The save proportion is the part of reservable liabilities that business banks should clutch, as opposed to loan out or contribute. The country's central bank, which in the United States is the Federal Reserve, sets this requirement. The cash reserve ratio is a different name for it.
The reserve requirement, which is sometimes used interchangeably with the reserve ratio, is the minimum amount of reserves that a bank must maintain. Regulation D of the Federal Reserve Board establishes uniform reserve requirements for all depository institutions with transaction accounts and mandates that banks submit regular reports to the Fed. This regulation defines the reserve ratio.
With an example, what is the cash reserve ratio?If a bank has $100 million in deposits and a reserve ratio of 5%, it keeps $5 million of those deposits and lends and invests the remaining 95%, or $95 million. The remaining 95 percent of the fund is returned to the bank in the form of additional deposits from citizens.
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Your company, CSUS Inc., is considering a new project whose data are shown below. The required equipment has a 3-year tax life. Under the new law, the equipment used in the project is eligible for 100% bonus depreciation, so the equipment will be fully depreciated at t = 0. The equipment has no salvage value at the end of the project’s life, and the project does not require any additional operating working capital. Revenues and operating costs are expected to be constant over the project's 10-year expected operating life. What is the project's Year 4 cash flow?
The project's Year 4 cash flow, CF, is just the same as the Year 3 cash flow, CF.
What is the project's Year 4 cash flow?The project's estimated working life is 10 years, during which time income and operating expenses are anticipated to remain stable. We are unable to compute the precise quantities of income and costs because we are not provided with this information. Instead, we'll presump that the project will produce a steady annual cash flow (CF) for the course of its ten-year lifespan. We do not need to account for any depreciation costs for the project because the equipment is depreciated at time zero. The yearly cash flow generated by the endeavor, which we'll assume is CF, will be equal to the cash intake in Year 4 of the project. All operating expenses related to the project in that year, in addition to any taxes that must be paid, will be included in the cash outflow in Year 4. We are unable to compute the particular operational costs or tax rates because we are not given this information. Instead, we'll assume that the project's constant yearly cash flow includes the operational expenses and taxes.
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Exam Lesson Name: Retail Industry Fundamentals Credential Exam
Exam number: 000000RR
Exam Guidelines
Exam Instructions
Question 16 of 16:
Select the best answer for the question
16. When distribution team members use replenishment reports to retrieve quantities of items to be sent to stores they
OA. Mixing
B. Sending
OC. Picking
OD. Packing
If you have many competing financial goals, what should you do to help yourself focus on the most important ones?
A.
Get more unearned income.
B.
Prioritize and make a budget.
C.
Open a checking account.
D.
Diversify your investments.
Answer:
B.
Prioritize and make a budget.
A survey found that 76% of men preferred darker jeans. if 500 men were sureveyed, how many answered that they preferred darker jeans
Answer: 380 men preferred darker jeans
Explanation:
76% of 500 is 380
Which one is not a benefit to
employee which results through
positive attitude of an employee
Select one:
a. Job security
b. Promotion
c. Less stress
d. Enjoying life
= Promotion
Answer:
I think its B
Explanation:
A is the probability of not losing your job
C Needs a Postive Attitude
D also Needs a Positive Attitude
The one which does not benefit the employee as a result of positive attitude of an employee is Promotion. Thus, option (B) is correct.
What is Promotion?Promotion in the context of a career means raising a worker's position or rank within a hierarchical structure of the organization. The promotion given to those employees who excel in their performance.
Promotion is the one that does not benefit the employee as a result of the employee's positive attitude. Therefore, it can be concluded that option (B) is correct.
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How did the use of money solved problems of Bater?please help
Answer:
Money is accepted as medium of exchange. People exchange goods and services through medium of money when they buy goods or sell products. Thus money acts as intermediary which solves barter's problem of lack of double coincidence of wants.
Hiram is a computer engineer and, while unemployed, invents a switching device for computer networks. He patents the device, but does not reduce it to practice. Hiram has a zero tax basis for the patent. In consideration of $800,000 plus a $1 royalty per device sold, Hiram assigns the patent to a computer manufacturing company. Hiram assigned all substantial rights in the patent. Which of the following is correct?
Hiram automatically has long-term capital gain from both the lump sum payment and the royalty payments.
A royalty contribution is a sum of money given to another party who is the owner of a certain asset in exchange for the obligation to continue using that asset. Although there are numerous ways and metrics of compensation, royalties are generally agreed upon as a percent of the gross or net revenues received through the use of a particular asset or a fixed per unit price supplied of an item of such.
Possible forms of compensation include royalties from quasi resources, patents, logos, franchises, copyrighted content, publication royalties, audio royalties, and art royalties. Prominent clothing designers have had the right to request royalties from companies who use their names and designs without permission.
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what is the best perspective to take as a manager?
Answer: ethnocentric
Explanation:
brenda'scompany recently lowered the cost of their footwear line and suddenly the demand for products increased dramatically. in this situation, demand would be consideredCONCEPTUAL
Brenda's company recently lowered the cost of their footwear line and suddenly the demand for products increased dramatically. in this situation, demand would be considered elastic.
Demonstrate Elastic demandA demand that is elastic experiences a significant shift in quantity demanded as a result of a price adjustment. When the amount sought changes little as a result of a price adjustment, the demand is said to be inelastic. Be aware that a change in price causes the quantity requested to alter significantly. Consumer durables are an example of a product with elastic demand. Like a washing machine or a car, these are infrequently acquired things that can be put off if the price increases. For instance, car discounts have been quite effective at increasing car sales by lowering the price.
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A major drawback with lot-for-lot sizing is?
a) high setup costs
b) low investment costs
c) low setup costs
d) high capital investments
Answer:
c is the answer I think because I just think
SELECT AN ORGANISATION OF YOUR CHIOCE.
1.1 SUMMARISE THE NATURE OF BUSINESS
1.2 SUMMARISE THE BUSINESS MODEL
1.3 WHAT ARE THE KEY BUSINESS DRIVERS
2.1 NATURE OF DECISION DESCRIBING WHAT DECISION NEEDED TO BE MADE AND WHY
2.2 SUMMARISE HOW WAS THE DECISION MADE
2.3 ANALYSE THE DECISION MADE AND DESCRIBE IF A QUALITATIVE OR QUANTITATIVE APPROACH WAS USED AND JUSTIFY YOUR RESPONSE
2.4CONFIRM WHY WAS THIS APPROACH TAKEN BY THE BUSINESS AND APPRAISE THIS APPROACH FROM RISK MODELLING PERSPECTIVE
3.1 USING THE SELECTED BUSINESS DECISION FROM ABOVE, IDENTIFY AT LEAST 5 RISKS THAT NEEDED TO BE CONSIDERED TO MAKE THE SAME
3.2 USING THE RISK REGISTER IN THE PREVIOUS SECTION, CONDUCT A QUALITATIVE RISK ANALYSIS FOR THESE 5 RISKS BY PROPOSING THE PROBABILITY OF OCCURRENCE AND IMPACT FOR EACH RISK
3.3 USING A MATRIX INCLUDED IN APPENDIX A, PLOT THE RISKS ON A HEAT MAP AND EXPLAIN WHAT THE MAP MEANS
4.1 USING THE REGISTER DERIVED IN QUESTION 3.1, CALCULATE THE AVERAGE IMPACT (EXPECTED MONETARY VALUE) USING AGGREGATION OF STATIC VALUES
4.2 SUMMARISE WHAT DOES THIS AVERAGE IMPACT VALUE MEANS FOR THE ORGANISATION
5.1 USING THE REGISTER FROM 3.1, CALCULATE THE 5 POSSIBLE EXPECTED MONETORY VALUES USING THE AGGREGATION OF THE RISK DRIVEN OCCURRENCES METHODOLOGY
5.2 DESCRIBE THE RESULT OF THIS METHODOLOGY USING AN APPROPRIATE DIAGRAM
5.3 SUMMARISE WHAT DOES THIS AVERAGE IMPACT VALUE MEANS FOR THE ORGANISATION
An organization that will be analyzed in this context is Coca-Cola.1.1 Summary of the nature of the business:Coca-Cola is one of the most well-known beverage manufacturers in the world. They create fizzy drinks, juices, and water for a variety of markets.
Their drink portfolio includes more than 200 brands sold in over 200 countries.1.2 Summary of the business model:Coca-Cola Company follows a business model based on creating strong brands that generate significant customer demand.
Their main goal is to build and enhance brand equity. They engage in extensive advertising and promotion campaigns to attract more consumers.1.3 What are the key business drivers:Coca-Cola's essential business drivers are its brand, extensive distribution network, market reach, product innovation, customer satisfaction, and product differentiation.2.1 Nature of decision describing what decision needed to be made and why:The business decision that was taken by Coca-Cola was regarding the selection of the right marketing mix, which is a critical decision.
This allowed them to gain valuable insights into how the consumers perceive their products, which they could use to develop targeted marketing strategies. From a risk modeling perspective, the approach is beneficial because it allows the company to minimize the risks by identifying the issues that consumers may face with their products.3.1 Using the selected business decision from above, identify at least 5 risks that needed to be considered to make the same:1. Competition from other beverage manufacturers2. Consumer preferences and behavior3. Changes in market trends4. Fluctuating economic conditions
5. Changing health and safety regulations3.2 Using the risk register in the previous section, conduct a qualitative risk analysis for these 5 risks by proposing the probability of occurrence and impact for each risk:The following table shows the qualitative risk analysis for the five risks that were identified:RiskProbabilityImpactCompetitionMediumHighConsumer preferences and behaviorHighHighChanges in market trendsLowHighFluctuating economic conditionsHighMediumChanging health and safety regulationsLowMedium3.3 Using a matrix included in Appendix A, plot the risks on a heat map and explain what the map means:The risks were plotted on a heat map, as shown below:The heat map shows that the competition and consumer preferences risks have a higher probability of occurrence and impact, while the changes in market trends and health and safety regulations have a lower probability of occurrence and impact.4.1 Using the register derived in question 3.1, calculate the average impact (expected monetary value) using aggregation of static values:
The five possible expected monetary values are calculated by multiplying the probability of each risk and the range of possible impacts.RiskProbabilityImpactRange of possible impactsExpected Monetary ValueCompetitionMedium$2,000,000-$4,000,000$1,200,000Consumer preferences and behaviorHigh$3,000,000-$5,000,000$3,000,000Changes in market trendsLow$1,000,000-$3,000,000$300,000Fluctuating economic conditionsHigh$1,000,000-$2,000,000$1,200,000Changing health and safety regulationsLow$500,000-$1,000,000$50,000Total Expected Monetary Value$5,750,0005.2 Describe the result of this methodology using an appropriate diagram:The following diagram shows the possible expected monetary values for the five risks:5.3 Summarize what does this average impact value mean for the organization:
The average impact value means that the Coca-Cola Company could potentially lose an estimated $5,750,000 due to the five risks that were identified. This value represents the range of possible impacts that the company may face, given the probability of occurrence of each risk. The company can use this information to identify the risk mitigation strategies that are required to minimize the impact of these risks.
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The annual net sales for a huge soft drink company were 5.6 billion dollars in 2012 and sales were increasing at a continuous rate of 3.85% per year. Estimate, in billions of dollars, the annual net sales in 2016
Answer: 6.51 billion dollars
Explanation:
From the question, we are informed that the annual net sales for a huge soft drink company were 5.6 billion dollars in 2012 and that sales were increasing at a continuous rate of 3.85% per year.
The annual net sales in 2016 will be:
= 5.6 billion × (1 + 3.85%)^4
= 5.6 billion × (1 + 0.0385)^4
= 5.6 billion × (1.0385)^4
= 5.6 billion × 1.1631
= 6.51 billion dollars
Pearland, Inc. has 9,000 shares of preferred stock outstanding. The preferred stock has a $90 par value, a 14% dividend rate, and is noncumulative. If Pearland has sufficient funds to pay dividends, what is the total amount of dividends that will be paid out to preferred stockholders
Answer: $113400
Explanation:
The total amount of dividends that will be paid out to preferred stockholders will be:
= Number of shares × Par value of preferred stock × Dividend rate
= 9000 × $90 × 14%
= 9000 × $90 × 0.14
= $113400
Therefore, the total amount of dividends that will be paid out to preferred stockholders is $113400
Items such as sales receipts, bank statements, checks, and purchase orders are examples of a business's source documents. Group of answer choices True False
Items such as sales receipts, bank statements, checks, and purchase orders are examples of a business's source documents
What are source documents?A source document is a document that has the initial information on a business transaction.
A source document has the following information:
Name of the parties in the transactionAmount paid Date the transaction occurredExamples of source documents:
Bank Statements.Sales receipts.Invoices.Check Registers.Purchase Orders.To learn more about cheques, please check: https://brainly.com/question/24555580
merchandise inventory was destroyed by fire on october 11.
jan-1-merchandise inventory birr_260000
jan1_oct-11,purchase birr 1900000
sales(net)birr 3200000
estimated gross profit rate 40percent
A.estimate the cost of the merchandise destroyed
B.briefly describe the situation
A) The cost of merchandise destroyed by fire should be determined as $240,000.
B) The amount of merchandise destroyed by fire can be computed by deducting the cost of merchandise sold from the amount of merchandise available for sale.
What is the merchandise?Merchandise refers to the goods produced by a company and then sale them in the consumer market or their distributors.
Given values:
Beginning inventory: 260,000
Inventory purchases: 1,900,000
Net sales: 3,200,000
Gross profit ratio: 40%
Step-1 Computation of merchandise available for sale:
\(\rm\ Total \rm\ Merchandise \rm\ sold=\rm\ Beginning \rm\ Inventory + \rm\ Inventory \rm\ Purchases\\\rm\ Total \rm\ Merchandise \rm\ sold=260,000 + 1,900,000\\\rm\ Total \rm\ Merchandise \rm\ sold=2,160,000\)
Step-2 Computation of gross profit:
\(\rm\ Gross \rm\ profit=\rm\ Net \rm\ sales \times \rm\ Gross \rm\ profit \rm\ ratio\\\rm\ Gross \rm\ profit=3,200,000 \times\ 40\%\\\rm\ Gross \rm\ profit=1,280,000\)
Step-3 Computation of cost of sold merchandise:
\(\rm\ Cost \rm\ of \rm\ sold \rm\ merchandise = \rm\ Net \rm\ sales-\rm\ Gross \rm\ profit\\\rm\ Cost \rm\ of \rm\ sold \rm\ merchandise=3,200,000-1,280,000\\\rm\ Cost \rm\ of \rm\ sold \rm\ merchandise=1,920,000\)
Step-4 Computation of merchandise destroyed by fire:
\(\rm\ Merchandise \rm\ destroyed \rm\ by \rm\ fire=\rm\ Total \rm\ merchandise \rm\ sold-\rm\ Cost \rm\ of \rm\ merchandise \rm\ sold\\\rm\ Merchandise \rm\ destroyed \rm\ by \rm\ fire=2,160,000-1,920,000\\\rm\ Merchandise \rm\ destroyed \rm\ by \rm\ fire=240,000\)
Therefore, the amount of merchandise destroyed by fire comes out to be 240,000.
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Duality and interpretation of dual variables
In the event that the base issue is an expansion issue, the double issue is a minimization issue as well as the other way around.
What is Duality?By and large, the duality hypothesis tends to itself to investigate of the association between two related straight programming issues, where one of them, the base, is an expansion issue and the other, the double, is a minimization issue.
Duality of dual variables
Duality gives a ton of computational benefit in an issue with a lesser number of factors and a huge number of imperatives.
Interpretation of dual variables
The duality includes an exceptional connection between an LP issue and another, the two of which include similar unique information.
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The question is incomplete, Complete question probably will be:
Explain in brief the event of Duality and interpretation of dual variables.
Examine the fundamental causes of nation's business cycle fluctuations.
Answer:
There are always ups and downs (business cycle fluctuations) in any nation due to some fundamental causes
Explanation:
1: Changes in GDP
The greater the government spend on its nation the greater will be the consumption due to which GDP increases and the economy starts to expand but when the government lower its spending then it will be a vice versa situation and economy will contract
2: Technolgy
It plays a very important role in business cycle fluctuations If there is a positive change in technology than it can lead the economy to expansion or vice versa. Nowadays communication in businesses got a lot better due to a positive change in technology.
3: Interest rates
If there is a low-interest rate on borrowings, more people will borrow money to make bigger purchases like land, vehicles, and houses. This will allow people to spend more due to which the nation's economy will expand or vice versa.
Given the following cost function: TC = 1500 + 15Q – 6Q 2 + Q3 i. Determine the total fixed cost for producing 1000 units of output and 500 units of output.
Explanation:
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The total fixed cost for producing 1000 units of output and 500 units of output is 1,500.
Given that,
The cost function is TC = 1500 + 15Q – 6Q 2 + Q3i.Based on the above information, the calculation is as follows:
The total fixed cost should remain the same whether the production is changed or not.
So here the fixed cost should be 1,500 in both the cases.
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Ethics Student Activity Packet
In this lesson, you will learn to:
- Define what ethics is
- Explore some of the ethical dilemmas our society faces, such as those posed by self-driving cars
- Analyze a number of ethical dilemmas and recommend how the people in these situations should proceed
NOTE: Vocabulary for this unit can be found in the NGPF Personal Finance Dictionary
RESOURCES
Discussion Prompts
Write your responses to the questions. Then, share what you wrote with your classmates or a partner.
QUESTIONS
1. How do you know if a behavior or action is right or wrong?
A behavior or action is right or wrong due to the fact that it is a specific kind of action, that tends to fits in with some principles or rules, and can also say the behavior is right or wrong due to the fact that it brings about good or negative consequences.
How do we know good and bad behavior?We must first comprehend what we mean when we speak about right and wrong in order to taken in how to acquire moral understanding.
Therefore, one can make use of Conscience-Based Action: Ethical Knowledge. It is seen as a more prevalent viewpoint that exists that is not too dissimilar from that. It is the notion that by paying attention to our conscience, we can determine what is morally right and wrong. What determines whether anything is right or wrong is that still, small voice within of us.
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Which of the following statements is TRUE?
O An increase in the price of gasoline will decrease the demand for
gasoline.
O An increase in the price of gasoline will increase the quantity
demanded of gasoline.
O An increase in the price of gasoline will increase the quantity
supplied of gasoline.
O An increase in the price of gasoline will increase the supply of
gasoline.
An increase in the price of gasoline will decrease the demand for gasoline.
This statement is true.
When two goods are equivalent, the price increase of one will result in a rise in demand for the other.
If they are complementary, then the demand for one will decline as its price rises. Tires and gasoline go together.
Does the price of gas affect demand?Higher prices, in turn, typically regulate or reduce demand while promoting output, whereas lower prices typically have the opposite impact. Prices are impacted by three main supply-side factors: the volume of gas produced.
When gas prices rise, households are more likely to spend a higher portion of their budgets on it, leaving less money available for other purchases. The same is true for companies that must ship their products from one location to another or that depend heavily on gasoline (such as the airline industry).
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Entrepreneurs generally think differently about resources than do employee-managers in which of the following ways?
Managers want larger budgets; entrepreneurs work to do more with less.
How do entrepreneurs approach resources differently from employee-managers?Entrepreneurs have a distinct mindset when it comes to resources compared to employee-managers. While managers often seek larger budgets to accomplish their goals, entrepreneurs tend to focus on doing more with less.
This difference in perspective stems from the inherent nature of entrepreneurship which involves taking calculated risks and maximizing efficiency in resource allocation.
Entrepreneurs understand that resources, such as capital, time, and manpower, are limited and valuable. They recognize that acquiring substantial budgets may not always be feasible, especially in the early stages of a venture.
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Intrapreneurs:
A. have a high degree of autonomy in spite of the fact they work for a large corporation
B. have the characteristics of creativity, vision, and risk taking.
C. receive regular salaries and employee benefits
D. run mini-companies within large corporations
E. are accurately described by all of the above
The statement indicates that option (E) is the best choice because all of that correctly describe it.
What do company intrapreneurs do?An employee who now is given the freedom and resources to create a brand-new product without being worried over whether or not it will generate income for the firm is known as an intrapreneur.
What distinguishes an entrepreneur from an intrapreneur?An entrepreneur creates a startup to execute out a revolutionary business idea. An employee who uses their own ingenuity and invention to create new goods and services for their employer, and sometimes even new markets, is known as an intrapreneur.
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A manager’s position in the organization, ability to give out rewards, and other factors give the manager ____________, which is the potential to impact the behavior of other people.
A. power
B. influence
HELP PLEASE
UR OWN WORDS PLZ
Using complete sentences, identify and describe the four major ethnic groups of the Middle East.
Answer: Arabs, Kurds, etc.
Explanation:
There are four main ethnic groups living in the Middle East. The Arabs are the largest, making up 75% of the region's population. Their ancestors were tribal members from the Arabian peninsula. The Persians reside mainly in Iran; their ancestors came to the region from Central Asia. The Kurds live in a rural, mountainous area between Iraq and Turkey. Many of them make a living as farmers or herders. Like the Persians, the Turks also have ancestors from Central Asia. This group lives in Turkey.
What dose it mean to be fully human were interacting with others any virtual space like classroom why or why not
While interacting with others in a virtual space, to be fully human means for instance such as in a classroom, means having the qualities and characteristics inclusive to humanity, even though the medium of communication being virtual.
It involves identifying and embracing our shared humanity and engaging in meaningful connections with other people like friends family colleagues, even though miles apart and can only see by virtual screens.
Emotional connections, sharing knowledge, expression ,communication collaboration cooperation are the various forms. Therefore, virtual experiences though lack sensory and physical aspects of face-to-face interactions, they still provide a platform for human connection, learning, and growth.
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when other sources of information about quality aren't readily available, what role does price place in consumers' evaluation process?
When other sources of information about quality aren't readily available, the higher price is what is used in consumers' evaluation process.
What is the consumers' evaluation process?Consumer assessment, often known as consumer testing or consumer research, is the act of evaluating a product or service's qualities or performance based on how people perceive it to be. With the expansion of the consumer goods business over the past few decades, numerous techniques have been developed.
You can use a customer assessment form to get information from customers regarding their interactions with your business. This comprises—without being limited to—satisfaction ratings, areas for improvement, and comments on particular goods or services.
Consumer assessment, often known as consumer testing or consumer research, is the act of evaluating a product or service's qualities or performance based on how people perceive it to be. With the expansion of the consumer goods business over the past few decades, numerous techniques have been developed.
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Several companies in the EU were importing safety footwear from Argentina. Specifically, thousands of pairs of steel-toed boots were being imported for end use by workers in hazardous industries, such as mining, construction, and manufacturing. The EU became concerned that the steel inside the footwear was not of the agreed upon quality and so it called upon the ________ to monitor and enforce the trade agreement.
The EU countries will call upon the World trade Organization to monitor and enforce the trade agreement.
World Trade Organization (WTO) is the international body that regulates the international trade between and among the world nations.
The WTO enables nations producers, exporters, importers to conduct their business around the world.
The WTO helps in administering trade agreement between nations, handles trade disputes and monitors national trade policies.
Therefore, in this question context, the European Union will call on the World trade Organization to monitor and enforce the trade agreement between the EU countries and Argentina.
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Dustin, who is 48 years old, works for Pinnacle Inc., with a salary of $300,000, a car allowance, and a very nice expense account. Pinnacle is a Fortune 1,000 company that sponsors a defined benefit plan that pays 2 percent times years of participation times the average of the three final years of compensation. In addition, Pinnacle sponsors a 401(k) / profit sharing plan and contributes 18% of employees salary to the profit sharing plan. There is no additional match. If the ADP of the NHCEs is 3%, what is the maximum that Dustin can defer this year (2020)? a. $17,100. b. $14,250. c. $19,500. d. $5,700.
Answer:
c. $19,500.
Explanation:
Given that Pinnacle offer 401(k) proft sharing plan to Dustin, and Dustin is a 48 years old man. It should be noted that one of the benefits of this plan is that it allows the person involved to defer a portion of his paycheck to retirement account each month automatically.
However, it comes with certain limitations on how much can be saved. The limitation is dependent on age and compensation level. In which for the year 2020, the individual 401(k) contribution limit is pegged at $19,500, or $26,000 if such individual's age is 50years and above.
Hence, given that Dustin is 48 years old, the maximum that Dustin can defer this year (2020) is $19500. This is in contrast to the last year 2019, the individual 401(k) contribution limits were $19,000, or $25,000 if such individual is 50years and above.
Wally's Walleyes wants to introduce a new product that has a start-up cost of $7,800. The product has a 2-year life and will provide cash flows of $4,500 in Year 1 and $4,300 in Year 2. The required rate of return is 15 percent. Should the product be introduced? Why or why not?
The calculated NPV is negative, indicating that the present value of expected cash flows does not exceed the start-up cost of the project. In other words, the project is expected to generate a net loss.
To determine whether Wally's Walleyes should introduce the new product, we can calculate the net present value (NPV) of the project. The NPV measures the present value of expected cash flows, taking into account the required rate of return.
To calculate the NPV, we need to discount the cash flows using the required rate of return (15 percent). The formula for calculating NPV is:
NPV = Cash Flow Year 1 / (1 + Required Rate of Return)^1 + Cash Flow Year 2 / (1 + Required Rate of Return)^2 - Start-up Cost
\(NPV = $4,500 / (1 + 0.15)^1 + $4,300 / (1 + 0.15)^2 - $7,800\)
\(NPV = $4,500 / 1.15 + $4,300 / (1.15)^2 - $7,800\)
NPV = $3,913.04 + $3,537.41 - $7,800
NPV = -$350.55
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What is profitability
Answer:
Profitability is a measure of a company’s ability to generate earnings or profits over a specific period. It is calculated by taking the company’s net income and dividing it by its revenue. A company’s profitability is important because it indicates how well it is managing its resources and generating returns for its shareholders. A high profitability ratio is generally considered a positive sign, while a low profitability ratio may suggest that the company is not using its resources effectively.
Explanation:
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