [(r s – r RF) / (r M – r RF)] x [1 – T],where: Rs = Cost of equity r RF = Risk-free rate m = Market risk premium T = Tax rate Using the formula above, the optimal capital structure is calculated as follows: Optimal debt ratio (D/S) = [(rs – r RF) / (r M – r RF)] x [1 – T] = [1.2 – 0.05 / 0.06] x [1 – 0.4] = 0.289 x 0.6 = 0.1734 or 17.34%
The formula to calculate the weighted average cost of capital (WACC) is as follows: WACC = (wd x kd x (1 - T)) + (wc x KS),where :wd = Weight of debt k d = Cost of debt k = Interest tax deductibility wc = Weight of common equity rs = Cost of common equity T = Tax rate Using the formula above, the cost of capital is calculated as follows: WACC = (0.1734 x 5.9% x (1 - 0.4)) + (0.8266 x 10.03%) = 0.0631 or 6.31%.
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8. The supply and demand for broccoli are described by the following equations: Supply: Qs = 4P-80 Demand: QD = 100-2P Q is in tonnes, and P is in dolars per bushel. a. Graph the supply curve and the demand curve. What are the equilibrium price and quantity? b. Calculate consumer surplus, producer surplus, and total surplus at the equilibrium. c. If a dictator who hated broccoli were to ban the vegetable, who would bear the larger burden-the buyers or sellers of broccoli?
- The equilibrium price and quantity is $30 and 40 tonnes.
- Consumer surplus, Producer surplus and total surplus is $600, $600 and $1200 respectively.
- If a dictator bans broccoli, the burden on broccoli sellers (producers) will be more.
a. To graph the supply and demand curves, we need to plot the quantity (Q) on the horizontal axis and the price (P) on the vertical axis.
Supply: Qs = 4P - 80
Demand: QD = 100 - 2P
4P - 80 = 100 - 2P
6P = 180
P = 30
We can substitute the equilibrium price (P = 30) into equation:
Qs = 4P - 80
= 4(30) - 80
= 120 - 80
= 40
The equilibrium price is $30 per bushel, and the equilibrium quantity is 40 tonnes.
b. Consumer Surplus:
= 0.5 * (QD at equilibrium) * (Equilibrium Price - Lowest Price)
= 0.5 * (40) * (30 - 0)
= $600
Producer Surplus:
= 0.5 * (Qs at equilibrium) * (Highest Price - Equilibrium Price)
= 0.5 * (40) * (30 - 0)
= $600
Total Surplus = Consumer Surplus + Producer Surplus
= $600 + $600
= $1,200
c. If a dictator bans broccoli, the burden on broccoli sellers (producers) will be even greater. If you ban broccoli, there will be no supply of broccoli, and the supply will be zero. Broccoli can no longer be purchased by shoppers, but can be substituted with other vegetables. On the other hand, sellers will lose the entire market for broccoli, resulting in a complete loss of producer surplus. This scenario therefore places a greater burden on the seller.
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= Q.3 Two firms produce homogeneous products. The inverse demand function is given by: p(x₁, x₂) = 80x₁-x2, where x₁ is the quantity chosen by firm 1 and x₂ the quantity chosen simultaneously by firm 2. the cost function of firm 2 is c2(x2) = 20x2 . the cost function of firm 1 is c1(x1) = 15 with probability of 0.5 . Identify the static bayesian nash equilibrium.
The static Bayesian Nash equilibrium in this scenario is for firm 1 to choose a quantity of x₁ = 10 and for firm 2 to choose a quantity of x₂ = 20.
In order to identify the static Bayesian Nash equilibrium, we need to consider each firm's best response given the strategy of the other firm. In this case, firm 1 and firm 2 simultaneously choose their quantities, considering the inverse demand function and their cost functions.
Firm 2's cost function is given as c₂(x₂) = 20x₂. Since firm 2's cost is independent of the quantity chosen by firm 1, it will aim to maximize its profit by setting its quantity where marginal cost equals marginal revenue. Firm 2's marginal cost is constant at 20, and the marginal revenue can be derived from the inverse demand function:
MR₂ = ∂p/∂x₂ = 80 - 2x₂
Setting MR₂ equal to 20, we get:
80 - 2x₂ = 20
Solving for x₂, we find:
x₂ = 30
Now, turning to firm 1, its cost function is c₁(x₁) = 15, which is independent of the quantity chosen by firm 2. Firm 1 will also aim to maximize its profit by setting its quantity where marginal cost equals marginal revenue. Firm 1's marginal cost is constant at 15. The marginal revenue for firm 1 can be derived by taking the derivative of the inverse demand function with respect to x₁:
MR₁ = ∂p/∂x₁ = 80
Setting MR₁ equal to 15, we have:
80 = 15
This equation does not have a solution as the quantities chosen by the two firms do not affect each other. Therefore, firm 1 can choose any quantity without affecting firm 2's profit.
Considering the probability of 0.5 for firm 1's cost function, we find that firm 1 will choose a quantity of x₁ = 10 with a probability of 0.5. Firm 2 will choose its quantity of x₂ = 20 regardless of firm 1's choice. This is the static Bayesian Nash equilibrium, where neither firm has an incentive to deviate from their chosen strategy given the strategy of the other firm.
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From your own understanding, describe the common areas in which specific human resources policies exist in an organisation, and analyse the steps thereof, that should be considered when formulating the HR policies: [5 Marks]
Human Resource (HR) policies are guidelines that govern a company's management of its employees. Policies are set up to protect the rights of the employer and the employee while also outlining the processes of recruitment, performance management, compensation, training and development, and other human resource functions.
Analyzing the steps thereof, that should be considered when formulating the HR policies include the following:1. Needs assessment: Determine the needs of the organization and its employees in terms of HR policies and procedures.2. Benchmarking: Research best practices in HR policy formulation and implementation.
3. Policy drafting: Develop policies and procedures that are consistent with the organization's needs and goals.4. Consultation: Get input and feedback from employees, managers, and other stakeholders in the organization.
5. Implementation: Communicate policies and procedures to employees and ensure that they are understood and implemented properly.6. Monitoring and review: Regularly review and evaluate the effectiveness of policies and procedures to ensure that they are meeting the needs of the organization and its employees.
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QUESTION 4 (20 Marks)
Critically analyse the forms of political systems in a business
environment
(Please provide answer for 20 Marks)
In a business environment, various forms of political systems are found. These political systems are critical for the operation of businesses as they govern the activities that occur within them. The most common forms of political systems found in businesses include autocratic, democratic, and laissez-faire.
Autocratic leadership is where the leader makes decisions alone without considering the opinions of others. This form of leadership can be effective in situations where quick decisions are required or in cases where there is a need for strict control over the workforce. However, it can also lead to resentment and a lack of motivation among employees. Democratic leadership is where leaders consider the opinions of others before making a decision. This form of leadership can promote creativity, innovation, and teamwork.
However, it can also be time-consuming and lead to a lack of direction in decision-making.Laissez-faire leadership is where leaders take a hands-off approach to leadership and allow employees to make their own decisions. This form of leadership can be useful in promoting employee autonomy and creativity. However, it can also lead to a lack of direction and accountability, as well as a lack of motivation among employees.
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Explain how ethical
imperialism applies to universalism.
Forcing a universal ethical framework onto diverse societies can undermine cultural autonomy and perpetuate power imbalances.
critics of ethical imperialism argue that it can lead to cultural insensitivity, paternalism, and the erasure of diverse ethical perspectives. they argue that ethical values are deeply rooted in cultural and social contexts, and what may be considered ethical in one culture may not be applicable or relevant in another. while universal ethical principles, such as respect for human rights or the prohibition of torture, may be widely accepted, it is essential to approach universalism with caution and respect for cultural differences. emphasizing dialogue, mutual understanding, and respecting the ethical diversity of different cultures can foster a more inclusive and nuanced approach to ethics that acknowledges the importance of context and cultural relativism.
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If the monthly interest rate is .5%, what monthly annuity
payment can the firm offer to the retiring professor?
Professor's Annuity Corp. offers a lifetime annuity to retiring professors. For a payment of $ 80,000 at age 65 , the firm will pay the retiring professor $ 600 a month until death.
The firm can offer a monthly annuity payment of $600 to the retiring professor.
To find the monthly annuity payment that the firm can offer to the retiring professor, we need to consider the given information.
The retiring professor pays a lump sum of $80,000 at age 65 and will receive $600 a month until death.
First, let's calculate the total number of months that the professor is expected to receive payments. Since this is a "lifetime" annuity, we need to estimate the number of months based on average life expectancy.
Assuming the average life expectancy is 150 months after age 65,
we can subtract 65 from 150 to find the number of months the professor is expected to receive payments:
150 - 65 = 85 months.
Next, we calculate the total amount that the professor will receive over those 85 months.
Since the monthly payment is $600, we multiply it by 85:
$600 * 85 = $51,000.
So, the firm can offer a monthly annuity payment of $600 to the retiring professor.
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Brian owns a corn dog stand that will generate $176,000 per year forever, but since corn dogs are out of favor, the first cash flow won't occur until 6 years from today. Suppose he wants out of the corn dog business and decides to sell the stand to a friend. If the discount rate is 4%, what is TODAY's fair price for Brian's corn dog stand? Enter your answer as a positive number rounded to the nearest dollar.
Today's fair price for Brian's corn dog stand is $4,400,000.
The fair price for Brian's corn dog stand can be determined by calculating the present value of the future cash flows.
Since the first cash flow occurs 6 years from today and is expected to generate $176,000 per year indefinitely, we need to calculate the present value of a perpetuity.
Using the formula for the present value of a perpetuity, which is Cash Flow / Discount Rate, the fair price can be calculated as:
Fair Price = $176,000 / 0.04
Fair Price = $4,400,000
Therefore, today's fair price for Brian's corn dog stand is $4,400,000.
To determine the present value of the cash flows, we divide the expected cash flow per year ($176,000) by the discount rate (4%). This represents the perpetuity formula, as the cash flows continue indefinitely.
By performing the calculation, we find that the fair price for the corn dog stand is $4,400,000. This amount represents the value of the expected future cash flows discounted to their present value, accounting for the time value of money.
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You have read in the news that due to current COVID-19 pandemic, women work less, thus they make 70 cents to the $1 that men earn.
To test this hypothesis, you first regress weekly earnings of individuals (EARN, in dollars) on a constant and their Age (in years), and their level of education (EDUC, in years) a binary variable (Female) , which takes on a value of 1 for female and is 0 otherwise. The results are:
Estimated(EARN) = 570.70 + 5.33(Age) - 170.72(Female) + 18.99(EDUC), n= 110 , R2 = 0.084, SER = 282.12
Standard errors are as here:
SE(intercept)=(9.44)
SE(Age)=(0.57)
SE(Female)=(13.52)
SE(EDUC) = 3.1
(a) By carrying out 5% level of significance and using the relevant t-statistics, test for gender discrimination in here. Indicate all the steps.
Justify your choice of a one-sided or two-sided alternative test.
Are these results evidence enough to argue that there is discrimination against females? Why or why not?
(b) Test for the joint significance of the "Age" and "Female" coefficients. Use 5% level of significance, and the result of F-statistics has become F-statistic=288.2 (Note: the required statistical table is attached)
(c) Why do you think that age plays a role in earnings determination?
(a) In order to test the gender discrimination in the given scenario, we need to test the null hypothesis that there is no discrimination on the basis of gender. In other words, female employees are not paid less compared to their male counterparts. The alternative hypothesis can be a one-sided or two-sided test.
One-sided alternative test: The one-sided alternative test states that women are paid less compared to men due to COVID-19 pandemic. The null hypothesis is that women are paid equally compared to men.
Two-sided alternative test: The two-sided alternative test states that gender doesn't have any effect on the salary of employees. The null hypothesis is that there is no difference in the pay of male and female employees.
For a 5% level of significance, the critical value for t-distribution for 107 degrees of freedom is 1.656. The t-value for female coefficient is -170.72/13.52 = -12.62. As the calculated value of t is much smaller than the critical value, we can reject the null hypothesis. Thus, we can say that women are paid less compared to men.
(b) Joint hypothesis test for Age and Female coefficients:
Null hypothesis: The coefficients of Age and Female are equal to zero.
Alternate hypothesis: At least one of the coefficient is not equal to zero.
F-Statistic = ((RSS1-RSS2)/(k2-k1))/(RSS2/(n-k2))
where RSS1 = residual sum of squares for the complete model
RSS2 = residual sum of squares for the reduced model
k1 = number of parameters in the reduced model (2 in this case)
k2 = number of parameters in the complete model (4 in this case)
n = sample size (110 in this case)
RSS1 = 22972216.8
RSS2 = 23048727.9
k1 = 2
k2 = 4
n = 110
F-Statistic = ((22972216.8 - 23048727.9)/(4-2))/(23048727.9/(110-4)) = 17.84
From the F-table, the critical value at 5% level of significance for F-statistic with 2 and 103 degrees of freedom is 3.12. Since the calculated value of F-statistic is greater than the critical value, we can reject the null hypothesis. Thus, we can conclude that at least one of the coefficients is not equal to zero.
(c) Age plays a role in the earnings determination because the coefficient of age is positive (5.33), indicating that as the age of the employees increases, their earnings also increase. Older employees are generally more experienced and skilled, which leads to a higher salary.
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because a project usually has a defined scope with agreed-upon tasks, responsibilities, and deliverables, it is often more difficult to measure project success compared with other types of work.
Measuring the success of a project is often more difficult compared to other types of work due to its defined scope, tasks, responsibilities, and deliverables, requiring clear metrics and consideration of stakeholders' perspectives.
Measuring the success of a project can be more challenging than measuring the success of other types of work due to several factors. Firstly, projects have a defined scope with specific tasks, responsibilities, and deliverables, which requires establishing clear metrics and criteria for evaluation.
The unique nature of projects also means that success can be subjective and dependent on the perspectives of various stakeholders involved. Additionally, project success is often tied to predefined objectives and expectations, making it crucial to carefully consider and align with these factors when assessing project outcomes. Overall, the complexity and multidimensional nature of projects necessitate a comprehensive approach to measuring and determining their success.
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The two-month interest rates in Australia and the United States are 4.5% and 1% per annum, respectively, with continuous compounding. The spot price of the US dollar per Australian dollar is 0.9850. The futures price for a contract deliverable in two months is 0.9900. What arbitrage opportunities does this create?
A difference between the spot exchange rate, interest rates, and futures price in the scenario under discussion creates an arbitrage opportunity. Traders can take advantage of this by borrowing USD, exchanging it for AUD, making investments in Australia, and then utilising a futures contract to sell the AUD and exchange rate it back for USD, making a profit without taking any risks.
According to the available data, there is a chance for arbitrage in this situation. This is how:
$1 USD to AUD conversion using the current exchange rate:
$1 USD multiplied by 0.9850 AUD/USD equals 0.9850 AUD
Invest the AUD in Australia at the 2.5% annual, continuously compounded interest rate.
The AUD will increase to:
0.9850 AUD * e(0.045 * (2/12)) = 0.9925 AUD after two months.
Invest the AUD in Australia at the 2.5% annual, continuously compounded interest rate. The AUD will increase to: 0.9850 AUD * e(0.045 * (2/12)) = 0.9925 AUD after two months.
Enter into a futures contract to sell AUD and purchase USD at a futures price of 0.9900 over a two-month period. Let's presume the contract is for 1 AUD as the contract amount is not indicated.
Deliver the AUD at the futures price at the end of two months:
$1 USD divided by 0.99 AUD is 0.99 USD.
Using the current exchange rate, turn the USD back to AUD:
0.9900 USD x 1.0150 AUD/USD = 1.00485 AUD
Comparing the results of stages 2 and 5:
0.9925 AUD
1.00485 AUD
There is a chance for arbitrage because the value from step 5 is greater than the value from step 2. Traders can borrow USD, exchange it for AUD, invest the AUD in Australia, and then utilise the futures contract to sell the AUD and exchange it back for USD, making a profit without taking any risks.
Real-world arbitrage opportunities should take into account transaction costs, other factors, and possible differences in actual market conditions.
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(a) We saw in Chapter 4 that the TFP for Brazil is about 0.43(=43%). Briefly and clearly explain what this number 0.43 tells us. (b) Relative to the USA, Argentina's y=0.30 and k=0.18. Calculate its TFP ( Aˉ ) using the production model we studied (round to the 2 nd decimal place).
The Total Factor Productivity is 0.30 - α(0.18).
(a) The TFP (Total Factor Productivity) value of 0.43 for Brazil indicates that the country's output is 43% higher than what can be attributed to the combined inputs of labor and capital alone. TFP measures the efficiency of production by capturing the residual growth that is not explained by the inputs. In other words, it tells us how much of the output can be attributed to factors other than labor and capital, such as technology, management, or institutional factors. A TFP value greater than 1 indicates that the country is experiencing positive technological progress, resulting in higher output levels.
(b) To calculate the TFP (Aˉ) for Argentina, we can use the equation Aˉ = y - αk, where y represents output, k represents capital, and α represents the capital share in the production function. Given that y = 0.30 and k = 0.18, and assuming α is a constant value, we can substitute these values into the equation to find the TFP.
Aˉ = 0.30 - α(0.18)
Therefore, the Total Factor Productivity is 0.30 - α(0.18).
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A man deposits $13,000 at the beginning of each year for 14 years in an account paying 8% compounded annually. He then puts the total amount on deposit in another account paying 9% compounded semiannually for another 12 years. Find the final amount on deposit after the entire 26 -year period. He will have a final amount of $ after the entire 26 -year period. (Simplify your answer. Round to the nearest cent as needed.) Find the interest rate needed for the sinking fund to reach the required amount. Assume that the compounding period is the same as the payment period. (Note. A sinking fund is an account created to fund a future expense. It's like a savings account) $16,394 to be accumulated in 4 years; quarterly payments of $900 The interest rate needed is approximately %. (Type an integer or decimal rounded to two decimal places as needed.) Find the effective rate for a payday loan which charges $63.55 for a two week loan of $480. The effective rate of the loan is percent. (Round to two decimal places.) Upon graduation from college, Warren Roberge was able to defer payment on his $45,000 student loan for 6 months. Since the interest will no longer be paid on his behalf, it will be added to the principal until payments begin. If the interest is 5.82% compounded monthly, what will the principal amount be when he must begin repaying his loan? What is N in this problem? A. The number of payments. B. The number of years. C. The number of compounds per year. D. The number of months. The principal amount will be $ (Do not round until the final answer. Then round to the nearest cent as needed.)
P = A/(1+r)n, where A is his current monthly payment and r is the future value of his loan ($45,000).
we can utilize the equation [tex]A = P(1 + r/n)^(nt)[/tex]
The aggregate sum on store following 14 years can be determined as follows:
The final deposit amount after the 26-year period can be calculated as follows: P = $13,000 r = 8% = 0.08 n = 1 (compounded annually) t = 14 A = P(1 + r/n)(nt) A = $13,000(1 + 0.08/1)(1*14) A = $13,000(1.08)14 A = $39,366.96
P = $39,366.96 r = 9% = 0.09 n = 2 (compounded semiannually) t = 12
A = P(1 + r/n)^(nt) A = $39,366.96(1 + 0.09/2)^(2*12) A = $39,366.96(1.045)^24 A = $128,174.31
Subsequently, he will have a last measure of $128,174.31 after the whole 26-year time span.
The formula below can be used to determine the interest rate:
The following results are obtained by substituting these values into the formula and solving for r:
[tex]FV = PMT[(1 + r/n)(nt) - 1)/(r/n)]\\[/tex] $16,394 = $900[(1 + r/4)(44) - 1)/(r/4)] $16,394 = $900[(1 + r/4)16 - 1)/(r/4)] $16,394(r/4) = $900((1 + r/4)16 - 1) (r/4)(1 +
The following formula was used to determine the effective rate for a payday loan:
Powerful Rate =[tex][(1 + I/n)^n - 1] x 100\\[/tex]
I = ($63.55/$480) x (26/2) I ≈ 0.6625
Subbing this worth into the recipe gives:
The principal amount at which he must begin repaying his loan can be calculated using: Effective Rate =[tex][(1 + i/n)n - 1] x 100\\[/tex] Effective Rate = [(1 + 0.6625/26) - 1] x 100 Effective Rate = 17.50%
P = A/(1+r)n, where A is his current monthly payment and r is the future value of his loan ($45,000).
The transfer of money from one party to another with the prospect of return is referred to in the financial world as a loan. The recipient, or borrower, incurs a debt for utilising the funds, for which they frequently must pay interest.
The principal amount borrowed, the interest rate being charged by the lender, and the due date will frequently be listed in the promissory note or analogous document required to verify the obligation. As part of a loan, the relevant asset(s) will be temporarily divided between the lender and the borrower. Because they earn interest on their loans, lenders are driven to issue loans.
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He concealed illegal and misleading accounting practices for three years but was later exposed by a whistleblower. John was punished with a jail sentence under the ________ Act.
He concealed illegal and misleading accounting practices for three years but was later exposed by a whistleblower. John was punished with a jail sentence under the Sarbanes-Oxley Act.
The Sarbanes-Oxley Act, also known as the SOX Act, is a United States federal law that was enacted in 2002 in response to a series of high-profile corporate scandals. The act aims to protect investors and improve the accuracy and reliability of corporate financial disclosures. It sets strict requirements for financial reporting, internal controls, and corporate governance.
One of the provisions of the Sarbanes-Oxley Act is the imposition of criminal penalties, including jail sentences, for individuals who engage in fraudulent accounting practices or make false statements related to financial reporting. Therefore,He concealed illegal and misleading accounting practices for three years but was later exposed by a whistleblower. John was punished with a jail sentence under the Sarbanes-Oxley Act.This act played a significant role in holding individuals accountable for their involvement in financial fraud and ensuring transparency and integrity in financial reporting.
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The cost of the machine is $14,426. The CCA rate is 27%. After 10 years, the machine is sold for $1,302 which is less than the UCC of the asset class. If there are other assets in the asset class, the discount rate is 10% and the tax rate is 33%, what is the present value of the CCA tax shield of this machine? (Assume 150%-rule)
The present value of the CCA tax shield for the machine is approximately -$1,175.92. The negative value indicates that there is a tax benefit resulting from the CCA deductions over the asset's useful life.
To calculate the present value of the CCA tax shield for the machine, determine the tax savings from the capital cost allowance (CCA) deductions over the asset's useful life and then discount them to their present value. Here are the steps to calculate it:
1. Calculate the CCA claimed over the 10 years:
CCA claimed = Cost of the machine * CCA rate
CCA claimed = $14,426 * 27% = $3,892.02
2. Determine the Undepreciated Capital Cost (UCC) at the end of the 10 years:
UCC = Cost of the machine - CCA claimed
UCC = $14,426 - $3,892.02 = $10,533.98
3. Calculate the Capital Gain (Loss) on the sale of the machine:
Capital Gain (Loss) = Proceeds from the sale - UCC
Capital Gain (Loss) = $1,302 - $10,533.98 = -$9,231.98 (Loss)
4. Determine the Recaptured CCA as the lesser of the Capital Gain (Loss) or the CCA claimed:
Recaptured CCA = min(Capital Gain (Loss), CCA claimed)
Recaptured CCA = min(-$9,231.98, $3,892.02) = -$9,231.98 (Loss)
5. Calculate the tax savings from the CCA deductions:
Tax Savings = Recaptured CCA * Tax Rate
Tax Savings = -$9,231.98 * 33% = -$3,045.35
6. Discount the tax savings to the present value using the discount rate:
Present Value of Tax Savings = Tax Savings / (1 + Discount Rate)^Years
Present Value of Tax Savings = -$3,045.35 / (1 + 10%)^10
Present Value of Tax Savings = -$3,045.35 / 1.1^10
Present Value of Tax Savings ≈ -$3,045.35 / 2.5937
Present Value of Tax Savings ≈ -$1,175.92
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Specific performance is always available in Group of answer choices agreements involving farm goods. agreements involving vehicles. real estate contracts. employment contracts.
Specific performance is always available in real estate contracts.
Specific performance is a legal remedy that requires a party to fulfill the terms of a contract as agreed upon. While the other options mentioned (agreements involving farm goods, agreements involving vehicles, employment contracts) may sometimes allow for specific performance as a remedy, it is not always available or applicable.
However, in the context of real estate contracts, specific performance is generally considered an available remedy. This is because real estate is often considered unique, and monetary damages may not adequately compensate the injured party in case of a breach.
Therefore, a court may order specific performance to require the defaulting party to fulfill the terms of the real estate contract, such as transferring the property title or completing the agreed-upon transaction.
Specific performance is always available in real estate contracts.
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The Board of Directors of a national Health Care System is considering which electronic health record (EHR) system to use and how to implement the EHR in all of its facilities. As a Health Care IT consultant, the student will work with various team members at the corporate level to gather information and analyze the efficacy, safety/security/legal factors, cost effectiveness, and cost-benefit factors of two possible new systems to help them decide whether or not to implement one of them. The student will also recommend a high-level implementation plan that considers system cutover and change management.
The student will evaluate two EHR systems, analyze their factors, and recommend an implementation plan to the Board.
As a Medical services IT specialist, the understudy's job includes working with the Governing body and corporate colleagues to assess two potential electronic wellbeing record (EHR) frameworks for a public Medical services Framework.
The understudy's liabilities remember gathering data and directing examinations for the adequacy, wellbeing, security, lawful variables, cost viability, and money saving advantage contemplations of the proposed frameworks.
In light of the examination, the understudy will give suggestions to the Board with respect to the execution of one of the EHR frameworks.
Furthermore, the understudy will foster a significant level execution plan that includes framework cutover and change the executives, guaranteeing a smooth progress and fruitful reception of the picked EHR framework across all offices.
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You are evaluating two different silicon wafer milling machines. The Techron 1 costs $265.000, has a three-year life, and has pretax operating costs of $74,000 per year. The Techron il costs $445,000, has a five-year life, and has pretax operating costs of $47.000 per year. For both milling machines, use straight-line depreciation to zero over the project's life and assume a salvage value of $35.000, If your tax rate is 22 percent and your discount rate is 10 percent compute the EAC for both machines. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, eg., 32.16.)
Techron 1
Techron 11
The EAC for Techron 1 is $373,508.94.
The EAC for Techron II is $548,945.27.
To calculate the Equivalent Annual Cost (EAC) for each milling machine, we need to consider the initial cost, operating costs, salvage value, tax rate, discount rate, and project life. We'll calculate the EAC using the following formula:
EAC = (Initial Cost - Salvage Value) + (Operating Costs - Tax Savings) * PVAF
Where PVAF is the Present Value Annuity Factor, calculated using the discount rate and project life.
Let's calculate the EAC for each milling machine:
Techron 1:
Initial Cost: $265,000
Operating Costs: $74,000 per year
Salvage Value: $35,000
Tax Rate: 22%
Discount Rate: 10%
Project Life: 3 years
Step 1: Calculate Tax Savings
Tax Savings = Operating Costs * Tax Rate
Tax Savings = $74,000 * 0.22
Step 2: Calculate PVAF
PVAF = (1 - (1 + Discount Rate)^(-Project Life)) / Discount Rate
PVAF = (1 - (1 + 0.10)^(-3)) / 0.10
Step 3: Calculate EAC
EAC = ($265,000 - $35,000) + ($74,000 - Tax Savings) * PVAF
EAC = ($265,000 - $35,000) + ($74,000 - $16,280) * 2.4869
EAC = $230,000 + $57,720 * 2.4869
EAC = $230,000 + $143,508.9368
EAC = $373,508.9368
Techron II:
Initial Cost: $445,000
Operating Costs: $47,000 per year
Salvage Value: $35,000
Tax Rate: 22%
Discount Rate: 10%
Project Life: 5 years
Step 1: Calculate Tax Savings
Tax Savings = Operating Costs * Tax Rate
Tax Savings = $47,000 * 0.22
Step 2: Calculate PVAF
PVAF = (1 - (1 + Discount Rate)^(-Project Life)) / Discount Rate
PVAF = (1 - (1 + 0.10)^(-5)) / 0.10
Step 3: Calculate EAC
EAC = ($445,000 - $35,000) + ($47,000 - Tax Savings) * PVAF
EAC = ($445,000 - $35,000) + ($47,000 - $10,340) * 3.7908
EAC = $410,000 + $36,660 * 3.7908
EAC = $410,000 + $138,945.2688
EAC = $548,945.2688
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Part D – Real Options Analysis – 1 question (4 points)
Five years ago, Rednip Ltd purchased a block of land to establish manufacturing operations. They spent $1 million for the 4 acres of land, which was significantly larger than what they needed to conduct operations at the time. In fact they could have gotten away with spending only $700,000 on a smaller parcel of land. Now they are considering building a new factory on the site in response to an increase in demand for their product. It will cost them $200,000 to construct the new buildings on the previously unused part of their land parcel.
6. Answer ALL of the following questions:
a. What style of option has been described? [e.g. Option to abandon]
b. Is the option described in the text above a put option or a call option?
c. What was the price paid for the option?
d. What is the exercise price of the option?
a. The style of option described is an "Option to Expand" or "Growth Option" since Rednip Ltd is considering building a new factory on the previously unused part of their land.
b. The described in the text above is a call since Rednip Ltd has the right, but not the obligation, to expand their operations by building a new factory.
c. The price paid for the is not explicitly mentioned in the given information. It only states that Rednip Ltd purchase a block of land for $1 million five years ago.
d. The exercise price of the is also not explicitly mentioned in the given information. It states that Rednip Ltd spent $200,000 to construct the new buildings on the previously unused part of their land. However, the exercise price refers to the price at which the holder can exercise their right, and it is not provided in this scenario.
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