Suppose only two airlines, United and Delta provide flights between Atlanta and Greenville. Both firms must choose whether to advertise or not advertise.The advertising straategies with corresponding profits are depicted in the payoff matrix. United Aitlines profits are in blue and Deltas Airlines are in red.United Airlines dominant strategy is advertise or not advertise ( choose one),and Delta donminant strategy is to advertise or not advertise (choose ones)What is the Nash equilibrium for this game? (choose one)a) United will choose to advertise and Delta will choose not to advertiseb) United will choose not to advertise and Delta will choose to advertisec) United and Delta will both choose to advertised) United and Delta will both choose not to advertise
Answers
Answer and Explanation:
(1) A dominant strategy is a strategy selected by one player regardless of the other player 's strategy.
According to the question
United dominant strategy is to Advertise, as it contains higher payoff ($9,000 > $1,000 and $16,000 > $11,000).
While on the other hand, Delta dominant strategy is to Advertise, as it contains higher payoff ($9,000 > $1,000 and $16,000 > $11,000).
(2) If Delta advertises, the best option for United is to advertise as the payout is higher($9,000 > $1,000).
If Delta does not advertise, the better option for United is to advertise as the payoff is higher($16,000 > $11,000).
The best strategy for Delta as United Advertises is to advertise because the payoff is higher ($9,000 > $1,000).
If United doesn't advertise, the best strategy for Delta is to advertise as the payoff is higher($16,000 > $11,000).
Hence Nash equilibrium is: (United Advertises, Delta Advertises)
Related Questions
Year
Pens
Muffins
Price
Quantity
Price
Quantity
(Dollars per pen)
(Number of pens)
(Dollars per muffin)
(Number of muffins)
2008 1 110 2 150
2009 2 155 4 215
2010 3 120 4 180
Use the information from the previous table to fill in the following table.
Year
GDP
Real GDP
(Dollars)
(Base year 2008, dollars)
2008
2009
2010
From 2009 to 2010, GDPdecreased , and real GDPdecreased .
Answers
1. Using the information to fill the following Nominal GDP and Real GDP table is as follows:
Nominal GDP Real GDP
Year (Dollars) (Base year 2008, Dollars)
2008 410 410
2009 1,170 585
2010 840 480
2. From 2009 to 2010, nominal GDP decreased, and real GDP decreased.
What differentiates the nominal GDP from the real GDP?The nominal GDP is based on the current prices and quantities.
The real GDP adjusts the current prices to remove the effects of inflation.
Pens Muffins
Price Quantity Price Quantity
Year (Dollars per pen) (Number of pens) (Dollars per muffin) (Number of
muffins)
2008 1 110 2 150
2009 2 155 4 215
2010 3 120 4 180
Nominal GDP:2008 = $410 ($1 x 110 + $2 x 150)
2009 = $1,170 ($2 x 155 + $4 x 215)
2010 = $840 ($3 x 120 + $4 x 180)
Nominal GDP Real GDP
Year (Dollars) (Base year 2008, Dollars)
2008 410 410 ($1 x 110 + $2 x 150)
2009 1,170 585 ($1 x 155 + $2 x 215)
2010 840 480 ($1 x 120 + $2 x 180)
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Crimson Tide Music Academy offers lessons in playing a wide range of musical instruments. The unadjusted trial balance as of December 31, 2021, appears below. December 31 is the company's fiscal year-end.
Accounts Debits Credits
Cash $ 10,300
Accounts Receivable 9,500
Supplies 2,000
Prepaid Rent 7,200
Equipment 90,000
Accumulated Depreciation $ 12,000
Accounts Payable 7,700
Salaries Payable 0
Interest Payable 0
Utilities Payable 0
Notes Payable 20,000
Common Stock 45,000
Retained Earnings 19,000
Service Revenue 42,200
Salaries Expense 24,500
Interest Expense 0
Rent Expense 0
Supplies Expense 0
Utilities Expense 2,400
Depreciation Expense 0
Totals $ 145,900 $ 145,900
Information necessary to prepare the year-end adjusting entries appears below.
a. Depreciation of equipment for the year is $6,000.
b. Accrued salaries at year-end should be $2,100.
c. Crimson Tide borrows $20,000 on September 1, 2018. The principal is due to be repaid in four years. Interest is payable each August 31 at an annual rate of 12%.
d. Unused supplies at year-end total $700. Crimson Tide debits Supplies at the time supplies are purchased.
e. Crimson Tide opens a second studio by paying for one year of rent in advance on April 1, 2018, for $7,200 ($600 per month) debiting Prepaid Rent.
f. Unpaid utilities for December total $200.
Required:
1) Enter the unadjusted balances from the trial balance and post the adjusting entries to the T-accounts, and post the closing entries to the T-accounts.
2) prepare an adjusted trial balance.
3a ) prepare an income statement for the year end december 31,2018.
3b) prepare a statement of sharholders equity for the year ended decmber 31,2018.
3c) prepare a classified balance sheet for the year ended december 31, 2018.
4) record the closing entries.
5) prepare a post-closing trial balance.
Answers
Answer:
asdasd sadad asd asdas 2 212 313135 54 554 dsa asd sad asa sd
Explanation:
In recording the acquisition cost of an entire business: goodwill is recorded as the excess of cost over the fair market value of identifiable net assets. assets are recorded at the seller's book values. goodwill, if it exists, is never recorded. goodwill is recorded as the excess of cost over the book value of identifiable net assets.
Answers
Teamwork Skills
And what you can learn from it
In in skill In
life
Answers
Communication.
Time management.
Problem-solving.
Listening.
Critical thinking.
Collaboration.
Leadership.
And you can learn how to respectfully and confidently express their ideas and opinions effectively in a group setting.
The executive summary component of a business plan is to describe _____.
a. where the funds to start and operate your business will come from, when you expect to see profit, and how much profit you expect to see
b. the size of the market, how your business will fit into the market, and how your business will stand out from other businesses in the market
c. the 'big picture' behind your business, what your business has to offer the consumer, and why your business will be successful
d. how your business will be organized and what type of management or department structure your business will have
Please select the best answer from the choices provided
A
B
C
D
Answers
Answer: c. the 'big picture' behind your business, what your business has to offer the consumer, and why your business will be successful
Explanation:
distinguish between price elasticity of demand and price elasticity supply
Answers
Answer:
The price elasticity of demand is the percentage change in the quantity demanded of a good or service divided by the percentage change in the price. The price elasticity of supply is the percentage change in quantity supplied divided by the percentage change in price
Coast-to-Coast Shipping Company's general manager reports quarterly to the
company president on the firm's operating performance. The company uses a
budget based on detailed expectations for the forthcoming quarter. The general
manager has just received the condensed quarterly performance report shown
below.
Budget Actual Variance
Net revenue $8,000,000 $7,600,000 $400,000 U
Fuel $160,000 $157,000 $3,000 F
Repairs and maintenance 80,000 78,000 2,000 F
Supplies and miscellaneous 800,000 788,000 12,000 F
Variable payroll 5,360,000 5,200,000 160,000 F
Total variable costs* $6,400,000 $6,223,000 $177,000 F
Supervision $160,000 $164,000 $4,000 U
Rent 160,000 160,000 ___
Depreciation 480,000 480,000 ___
Other fixed costs 160,000 158,000 2,000 F
Total fixed costs $960,000 $962,000 $2,000 F
Total costs charged against Revenue $7,360,000 $7,185,000 $175,000 F
Operating income $640,000 $415,000 $225,000 U
U = Unfavorable F = Favorable
*For purposes of this analysis, assume that all these costs are totally variable with respect to sales
revenue. In practice, many are mixed and have to be subdivided into variable and fixed components
before a meaningful analysis can be made. Also assume that the prices and mix of services sold remain
unchanged.
Although the general manager was upset about not obtaining enough revenue, she was happy that her
cost of performance was favorable; otherwise her net operating income would be even worse.
The president was totally unhappy and remarked: "I can see some merit in comparing actual
performance with budgeted performance because we can see whether actual revenue coincided with our
best guess for budget purposes. But I can't see how this performance reports helps me evaluate cost
control performance."
Required:
1. Prepare a columnar flexible budget for Coast-to-Coast Shipping at revenue levels of $7,000,000;
$8,000,000; and $9,000,000. Assume that the prices and mix of products sold are equal to the budgeted
prices and mix.
2. Express the flexible budget for costs in formula form.
3. Prepare a condensed table showing the master (static) budget variance, the sales volume variance,
and the flexible budget variance
Answers
1. Columnar Flexible Budget:
$7,000,000 $8,000,000 $9,000,000
Net Revenue $7,000,000 $8,000,000 $9,000,000
Fuel $140,000 $160,000 $180,000
Repairs and Maintenance $70,000 $80,000 $90,000
Supplies and Miscellaneous $700,000 $800,000 $900,000
Variable Payroll $4,690,000 $5,360,000 $6,030,000
Total Variable Costs* $5,600,000 $6,400,000 $7,200,000
Supervision $140,000 $160,000 $180,000
Rent $160,000 $160,000 $160,000
Depreciation $480,000 $480,000 $480,000
Other Fixed Costs $160,000 $160,000 $160,000
Total Fixed Costs $940,000 $960,000 $960,000
Total Costs $6,540,000 $7,360,000 $8,160,000
Operating Income $460,000 $640,000 $840,000
2. Formula for Flexible Budget Costs:
Total Variable Costs = (Variable Cost per Unit * Net Revenue) + Total Fixed Costs
3. Condensed Table:
Variance Master (Static) Budget Sales Volume Variance Flexible Budget Variance
Net Revenue $400,000 UF $0 $200,000 UF
Total Costs $175,000 F $0 $50,000 F
Operating Income $225,000 U $0 $150,000 U
The Master (Static) Budget Variance is the difference between the budgeted net revenue and the actual net revenue. In this case, it is an unfavorable variance of $400,000.
The Sales Volume Variance is the difference between the flexible budget net revenue and the budgeted net revenue. Since there is no change in the sales volume, this variance is zero.
The Flexible Budget Variance is the difference between the flexible budget total costs and the actual total costs. In this case, it is a favorable variance of $50,000. This indicates that the company was able to control costs better than anticipated.
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A great way to ontain hands-on training in a real work environment is to complete a(n)
Answers
Answer:
It's c, apprenticenship
instance, think about the jobs listed below. While those in positions like these get to work
in and around show business, the functions they perform are based right in the clusters we
considered today: Business Management, Finance, Marketing and Sales. See if you can
search online to find what is involved with these three specific jobs. Can you find an example
of someone who holds this position? What do the do? How might their job allow them to
feel like a part of Hollywood?
Senior Vice President of Theatre Operations
Media Production Accountant
Social Media Director, Film Marketing Agency description of each of the three careers that you researched, including what tasks the
job requires and why the job is so important
2. A breakdown of the education requirements for each career, including subjects that might
be beneficial in preparing for each career
3. The projected annual salary for someone in each career and the job outlook according to
the Bureau of Labor
4. A summary of why you think this job is a good choice for someone who is interested it
"show business*
Answers
Each of these careers can be a good choice for someone interested in "show business" as they offer opportunities to work closely within the entertainment industry and contribute to its success. They provide a chance to be involved in the operations, financial management, marketing, and promotion of films and theaters.
Senior Vice President of Theatre Operations:
This role involves overseeing the operations and management of theaters within a company. Responsibilities may include developing and implementing operational strategies, managing budgets and financial performance, coordinating with production teams, ensuring smooth theater operations, and enhancing the overall customer experience. An example of someone who holds this position is Mark Manuel, Senior Vice President of Theatre Operations at AMC Theatres.
Media Production Accountant:
A media production accountant is responsible for managing the financial aspects of film and television production. They handle budgeting, cost tracking, payroll, financial reporting, and ensuring compliance with industry regulations. Their role is crucial in managing the financial resources of a production, tracking expenses, and providing accurate financial information for decision-making. Relevant education in accounting or finance is essential for this career, and knowledge of the entertainment industry can be beneficial.
Social Media Director, Film Marketing Agency:
As a social media director in a film marketing agency, the role involves developing and implementing social media strategies to promote films. They oversee social media campaigns, manage content creation, engage with audiences, analyze performance metrics, and work closely with marketing teams. Their job is important in building an online presence, creating buzz, and engaging fans within the film industry. A background in marketing, communication, or digital media is typically desired for this role.
Each of these careers can be a good choice for someone interested in "show business" as they offer opportunities to work closely within the entertainment industry and contribute to its success. They provide a chance to be involved in the operations, financial management, marketing, and promotion of films and theaters. These roles allow individuals to work behind the scenes, making critical decisions and supporting the overall success of productions. Additionally, being part of the entertainment industry can be exciting and fulfilling for those passionate about the world of show business.
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An account never used in a service business is
Answers
Answer:
inventory
Explanation:
INFORMATION: List of balances extracted from the accounting records of BERGVILLE LTD on 29 February 2023, the end of the financial year, unless otherwise stated. A. B. C. D. E. Ordinary share capital Retained income Loan from Iniwe Bank Fixed assets at carrying value Fixed deposit: Khula bank Trading stock Creditors control Bank (unfavourable) Accrued expenses (expenses payable) Net trade debtors SARS income tax (provisional tax payments) Petty cash - Dividends: Interim dividends : R123 000 Final dividends: R320 000 ? 280 000 985 400 ted the following: ? 200 000 ? 440 000 25 000 11 500 ? 560 000 ? Bank reconciliation statement: The bank reconciliation on 29 February 2022 reflected a post-dated EFT for R5 000 dated 31 March 2023. Trade and other receivables occupied 54% of the current assets. Loan: CAPITEC bank ne ansac edite ACCO
Answers
Given balances extracted from the accounting records of BERGVILLE LTD on 29 February 2023 are as follows:Information:Ordinary share capital = R200,000Retained income = R440,000Loan from Iniwe Bank = R25,000Fixed assets at carrying value = R11,500Fixed deposit:
Khula bank = R560,000Trading stock = R985,400Creditors control = R280,000Bank (unfavorable) = R25,000Accrued expenses (expenses payable) = R11,500Net trade debtors = R280,000SARS income tax (provisional tax payments) = R54,000Petty cash = R5,000Dividends:Interim dividends: R123,000
Final dividends: R320,000Therefore, total shareholders' equity can be calculated as:Share capital + Retained income = 200000+440000= R640,000The total current assets would be:Trading stock + Debtors + Cash = 985400+280000+5000= R1,270,400As given, Trade and other receivables occupied 54% of the current assets.
Therefore, Trade receivables = 54% * 1270400 = R685,216Bank balance as per cash book = 560000 - 25000 - 11500 + 280000 - 54000 - 5000= R1,95500Bank reconciliation statement:Bank balance as per bank statement as at 29 February 2023 = R2,000,500Post-dated EFT of R5,000 dated 31 March 2023Add: Unpresented cheque = R 3,000Add:
Deposit in transit = R12,000Less: Bank charges = R300Less: Uncredited cheque = R7,000Adjusted bank balance as per bank statement = 2,00,500 + 5000 + 3000 + 12000 - 3000 - 7000 = R2,13,500Thus, the adjusted bank balance as per bank statement is R2,13,500.
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Which of the following is a type of intellectual property?
Answers
Answer:
house
Explanation:
how do supply and demand work together to influence the price of a product
Answers
Discuss what an event professional or management could do to strive for a disciplinary process that is fair and effective in curtailing unwanted behavior.
Answers
The event professional should strive for a disciplinary process that is fair and effective to ensure a formal disciplinary process.
The practice of discipline is a management tactic which is used to control unwanted conduct during an event.
Normally, any act of misconduct are penalized but a disciplinary process may also be employed to address the issues of misconduct that might be committed by the event employees.The disciplinary process is a formal procedure for an event-planner to deal with his/her employee.Some stages of the disciplinary procedure includes:
Preliminary InvestigationSuspension Pending EnquiryNotice of EnquiryRecording the FindingsAwarding PunishmentCommunicating Punishment etcIn conclusion, the event professional should strive for a disciplinary process that is fair and effective to ensure a formal disciplinary process.
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Search the Internet and locate a job that you would consider applying for.
Construct a Cover Letter for this actual job.
Upload your professional cover letter
Answers
A Cover Letter for this actual job.
[Your Name]
[Your Address]
[City, State, ZIP Code]
[Email Address]
[Phone Number]
[Today's Date]
[Recipient's Name]
[Company Name]
[Company Address]
[City, State, ZIP Code]
Dear [Recipient's Name],
I am writing to express my keen interest in the [Job Title] position at [Company Name], as advertised on [Job Board/Company Website]. With my strong background in [Relevant Skills/Experience], I am confident in my ability to contribute to the success of your organization.
Having [X years] of experience in [Industry/Field], I have honed my skills in [Key Skills/Expertise], which I believe align perfectly with the requirements of the [Job Title] role. I am particularly drawn to [Company Name]'s commitment to [Specific Company Values/Initiatives] and its reputation for excellence in [Industry/Field].
Throughout my career, I have demonstrated a strong track record in [Relevant Achievements/Projects], showcasing my ability to [Specific Skills/Results]. I am highly skilled in [Technical Skills/Software], and I possess excellent [Soft Skills/Abilities], allowing me to collaborate effectively with cross-functional teams and deliver outstanding results.
I am excited about the opportunity to contribute to [Company Name]'s ongoing success and would welcome the chance to discuss further how my skills and experience align with your organization's goals. Enclosed is my resume for your review.
Thank you for considering my application. I look forward to the possibility of meeting with you to discuss how my qualifications make me a strong fit for the [Job Title] position at [Company Name].
Sincerely,
[Your Name]
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the federal government has Group of answer choices separate capital and operating budgets only a capital budget an operating budget only a single budget that includes both operating expenses and capital spending
Answers
Answer:
A single budget that includes both operating expenses and capital spending.
Explanation:
A budget can be defined as a financial plan used for the estimation of revenue and expenditures of an individual, organization or government for a specified period of time, often one year. Budgets are usually compiled, analyzed and re-evaluated on periodic basis.
In the preparation of a budget, a list of each type of income and expense with respect to the budget is generally considered to be the first step. Also, the final step is making necessary adjustments to the budget by the top executive.
The federal government has a single budget that includes both operating expenses and capital spending on a cash basis.
Additionally, the benefits of having a budget is that it aids in setting goals, earmarking revenues and resources, measuring outcomes and planning against contingencies.
What products do you think will increase in demand because of the 2020 election?
Answers
Answer:
you know the basics. masks, gloves, hand sanitizer, stuff like that
Explanation:
What was Indiana's total government expenditures in fiscal year 2018-2019? (1 point)
O $15.9 billion
O $11.9 billion
O$34.89 billion
O $34.11 billion
Answers
Indiana's total government expenditures in the fiscal year 2018-2019 is $34.89 billion. The correct option is C.
Public consumption, public investment, and transfer payments made up of capital transfers and income transfers (pensions, social benefits), collectively referred to as government expenditures, are all included in the definition of goods and services.
Fiscal policy is characterized as the strategy used by the government to carry out various economic policy goals through the use of taxation, public expenditure, and public borrowing.
Thus, the ideal selection is option C.
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Anastasia is a principal who is responsible for telling one of her teachers that the school will be cutting her Spanish program in the fall. She has been friends with this teacher for years and knows that the teacher will be very upset. What is the most appropriate communication channel for Anastasia to choose to share this news with the teacher in this scenario?
Question 2 options:
She should send the teacher a formal, typed letter.
She should talk to the teacher face-to-face.
She should send the teacher a text message.
She should post the news on the school website.
Answers
Answer she should talk to her face to face
Explanation:
if she respects this woman that is the best way to keep it
What were economic impacts of European imperialism in Africa?; What was one effect of European imperialism Africa?; How did European imperialism affect the economy?; What were the main effects of European colonization of Africa?
Answers
Measuring economic impact not only lets in public zone our bodies to assess their monetary go back on funding, but it additionally demonstrates how events power economic advantages - allowing event Organisers develop practices which maximise those blessings.
Monetary impact research estimate the full greenbacks, jobs, and family income generated in an economic system because of a new activity; for example, a business coming to or growing in the vicinity, a pageant, creation of an occasion center.
The effect of economic increase on commercial enterprise is highly advantageous: your enterprise is possibly to earn more customers, boom profitability, and revel in first-rate opportunities for further boom and enlargement.
Social and financial factors, including profits, education, employment, community safety, and social helps can significantly have an effect on how properly and how long we live. those factors affect our capability to make healthy alternatives, come up with the money for hospital treatment and housing, control stress, and more.
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What is the opportunity cost in this scenario?
Harry has been very busy at work for the past two weeks. He has been working weekends too. Finally, he is going to get a weekend off.
Originally, he planned to paint his apartment that weekend. He also considered going fishing for the weekend
But then his parents called and asked him to come for dinner because it has been a while since they have seen each other
Later on, his friend Theo informed him about a surprise birthday party for another friend. Theo plans to reserve a room at a restaurant for the
celebration, with the cost to reserve the room split between Theo, Harry, and three other friends.
Now Harry is confused about what he should do over the weekend. He decides that, for him, the most important commitments are going over to
his parent's house and attending his friend's birthday party. In the end, Harry decides to see his parents.
Answers
solve this challenge delay in payment of contribution by employee, by going through these steps, identify the problem, identify the alternative solution, evaluate alternative solution, select the best Alternative, implementation and follow up .in Zanzibar social security fund
Answers
To address the issue of delayed payment of contributions by employees to the Zanzibar Social Security Fund, it is crucial to follow a systematic approach.
How can the problem of delayed payment of contributions be addressed?Firstly, the problem needs to be identified which is the delay in payment of contributions by employees. This delay will result in financial instability for the fund and may hinder its ability to provide social security benefits to its members in a timely manner.
The alternative solution to this problem could be implementing stricter enforcement measures and penalties for late payments. By imposing significant fines or penalties for delayed contributions, employees would be incentivized to make timely payments to the fund.
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Economic theory assumes that people act rationally and maximize their total satisfaction. Explain this proposition and discuss whether people who spend 30 days a year commuting fulfil these assumptions.
Answers
Indeed, the proposition is that people act rationally and maximize their total satisfaction when making decisions.
What is rational behavior?Rational behavior is a decision-making process that results to optimal benefits or utility for the decision-maker. The assumption of rational behavior implies that decision-makers make choices to benefit them above the marginal costs of such decisions.
Thus, people who spend 30 days per year in commuting actually fulfill the rational assumption, because they derive maximum marginal benefits visa-a-vis commuting more or less than 30 days annually.
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Some analysts that a business should focus on making a profit and leave social and environmental problems to nonprofit organizations and government.
Ture
False
Answers
Beverly Mills has decided to lease a hybrid car to save on gasoline expenses and to do her part to help keep the environment clean. The car she selected is available from only one dealer in the local area, but that dealer has several leasing options to accom-modate a variety of driving patterns. All the leases are for 3 years and require no money at the time of signing the lease. The first option has a monthly cost of $330, a total mileage allowance of 36,000 miles (an average of 12,000 miles per year), and a cost of $0.35 per mile for any miles over 36,000. The following table summarizes each of the three lease
options:
(See photos below)
Answers
Beverly Mills has three leasing options to choose from. Each of these options differs in terms of the monthly cost, the total mileage allowance, and the cost for any miles over the set mileage allowance. Depending on her driving patterns, Beverly Mills can select the option that suits her the best.
Beverly Mills decided to lease a hybrid car to save on gasoline expenses and to do her part to help keep the environment clean. The car she selected is available from only one dealer in the local area, but that dealer has several leasing options to accommodate a variety of driving patterns.All the leases are for 3 years and require no money at the time of signing the lease.
The three lease options available to Beverly Mills are as follows:
Option 1:Monthly cost: $330Total mileage allowance: 36,000 miles (an average of 12,000 miles per year)Cost for any miles over 36,000: $0.35 per mile
Option 2:Monthly cost: $460Total mileage allowance: 45,000 miles (an average of 15,000 miles per year)Cost for any miles over 45,000: $0.45 per mile
Option 3:Monthly cost: $540Total mileage allowance: 60,000 miles (an average of 20,000 miles per year)Cost for any miles over 60,000: $0.55 per mile
Therefore, Beverly Mills has three leasing options to choose from. Each of these options differs in terms of the monthly cost, the total mileage allowance, and the cost for any miles over the set mileage allowance. Depending on her driving patterns, Beverly Mills can select the option that suits her the best.
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tell me the HCF of 18 and 48
Answers
Answer:
6
Explanation:
Assignment Question JD Sdn Bhd has developed a new industrial detergent that can be used in motor vehicle garages. It would cost RM1 million to buy the equipment necessary to manufacture the blenders, and initially it would require net operating working capital equal to 10% of the 1st year sales. The project would have a life of 5 years. If the project is undertaken, it must be continued for the entire 5 years. The firm believes it could sell 120,000 units per year. The detergents would sell for RM12 per unit. After the first year, JD intends to increase the sales price by 3% annually. The variable cost is RM4 per unit. The variable cost will also increase at the inflation rate of 3%. The company's fixed costs would be RM550,000 at Year 1 and would also increase at a rate of 3% annually. The equipment would be depreciated over a 5-year period, using the straight-line method. The annual depreciation will be calculated based on a salvage value of the equipment at the end of the project's 5-year life of RM200,000. The company however estimated the machine can be sold as scrap for RM250,000. The corporate tax rate is 25%. The cost of capital is 15%.
a. Develop a spreadsheet model and use it to find the project's NPV, IRR, and payback.
b. Conduct a sensitivity analysis to determine the sensitivity of NPV to changes in the sales price, number of units sold, the variable costs per unit, fixed costs and the cost of capital. Set these variables' values at 10% above and 10% below their base-case values. Include a graph in your analysis.
c. Conduct a scenario analysis. Assume that the best-case condition is with no increase in the sales price, a 5% increase in the number of units sold, and a 3% decrease in the variable cost per unit. All other variables remain the same. For the worst-case condition, there will be a 5% decrease in units sold, a 2% decrease in unit price and a 3% increase in the variable cost per unit. The best-case condition, worst-case condition, and the base case are assumed to have an equal probability. Determine the expected NPV, the standard deviation of the NPV and the project's coefficient of variation NPV.
d. On the basis of your analysis, would you recommend that the project be accepted? What added advise and special attention would you give to the company with regard to the project?
Answers
a. Create a spreadsheet model to calculate the project's NPV, IRR, and payback by considering various financial parameters such as sales revenue, variable costs, fixed costs, depreciation, tax, net cash flow, cumulative cash flow, payback period, and the formula for NPV and IRR.
b. Perform a sensitivity analysis by creating a data table in the spreadsheet model to vary inputs by ±10% and observe the corresponding changes in NPV, then visualize the sensitivity using a graph.
c. Conduct scenario analysis by creating separate scenarios in the spreadsheet model to calculate NPV for best-case and worst-case conditions, determining the expected NPV as the average of scenario NPVs, and calculating the standard deviation and coefficient of variation NPV to assess variability and risk.
d. Based on the analysis, if NPV is positive, IRR exceeds the cost of capital, and the payback period is acceptable, it is recommended to accept the project. Sensitivity and scenario analysis should be considered to assess robustness and potential risks, with close monitoring of key variables and contingency plans. Regular review and updates ensure ongoing evaluation of project viability.
a. To calculate the project's NPV, IRR, and payback, we need to create a spreadsheet model. We can use the following steps:
1. Calculate the annual sales revenue: Annual Sales Revenue = Units Sold * Sales Price.
2. Calculate the annual variable costs: Annual Variable Costs = Units Sold * Variable Cost per Unit.
3. Calculate the annual fixed costs: Annual Fixed Costs = Initial Fixed Costs * (1 + Inflation Rate)^(Year - 1).
4. Calculate the annual depreciation expense: Annual Depreciation Expense = (Initial Equipment Cost - Salvage Value) / Project Life.
5. Calculate the annual net cash flow before tax: Net Cash Flow before Tax = Annual Sales Revenue - Annual Variable Costs - Annual Fixed Costs - Annual Depreciation Expense.
6. Calculate the annual tax: Tax = Net Cash Flow before Tax * Tax Rate.
7. Calculate the annual net cash flow after tax: Net Cash Flow after Tax = Net Cash Flow before Tax - Tax.
8. Calculate the net working capital: Net Working Capital = 10% * Annual Sales Revenue.
9. Calculate the initial investment: Initial Investment = Initial Equipment Cost + Net Working Capital.
10. Calculate the net cash flow: Net Cash Flow = Net Cash Flow after Tax - Depreciation Expense + Net Working Capital.
11. Calculate the cumulative cash flow: Cumulative Cash Flow = Cumulative Cash Flow + Net Cash Flow.
12. Calculate the payback period: Payback Period = Year when Cumulative Cash Flow becomes positive + (Remaining Cumulative Cash Flow / Net Cash Flow).
13. Calculate the NPV: NPV = Σ (Net Cash Flow / (1 + Cost of Capital)^Year).
14. Calculate the IRR using the IRR function in the spreadsheet.
b. To conduct a sensitivity analysis, we can create a data table in the spreadsheet model and vary the inputs (sales price, units sold, variable costs per unit, fixed costs, and cost of capital) by 10% above and below their base-case values. We can observe the changes in NPV for each variation and create a graph to visualize the sensitivity.
c. In scenario analysis, we consider the best-case and worst-case conditions. We can create separate scenarios in the spreadsheet model by adjusting the inputs accordingly. Then, we calculate the NPV for each scenario.
The expected NPV is the average of the NPVs in the different scenarios. The standard deviation of NPV measures the variability of NPV across the scenarios. The coefficient of variation NPV is the ratio of the standard deviation of NPV to the expected NPV.
d. Based on the analysis, we can compare the NPV, IRR, and payback with the company's minimum required return. If the NPV is positive, IRR is greater than the cost of capital, and the payback period is within an acceptable range, we can recommend accepting the project.
Additionally, we should consider the sensitivity analysis and scenario analysis results to assess the project's robustness. It's important to note any potential risks and uncertainties, such as the sensitivity of NPV to changes in key variables.
We should advise the company to closely monitor these variables and have contingency plans in case of adverse changes. Furthermore, the company should regularly review and update the analysis as new information becomes available, ensuring ongoing evaluation of the project's viability.
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A small town has 1,000 people, 600 of whom are healthy and 400 of whom are sick. The annual expected medical claims of the healthy and sick are $500 and $9,000, respectively. If the insurance company cannot determine who is healthy and who is sick prior to the purchase of insurance, the annual premium must be at least $____________.
a. 3,900
b. 9,000
c. 2,000
d. 4,750
Answers
Answer:
a. 3,900
Explanation:
We find the probability of healthy persons & the weak out of the total population in the town.
Probability of healthy persons
P(h) = 600/1000
P(h) = 0.6
Probability of weak persons
P(w) = 400/1000
P(w) = 0.4
We find the pay off for both the healthy and the weak, then add up to get the expected value or the minimal annual premium
Expected Value = 0.6*$500 + 0.4*$9000
Expected Value = $300 + $9000
Expected Value = $3,900
So, the annual premium must be at least $3,900.
Explain how the employer promotes the health and safety of employees to minimise the risk of contracting the corona virus
Answers
There are many ways the employer can do this. Here are some examples:
✰ - Forcing all employees to get tested
✰- Must wear masks
✰- If it is a doctors/dentists, or somewhere you can't social distance, have employees wear face shields
✰- Social Distance, if possible.
✰- Sanitize anywhere a patient/customer could have been
The price of a video is $3 and the price of a dinner is $9. From this we know that a consumer who is maximizing utility will a. Buy enough of the two goods such that the marginal utility from the last dinner consumed is three times greater than the marginal utility from the last video. b. Buy three times as many dinners as videos. c. Buy rnough of the two goods such that the marginal utility from the last vide is three times greater than the marginal utility from the last dinner consumed. d. Buy three times as many videos as dinners.
Answers
The correct answer is C. Buy enough of the two goods such that the marginal utility from the last dinner consumed is three times greater than the marginal utility from the last video. Marginal utility is additional satisfaction that is received when one consumes an additional unit of a good.
In economics, the software is the satisfaction or benefit derived from eating a product. The marginal utility of an awesome or carrier describes how plenty of satisfaction or delight is won by way of purchasers because of the growth or lower in intake by using one unit. There are three varieties of marginal utility.
Marginal application is the delivered satisfaction that a consumer gets from having one extra unit of a good or service. The concept of marginal software is used by economists to determine how a good deal of objects purchasers are inclined to buy. In other words, a bad marginal application indicates that each unit of goods or carrier ate up will do extra damage than suitable, to be able to result in the lower of average software degree, whilst the tremendous marginal utility shows that every unit of products or services consumed will boom the overall software stage.
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