Answer:
I really would like to help
Explanation:
but I think that you need to include more information like is there a paragraph or reading ahead of the question? If you get back to me about this I can help
Answer:
To learn how to make good economic decisions.
Explanation:
what is meant by management is a continuous process
Explanation:
Management is a "continuous process" because it involves 3 steps.
Identifying the problemSolvingMonitoringManagement is actually creating the operations and when the operation goes for implementation, there might be a down fall or a setback due to various reason and it is the responsible of the managing team to identify and solve the problem and continuously monitor for showing improvement also to avoid issues. In simple its a never-ending process.
please answer this!!
Final answer:
Algebraic expressions in high school mathematics consist of numbers, variables, and operations. Simplification follows the order of operations, and understanding this is crucial for advancing in mathematics.
Explanation:
Understanding the Basics of Algebraic ExpressionsAlgebraic expressions are a fundamental component of high school mathematics. An algebraic expression consists of numbers, variables, and arithmetic operations like addition, subtraction, multiplication, and division. To simplify an expression, we use the order of operations, which dictates that we perform operations inside parentheses first, followed by exponents, then multiplication and division (from left to right), and finally addition and subtraction (from left to right).For example, to simplify the expression 3(x + 2) - 4, first evaluate what's inside the parentheses: x + 2. Multiply this by 3 to get 3x + 6, and then subtract 4, which results in the simplified expression 3x + 2.
Understanding how to work with and simplify algebraic expressions is crucial in algebra, a subject that is foundational to more advanced mathematics and many applications in science and engineering.
Compound interest is the interest that is divided into different accounts.
True
False
OUT AUTION
CAN NEVT COTION
rann
Answer:
True answer is False.
Compound interest has nothing to with to which account it is credited.
There are two types of interest that can be received on an investment, that is Simple interest and compound interest.
In simple interest, a certain percentage out of the principal amount is calculated in each period. The principal amount stays the same and when the interest is calculated for.for . the next period, interest is not added to the principal.
Compound interest gets "compounded" or added to the principal each period and the new interest in calculated on the new amount (principal + interest added)
Hope this helps! !! Comment if you need to clarify more!
Explanation:
The statement is False
Assume that a customer shops are a local grocery store spending an average of $400 a week, resulting in the retailer earning a $30 profit each week from this customer. Assuming the shopper visits the store all 52 weeks of the year, calculate the customer lifetime value if this shopper remains loyal over a 10-year life- span. Also assume a 7 percent annual interest rate and no initial cost to acquire the customer. The customer yields $ per year in profits for this retailer.
Answer:
a. The customer lifetime value=$10,956.77
b. The customer yields $1,560 per year in profits for this retailer
Explanation:
a.
In order to calculate the customers life-time value, the net present flow is determined from all the future profit cash flows profits. This can be expressed as;
NPV= R/(1+r)^t
where;
NPV=net present value
R=net cash flow during a certain period
r=annual interest rate
t=period
In our case;
NPV=unknown
R=profits per year=profit per week×number of weeks=$30×52=$1,560
r=7%=7/100=0.07
t=varies from 0 to 10 years
Consider the table below;
Year Future cash flows Net present value
1 1560 1560/{(1+0.07)^1}=1,457.94
2 1560 1560/{(1+0.07)^2}=1,362.56
3 1560 1560/{(1+0.07)^3}=1,273.42
4 1560 1560/{(1+0.07)^4}=1,190.12
5 1560 1560/{(1+0.07)^5}=1,112.26
6 1560 1560/{(1+0.07)^6}=1,039.49
7 1560 1560/{(1+0.07)^7}=971.49
8 1560 1560/{(1+0.07)^8}=907.93
9 1560 1560/{(1+0.07)^9}=848.54
10 1560 1560/{(1+0.07)^10}=793.02
Total NPV= 1,457.94+1,362.56+1,273.42+1,190.12+1,112.26+1,039.49+971.49+907.93+
848.54+793.02=$10,956.77
The customer lifetime value=$10,956.77
b.
The Profit yields per year can be determined using the expression below;
P=p×n
where;
P=annual profits
p=profits per week
n=number of weeks in a year
In our case;
P=unknown
p=$30
n=52 weeks
replacing;
P=30×52=$1,560 per year
The customer yields $1,560 per year in profits for this retailer
The retailer earns a profit of $1669.2 in per year from this consumer in profits. As a part of sales the annual sales include $20800. This will be taxable in the hands of the retailer.
The retailer employed zero capital to acquire such customer and hence no initial costs of pickup will be required by the retailer to attract this number of sales by the consumers.
Consumer purchases groceries of 400 dollars each week and has not missed a single week during the lifetime span of 10 years of him visiting the store resulting in sales of $20800 each year and overall sales of $208000.It is given that the retailer earns $30 per week from such sales and hence the profits made by the retailer will be $1560.[tex]30 *52= 1560[/tex]
and the overall profits of the retailer over the life of 10 years will be
[tex]1560*10=15600[/tex]
16692 dollars profits in 10 years will be earned by the retailer after adding 7% interest earned over the amount invested.Hence, the retailer earns a profit of $1669 each year by such sales considering a 7% interest received.
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Henry wants to buy a new table saw for his carpentry shop. He has saved $360, which is 2 third of the price of the saw. How much does the table saw cost?
Answer:
It cost 540$
Explanation:
360/2=180
360+180=540
Answer:
$540
Explanation:
1 / 3 of $540 = $540/3 = $180.
2/3 of $540 = $540/3 *2 = $360.
This explanation confirms the answer.
In the secondary market, what determines the cost of a share of stock?
A. The regulations of the government
B. The investment banks
C. The interaction of consumers
D. The corporation
Answer:
The answer is C. The interaction of consumers.
Explanation:
In the primary markets, the valuers, corporations and even the regulatory bodies may set the price. However, when they are released into the market, supply and demand sets the price levels. In other words, consumer behaviour, expectations and interactions.
The cost of a share of stock in the secondary market is determined by the interaction of consumers.
Explanation:The cost of a share of stock in the secondary market is determined by C. The interaction of consumers. In the stock market, buyers and sellers interact to determine the price of a stock. When there is high demand for a particular stock, the price tends to increase. Conversely, when there is low demand for a stock, the price tends to decrease.
Describe how you would transition to another career of your choice. Be sure to includes reference to how
you would constructa resume for the position you want and how your experience as a janitor would make you a good fit for
ttle position you wish to obtain
Explanation:
To list out the responsibilities the following might be helpful:
Make the building disease free by mopping, vacuuming, sweepingTake the best care to fill restrooms and bathrooms for the personal care of the employees and customerProtects the building by cleaning up trash on timeBring business by doing duties on timeTo list out the skill and attitude:
Cautious about cleanlinessPerfect in natureAdapt to changeProtection is my ultimate goalWhat is investing best for
Investing is best for individuals who want to grow their wealth over time by putting their money into various assets. It involves risks and individuals should consider their risk tolerance and investment goals.
Investing is best for individuals who are looking to grow their wealth over time by putting their money into various assets such as stocks, bonds, and real estate.
However, it is important to note that investing involves risks, especially in the short run, and the potential for loss of capital. Investors should carefully consider their risk tolerance and investment goals before making any investment decisions.
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Explain what the implications are to the Canadian economy if the brain drain is not stopped? Within the implications, consider the various stakeholders in the economy who might be affected by the brain drain.
Answer:
Low tax collection, low working population
Explanation:
Brain drain is a condition where a country loses its population through migration. Generally, this happens with the low developing countries, because people try to search for jobs in developed countries. Canada will lose tax revenue collection and low working population as a result of the brain drain. Government is the most important stakeholder which will be affected by brain drain apart from that; hospitals and industrial units will be affected by the brain drain.
Select all that apply.
Select the items that describe different ways to measure U.S. Gross Domestic Product.
adding up consumption, investment, government expenses, and net exports
adding up the market value of goods made by American productive resources
adding up the market prices of final goods and services produced in the U.S.
adding up the incomes of producers and taxes paid to the government
Answer:
adding up consumption, investment, government expenses, and net exports
adding up the market prices of final goods and services produced in the U.S
adding up the incomes of producers and taxes paid to the government
Explanation:
GDP is a measure of the sum value of a country's output in a given period. The GDP value reflects economic growth or decline in a country for the period under review.
GDP is calculated using three methods. They include the income, production, and expenditure approach.
In the Income approach, economists add up all the earnings from the factors of production. Wages and salaries of all employees; the profits from businesses and corporates' ; rents, and interests form landlords are summed up to get GDP. Adjustments are made to cater for the taxes paid to the relevant government agencies. ( 4th option)
The production approach involves getting the value of all the finished consumer goods and services in the economy. The approach excludes intermediary goods and work-n progress. GDP is obtained by adding the total of the finished products and services and multiplying them by their prices. (3rd option)
The consumption option applies a formula that GDP = C+G+I+ NX, where C is private consumption expenditure, G is government consumption and investment expenditure, and I in private investment expenditure. NX is the net imports. ( 1 st option )
What are the four risks taken when saving and investing money?
Answer:
inflation risk, equity risk ,interest rate risk ,liquidity risk
Explanation:
Saving money refers to stacking cash away in interest bearing account. This could be in form of a en emergency savings account. An investment on the other hand could be in form of buying stocks or bonds.All these have risks and one of them is inflation risk; occurs when overall prices of goods and services increase and putting money into an account that has a yield lower than the inflation is risky. Investment in stocks also have equity risk due to movement in prices of stocks and the last two are interest rate risk and liquidity risk.
When you hire an employee, he or she must complete Form I-9. This form
Question 7 options:
verifies that the employee is legally eligible to work in the United States.
verifies that the employee doesn't have a criminal record.
indicates the employee's filing status and withholding allowances.
determines how much Medicare tax to withhold from the employee's paycheck
Answer:
When you hire an employee, he or she must complete Form I-9. This form verifies that the employee is legally eligible to work in the United States.
Explanation:
One must fill Form 1-9 for every employee hired after November 6, 1986. The employee can be hired to perform labor and service in return for some ind of payment in the form of wages and other forms of remuneration. Remuneration can be described as anything that can be valued that is given as a trade for labor and services provided.
All employees have to complete section 1 of the form at the time of hire. The time of hire is the time that the worker starts employment; they are eligible for remuneration. Section 2 has to be completed withing three business days from the time of hire. For example, if one gets hired on Tuesday, then he/she must fill Section 2 by Friday.
Some scenarios occur when the employee is hired for less than three days. In such cases, Section 1 and 2 have to be completed on the day of hire. This generally means that if one gets hired on a Monday, then they have to complete Section 1 and 2 on the same day.
Answer:
A) verifies that the employee is legally eligible to work in the United States.
Explanation:
What can you do to stop inappropriate text and pictures from appearing in your search results?
Answer:
Change the filtering settings.
Hope this helps!
Explanation:
Changing the filtering settings can help change to stop inappropriate text and pictures from appearing in search results.
What is the meaning of Filtering?The technique of filtering involves forcing a liquid to flow through the pores of a substance known as a filter to separate suspended solid particles from a liquid. The filtrate is the liquid that has gone through the filter.
Digital image filters, which alter an image's look, are frequently utilized on social media. They began by simulating the effects with camera filters, and have since advanced to include augmented reality created by computers and facial recognition technologies.
The low-pass filter, high-pass filter, band-pass filter, and notch filter are the four main categories of filters.
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Which is an example of price fixing? A large furniture maker charges a price below production cost in order to eliminate small competitors. A group of music companies agrees to charge $20 for CDs. A defense contractor gets its competitors to agree not to seek government work. A coffee maker falsely claims that its drinks reduce the incidence of heart attacks.
Answer:
A group of music companies agrees to charge $20 for CDs.
Explanation:
The example with the music companies is the only example to show price fixing. Instead of conforming to the market needs (demand and supply determining the price of goods and services in a particular market), companies mutually agree to set a fixed price for their product. Nowadays, price fixing is considered unethical and is regulated by antitrust policies.
Answer:
A group of music companies agrees to charge $20 for CDs.
Explanation:
How is an advertisement different from a comment from
a regular consumer?
Final answer:
Advertisements are paid, crafted messages by companies to influence consumers, while consumer comments are authentic, unsolicited opinions from individuals based on personal experience.
Explanation:
Advertisements and consumer comments are two distinct forms of communication about products and services, each serving different purposes and originating from different sources. An advertisement is a promotional message created and paid for by a company, aiming to inform, persuade, or remind potential customers about its products or services. Advertisements are designed to influence consumer behavior and decision-making, often highlighting the benefits and features of a product or service in a controlled and strategic way.
On the other hand, a consumer comment is a form of user-generated content that reflects an individual's personal experience and opinion. These comments are unsolicited and can be found on various platforms such as review websites, social media, and forums. Unlike advertisements, consumer comments are not crafted by marketing professionals, and they provide a more authentic, unbiased insight into the actual use and satisfaction level with a product or service.
In summary, advertisements are more strategic and persuasive marketing tools, while consumer comments offer genuine and spontaneous feedback from actual users. Both can play a role in a consumer's purchasing decision but differ significantly in their origin and intent.
True or false, careers cannot be built from and number of jobs, only a select few
Answer:
false
Explanation:
Careers can be built from a variety of jobs and are not limited to a select few. Each job can contribute to building a successful and fulfilling career by providing skills, experiences, and connections. Passion, skills, and continuous learning are key to defining a career.
Explanation:Careers can be built from a variety of jobs, and it is not limited to a select few. In today's job market, individuals often have multiple career paths and switch jobs several times throughout their professional lives. Each job can provide valuable skills, experiences, and connections that contribute to building a successful and fulfilling career.
For example, someone might start as an entry-level employee in a specific field and gradually progress to higher positions through promotions, gaining knowledge and expertise along the way. Alternatively, someone might work in different industries or roles to diversify their skills and explore their interests.
Therefore, it is important to recognize that careers are not defined by a limited number of jobs, but rather by the individual's passion, skills, and continuous learning and development.
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A company receives money for the sale of its stock
A) during its IPO
B) whenever its stock is traded
C) when shares are purchased in a secondary market
D) when shares are privately traded
The company receives money for the sale of its stock when shares are purchased in a secondary market.
Explanation:The answer to the question is C) when shares are purchased in a secondary market.
Companies receive money for the sale of their stock when shares are purchased in a secondary market. This is different from an initial public offering (IPO), where shares are sold to the public for the first time.
For example, if a company's stock is listed on a stock exchange, such as the New York Stock Exchange, investors can buy and sell shares of the company's stock, and the company will receive money when those shares are purchased.
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Balloon paymeants are paymeants that are
A. Larger than the others and occur at the beginning of the loan term.
B. Lager the get smaller as time goes by.
C. Lager than the others and occur at the of loan term.
D. Typical in mortgages with 30-year terms.
Balloon payments are the payments that are larger than the others and occurs at the end of the loan term.
Option C
Explanation:
A balloon payment is a substantial amount scheduled for the last of a globular debt, for example mortgage, business loan or other depreciated loan. Close to a refund of an email.
In the standard 30-year home mortgage, a revolving payment is not commonly used.
Payments for balloons are sometimes at least twice as high as the original loan payments. In a declining home market, a ballon payout may be a major issue because sellers may Could not sell their houses as well as before the payment.
Select all that apply. Careers in the Arts, Audio/Video Technology, & Communications Career Cluster include: news anchor, soldier, ballet dancer, recording artist.
Answer:
- news anchor - they say stuff on tv (communications / audio video tech)
- ballet dancer - dancing is an art
- recording artist - audio tech
Explanation:
Final answer:
The Arts, Audio/Video Technology, & Communications career cluster includes careers such as news anchor, ballet dancer, and recording artist, but not soldier. Communication majors have diverse career opportunities in business, media, public relations, and more.
Explanation:
The Arts, Audio/Video Technology, & Communications career cluster includes a wide range of careers that involve creating, designing, producing, performing, writing, and multimedia communication. Based on the options provided, careers that fit within this cluster include a news anchor, ballet dancer, and a recording artist. A soldier, however, typically falls under the Government and Public Administration cluster or the Military and Defense category, which is separate from the arts and communication fields.
The main career areas for communication majors include business, public relations/advertising, media, nonprofit, government/law, and education. Each of these areas offers diverse career paths requiring communication skills. For example, communication professionals may be called upon to create marketing materials, deliver presentations, or conduct market research, thus showcasing their ability to handle varied tasks and leverage their skills across multiple domains.
In conclusion, not all artists achieve fame or make a living through art sales alone; there are numerous employment opportunities in the art field such as teaching, writing, museum curation, art therapy, and roles within the music and theater sectors. This diversity in potential employment reflects the wide array of skills and interests that can be serviced by this career cluster.
Identify the characteristics of the system of ethics known as formalism
Answer:
Ethical formalism is a way of describing moral judgement based on logical concepts as opposed to their content.
Explanation:
Ethical formalism is a way of describing moral judgement based on logical concepts as opposed to their content. Logic generally includes laws and universal authorization while content defines what will improve the human well-being.
Formalism has the following characteristics;
1. Formalism as a system of ethics is insist that if something is wrong or right, it is absolute and doesn't depend on the conditions. Even though conditions might vary. That is why formalism can at times be defined as an absolutist system since it doesn't consider the changing conditions with each condition.
2. Ethical formalism has a relationship with formal ethics in that they are identical but differ in the sense that formal ethics is incomplete by intention. An example is that while some universal laws that is a function of ethical formalism are universally accepted even by the system of formal ethics, the formal ethics still view these features as necessary but inadequate.
Final answer:
Formalism is an ethical system that champions universal moral principles and duties that are not subject to change due to circumstance. It aligns with Kantian deontology, which assesses actions by adherence to rules rather than consequences. Formalism in professional settings leads to the establishment of clear ethical codes.
Explanation:
Characteristics of Formalism in Ethics
Formalism, as a system of ethics, values the idea of universal moral principles that are innately valid and immutable. This ethical theory is grounded in the belief that right and wrong are absolute, and not subject to change due to context or circumstance. It distinguishes itself from systems where morality is seen as relative or situational.
The system of formalism often reflects the characteristics of Kantian deontological ethics, where the morality of an action is judged based on adherence to rules or duties, rather than the consequences of the action. Under formalism, one would follow universal moral laws or categorical imperatives that command unconditional adherence, regardless of the potential outcomes.
Formalism, in the context of professional ethics, results in the creation of formal codes eliminating ambiguity regarding ethical behavior. This ensures that decisions are not merely subject to the fluctuating moral compass of individuals or cultures but adhere to an established set of principles. It is this unwavering commitment to universality and principled action that characterizes formalism in ethics.
Which of the following commodities is a good?
Answer:
Out of the given commodities, a desk can be termed as a good.
Explanation:
For a commodity to be a good, it has to be tangible in nature. If a commodity has a solid visible material form, it can be termed as a good. Any good has a specific shape and dimension, and other quantities that are easily measurable. Hence, a good is a commodity that is physically existent and can be used as need be.Answer:
Corn dogs
Explanation:
A corn dog is processed, so it is not a commodity.
PLEASE HURRY!! Which career worker installs, maintains, and repairs equipment used for communication? Select all that apply.
Printing Technology
Printing Press Operator
Electronic Home Entertainment Equipment Installer
Journalism and Broadcasting
Telecommunications
Answer:Electronic Home Entertainment Equipment Installer and Telecommunication.
Explanation: Equipment Installer is responsible for repairing equipment while Telecommunication involves any process that deals with installing and using data to communicate.
Answer:
Electronic Home Entertainment Equipment Installer
Telecommunication.
Explanation:
When sales slow or stop, businesses reach a point where the profits or benefits gained are less than the amount of money invested, meaning that they have entered into:
Select one:
a. voluntary exchange.
b. market segmentation.
c. economic freedom.
d. diminishing returns.
The correct option to the question above is - d) diminishing returns
The law of diminishing returns in business explains situations where profits decline as additional resources are added. Understanding this concept can help firms make informed decisions regarding their operations.The phenomenon described is known as the law of diminishing returns in economics. This law states that when additional units of a variable factor are added while holding a fixed amount of capital constant, the marginal contribution of those units will eventually decline.When sales slow or stop, businesses experiencing diminishing returns find that their profits are outweighed by the money invested, indicating they have entered a phase of diminishing returns.In response to this situation, firms may choose to exit the market if profits are insufficient to cover costs, highlighting the importance of understanding and managing the concept of diminishing returns in business operations.Which of the following is a con of buying a franchise?
Answer:
A con of buying a franchise is limited business control and creativity.
Explanation:
A franchise is an authority by a company or government to an individual or groups of people to enable them to conduct specified business activities. It is a kind of license to utilize and have access to specific knowledge about a company or organization. The entity that can purchase the franchise at a certain cost depending on the value of the franchise, in return he/she gets a license to use the franchise within the threshold of the licensing agreement.
Purchasing a franchise has it's advantages and disadvantages.One major advantage is; since buying a franchise involves buying the right to use a company's name, this is beneficial since there is a ready-made business operation. On the other hand, franchise has also a disadvantage. The major disadvantage of buying a franchise is that there is no business control since one has limited creativity with the product. The franchise always has a certain in built brand, limiting the ability of the person buying the franchise to be creative with adding or taking from the franchise.
does working at chick fil a count as serving experience?
Answer:
I think so
Explanation:
Because you are providing people with food
A situation in which some resources are NOT fully utilized is represented in a
production possibilities frontier diagram by
In the Production possibilities frontier diagram, the unreachable point is the point outside of the curve where available resources cannot be utilized for production at this time.
What is a Production Possibilities Curve?It is a curve that depicts possible combinations of two things that can be made with the available resources and technology, with the available resources being effectively utilized per unit time.
It is a graph that depicts the conceivable quantities that can be generated from two different products.
A production possibilities frontier (PPF) has all achievable points. All points beyond the border of production possibilities are unreachable.
Hence, a situation in which some resources are not fully utilized is represented in the production possibilities frontier (PPF) curve as unattainable points. Expanding into the unattainable zone, on the other hand, would be beneficial for the economy.
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When businesses can promote different features of their products and consumers are willing to pay more for products containing the features they desire, the competitive environment is probably
Answer:
Monopolistic competition can promote different features of their products and consumers are willing to pay more for products containing the features that they desire.
Explanation:
Here many firms create similar products but they are not a substitute of any other.This combines monopoly and competitive marketIt is a form of "imperfect competition"This has emerged because the product developed by different people target the same set of audience by providing few differentiation.Examples of monopolistic competition:
The restaurant businessConsumer servicesGeneral specialist retailingHotels / Pubs.\Advantages:
Greater ability to fundResearch & DevelopmentDisadvantage:
Higher priceFewer incentivesSuppose you are the economic policy adviser to the president and are asked what should be done to eliminate a federal deficit. What would you recommend?
To eliminate the federal deficit, a combination of revenue enhancement and managed expenditure is necessary, considering a review of tax policies and prioritizing efficient government spending. Careful evaluation of the impact on various demographics is crucial. A strategic approach is preferred over blunt measures like automatic sequestration.
Explanation:As an economic policy adviser, to eliminate the federal deficit, I would recommend a balanced approach that both enhances revenue and manages expenditure. To enhance revenue, I would suggest a review of current tax policies to close loopholes and ensure efficient tax collection without unduly burdening any particular economic group. Additionally, during periods of economic growth, modest tax increases should be considered to capitalize on higher earnings and control inflation. On the expenditure side, a thorough evaluation of government spending is crucial. This may involve re-prioritizing spending, aiming to reduce waste and ensure that government programs are more cost-effective, without undermining essential public services.
I would caution against relying solely on spending cuts, especially in areas that stimulate economic growth or provide social safety nets, such as education, healthcare, and infrastructure. Instead, a combination of spending cuts and revenue enhancements is often a more sustainable approach. Moreover, it is vital to consider the long-term implications of any policy changes on different demographics, including college students, young professionals, and middle-income families. For instance, reduced funding for higher education can increase the cost of tuition, whereas cuts in healthcare spending could lead to higher out-of-pocket expenses for individuals.
In terms of deficit spending, it is sometimes necessary to stimulate the economy during downturns, although such measures should be accompanied by plans to return to fiscal responsibility in the future. Meanwhile, automatic sequestration is a blunt instrument that may cause harm to vital programs; more strategic, targeted cuts alongside revenue-raising measures would be advisable.
The Federal Reserve is worried about rising prices, so it has decided to decrease the money supply. The government
wants to encourage economic growth, so it has decided to cut taxes. This situation shows that the Federal Reserve and
the government can have_ goals.
the same
conflicting (or different)
Answer:
conflicting
Explanation:
The money supply in an economy usually affects the price of goods and economic growth thus they need to be constantly checked and controlled to ensure that the price is manageable and the economy is also growing at a reasonable rate. Different policies can be put in place to control the money supply. There are two major types of policies that can be utilized, namely; contractionary and expansionary policies. Contractionary policy tends to reduce the money supply in the economy. In an economy where there is a huge supply of money in the economy, people tend to spend more thus increasing demand for goods and services. This increased demand causes the price to rise, causing inflation. On the other hand, expansionary policy is used to increase the money supply in an economy When the money supply in the economy is low, there is less spending thus the economy growth is greatly reduced.
In our case, the decision by the Federal Reserve to decrease money supply in order to reduce rising prices is a type of contractionary policy, while the decision by the government to cut taxes to encourage economic growth is a type of expansionary policy. These tend to have conflicting goals since one aims at decreasing money supply while the other aims at increasing money supply.
“The Designers” an international furniture making company wants to expand its business in Pakistan by introducing its specialized Teak-wood rocking chair. For this purpose, the company needs a warehouse to store the goods. The company has forecasted the demand of the chair to be 4000 units each year for the next four years. The revenue generated by the company is Rs.20000 per chair. A single chair takes up an area of about 10 square feet. Swift Logistics, a warehousing expert company, has offered to provide its services for storage of the goods. It has presented two alternatives: either to Lease the warehouse at the rate of Rs.10000 per 100 square feet or have it on Spot Market rate which is Rs.15000 per 100 square feet. Task: a) Being the supply chain manager of “The Designers”, you have to decide either to hire the warehouse on Lease or choose On Spot rate on the basis of a Discounted Cash Flow Analysis with discount rate of 15%; considering the fact that the only relevant cost is the warehouse cost (7 marks) b) If the company decides to shut down the production after two years, will the option chosen in Part (a) still be feasible? Provide justification for your answer (3 marks) Instructions: In this assignment, you have to calculate the NPV (Net Present Value) of both options. You are required to show the necessary calculations in solution. No theoretical definitions and explanations a
Answer:
a. I would consider consider leasing since the profits gained from leasing ($216,978,355.60) is greater compared to the profits if a spot rate is considered ($214,676,191.10) in 4 years.
b. I would consider consider leasing since the value gained from leasing ($123,553,875.20) is greater compared to the value if a spot rate is considered ($120,982,986.80) in 2 years.
Explanation:
a. Determine best option
Step 1: Determine total revenue per year if they meet the demand.
Total revenue per year=revenue per chair×number of chairs per year
where;
revenue per chair=Rs.20,000
number of chairs per year=4,000 units
replacing;
Total revenue per year=(20,000×4,000)=$80,000,000
Step 2: Determine the net revenue per year for Leasing
Net revenue=total revenue-total cost for leasing
total cost for leasing=cost per chair per square feet×area per chair×number of chairs
where;
cost per chair per square feet=10,000/100=$100
area per chair=10 square feet
number of chairs=4,000
replacing;
total cost for leasing=100×10×4,000=$4,000,000
Net revenue=80,000,000-4,000,000=76,000,000 per year
Step 3: Determine the present value of the net revenue per year for Leasing
Year Future cash flow Present cash flow Amount
1 76,000,000 76,000,000/{(1+0.15)^1} 66,086,956.52
2 76,000,000 76,000,000/{(1+0.15)^2} 57,466,918.71
3 76,000,000 76,000,000/{(1+0.15)^3} 49,971,233.66
4 76,000,000 76,000,000/{(1+0.15)^4} 43,453,246.67
Total present value of the future net revenue for leasing=(66,086,956.52+57,466,918.71+49,971,233.66+43,453,246.67)=
$216,978,355.60
Step 3: Determine the present value for the cost for spot Market rate
Since the spot market rate is paid once;
Total cost=(15,000/100)×10×4,000=$6,000,000
Total cost in four years=6,000,000×4=$24,000,000
Present value of spot rate cost=24,000,000/{(1+0.15)^4}=$13,722,077.89
Step 4: Determine the present value of the revenue per year
Year Future cash flow Present cash flow Amount
1 80,000,000 80,000,000/{(1+0.15)^1} 69,565,217.39
2 80,000,000 80,000,000/{(1+0.15)^2} 60,491,493.38
3 80,000,000 80,000,000/{(1+0.15)^3} 52,601,298.59
4 80,000,000 80,000,000/{(1+0.15)^4} 45,740,259.65
Present value of Total revenue=69,565,217.39+60,491,493.38+52,601,298.59+45,740,259.65=
$228,398,269
Step 5: Determine the present value of the net revenue per year for sport rate
Net present value=(228,398,269-13,722,077.89)=$214,676,191.10
I would consider consider leasing since the profits gained from leasing ($216,978,355.60) is greater compared to the profits if a spot rate is considered ($214,676,191.10).
b.
Step 6: Consider NPV for 2 years if they Lease
Year Future cash flow Present cash flow Amount
1 76,000,000 76,000,000/{(1+0.15)^1} 66,086,956.52
2 76,000,000 76,000,000/{(1+0.15)^2} 57,466,918.71
Net present value=(66,086,956.52+57,466,918.71)=$123,553,875.20
Step 7: Consider total revenue if the use a spot rate
Year Future cash flow Present cash flow Amount
1 80,000,000 80,000,000/{(1+0.15)^1} 69,565,217.39
2 80,000,000 80,000,000/{(1+0.15)^2} 60,491,493.38
Total revenue=(69,565,217.39+60,491,493.38)=$130,056,710.80
Step 7: Consider cost for 2 years if they use a spot rate
Total cost=6,000,000×2=$12,000,000
Present value=12,000,000/{(1+0.15)^2}=$9,073,724.008
Net present value=130,056,710.80-9,073,724.008=$120,982,986.80
I would consider consider leasing since the value gained from leasing ($123,553,875.20) is greater compared to the value if a spot rate is considered ($120,982,986.80) in 2 years.