On January 1, Year 1, Weller Company issued bonds with a $360,000 face value, a stated rate of interest of 10.50%, and a 10-year term to maturity. Weller uses the effective interest method to amortize bond discounts and premiums. The market rate of interest on the date of issuance was 8.50%. Interest is paid annually on December 31. Assuming Weller issued the bond for $390,440, what is the amount of interest expense that will be recognized during Year 3? (Round your intermediate calculations and final answer to the nearest whole dollar amount.)

Answers

Answer 1

Answer:

$ 32,370  

Explanation:

First and foremost,find attached amortization schedule showing the opening balance of the bonds in each year,the interest expense which is the opening balance multiplied by market interest rate of 8.5% as well as the interest coupon which is face value of $360,000 multiplied by stated interest of 10.50% i.e $360,000*10.5%=$37,800

The interest expense in year 3 = opening balance in year 3*8.5%=$380,823*8.5% =$32,370  

Answer 2

The amount of interest expense that will be recognized during Year 3 is $32,370.

For year 1

Cash paid = $360,000*10.5%

Cash paid = $37,800

Interest expense = $390,440*8.5%

Interest expense = $33,187

Premium amortization = $37,800 - $33,187

Premium amortization = $4,613

For year 2

Cash paid = $37,800

Interest expense = $385,827*8.5%

Interest expense = $32,795

Premium amortization = $37,800 - $37,800

Premium amortization = $5,005

For year 3

Cash paid = $37,800

Interest expense = $380,822 * 8.5%

Interest expense = $32,370

Therefore, The amount of interest expense that will be recognized during Year 3 is $32,370.

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Related Questions

Reggie, who is 55, had AGI of $35,200 in 2022. During the year, he paid the following medical expenses:
Drugs (prescribed by physicians)
Marijuana (prescribed by physicians)
Health insurance premiums-after taxes
Doctors' fees
Eyeglasses
Over-the-counter drugs
$ 570
1,470
1,280
1,320
445
270
Required:
Reggie received $570 in 2022 for a portion of the doctors' fees from his insurance. What is Reggie's medical expense deduction?

Answers

Reggie's medical expense deduction is $7,276.

AGI, or adjusted gross income, is a person's total income minus certain deductions and is used to calculate taxable income.

Reggie, who is 55 years old, had an AGI of $35,200 in 2022. During the year, he incurred the following medical expenses:

Drugs (prescribed by physicians): $5,701

Marijuana (prescribed by physicians): $1,470

Health insurance premiums-after taxes: $1,280

Doctors' fees: $1,320

Eyeglasses: $445

Over-the-counter drugs: $270

Reggie was reimbursed $570 by his insurance company for a portion of the doctors' fees. To calculate his medical expense deduction, we first need to subtract any reimbursements from his total medical expenses.

Total medical expenses: $5,701 + $1,470 + $1,280 + $1,320 + $445 + $270 = $10,486

Reimbursements: $570

Medical expenses after reimbursements: $10,486 - $570 = $9,916

To claim a medical expense deduction, the expenses must exceed a certain percentage of AGI, which varies depending on the taxpayer's age. For taxpayers who are 65 or younger, the threshold is 7.5% of AGI. For taxpayers who are over 65, the threshold is 7%.

Since Reggie is 55 years old, the threshold is 7.5% of his AGI or $35,200 x 0.075 = $2,640.

Therefore, Reggie can deduct the portion of his medical expenses that exceed $2,640.

Amount of medical expenses that exceed the threshold: $9,916 - $2,640 = $7,276

Therefore, Reggie's medical expense deduction is $7,276.

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A hyperlink:
A. can tell you if the battery on your laptop is running low.
B. can run the grammar check function.
C. can take the user to an external Internet site.
D. can spell check your slide presentation.

Answers

Can run the grammar check function

Answer: C

Explanation:

hi this is just a question for my career! i want to be a veterinarian or have a job in working with animals’ health. would this be a subject in biology? like zoology? also what subjects should i do well in for this job, would a subject be chemistry? and lastly should i have knowledge in medicine for it? thank you !

Answers

Answer:

This degree focuses on the health care and maintenance of all kinds of animals, including pets, livestock, and zoo creatures

Explanation:

Answer:

This degree focuses on the health care and maintenance of all kinds of animals, including pets, livestock, and zoo creatures

Explanation:

I’m the speech “I have a dream” by Martin luther king jr. did he Use of verbal signposts to create coherence?

Answers

Answer:

yes

Explanation:

he did to attract customers

When markets fail, public policya. can do nothing to improve the situationb. can potentially remedy the problem an increase economicefficiency.c. can always remedy the problem and increase economicefficiency.d. can in theory, remedy the problem, buy in practice, publicpolicy has proven to be ineffective

Answers

Answer:

b. can potentially remedy the problem an increase economic efficiency.

Explanation:

A market failure can be defined as a situation in which the market fails to produce an efficient level of output required to meet the demands of the consumers or customers.

This ultimately implies that, a market failure arises when there is inefficiency in the distribution or allocation of goods and services in a free market. Thus, the demand of the consumer of these goods and services are not being met with the level of supply (output) required i.e the forces of demand and supply are not efficient in producing the level of output required by the economy.

Some of the causes of market failure are imperfect information, monopoly, oligopoly, externalities etc.

Hence, when markets fail, public policy can potentially remedy the problem an increase economic efficiency.

Some of the public policy are pollution permits, government price controls, advertising etc.

Select the correct point on the graph. Which point on the graph indicates the lowest quantity supplied of goods? 9.00 8.00 Price per Pound 7.00 6.00 5.00 4.00 3.00 2.00 supply Curve 1,000 2,000 3,000 4,000 5,000 6,000 7.000 Quantity in Pounds​

Select the correct point on the graph. Which point on the graph indicates the lowest quantity supplied

Answers

Answer:

It would be A

Explanation:

the right location on the graph. Which point on the graph represents the lowest number of items supplied It is 9.00 8.00 Price per Pound. As a result, choice (A) is the right one.

What is meant by  supply Curve?

In economics, supply refers to the quantity of a resource that businesses, producers, workers, suppliers of financial assets, or other economic agents are willing and able to offer to the market or to a specific person. Supply can refer to manufactured items, labor hours, raw resources, or any other limited-supply or high-value item.

Supply is frequently represented graphically as a supply curve, with the price per unit on the vertical axis and the amount delivered as a function of price on the horizontal axis. This undesirable yet common practice involves flipping the independent and dependent variables from their regular positions.

The supply curve might represent a single seller or the market as a whole, totaling the quantity given by every vendor.

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A successful data-driven market segmentation program depends on each of the following except:

a.
the rejection of tradiitional marketing research techniques

b.
the use of transactional and event data

c.
a common definition of market segments across all areas of the business

d.
developing a centralized and accessible CRM (Customer Relationship Management) database

Answers

A successful data-driven market segmentation program depends on the "use of transactional and event data", "a common definition of market segments", "and the development of a centralized CRM database" but it does not depend on "the rejection of tradiitional marketing research techniques".

The correct option to the given question is option a.

Traditional marketing research techniques, such as surveys, focus groups, and interviews, have long been used to gather insights about consumer behavior and preferences. While these techniques may have limitations, they still play a valuable role in understanding customer motivations and attitudes. Data-driven market segmentation programs can benefit from a combination of both traditional and data-driven research approaches. The use of transactional and event data is crucial for a data-driven market segmentation program. This type of data provides valuable information about customer behaviors, purchase patterns, and interactions with the business.

Having a common definition of market segments across all areas of the business ensures consistency and alignment in marketing efforts. This allows for targeted and personalized messaging that resonates with each segment. It also facilitates coordination between different departments, such as marketing, sales, and customer service, leading to a more cohesive and effective customer experience.

Finally, developing a centralized and accessible CRM database is essential for managing and analyzing customer data. It enables the integration of data from various sources, such as transactions, interactions, and demographic information, into a single platform. This centralized database provides a comprehensive view of customers, enabling more accurate segmentation and personalized marketing initiatives.

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Help
Sove & Exit
Submit
For the current fiscal year, Purchases were $350,000, Purchases Returns and Allowances were $5,000 and Freight In was $29,000. If the
beginning merchandise inventory was $210,000 and the ending merchandise inventory was 595,000, the Cost of Goods Sold is:

Answers

Answer:

212,000

Explanation:

explain opening stock in the preparation of the final account​

Answers

Opening stock is an important component in the preparation of the final accounts of a business, as it represents the value of goods available for sale during the period.

How is opening stock shown in the final accounts ?

In the final accounts, opening stock is typically recorded in the trading account. The trading account shows the gross profit or loss made by the business during the period, and it is prepared by subtracting the cost of goods sold from the net sales revenue.

Overall, opening stock is an important concept in the preparation of final accounts, as it helps to determine the cost of goods sold and the gross profit or loss made by a business during a financial period.

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1. Some businesspeople believe that elimination agents and wholesalers reduce their operating expenses. Discuss the opportunity costs associated with eliminating intermediaries.

Answers

1. While eliminating intermediaries may result in reduced operating expenses, businesses need to weigh these savings against the associated opportunity costs. These costs may include the loss of expertise and value-added services, additional responsibilities and expenses, and reduced customer access to products.

Eliminating intermediaries such as elimination agents and wholesalers reduce operating expenses, but it also has associated opportunity costs that businesses need to consider. One of the primary costs is the loss of the expertise and value-added services that intermediaries offer to businesses and customers. Eliminating intermediaries may result in businesses taking on additional responsibilities and expenses such as marketing, distribution, and logistics.

This may result in the need for additional staff and resources to ensure that products reach customers on time. Furthermore, eliminating intermediaries may also result in reduced customer access to products, as intermediaries are often responsible for finding new markets and customer segments. In this case, businesses may need to invest additional resources to market and promote their products to reach new customers.

In conclusion, while eliminating intermediaries may result in reduced operating expenses, businesses need to weigh these savings against the associated opportunity costs. These costs may include the loss of expertise and value-added services, additional responsibilities and expenses, and reduced customer access to products.

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Relative Valuation (45 min) X KNOWLEDGE CHECK On the chart below, if the earnings per share grew from 7.61 on December 31, 2018, to 7.82 on June 30, 2019, what would the implied earnings yield be?

Relative Valuation (45 min) X KNOWLEDGE CHECK On the chart below, if the earnings per share grew from
Relative Valuation (45 min) X KNOWLEDGE CHECK On the chart below, if the earnings per share grew from

Answers

The implied earnings yield be 4.1%.

Thus, the correct option is B.

What do you mean by earnings?

The net advantages of a corporation's operations are its earnings. Additionally, earnings are the source of corporation tax obligations.

EBIT and EBITDA are two additional terms that are more specifically utilized for a study of certain areas of company operations. There are other other names for earnings that are frequently used, including income and profit.

Earnings are the sum of money that a person or organization receives over a specific time period.

They can be found on an income statement for a business and are used to gauge how profitable it is. Better financial performance is typically indicated by higher recurring earnings, which can also have a beneficial effect on stock values.

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Which of the following types of courts are the most prevalent nationwide?

Answers

A trial court is a type of court that is the most prevalent nationwide.

What is a court?

A court can be defined as an enclosed space, where legal practitioners (judges, lawyers or attorneys and a jury) converge to hold judicial proceedings, especially by listening to evidences and giving a verdict about legal cases.

Within the Judicial system, the four (4) stages of the judicial process are:

PretrialTrialDispositionAppeals.

What is a trial court?

A trial court can be defined as a court with original jurisdiction and as such it is a type of court where issues of fact, evidence, laws, and testimony for a litigation are first received, considered and decided.

This ultimately implies that, a trial court is a type of court that is the most prevalent nationwide.

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what are the six-step process of conducting an ethics audit in detail.

Answers

Answer and Explanation:

Ethics Audit is essentially an independent review into whether a company proves the ethical principles of the latter's industry itself and surroundings in specific. Generally, the ethical company might well take into account the organization's procedures of having to deal with grievances, the disclosure of all its financial situation, whether something penalizes whistle-blowers, or perhaps even the particular culture surrounding its involvement.

Conducting an audit of ethics are as follows:

The employee will be supervised by the Ethics Review Committee throughout the settings of the Company. Representatives will be named to the Group based on their proven expertise throughout the Agency's ethical standards, procedures, and systems. Preferably, the chair would also have acquired formal schooling as well as practice in the field of ethical conduct.The internal auditors could perhaps target specific ethical issues to be addressed. In certain contexts, the working group may start deciding to undertake a thorough ethical audit. In many other departments, the Committee could be focusing on particular ethical concerns that would be of particular importance in these settings.The morality internal auditing should take a glance as to what kind of personal data it needs to carry out the review. Data is collected from research and reports with agency staff dealing with various ethical concerns. The Panel will also review the applicable codes of conduct including federal legislation as well as laws.If the appropriate data is collected and adequately examined, the audit committee will identify risks connected to each problem. Each problem should be evaluated in compliance with the appropriate Agency processes and regulations followed by employees.The Committee could perhaps validate the comprehensive audit process to illustrate its sincerity in the assessment of ethical processes and regulations. Such writing can be useful in the case that somebody else poses concerns about the appropriateness including its Agency's ethical practices.The Committee could perhaps recognize which individuals would be responsible for the different assignments and set a schedule for something like the completion as well as a framework for monitoring instead of every task to ensure that it is completed and also to supervise its execution.

Question 18 of 20
How is simple interest different from compound interest?
A. Compound interest is not paid on the principal, or initial deposit.
B. Simple interest is only paid on the principal, or initial deposit.
C. Simple interest is paid on the original deposit plus any interest
earned.
D. Compound interest is only paid on the principal, or initial deposit.
SUBMIT

Answers

Simple interest is only paid on the principal, or initial deposit. Hence Option (B) is correct.

Simple Interest refers to the interest on a principal amount over a certain period of time. Its formula is as under:

Simple Interest = Principal × Interest Rate × Time

The total amount accumulated or repaid at the end of the period is calculated by adding the simple interest to the principal:

Total Amount = Principal + Simple Interest

On the other hand, compound interest refers to calculating interest on a principal amount that takes into account the accumulated interest from previous periods. Its formula is as under:

A = P(1 + r/n)^(nt)

Thus, simple interest is on the original principal, while compound interest considers the accumulated interest from previous periods.

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If Long-term debt to total assets ratio = 0.30 and total liability = $45000 and total assets =
$120000. The Long-term debt equal

Answers

Answer:

C

Explanation:

If Long-term debt to total assets ratio = 0.30 and total liability = $45000 and total assets =

$120000. The Long-term debt equalj

The US Senate overwhelmingly passed the 2022 Defense Authorization Act. The $768 billion "Defense Authorization Act" not only exceeds the defense spending proposed by the Biden administration by $25 billion, but also increases the US defense budget by about 5% compared to last year.

Answers

The US Senate passed the 2022 Defense Authorization Act, a $768 billion bill that surpasses the Biden administration's defense spending proposal by $25 billion and represents a 5% increase in the US defense budget compared to the previous year.

1. The US Senate passed the 2022 Defense Authorization Act.

2. The Defense Authorization Act is a bill that determines the budget and expenditures for the US defense sector.

3. The total amount allocated for the Defense Authorization Act is $768 billion.

4. The defense spending proposed by the Biden administration was exceeded by $25 billion in this Act.

5. The Act represents a 5% increase in the US defense budget when compared to the previous year.

6. This increase in the defense budget indicates a commitment to strengthening the country's defense capabilities.

7. The Act was passed overwhelmingly, indicating strong support from the Senate.

8. The Defense Authorization Act is an essential piece of legislation that ensures the funding and resources necessary for the US military to carry out its operations effectively.

9. The Act covers various aspects of defense spending, including military personnel, equipment, research and development, and strategic initiatives.

10. By passing the Defense Authorization Act, the US Senate has demonstrated its commitment to national security and defense preparedness.

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Project task E has the following estimates: (1) optimistic time – 10 days, (2) Pessimistic time - 20 days, and (3) Most likely time – 12 Days. The standard deviation for time using the beta statistical distribution is ________ days.

Answers

Answer:

13 days

Explanation:

Calculation for the standard deviation for time using the beta statistical distribution

Expected time = [10 days + (4 * 12 days) + 20 days) / 6]

Expected time = [10 days + 48 days + 20 days) / 6]

Expected time=78 days/6

Expected time=13 days

Therefore the standard deviation for time using the beta statistical distribution is 13 days.

Recently, "de-dollarization" has become a hot topic of global discussion. Recently, a Chinese think tank published an article saying that the trend of global de-dollarization has become very clear, and many countries in the world are working hard to reduce their dependence on the US dollar. The main driving force for this trend is my country's weaponization of its currency through excessive sanctions.

Answers

De-dollarization, or the reduction of dependence on the US dollar in global financial transactions, has indeed gained attention in recent years. While it is true that some countries are actively working to diversify their currency holdings and reduce reliance on the US dollar, it is essential to consider multiple factors that contribute to this trend.

One of the factors that have led to discussions about de-dollarization is the use of economic sanctions by the United States. Economic sanctions can be a powerful tool for a country to exert pressure on another nation, but they can also have unintended consequences. When the US imposes sanctions, it often restricts access to the US financial system, which is heavily reliant on the US dollar. This has prompted some countries to explore alternative methods of conducting international trade and finance to mitigate the impact of sanctions.

China, as a rising economic power, has been at the forefront of efforts to promote de-dollarization. It has taken steps to internationalize its currency, the yuan (also known as the renminbi), and has established currency swap agreements with various countries to facilitate trade settlements in yuan. Additionally, China has been promoting the use of its currency in international transactions through initiatives like the Belt and Road Initiative, which aims to enhance trade connectivity and financial integration among participating countries.

While weaponization of the US dollar through sanctions is indeed a contributing factor to the de-dollarization trend, it is not the sole driver. Other factors include concerns about the long-term stability of the US dollar, efforts by countries to reduce vulnerability to currency fluctuations, and geopolitical considerations. Some countries view de-dollarization as a way to enhance their economic and financial sovereignty, diversify risk, and reduce exposure to potential US policy changes.

It is important to note that the process of de-dollarization is gradual and complex. The US dollar still remains the dominant global reserve currency and the primary currency for international trade. The global financial system has deep-rooted structures and networks that make a rapid shift away from the US dollar challenging. However, as various countries seek to reduce their dependence on the US dollar, we can expect ongoing discussions and actions related to de-dollarization in the global economic landscape.

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Free Cash Flow

100

Growth rate

2%

Tax Rate

1%

Cost of Capital

5%

Debt-to-total value

50%

Given the data in the above, what is the terminal value of the business (using the growing perpetuity formula)?

Answers

Answer:

Explanation:

Terminal value of business Formula = FCF (1+g)/(WACC- g)

Where:

FCF= current free cash flow = 100  

g= Growth rate = 2%  

WACC = Weighted average cost of capital = Cost of capital = 5%

Terminal Value of the business= FCF (1+g)/(WACC- g)

Terminal Value of the business= 100 (1+2%)/(5%- 2%)

Terminal Value of the business= 3,400

A pharmaceutical company announces that it has received Federal Drug Administration approval for a new allergy drug that completely prevents hay fever. The consensus analyst forecast for the company’s earnings per share (EPS) is $4.50, but insiders know that, with this new drug, earnings will increase and drive the EPS to $5.00. What will happen when the company releases its next earnings report?

Answers

Answer:

stock price will not change at all

Explanation:

Based on the information provided it can be said that when the company releases its next earnings report the stock price will not change at all. This is because stock markets move fast, the stock price of EPS moved when the in the announcement about FDA approval was made. Therefore the markets already expect these changes to reflect on the earnings report so prices will not move. Just as the saying goes, "Buy the Rumor, Sell the news."

Pharoah Company began operations in July 2020. At the end of the month, the company prepares monthly financial statements. It has the following information for the month. 1.At July 31, the company owed employees $1,100 in salaries that the company will pay in August. 2.On July 1, the company borrowed $20,000 from a local bank on a 10-year note. The annual interest rate is 12%. 3.Service revenue unrecorded in July totaled $3,000. Prepare the adjusting entries needed at July 31, 2020.

Answers

Answer:

1.At July 31, the company owed employees $1,100 in salaries that the company will pay in August.

July, 31

DR Salaries Expense.................................................$1,100

CR Salaries Payable.................................................................$1,100

(To record accrued salaries expense)

2.On July 1, the company borrowed $20,000 from a local bank on a 10-year note. The annual interest rate is 12%.

July entry would be;

July 31,

DR Interest Expense ................................................$200

CR Interest Payable ............................................................$200

(To record interest accrued for the month)

Working

= 20,000 * 12%/12 months

=  $200

3. Service revenue unrecorded in July totaled $3,000.

July 31,

DR Accounts Receivable .......................................$3,000

CR Service Revenue ...............................................................$3,000

( To record unrecorded Service revenue.)

List of biodegradable products?

Please give good answers! 100 points!

Answers

Answer:

food scraps and coffee grounds, paper towels, toilet paper, newspapers, junk mail, paper plates and cups, clothing and towels

Sultan Company uses an activity-based costing system. At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools:_____.
Activity Cost Pool Activity Measure Expected Overhead Cost Expected Activity Labor-related Direct labor-hours $ 269,100 29,900 DLHs Purchase orders Number of orders $ 11,000 220 orders Parts management Number of part types $ 78,440 106 part types Board etching Number of boards $ 85,050 1,890 boards General factory Machine-hours $ 242,400 20,200 MHs
Required:
1. Compute the activity rate for each of the activity cost pools.
2. The expected activity for the year was distributed among the company’s four products as follows:_________.
Expected Activity Activity Cost Pool Product A Product B Product C Product D Labor-related (DLHs) 7,500 13,400 3,800 5,200 Purchase orders (orders) 66 30 32 92 Parts management (part types) 29 19 47 11 Board etching (boards) 580 750 560 0 General factory (MHs) 2,600 7,300 3,700 6,600 Using the ABC data, determine the total amount of overhead cost assigned to each product.

Answers

Answer:

Activity                       Activity                    Expected              Expected

cost pool                    measure                 overhead cost      activity        

Labor-related            Direct labor-hours  $269,100              29,900 DLHs

Purchase orders       Number of orders   $11,000                 220 orders

Parts management   # of part types        $78,440                106 part types

Board etching           # of boards             $85,050                1,890 boards

General factory         Machine-hours       $242,400              20,200 MHs

1) cost per direct labor hour = $269,100 / 29,900 = $9

cost per order = $11,000 / 220 = $50

cost per number of parts = $78,440 / 106 = $740

cost per # of boards = $85,050 / 1,890 = $45

cost per machine hour = $242,400 / 20,200 = $12

                                                           Expected Activity

Activity Cost Pool        Product A   Product B   Product C   Product D

Labor-related (DLHs)        7,500       13,400        3,800          5,200

Purchase orders (orders)    66             30              32                92

Parts management              29             19              47                  11

Board etching (boards)     580           750            560                0

General factory (MHs)     2,600        7,300         3,700           6,600

2) Using the ABC data, determine the total amount of overhead cost assigned to each product.

overhead cost assign to product A = ($9 x 7,500) + ($50 x 66) + ($740 x 29) + ($45 x 580) + ($12 x 2,600) = $149,560

overhead cost assign to product B = ($9 x 13,400) + ($50 x 30) + ($740 x 19) + ($45 x 750) + ($12 x 7,300) = $257,510

overhead cost assign to product C = ($9 x 3,800) + ($50 x 32) + ($740 x 47) + ($45 x 560) + ($12 x 3,700) = $140,180

overhead cost assign to product D = ($9 x 5,200) + ($50 x 92) + ($740 x 11) + ($45 x 0) + ($12 x 6,600) = $138,740

Deregulation in the banking industry in 2007 was mainly intended to lead to _____. (Select all that apply.)


an efficient marketplace

competitive pricing

riskier investments

volatile interest rates

Answers

Answer:

riskier investment

Explanation:

Mark brainliest

How was thinking on the margin help increase the chance of long-term success for your business, even if additional competition enters your community?

Answers

The thinking on the margin help increase the chance of long-term success for your business, even if additional competition enters your community by establishing strategies to give that push to potential consumers.

What is the long-term success for your business?

You must conduct a thorough analysis of your company, both reviewing the history and "visioning" the future, to ensure long-term success. This process entails both what you have already done and what you must do to give it the "legs" it needs to survive for many years to come.

By developing tactics to encourage potential customers, margin thinking can boost your company's chances of long-term success—even if new competitors move into your neighborhood.

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You are given the following information for Lightning Power Company. Assume the company’s tax rate is 24 percent.

Debt: 9,000 5.8 percent coupon bonds outstanding, $1,000 par value, 24 years to maturity, selling for 106 percent of par; the bonds make semiannual payments.
Common stock: 420,000 shares outstanding, selling for $60 per share; beta is 1.11.
Preferred stock: 18,000 shares of 3.6 percent preferred stock outstanding, a $100 par value, selling for $81 per share.
Market: 5 percent market risk premium and 4.6 percent risk-free rate.
What is the company's WACC?

Answers

The Weighted Average Cost of Capital (WACC) for Lightning Power Company is 9.84%.

To calculate the Weighted Average Cost of Capital (WACC) for Lightning Power Company, we need to determine the cost of each component of its capital structure and their respective weights. The WACC is the weighted average of these costs.

Cost of Debt:

The debt component consists of 9,000 bonds with a 5.8 percent coupon rate, a $1,000 par value, and selling for 106 percent of par. The semiannual coupon payment is calculated as (5.8% * $1,000) / 2 = $29.

The current market price of the bond is 106% of $1,000, which is $1,060. The yield to maturity (YTM) can be calculated using financial calculators or Excel. Let's assume the YTM is 4.5%. Therefore, the cost of debt is 4.5%.

Cost of Common Stock:

The cost of common stock is determined using the Capital Asset Pricing Model (CAPM). The risk-free rate is given as 4.6%, and the market risk premium is 5%. The beta for Lightning Power Company's common stock is 1.11.

Using the CAPM formula: Cost of equity = Risk-free rate + Beta * Market risk premium. Therefore, the cost of equity is 4.6% + 1.11 * 5% = 9.71%.

Cost of Preferred Stock:

The cost of preferred stock is the dividend yield, which is the preferred dividend divided by the market price per share. The preferred stock has a 3.6% dividend yield, and it is selling for $81 per share. Therefore, the cost of preferred stock is 3.6% / $81 = 4.44%.

Next, we need to determine the weights of each component based on their market values. The market value of debt is 9,000 * $1,060 = $9,540,000. The market value of common stock is 420,000 * $60 = $25,200,000.

The market value of preferred stock is 18,000 * $81 = $1,458,000. The total market value of the company's capital structure is $36,198,000.

Now we can calculate the WACC using the formula:

WACC = (Weight of Debt * Cost of Debt) + (Weight of Equity * Cost of Equity) + (Weight of Preferred Stock * Cost of Preferred Stock).

Weight of Debt = $9,540,000 / $36,198,000 = 0.2639 (26.39%)

Weight of Equity = $25,200,000 / $36,198,000 = 0.6961 (69.61%)

Weight of Preferred Stock = $1,458,000 / $36,198,000 = 0.0401 (4.01%)

Plugging in the values, we get:

WACC = (0.2639 * 4.5%) + (0.6961 * 9.71%) + (0.0401 * 4.44%) = 2.88% + 6.78% + 0.18% = 9.84%.

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Describe the general processes that should be followed in managing risks throughout a project. Be sure to include the general sequence in which these processes are carried out.

Answers

Answer:

The risk management process can be summarised into simple but effective steps.

1. Identification / Recognition of Risk: You can't manage risk if you haven't identified it. Project risks can be very overwhelming. But here are some steps that can help you do so:

Consider every aspect of the projectLook at worst-case scenarios with respect to each milestone/aspect of the project. Ask the question "what is the worst occurent that can take place?"Consulting an expert can also be a quick way to properly identify risks. This is so because they have many years of experience doing so. The downside to this is that it can be expensive.Carrying out internal and external research Getting regular feedback from employees. Employees are the ones who operate the process. Their experiences are invaluable.Documenting and examining complaints from customers. This is one of the best ways of protecting one's brand for loss of equity. Customers are a strong gauge of whether or not the company is doing it right.

Once risks have been identified, they can be inserted into a Project Risk Register.

A project risk register is can be a hard document or an electronic document which itemizes all the risks relating to a project as well as their nature. It helps the project manager to keep an eye on all regulatory and compliance risks.

2. Risk Analysis

Risk analysis refers to the process of grouping risks according to their probability of occurence as well as their potential impact on the Project.

3. Risk Evaluation

This refers to the categorization of the risks according to the size of potential damage to the project if they occurred. Some of them will require urgent and or serious attention, others, on the balance of probability will require little or no treatment as their likelihood of occurrence and consequences are very low.

4. Transfer, Mitigate, or Eliminate the Risk

There are several ways to remove or reduce risks. Some of them are:

Use of policies: Policies modify and guide human behaviour within an organisation. When people do the right thing, there is less risk to worry about.Use of contracts: Many of the risks which can affect a project can arise from the contract. Having a legal professional go through a contract can help to reduce risks associated with entering into the same.Insurance: This is a risk transfer mechanism which allows an insurance company to take on the risks of a project or a business in exchange for a premium.

5. Continously review and monitor the Risks

The Project Risk Register is a good tool for reviewing and monitoring risks.

When there is a new development with the project, it is important to ask the question "how does this modify our risk exposure".

If for instance, the geographical location for a construction project has changed, this may significantly alter the risks universe of the project and needs to be reviewed/managed using steps 1-4 above.

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What is the future value of 875 six years from now if the required rate of return is 7% (Rounded to 2 decimal places)?​

Answers

The future value of 875 six years from now is mathematically given as

F= 1.313.13

What is the future value of 875 six years from now if the required rate of return is 7%?

Generally, the equation for Future Value is mathematically given as

Future Value = P * (1+r)^n

Therefore

F= 875 * (1+7%)^6

F= 875 * 1.50073035

F= 1.313.13

In conclusion, Future Value

F= 1.313.13

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I’m doing Economics but I’m not sure of this question.

Im doing Economics but Im not sure of this question.

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A terminology which is given to consumers who were willing to pay for a higher price, but don't have to because the equilibrium price has been set lower is: C. consumer surplus.

What is price?

Price can be defined as an amount of money which is primarily set by the seller of a good (product), and it must be paid by a buyer (consumer) to the seller, so as to enable the acquisition of this good (product).

What is consumer surplus?

Consumer surplus can be defined as an economic measure of the difference between the willingness of consumers to pay for a good (product) at higher price and the equilibrium price or actual price paid by the consumers.

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Complete Question:

What is the term given to consumers who were willing to pay for a higher price, but don't have to because the equilibrium price has been set lower?

A. Market failure.

B. Quantity excess.

C. Consumer surplus.

D. Consumer drop.

Suppose the demand for French bread rises. Explain what happens to producer surplus in the market for French bread. Explain what happens to producer surplus in the market for flour.

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Answer:

When the demand for French bread rises, the price of French bread will likely increase as well. This means that the quantity of French bread that sellers are willing and able to sell at each price will increase. As a result, the total amount of revenue that sellers of French bread receive will increase, which means that producer surplus in the market for French bread will increase.

In the market for flour, the increase in demand for French bread may lead to an increase in the price of flour. This is because the increased demand for French bread will likely increase the demand for flour as well, since flour is a key ingredient in making French bread. As the price of flour increases, the producer surplus in the market for flour will also increase.

It's worth noting that the exact change in producer surplus in the market for flour will depend on the elasticity of supply of flour. If the supply of flour is relatively inelastic, the increase in price will result in a larger increase in producer surplus, whereas if the supply of flour is more elastic, the increase in price will result in a smaller increase in producer surplus

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