Answer:
The Global Economic Crisis
Factors that led to the Mortgage Crisis include all:
A) Mortgages were accessible for borrowers who did not meet income and minimum down payment requirements. Moreover, the Fed kept interest rates really low to prevent a recession. This led to a decrease in the demand for homes and a further decline in housing prices.
B) The total amount of risk embedded in the securities created by bundling mortgages did not change. The securitization and resecuritization processes led to a distribution of total risk among different types of collateralized securities.
C) Mortgage payments based on short-term interest rates-called adjustable-rate mortgages (ARMs)—were preferred by subprime borrowers.
D) Rating agencies, such as Moody's and Standard & Poor's, earned fees from securitizing agencies for providing ratings for CDOs. The securitizing agencies were looking for higher ratings for their CDOs, and the rating agencies were earning fees. This led to a conflict of interest; thus, ratings did not reflect the true risk involved in the CDOs, which were backed by mortgages.
Explanation:
Hedge funds, banks, and insurance companies helped to cause the subprime mortgage meltdown while regulators looked the other way. They were given free rein to construct so many complex securities which somehow contributed to the mortgage defaults with financial institutions skimming fees during the securitization processes, and mortgages were made accessible for borrowers who did not meet the income and minimum down payment requirements.
Roman owns shares in a company called Copnay Telecom Inc.The company's financial performance has been declining over the past few months, and the value of its stock has been decreasing.Roman wants to proactively cut his losses and therefore sells his shares.Jeremy, a trading enthusiast, buys shares in Copnay Telecom because he believes that the share prices cannot go anywhere but up.Which of the following characteristics of a public stock company does this scenario best exemplify?A) Separation of legal ownership and management controlB) Legal personalityC) Limited liability for investorsD) Transferability of investor ownership
Answer: D. Transferability of investor ownership.
Explanation:
From the question, we are informed that Roman owns shares in a company called Copnay Telecom Inc. and that the company's financial performance has been declining over the past few months, and the value of its stock has been decreasing.
We are further told that Roman wants to proactively cut his losses and therefore sells his shares and that Jeremy, a trading enthusiast, buys shares in Copnay Telecom because he believes that the share prices cannot go anywhere but up.
The characteristics of a public stock company that this scenario best exemplify is transferability of investor ownership. This was illustrated when Roman transferred his ownership to Jeremy.
The YTM for a firm's bonds is 10%. The corporate tax rate is 40%. What is this firm's after-tax cost of debt
Answer:
6
Explanation:
Given that
Yield to maturity = 10%
Tax rate = 40%
According to the given scenario, the computation of firm's after-tax cost of debt is shown below:-
After-tax cost of debt = Yield to maturity × (1 - Tax rate)
= 10 × (1 - 0.4)
= 10 × 0.6
= 6
Therefore for computing the after-tax cost of debt we simply applied the above formula.
3. What is the value of the bullwhip measure for a company with a standard deviation of demand equal to 20, and a variance of orders equal to 450?
Answer:
1.125
Explanation:
The computation of the value of the bullwhip measure is shown below
As we know that
The Variance of demand = Square of the standard deviation of demand
i.e.
= square of 20
= 400
And, the Variance of orders = 450
Now the
Bullwhip measure is
= The variance of orders ÷ the variance of demand
= 450 ÷ 400
= 1.125
During a recent fiscal year, Creek Company reported pretax income of $123,000, a contribution margin ratio of 25% and total contribution margin of $380,000. Total variable costs must have been:_________. a. $1028,000 b. $1,140,000 c. $492,000 d. $1,520,000 $2,012,000
Answer:
b. $1,140,000
Explanation:
To get the total variable cost, we need to first get the sales.
Sales = Contribution / Margin ratio
= $380,000 / 25%
= $1,520,000
Therefore,
Total variable costs would be
= $1,520,000 * 75% [100% - 25%]
= $1,140,000
if a life insurance policy develops cash value faster than a seven pay whole life contract it becomes
Answer:
modified endowment contract (MEC)
Explanation:
In such a scenario the life insurance policy becomes a modified endowment contract (MEC). This is a tax qualification of all life insurance policies that is activated once that policy's cumulative premiums exceed federal tax law limits, which causes the taxation structure and IRS policy classification of that contract to completely change.
If a life insurance policy develops cash value faster than a seven-pay whole-life contract it becomes more attractive to policyholders as it accumulates funds quicker, providing additional financial benefits.
How can the cash be accessed?Policyholders can access the cash value through loans or withdrawals, offering flexibility and potential for investment opportunities. Faster cash value growth also means earlier potential for policyholders to benefit from dividends or other investment returns.
However, it's crucial to consider the trade-offs, such as higher premiums or reduced death benefits. Policyholders should review their specific needs, risk tolerance, and long-term objectives when choosing a life insurance policy. Consulting a financial advisor is recommended to make informed decisions about life insurance options.
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Job satisfaction questionnaires should always be anonymous to get employees to tell the truth.A. TrueB. False
Answer:
B. False
Explanation:
I would say that most of the time (the vast majority actually) questionnaires should be anonymous. Imagine if you had to answer a questionnaire about your teacher, and he/she is a really bad teacher. If the questionnaire had your name on it, you would probably be much nicer than if the questionnaire was anonymous (due to the fear of retaliation by the teacher). The same thing happens on any workplace, no one will tell how bad his/her boss is if their name will appear on the questionnaire. Employees will always fear retaliation from their supervisor or manager, so they will not be completely honest.
But on some companies, employees might not fear any type of retaliation, specially on very horizontal organizations (flat structures with few management levels). The advantage of non-anonymous questionnaires is that they can be used to actually solve problems and follow up how the problems were solved or how do employees feel after they were solved.
The problem is that non-anonymous questionnaires work for companies that probably do not need them very much in the first place, while on companies that really need them, they are anonymous.
The most important and volatile component of the current account in the U.S. balance of payments is:
Answer: net exports
Explanation:
Balance of payment simply shows the estimation of the inflows and outflow of a nation's money for a certain year. It should be noted that current account of the balance of payment consists of three main components which are the trade in Goods, the trade in services, and the transfer payments.
The trade in goods is segregated into imports and export. This therefore makes the net exports volatile and vital because it has higher share in a current account.
Discuss whether consumers will gain or lose from trade in the following cases below:________
a) The importing country when the market is perfect competition (3 points)
b) The exporting country when the market is perfect competition (3 points)
Answer:
a. Gain
b. Lose
Explanation:
a. The consumers in Importing country will gain in a perfect competition because imports by the country will increase the variety of products available and in a perfect competition every seller have the equal chance to sell its goods, so in order to increase sales the sellers may reduce prices which will result in a gain for the consumers.
b. The consumers in exporting country will lose in a perfect competition because the country is exporting the goods to another country and so the country exporting the goods will be left with limited goods and due to equal demand the prices will remain same or may increase if demand is increased which will result in a loss for the consumers of goods in a exporting country.
Suppose a participant in this experiment was expending $0 worth of effort in studying for each class before the experiment. Over the next 6 weeks, the student has a math class and an English class, where getting an A in math would require the student to exert $111 worth of effort, while getting an A in English would require the student to exert $114 worth of effort. In this experiment, the student (would or would not) increase time studying for math, and the student (would or would not) increase time studying for English.
Answer:
For Maths;
The student would increase time studying for maths.
For English;
The student would increase time studying for English.
Explanation:
This is the case in both cases because there's a certainty that the student earns an A in both cases if he puts in the equivalent $ amount worth of effort.
The student's ability to adapt to change comes under great test over the next 6 weeks in other to get an A in the math and English classes.
Technical skills: A. help you understand the potential and the limitations of information technology. B. help you work with end users, as well as other analysts and programmers. C. help you manage projects, resources, risk, and change. D. promote an understanding of the different types of information systems. E. enable you to understand the organization and its functions, to identify opportunities and problems, and to analyze and solve problems.
Answer: A. help you understand the potential and the limitations of information technology
Explanation: Helping you understand some, if not all of the potential and limitations of information technology is among the usefulness of technical skills which are skills, abilities, knowledge or expertise that are needed to perform complex tasks, processes or actions that are computational, mechanical, scientific or relating to information technology. Examples include the knowledge of programming languages, mechanical tools, design programs etc.
1. You are the owner of a small business that is a defendant in a lawsuit in federal court. You received bad news from your lawyer that the judge did not allow certain documents to be admitted as evidence in court and that the jury reached a $50,000 verdict in favor of the plaintiff. Your lawyer tells you that it is within your legal right to hire him to file an appeal with the United States Court of Appeals. If the appellate court rules in your favor, you may be able to avoid paying part or all of the $50,000. Evaluate your lawyer's suggestion about appealing the decision.
Answer:
Kindly check explanation
Explanation: After the verdict of the judge, as a lawyer who stood for the defendant, the lawyers would want to find a way out of the verdict such that his client could get a more favorable judgment, hence the option to appeal. However, appealing the verdict of a court also has two possible outcomes, which are either winning and getting a more favorable verdict which is avoiding the whole or part of the $50,000 fine or losing again which ultimately results in more expenses incurred during the duration of the legal suit. It could also dent the image of the business as his decision to appeal may be deemed as obstinate.
If ERS had an incremental increase in revenue of $100,000, based on the net profit margin computed, what is the additional potential profit
Answer:
The first part of the question was missing, so I looked for it:
total revenue = $934,500
net income = $62,260
net profit margin = (net income / total revenue) x 100 = ($62,260 / $934,500) x 100 = 6.662%
if revenue increases by $100,000, then net income should increase by:
$100,000 x 6.662% = $6,662
If a person spends $20 a week on coffee (assume $1,000 a year), what would be the future value of that amount over 10 years if the funds were deposited in an account earning 4 percent?
Answer:
he future value of that amount over 10 years is $12,006.11.
Explanation:
The Future Value, FV of the Fund is calculated as follows :
Pv = $0
Pmt = -$1,000
P/yr = 1
N = 10
r = 4%
Fv = ?
Using a Financial Calculator, the Future Value, FV is $12,006.11.
Stark Company's most recent balance sheet reported total assets of $1.82 million, total liabilities of $0.84 million, and total equity of $0.98 million. Its Debt to equity ratio is:
Answer:
Debt to Equity Ratio = 0.86
Explanation:
Debt to Equity Ratio = Total Liabilities / Stockholder's Equity
Total Liabilities = $0.84 million
Stockholder's Equity = $0.98 million
Debt to Equity Ratio = $0.84 million / $0.98 million
Debt to Equity Ratio = 0.857143
Debt to Equity Ratio = 0.86
Which function relates to maintaining inventory?
OA. accounting
OB. production
OC.
finance
OD.
human resource
Answer:production
Explanation:
Lower-level managers who supervise the operational activities of an organization are known as:______.
A. Frontline managers.
B. Middle managers.
C. Top-level managers.
D. Tactical managers.
E. Strategic managers.
Frontline managers, or operational managers, are lower-level managers who supervise the operations of an organization. These managers often have titles such as supervisor or sales manager.
Answer:
A. Front line managers
Explanation:
Front line or lower level manager is a manager that is responsible for supervising, controlling and directing operations staff. For instance in a manufacturing company, they are called supervisors because they supervise the activities of their direct report and are to ensure that these workers carry out their duties accordingly.
Basically, lower level managers focus on controlling and directing workers who performs the daily operation of a business. They also assign tasks to their direct report, ensure that productions are working according to plan and also supervise daily activities of the employees.
One advantage for Dell in using blogs is ______ to customers while engaging in conversation that builds better relationships. Multiple Choice communicating entertaining controlling talking listening
Answer:
communicating
Explanation:
A blog is a social media tool that allows a company like Dell to establish a more direct communication with the customer, providing content that helps in the engagement and in bringing the consumer closer to the company, which can mean an advantage of being able to approaching the customer in a more dynamic, flexible way that allows for a shorter conversation and response time that helps in building value for the customer by increasing their interaction with the company and brand awareness.
This marketing strategy gives the company a relationship building that increases the brand value and the company's positioning in the market.
Based on the information provided regarding Dell, which orientation would best describe its approach to marketing?
Answer:
Market Orientation
Explanation:
As Dell has shifted from "build to order" to "make to stock", there will always be availability of stock with him so that no customers are left without sale on short notice of demand also.
Further now as Dell, chooses and works on to analyse its customers, their needs, the pricing that should be done, it is trying to understand the customer perspective.
Also with that it is provided that it was able to increase its profit.
Accordingly in market orientation a company works on the the customers analysis and implements practices which favour the customer wants maximum in order to get more profitable deals.
Productivity in the United States doubled between 1945 and 1990. However, the work week didn't get shorter because
Answer:
the standard of living increased
Explanation:
Between the years 1948 and 1990, the level of productivity in the United States of America increased tremendously, to the extent that it was in the doubled fold. Consequently, this increase in the level of productivity simply exemplified that, there is a substantial increase in the standard of living for the average American.
Hence, it can be concluded that, in this case, the workweek didn't get shorter because "the standard of living increased."
The Divirgil Company Net Income is $100. Given the following items:Purchase of debt securities (trading) $7Amortization of premium on bonds payable $4Purchase of treasury stock $5Decrease in dividends payable $2Increase in retained earnings $92Change in Cash for the year is:___________.a. $74b. $76c. $82d. $84e. $78
Answer:
a. $74
Explanation:
The computation in the change in cash for the year is shown below:
Net income $100
Less: Purchase of Debt Securities -$7
Less: Amortization of Premium on Bonds payable -$4
Less: Purchase of Treasury Stock -$5
Less: cash Dividends paid -$10 {($100 - $92) + $2}
Change in Cash $74
Hence, the correct option is A. $74
We simply deduct all the items from the net income so that the change in cash could come
Rocky River Company is a pricetaker and uses target pricing. Refer to the following information:Production volume 602,000 units per yearMarket price $34 per unitDesired operating income 17% of total assetsTotal assets $13,900,000 What is the target full product cost per unit? (Round your answer to nearest cent.) Assume all units produced are sold.a. $34.00b. $30.07c. $5.78d. $28.22
Answer:
$30.07
Explanation:
Rocky river company uses target pricing
The production volume is 602,000 units
The market price is $34 per unit
The total assets is $13,900,000
The desired operating income is 17% of the total assets
= 17/100 × 13,900,000
= 0.17×13,900,000
= 2,363,000
The first step is to calculate the sales value
= 602,000 ×34
= 20,468,000
The total cost can be calculated as follows
= Sales value-desired operating income
= 20,468,000-2,363,000
= 18,105,000
Therefore the target full product cost per unit can be calculated as follows
= Total cost/production volume
= 18,105,000/602,000
= $30.07
Hence the full target product cost per unit is $30.07
Bauer Software's current balance sheet shows total common equity of $4,653,400. The company has 530,000 shares of stock outstanding, and they sell at a price of $27.50 per share. By how much do the firm's market and book values per share differ
Answer:
Difference between market value and book value = $18.72 (Approx)
Explanation:
Given:
Common equity = $4,653,400
Number of shares = 530,000
Selling price = $27.50 per share
Find:
Difference between market value and book value
Computation:
Difference between market value and book value = $27.50 per share - [$4,653,400 / 530,000]
Difference between market value and book value = $27.50 per share - 8.78 per share
Difference between market value and book value = $18.72 (Approx)
Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13). The manufacturing cost of each unit is calculated using activity-based costing; using the following manufacturing cost pools.
Cost Pools Allocations base Costing rate
1- Materials handling Number of parts 2.40 per part
2- Manufacturing Supervision Hours of machine time 14.80 per hour
3- Assembly Number of parts 3.30 per part
4- Machine setup Each setup 56.50 per setup
5- Inspection and testing Logged hours 45.50 per hour
6- Packaging Logged hours 19.50 per hour
LCI currently sells the B-13 model for $1,690 and the F-32 model for $922. Manufacturing costs and activity usage for the two products are as follows:________.
B-13 F-32
Direct materials $150.50 $95.90
Number of parts 180.00 110.00
Machine Hours 7.50 6.20
Inspection time 1.50 1.25
Packaging time .75 .50
Set-ups 3.00 2.00
1) The product cost for model B-13 is calculated to be:
2) The product cost for model F-32 is calculated to be:
3) The product margin for model B-13 is calculated to be:
4) The product margin for model F-32 is calculated to be:
Answer:
1. Product cost for model B-13
Various Manufacturing cost = Cost driver * Activity Rate
Materials handling = 180 parts x $2.40 = $432.00
Manufacturing Supervision = 7.50 machine hours x $14.80 = $111.00
Assembly = 180 parts * $3.30 = $594.00
Machine setup = 3 setups * $56.50 = $169.50
Inspection and testing = 1.50 inspection time * $45.50 = $68.25
Packaging = 0.75 packaging time * $19.50 = $14.63
Total Manufacturing cost =$432.00 + $111.00 + $594.00 + $169.50 + $68.25 + $14.63 = $1389.38
Particulars Amount$
Direct Materials 150.50
Manufacturing cost 1,389.38
Total Product cost 1,539.88
The product cost for model B-13 is $1,539.88
2. Product cost for model F-32
Various Manufacturing cost = Cost driver * Activity Rate
Materials handling = 110 parts * $2.40 = $264.00
Manufacturing Supervision hours = 6.20 machine hours * $14.80 = $91.76
Assembly = 110 parts * $3.30 = $363.00
Machine setup = 2 setups * $56.50 = $113.00
Inspection and testing = 1.25 inspection time * $45.50 = $56.88
Packaging = 0.50 packaging time * $19.50 = $9.75
Total Manufacturing cost = $264.00 + $91.76 + $363.00 + $113.00 + $56.88 + $9.75 = $898.39
Particulars Amount$
Direct Materials 95.90
Manufacturing cost 898.39
Total Product cost 994.29
Hence, the product cost for model F-32 is $994.29.
3. Particulars Amount$
Sales 1,690.00
Less: Product cost 1,539.88
Product Margin 150.12
Hence, the product margin for Model B-13 is $150.12
4. Particulars Amount$
Sales 922.00
Less: Product cost 994.29
Product Margin -72.29
Hence, the product margin for Model F-32 is -$72.29
Companies that are considered pricesetters usually employ the _________________ approach to pricing products.
Answer:
Cost-plus pricing
Explanation:
Cost-plus pricing is a pricing method used by companies where the cost of a product id determined and a percentage is added to the cost to determine the selling price of the product.
For example if it costs $5 to make a lemonade, you then add $5 and sell the lemonade for $10. This is an example of cost plus pricing
The hourglass model for structuring effective business presentations suggests you should:_______.
Answer:
Begin and end your presentation with motivating context
Explanation:
Just as the hourglass is shaped with a large top, narrow middle and a large bottom. Presentations should start on a general and motivational context.
The middle of the presentation should focus on some details and procedures on how to achieve set goals and objectives of the topic. This is where practical steps are given to the audience.
The end of the presentation should again be a motivational context again. The audience is made to see the big picture of the situation.
Broker Marty listed Jane’s home and showed it to Buyer Paul. Their listing agreement specified that Marty would receive a 7% commission and the safety period was set at six months after the listing expiration. After the listing expires, Jane lists her home with Broker Sarah for an agreed upon 8% commission rate. Sarah sells the home to Buyer Paul five months later. Which statement is true?
Answer:
Jane owes 8% commission to Broker Sarah and 7% commission to Broker Marty
Explanation:
Since Marty showed Paul the house while his agreement with Jane was valid, Paul is a prospective buyer that was originally registered as such by Marty. Since the safety period is 6 months, and Paul eventually bought the house only 5 months after Marty's agreement expired, Paul was still Marty's prospective buyer for up to 6 months.
Since Sarah negotiated the sale with Paul, Paul is also Sarah's buyer. If Paul had directly negotiated with Jane, she would only a commission to Marty.
Generally, when properties are listed again with different brokers, the list of prospective buyers form the previous broker is passed to the new broker. The seller of the house can request that the new and old broker get in touch and share a commission if any prospective buyer returns, but that has to be done before the sale is closed. It cannot be done afterwards, since the seller will then have to pay double commissions.
Outstanding debt of Home Depot trades with a yield to maturity of %. The tax rate of Home Depot is . What is the effective cost of debt of Home Depot?
Answer: 3.6%
Explanation:
The effective cost of debt is the interest rate adjusted for taxes so it is expressed by;
= Interest (1 - tax rate)
= 6% ( 1 - 40%)
= 3.6%
Answer:
3.6%
Explanation:
__________custom pack shipments when the exporter lacks the equipment or the expertise to do so itself.
Answer: export packer
Explanation:
Export packer custom pack shipments when the exporter lacks the equipment or the expertise to do so itself.
Export packing is simply defined as when goods or certain products are being prepared for international shipping. It should be noted that the degree of export packing that will be required depends on the mode of transportation, destination of the seaport or airport, the kind of product, and the facilities that are at the shipment.
What is a firm's fundamental, or intrinsic, value? What might cause a firm's intrinsic value to be different from its actual market value?
Answer:
Intrinsic value of a firm is the actual value of the firm, and not the market price of the share based value.
Explanation:
Intrinsic value is generally computed using the asset based method, as per this method we compute the actual value of each asset in the firm separately, and then deduct the value of liabilities from it. In this manner, we estimate the current value of the firm.
Whereas the market value is computed using the stock price of in the market.
As the market value is based solely on the market value of the stock, it does not consider sometimes the actual circumstances, as for example, the land value of the firm might be 10 times more than the value recorded in the books. Because it is recorded at historical cost, although the current value is generally more of a well established firm.
You want a seat on the board of directors of Zeph, Inc. The company has 250,000 shares of stock outstanding and the stock sells for $51 per share. There are currently 5 seats up for election. If the company uses cumulative voting, how much will it cost you to guarantee that you will be elected to the board?
Answer:
$2,550,000
Explanation:
When cumulative voting is used, you are generally assigned 1 vote per each stock that you own. In this case, since 5 seats are up for election, you will need at least 20% of the total stocks outstanding to be 100% sure that you will be elected to the board of directors.
250,000 x 20% x $51 = $2,550,000