Bodyguard Ltd. was established in Hong Kong in 2020. It produces surgical masks sold to retailers, like personal cares stores, in Hong Kong. With its unique Chinese pattern printed on the masks, it also sells good in North America and Canada since 2021. Bodyguard adopts standardized marketing strategy worldwide. Recently, Bodyguard would enter into a contract with a vendor in Vietnam to expand its production capacity. However, Bodyguard's managers have heard reports that the vendor operates factories with sweatshop conditions, which is not acceptable in Hong Kong. Employment in sweatshops provides a source of income for women in Vietnam, who can earn more wages than in many other jobs, which bring them food, nutrition and education for their children. Sweatshop is a preferred working place of Vietnamese. (a) Identify any TWO advantages of standardized marketing. Explain each identified advantage with an example from Bodyguard's case. (8 marks) (b) Explain the THREE pricing strategies that Bodyguard Ltd. could adopt in Canada with an example for each pricing strategy from Bodyguard's case. (12 marks) (c) Explain the TWO approaches in handling ethical dilemma - relativism and normativism. What would be the ethical standard of Bodyguard and would Bodyguard enter into a contract with the vendor in Vietnam Bodyguard's managers are taking each of these two approaches? Explain respectively.
Answers
a) Two advantages of standardized marketing are as follows:Standardized marketing provides consistent brand messaging to customers worldwide, regardless of cultural and linguistic differences. (B) Market skimming pricing Penetration pricing strategy
The use of uniform branding and messaging across markets and cultures promotes brand recognition, resulting in the development of a consistent and universal brand image that customers can connect with. Bodyguard Ltd. sells surgical masks to retailers in Hong Kong, with a unique Chinese pattern printed on them. Since 2021, these masks have been selling well in North America and Canada due to their distinctive design and uniform branding.Standardized marketing strategy also ensures cost-effectiveness and time-saving. When a company utilizes a standardized marketing strategy, it can develop global marketing campaigns and materials that are adaptable to local needs with minimal modifications. Bodyguard's decision to enter into a contract with a vendor in Vietnam to expand its production capacity is a perfect example of this.b) The three pricing strategies that Bodyguard Ltd. could adopt in Canada are:Market skimming pricing strategy is a pricing strategy in which a company sells a product or service at a high price when it is first introduced, then gradually reduces the price over time. Bodyguard Ltd. could adopt this pricing strategy by selling its surgical masks at a higher price when first introduced to the Canadian market. The company could then gradually reduce the price of its products over time as competition increases.Penetration pricing strategy is a pricing strategy in which a company offers a new product or service at a low price when it is first introduced to the market. Bodyguard Ltd. could adopt this pricing strategy by offering its surgical masks at a low price when first introduced to the Canadian market. The company could then gradually increase the price of its products over time, once customers are familiar with and trust the brand.Captive pricing strategy is a pricing strategy in which a company sells a product or service at a low price but sells other associated products or services at a higher price. Bodyguard Ltd. could adopt this pricing strategy by offering its surgical masks at a low price, but selling other health care products at a higher price. The company could also sell surgical masks with additional features or designs at a higher price.c) Relativism and Normativism are two approaches to ethical dilemmas. Normativism is an ethical theory that proposes that there are universal ethical standards that all people should follow, regardless of cultural and linguistic differences. In contrast, relativism is an ethical theory that proposes that ethical standards are subjective and dependent on the cultural and linguistic context. Bodyguard's ethical standard would be normative. Bodyguard's managers would refuse to enter into a contract with the vendor in Vietnam if the vendor operates factories with sweatshop conditions. This is because Bodyguard's managers would view the vendor's sweatshop conditions as an ethical violation of universal ethical standards that all people should follow.
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Related Questions
What is a business's target market?
O A. The clients or customers to whom the business is selling its
product or service
B. The location where the business will be most successful
C. The business's competitors
D. The amount of money the business hopes to make in the first year
Answers
Answer:
The Clients or customers to whom the Bussiness it product or service
Answer:A
Explanation: a p e x
_____ are costs of selecting one opportunity or investment over another.
Fixed costs
Opportunity costs
Variable costs
None of the above
Answers
Answer:
(B) opportunity cost
Explanation:
If you are giving up an opportunity over another than it is called opportunity cost.
Keesha is the ceo of a publicly-owned company. She was informed by the cfo that the company's earnings were down 30 percent from the prior year due to the recession. The company's stock price has declined by 20 percent. The cfo comes up with a scheme to hide debt and inflate revenues by selling underperforming assets to a special purpose entity affiliated with the company. Keesha is concerned about possible effects on the creditors but ultimately she agrees to the accounting. Keesha is reasoning at.
Answers
Keesha, the CEO of a publicly-owned company, is reasoning at Stage 3, which is fairness to others.
Describe Kohlberg's phases of moral development.In 1958, while a graduate psychology student at the University of Chicago, Kohlberg started researching this issue. Pre-conventional, conventional, and post-conventional moral reasoning are three separate levels that Kohlberg established. In order to describe how moral thinking develops, Lawrence Kohlberg created the "Kohlberg phases of moral development" planes of moral sufficiency.
The idea was developed at the University of Chicago while the author was a psychology student. It was motivated by a concern with children's responses to moral quandaries and by the work of Jean Piaget. In 1958, he composed a Ph.D. dissertation at the institution explaining what is now referred to as his stages of moral development.
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The complete question is:
Keesha is the CEO of a publicly-owned company. She was informed by the CFO that the company's earnings were down 30 percent from the prior year due to the recession. The company's stock price has declined by 20 percent. The CFO comes up with a scheme to hide debt and inflate revenues by selling underperforming assets to a special purpose entity affiliated with the company. Keesha is concerned about possible effects on the creditors but ultimately she agrees to the accounting. Keesha is reasoning at:
Stage 1
Stage 2
Stage 3
Stage 4
1) You are interested in buying Swiss Francs (CHF). Your bank quotes "CHF 1.0505/\$ Bid and CHF 1.0535/$ Ask". What would you pay in dollars if you bought CHF 10,000,000 at the current spot rate?
Answers
If you bought CHF 10,000,000 at the current spot rate with the given bank quotes of "CHF 1.0505/$ Bid and CHF 1.0535/$ Ask," you would pay approximately $9,503,793.34.
The bank quotes provided include the bid and ask prices for the exchange rate. The bid price represents the rate at which the bank is willing to buy the CHF (in this case, CHF 1.0505/$), while the ask price represents the rate at which the bank is willing to sell the CHF (in this case, CHF 1.0535/$).
To calculate the cost in dollars of buying CHF 10,000,000, we can use the ask price (as we are buying CHF). So, we divide the amount of CHF by the ask price:
$10,000,000 / CHF 1.0535/$ = $9,503,793.34 (approximately)
Therefore, if you were to buy CHF 10,000,000 at the current spot rate, you would pay approximately $9,503,793.34 in dollars.
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a project has a discounted payback period that is equal to the required payback period. given this, which of the following statements must be true?
Answers
If a project has a discounted payback period that is equal to the required payback period, then it means that the cash flows of the project are being discounted at the required rate of return.
In this case, the net present value of the project would be zero, since the present value of the cash inflows would be equal to the present value of the cash outflows. Therefore, the project would be expected to break even, but it would not generate any additional value or profits.
This means that the project is acceptable, but not necessarily desirable, as it would not provide any additional return beyond the required rate of return.
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a borrower wishes to take out a reverse annuity mortgage on her house. what annual payment can she get if she decides on a $100,000 debt at the end of 10 years, the current rate is 9%, and she wants to take a $10,000 advance
Answers
The borrower can expect to receive an annual payment of approximately $1,480.33 if she decides on a $100,000 debt at the end of 10 years, with a 9% interest rate and a $10,000 advance.
To calculate the annual payment for a reverse annuity mortgage, you can use the following formula:
Annual payment = (Debt / Remaining term) * (Interest rate / (1 - (1 + Interest rate) ^ (-Term)))
In this case, the borrower wishes to take out a reverse annuity mortgage with a debt of $100,000 after 10 years, at an interest rate of 9%. She also wants to take a $10,000 advance. Using the formula above, we can calculate the annual payment as follows:
Annual payment = ($100,000 / 10) * (0.09 / (1 - (1 + 0.09) ^ (-10)))
= $10,000 * (0.09 / (1 - 1.09 ^ (-10)))
= $10,000 * (0.09 / (1 - 0.39))
= $10,000 * (0.09 / 0.61)
= $1,480.33
It's important to note that this is just an estimate, as the actual annual payment will depend on a variety of factors, including the borrower's age, the value of the property, and any fees or closing costs associated with the reverse mortgage. It's always a good idea to carefully consider all of the terms and conditions of a reverse mortgage before making a decision.
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What is the role of doctor in our society? Explain Briefly
Answers
Answer:
All doctors have a role in the maintenance and promotion of population health, through evidence based practice. Some will enhance the health of the population through taking on roles in health education or research, service improvement and re-design, in public health and through health advocacy.
Prepare a short report about the importance of hotel management.
Answers
Answer:
Having a hotel management degree can help you get a lucrative entry position in food or beverage service, accounts, restaurant service, executive housekeeping, marketing, or other departments within a hotel
Allison would like to find all records that are in stock. In her database, she has a field named "in stock." When the item is in stock, a "yes" appears. What should Allison do?
Conduct a query and set the criteria as =yes.
Conduct a query and set the criteria to >2.
Locate each record and check each one.
Sort the records in ascending order by item number.
Answers
Answer: she should conduct a query and set the criteria to >2
Explanation:
Don’t know this but I tried I am only in 9th grade
PLEASE HELP QUICK!!!
Which of the following is an advantage of buying your home over renting?
(1 point)
O You do not have to worry about the housing market in your area.
O The amount you pay each month is set by the terms of your mortgage.
O If something breaks, you have to fix it or pay to have it fixed.
O Your mortgage payments will far exceed the value of your home.
Answers
Answer:
The amount you pay each month is set by the terms of your mortgage.
Explanation:
connexus
Graphical information can be useful in
a.
Math only
c.
Science only
b.
Social Studies only
d.
All subjects
Answers
Answer:
d all subjects
Explanation:
think its right sorry if its wrong
The answer fam is..........D) All subjects
Fill the Blank ? if a residual is negative, then that data point lies _________________ the regression line.
Answers
If a residual is negative, then that data point lies below the regression line.
In linear regression, residuals are the differences between the actual values and the predicted values of the response variable. A residual can be either positive or negative, depending on whether the actual value is greater or smaller than the predicted value. If a residual is negative, then the actual value is below the regression line, and if it is positive, then the actual value is above the regression line.
A negative residual indicates that the model underestimates the actual value, which means that the data point lies below the regression line. Understanding residuals is essential to assess the accuracy of the regression model and identify any outliers or influential data points that may affect the model's performance.
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krysta wants to take piano lessons. she asked a teacher how many new pieces she could expect to learn each month. the teacher gave an estimate of 3. write an equation that shows how the total number of pieces krysta would learn, y, depends on the number of months of piano lessons, x.
Answers
The required equation is y = 3x which represents the total number of pieces Krysta would learn, where x months of piano lessons.
What is the Linear equation?A linear equation is defined as an equation in which the highest power of the variable is always one.
Krysta wants to learn to play the piano. She inquired with an instructor about the number of new pieces she could anticipate studying each month. The teacher estimated three.
Let y represent the total number of pieces Krysta would learn,
And x represent depends on the number of months of piano lessons,
According to the given situation, we can write the equation would be as:
⇒ y = 3x
Therefore, the required equation is y = 3x which represents the total number of pieces Krysta would learn.
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true or false? group insurance is a type of private insurance that anticipates a large group of individuals will purchase insurance through their employer and the risk is spread among those paying individuals.\
Answers
This is untrue; group insurance is a form of private insurance that assumes a sizable number of people will purchase insurance through their employer, distributing the risk among those paying individuals.
The majority of people have some sort of insurance, whether it is for their life, their home, or their car. However, the majority of us don't really take insurance the time to consider what insurance is or how it risk operates.
Simply put, insurance is a contract, represented by a policy, under which a policyholder receives monetary protection or payment from an insurance firm against losses. To make payments more manageable for risk the insured, the company pools the risks of its clients.
Insurance policies are used as a hedge against the risk of monetary losses, both large and minor, that may arise from harm to the insured or their insurance property, or from liability for damage or injury given to a third party.
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Suppose that farmers can use their land to grow and sell soybeans and cotton. Cotton prices have risen. Farmers respond by producing _____ soybeans and _____ cotton.
Answers
When cotton prices rise, farmers will opt to produce more cotton and less soybeans.
This is because an increase in the price of cotton indicates a higher demand for cotton, so farmers will produce more of it to make a profit. They'll also reduce their soybean production since there's less demand for it, and therefore they can't make a profit from it as quickly.
As a result, it can be concluded that farmers respond to a rise in cotton prices by producing fewer soybeans and more cotton. This is the main answer to your question.
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Why might the natural rate of unemployment depend on recent unemployment (as is assumed in the preceding equation)
Answers
The natural rate of unemployment is the rate of unemployment that exists when the economy is at full employment and there is no cyclical unemployment.
This rate depends on several factors, including recent unemployment rates. When unemployment rates have been high for a long period, it can lead to a decrease in the natural rate of unemployment as people become discouraged and drop out of the labor force.
Conversely, when unemployment rates have been low for a long period, it can lead to an increase in the natural rate of unemployment as workers become more selective in their job search and are more likely to quit their jobs to search for better opportunities.
Therefore, recent unemployment rates are an important factor in determining the natural rate of unemployment.
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the phase of team development in which the team leader should back off, and simply monitor and enable team members is the _____ phase.
Answers
Performing phase.The performing phase is the stage of team development where the team leader should back off and assume a more hands-off role.
During this phase, the team members have established strong working relationships, clear roles and responsibilities, and a shared understanding of their goals. They are self-directed, motivated, and capable of working independently. At this point, the team leader's role shifts to monitoring and enabling the team members. Instead of micromanaging or directing their every move, the leader provides support, resources, and guidance when needed. The leader focuses on facilitating collaboration, fostering a positive team culture, and removing any obstacles that may hinder the team's progress. This allows team members to fully utilize their skills and expertise, leading to increased productivity and effectiveness in achieving their objectives.
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Is the sales manager a subordinate? explain why?
Answers
what is the law of demand and supply
Answers
Answer:The law of supply and demand is a theory that explains the interaction between the sellers of a resource and the buyers for that resource. The theory defines what effect the relationship between the availability of a particular product and the desire (or demand) for that product has on its price.
Explanation:
the result of the bretton woods agreement was that fixed exchange rates were desirable. however, most countries preferred a floating exchange rate instead. true or false
Answers
The answer is true, A fixed exchange rate is a system used by a government or the central bank that links the value of the nation's official currency to the currency of the another nation or the price of gold.
A fixed exchange rate system's goal is to maintain a currency's value within a specific range. The Fixed exchange rates are not allowed to move freely or adjust to the value daily shifts in supply and the demand. The government determines the currency's exchange rate. The European Central Bank (ECB) may set its exchange rate, for instance, at $1 = €1.
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Which of these situations can be handled by using the Management Information Systems?
An organization needs different types of managements 1
re business goals smoothly. However, managers, executives, and employees tace
problems and hurdles while running the organization. Sometimes, there are problems in the inventory department. At times, the organization faces
problems with the performance of their products in the market. Decision makers of the organization are not able to take proper decisions. Employees
face technical issues while feeding data into a database.
Answers
The situation that can be handled with the use of the Management Information Systems is: at times, the organization faces problems with the performance of their products in the market. The Option B is correct.
What is the Management Information Systems?The study of people, technology, organizations, and their relationships is known as management information systems (MIS). MIS specialists assist businesses in getting the most out of their investments in people, technology, and operational procedures. MIS is a people-focused industry with a focus on providing services using technology.
An information system used for decision-making, as well as for the coordination, control, analysis, and visualization of information inside an organization, is known as a management information system. In an organizational setting, people, procedures, and technology are all involved in the study of management information systems.
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best gas inc.stations buys new soda machines for $450,000 and pays $50,000 for installation. one half of the total cost is paid in cash; the other half is financed. how should the company record this transaction?
Answers
The company should record the cash payment of $250,000 as a debit to the Soda Machine asset account and a credit to the Cash account.
The financed portion of $250,000 should be recorded as a debit to the Soda Machine asset account and a credit to a liability account such as Loans Payable. The $50,000 installation cost should also be recorded as a debit to the Soda Machine asset account and a credit to the Cash account. This will accurately reflect the total cost of the transaction and how it was paid for.
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You are a marketing manager for IJ DAC, an insurer operating in the Irish market, which underwrites
professional indemnity insurance. It distributes its products through insurance brokers. IJ DAC has a
wide range of professional indemnity insurance products for specific professions. Due to stagnating sales, IJ DAC has decided that it needs to sell professional indemnity insurance
through an additional distribution method or channel. A) Identify, with justification, the most appropriate additional distribution method or channel for IJ
DAC. (4 marks)
b) Recommend two actions that IJ DAC should take to maximise the benefit of the additional
distribution method or channel, identified in (a) abov
Answers
a) The most appropriate additional distribution method or channel for IJ DAC would be online platforms or digital channels.
Justification: Online platforms and digital channels offer several advantages for insurance distribution in the current market landscape. Firstly, they provide a wide reach and accessibility to potential customers, allowing IJ DAC to tap into a larger customer base beyond traditional broker networks. Online platforms also enable customers to research, compare, and purchase insurance products conveniently, making it more convenient and efficient for them to obtain professional indemnity insurance.
b) To maximize the benefit of the additional distribution method or channel (online platforms/digital channels), IJ DAC should take the following actions:
Optimize Online Presence and User Experience: IJ DAC should invest in building a user-friendly and informative website or online platform that showcases their professional indemnity insurance products. This includes providing clear product information, easy-to-use quote and purchase processes, and responsive customer support. Optimizing the online presence and user experience will enhance customer engagement and increase the likelihood of conversions.
Digital Marketing and Customer Engagement: IJ DAC should implement targeted digital marketing strategies to raise awareness of their professional indemnity insurance offerings. This can include search engine optimization (SEO), pay-per-click (PPC) advertising, social media marketing, and content marketing. By engaging with potential customers through various digital channels, IJ DAC can generate leads and foster relationships with their target audience. Regularly providing valuable content and updates can help position IJ DAC as a trusted authority in professional indemnity insurance.
By implementing these actions, IJ DAC can leverage online platforms or digital channels effectively, attracting a broader customer base and boosting sales of their professional indemnity insurance products.
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is Jesus real? i'm so confused even though i am a Christian, i still don't believe that jesus is real
Answers
Answer:
i dont see any proof so nope he aint real
Explanation:
Answer:
Jesus is real
Explanation:
He is the son of the lord, and died for your sins. It's also been scientifically proven that he is real How could he not be real.
Hey y'all !! Can some body help me out!!
1.What is the role of engineer in development of nation.
2. Elucidate the importance of an animal doctor.
3.Finance sector is a very sensitive feild. Do you agree? Give reasons.
Thank you!!♡
Answers
Answer:
1.) Engineer play very important role in the development of society and nation. Engineer plan and build new bridges, huse building, roads, railways, dams, canals, etc. that helps agricultural, living, transportation and commuting. Appliance and gadgets at home are degined by engineers. They built the infrastructure and the tools necessary for progress.
2. A veterinary (Animal doctor) treat disease, disorders, and injuries in animlas. Most veterinary physician workbin clinical setting, treating animal directly.
3. Yeah, I do agree because finance sector is essential for day to day operation. It is the task of examining and controlling ecnomic transaction on the regular basic fir the financial sucess, based on law
answered
Sita and Zoya are two friends
belonging to Hindu and Muslim
religion. They start a
business of handicrafts together. They decide to
open the factory in rural area and give
employment opportunities to local residents.
a) Which form of business organisation have they
opted?
1 SEE ANSWER
Answers
They have chosen the partnership business structure:
Describe a partnership:In a partnership, parties who are referred to as business partners agree to work together to further their shared objectives. Individuals, companies, interest-based organizations, schools, governments, or combinations of these may be the partners in a partnership.
What is a partnership and what are its benefits?If there are less than 20 people involved and restricted liability is not required, think about forming a partnership. One benefit of a cooperation is that: Two or more heads are preferable to one. Your company is simple to launch and has modest startup expenses. The business has access to extra funding.
Briefing:In small- and medium-sized businesses, partnerships are a common type of company structure. One individual is unable to manage the growing scale of the company on their own. Therefore, a partnership between two or more people is formed to conduct business. The issue with sole proprietorships is beginning to be solved by this type of firm.
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There are three categories of income tax filers in the United States: those who never evade taxes, those who sometimes do it, and those who always do it. An examination of audited tax returns from one year to the next shows that of those who did not evade taxes last year, 95% continue in the same category this year, 4% move to the "sometimes" category, and the remainders move to the "always" category. For those who sometimes evade taxes, 6% move to "never," 90% stay the same, and 4% move to "always." As for the "always" evaders, 0% move to "never" category, 10% move to "sometimes" category, and 90% stay the same. a) Define the state space for the above process and show that it can be modeled as a Markov Chain. b) Construct the one step probability transition matrix. c) Identify the recurrent and transient states and determine the classes for the matrix you constructed in part (b) d) Is it possible to find limiting probabilities for this Markov Chain? Explain. e) Suppose that in 2019 a citizen is labeled in "always" category. Find the probability that she will be in "sometimes" category in 2021 .
Answers
Each state represents the category of income tax filers: Never (those who never evade taxes), Sometimes (those who sometimes evade taxes), and Always (those who always evade taxes).
This process can be modeled as a Markov Chain because the transition from one state to another only depends on the current state and not on the history of transitions. The probabilities of transitioning between states are fixed and do not change over time. The one-step probability transition matrix, P, can be constructed as follows:If a citizen is labeled in the "always" category in 2019, the probability that she will be in the "sometimes" category in 2021 can be found by multiplying the corresponding transition probabilities: and Always (those who always evade taxes).
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Representing the decision variables requires a. Identifying the decision alternatives. b. Determining the optimal solution. c. Allocating a separate cell in a spreadsheet to each decision variable. d. Finding the location of spreadsheet cells containing non-zero values.
Answers
Representing decision variables involves allocating cells in a spreadsheet and finding cells with non-zero values. Thus, option D is correct.
Representing decision variables involves allocating a separate cell in a spreadsheet for each variable and identifying the location of spreadsheet cells that contain non-zero values. Decision variables are the unknown quantities or factors that can be manipulated or chosen in a decision-making process. They represent the options or choices available to decision-makers.
To represent decision variables in a spreadsheet, it is common practice to allocate a specific cell for each variable. This allows for organized data entry and manipulation of the variables. By allocating cells to decision variables, it becomes easier to track and analyze their values and observe how changes in variables affect the overall solution.
Additionally, decision variables are typically represented by the location of spreadsheet cells containing non-zero values. This means that the values assigned to decision variables are stored in specific cells, and these cells contain numerical values other than zero. By identifying the location of cells with non-zero values, it becomes possible to gather and analyze the data related to the decision variables.
Therefore, representing decision variables involves both allocating separate cells in a spreadsheet for each variable and finding the specific location of spreadsheet cells that contain non-zero values, allowing for efficient data organization and analysis.
Thus, option D is correct.
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Since converting the firm's inventory to profits is a key function of management, firms use ______ to measure the effectiveness of management in utilizing the assets that are available.
Answers
The firms use financial performance to measure the effectiveness of management in utilizing the assets that are available.
What is financial performance?This is a term that is a measure of how well a firm is able to make use of its assets that are generated from its businesses and revenue generation.
It also is a measure of the financial health of a business over a period of time.
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On January 1,2021,5weet Ltd, granted 9,800 options to key executives. Each option allows the executive to purchase one share of Sweet's HK\$S par value ordinary shares at a price of HK $20 per share. The options were exercisable within a 2-year period beginning January 1, 2023, if the grantee was still employed by the company at the time of the exercise (the service period is 2 years). On the grant date, Sweet's shares were trading at HK $26 per share, and a fair value option-pricing model determines total compensation to be HK$387,000. On May 1,2023,8,820 options were exercised when the market price of Sweet's shares were HK $31 per share. The remaining options lapsed in 2025 because executives decided not to exercise their options. Prepare the necessary journal entries related to the share-option plan for the years 2021 through 2025. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter ofor the amounts. Round intermediate calculations to 5 decimal places, eg. 15.35486 and final answers to 0 decimal places, e.g. 5.125.
Answers
2021: Debit: Compensation Expense - Stock Options HK\$387,000,Credit: Share Option Liability HK\$387,000 2023 (May 1):Debit: Share Option Liability HK\$176,400,Credit: Share Capital HK\$88,200,Credit: Share Premium HK\$88,200
In 2021, when the options were granted, the fair value of the options was determined to be HK\$387,000 using an option-pricing model. This amount represents the total compensation expense associated with the stock options. The journal entry records this expense by debiting Compensation Expense - Stock Options and crediting Share Option Liability, which represents the obligation to issue shares upon exercise of the options.
In 2023, on May 1, 8,820 options were exercised when the market price of Sweet's shares was HK\$31 per share. To record the exercise of these options, the Share Option Liability account is debited for the fair value of the exercised options, which is calculated as the number of options exercised (8,820) multiplied by the option price (HK\$20) multiplied by the fair value per option (HK\$387,000/9,800). This results in a debit to Share Option Liability of HK\$176,400. At the same time, the Share Capital account is credited for the par value of the shares issued upon exercise of the options. The par value is HK\$1 per share, and the number of shares issued is equal to the number of options exercised (8,820). Therefore, the Share Capital account is credited for HK\$88,200. No further entries are required for the remaining options that lapsed in 2025 since they were not exercised, and no additional shares were issued.
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