The potential for losing money in the stock.If someone keeps their money invested for a year, there is a greater than 1 in 4 chance that they will lose money in the stock market.
When some people think about investing, they focus on the possibility of large gains—the possibility of buying unheard-of stocks that soar in value.Others focus on the risk—the chance to lose everything in a stock market downturn or as a result of making bad investment choices.It's true that there is risk involved with any investment. Additionally, it is true that investing is one of the best ways to increase the amount of money you have available to reach your goals (although expecting instant wealth is highly improbable).In truth, there is frequently a connection between an investment's level of risk and an individual keeps their money invested for one year.
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Given existing inputs, markets, and legal institutions, what term is used to describe the maximum quantity that an economy can produce in the ad/as model?
a. GDP deflator b. aggregate supply c. potential GDP
Potential GDP, also known as full-employment GDP, is the greatest amount that an economy can create when all of its physical capital, human capital, technological resources, and institutional resources are utilized to their full potential.
The amount of output that a country's economy is capable of producing at a constant rate of inflation is known as the potential gross domestic product (GDP) and is specified in the OECD's Economic Outlook publication.
Potential labor force growth (the number of persons who desire to be employed when the labor market is robust) and potential labor productivity growth are the two factors that influence potential GDP growth.
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What is the role of the central bank in a monetary economy?
monetary economy Conducting monetary policy to attain price stability low and stable inflation and assist in managing economic fluctuations is a crucial function of central banks.
Over the past few decades, significant modifications have been made to the policy frameworks within which central banks function. In order to implement monetary policy, central banks must modify the money supply, typically through open market operations. For instance, a central bank could lower the amount of money by obtaining funds from commercial banks by selling government bonds under a "sale and repurchase" deal. Fundamentally, monetary policy has the power to affect the price level, both the rate of inflation and the overall level of prices in an economy. Additionally, it makes sense to implement a more expansionary monetary policy when there is evidence that inflation is declining or will do so in the near future.
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thermogenesis has been studied the plants in the genus arum, including skunk cabbage and the corpse flower. in these plants, what hypotheses have been provided to explain the reason behind thermogenesis? select all that apply
All organs produce obligatory thermogenesis, which is a necessary complement to all metabolic processes necessary to keep the body alive.
It includes the amount of energy required to consume, digest, and process food (thermic effect of food).
The thermogenic theory: what is it?Your metabolism is boosted by certain foods, which cause your body to burn more calories and produce more heat. Thermogenic foods or compounds are those that stimulate metabolism and, as a result, generate more heat. Theoretically, the quicker you lose weight, the more calories burned.
What factors influence thermogenesis?Fatal cycles, such as the simultaneous occurrence of lipogenesis and lipolysis or glycolysis and gluconeogenesis, contribute to thermogenesis. In a broader sense, activity/rest cycles like the summer matter cycle can have an impact on futile cycles. Muscle metabolism is accelerated by acetylcholine stimulation.
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Full Question = Thermogenesis has been studied the plants in the genus Arum, including skunk cabbage and the corpse flower. In these plants, what biological process is most strongly associated with heat production?
a company produces three types of shoes, formal, casual, and athletic, at its two factories; factory i and factory ii. the company must produce at least 6000 pairs of formal shoes, 8000 pairs of casual shoes, and 9000 pairs of athletic shoes. daily production of each factory for each type of shoe isoperating factory i costs $1500 per day and it costs $2000 per day to operate factory ii. what is the minimum cost to operate both factories? round your answer to the nearest whole number. do not include a dollar sign or comma in your answer.
Answer:
100000
Explanation:
Let x be the days Factory I operates and let y be the days Factory II operates. Since we are trying to minimize cost, our objective function represents the total cost from operating Factory I and Factory II. This function is defined by
C(x,y)=1500x+2000y
The first constraint is that the company must produce at least 6000 pairs of formal shoes and we know that Factory I and Factory II each produce 100 formal shoes. This translates into the following inequality.
100x+100y≥6000
The second constraint is that the company must produce 8000 pairs of casual shoes and we know that Factory I produces 100 casual shoes and Factory II produces 200 casual shoes. This translates into the following inequality.
100x+200y≥8000
The third constraint is that the company must produces 9000 pairs of athletic shoes and we know that Factory I produces 300 athletic shoes while Factory II produces 100 athletic shoes. This translates into the following inequality.
300x+100y≥9000
The fact that x and y must be positive numbers is represented by the following two constraints:
x≥0,y≥0
Using all of this information, our problem is as follows.
Minimize: C(x,y)=1500x+2000y
Subject to: 100x+100y≥6000
100x+200y≥8000
300x+100y≥9000
x≥0
y≥0
The point (40,20) gives lowest cost: $100,000 .
Investments with longer payback periods are more desirable, all else being equal.
Investments with longer payback periods are more desirable, all else being equal. The payback method can be used when net cash inflows from the capital investment are unequal.
Investment is the determination of money to acquire an asset to obtain a growth in price over a time period. Investment requires a sacrifice of a few gift help, including time, cash, or effort. In finance, making an investment aims to generate a return from the invested asset.
The funding includes bonds, shares, and PPF amongst others, which enables growing cash and presents a further source of income. As investment enables us in developing our cash over a certain period of time, there is a particular risk accompanying the funding.
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It is most economically and environmentally sound to focus water resource management on.
The most sensible use of water is to concentrate on resource management, which will increase the effectiveness of how we use it.
What is the water resource management?The process of planning, establishing, and managing water resources—both in terms of their quantity and quality—across all water users is known as water resources management (WRM). It encompasses the organizations, physical facilities, financial incentives, and informational systems that support and direct water management. Conservation, allocation, retrofit programs, and behavioral approaches are several categories of water management techniques.
What is the importance of water resources management and what are the methods of it?Water management is crucial since it influences what can be expected from irrigation in the future. Water management is the control of water resources according to established rules and guidelines. Due to droughts and abuse, water, a resource that was previously plentiful, is now a more valuable commodity. Stormwater management, wastewater treatment, water supply, & preservation of existing water sources make up the four main pillars of integrated water resource management.
Reusing or conserving water, together with using alternate water sources, helps to recycle ground water. Rainwater irrigation, groundwater depletion, the reuse of gray water, and wastewater recycling are all aspects of this strategy.
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dave krug finances a new automobile by paying $6,500 cash and agreeing to make 40 monthly payments of $500 each, the first payment to be made one month after the purchase. the loan bears interest at an annual rate of 12%. what is the cost of the automobile? (pv of $1, fv
Dave krug finances a new automobile by paying $6,500 cash and agreeing to make 40 monthly payments of $500 each, the first payment to be made one month after the purchase. the loan bears interest at an annual rate of 12%. The cost of the automobile is $22,917.34
The cost of the automobile can be calculate as follows:
Monthly Payment = (Cost of automobile - down payment)* interest
interest = [i/12]/[1-(1+i/12)⁻ⁿ] = [0.12/12]/[1-(1+0.12/12)⁻⁴⁰] = 0.03046
where
i is annual rate
n is long monthly payments
Therefore,
Monthly Payment = (Cost of automobile - down payment)* interest
500 = (C-6,500)*0.03046
C-6,500 = 500/0.03046 = 16,417.34
C = 22,917.34
The cost of the automobile was $22,917.34
your question is incomplete but most probably the full question was
dave krug finances a new automobile by paying $6,500 cash and agreeing to make 40 monthly payments of $500 each, the first payment to be made one month after the purchase. the loan bears interest at an annual rate of 12%. what is the cost of the automobile? PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round PVA factor to 4 decimal places.)
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unfavorable condition in revenues occurs when actual figures exceed budgeted figures, and vice versa. group of answer choices true false
The given statement is false. The organization gains from the budget variation when real revenue or expenses surpass or fall short of the budget.
A budget variation is the disparity between the baseline or planned amount of an expense or revenue and its actual amount. It is occasionally possible to refer to the difference between actual assets and liabilities and budgeted assets and liabilities as the budget variance.
The baseline against which actual achievements are judged is frequently unreasonably low due to flawed assumptions or inappropriate budgeting (such as utilizing politics to establish an exceptionally simple budget objective).
By simply combining budget line items, it is possible to minimize some budget variations. For instance, the two line items might be consolidated for reporting purposes into a utilities line item with a net positive variance of $1,000 if there is a negative power budget variance of $2,000 and a positive telephone expense budget variance of $3,000.
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why do you think people spend so much money on their wants despite the financial costs?
Some people spend a lot of money, because they just think about their actual needs and don`t create budget. They also don't question whether they can function in life without what they want.
Which is more important to your needs or wants?You can simplify your budget by following the 50-30-20 rule. It states that 50% and 30% of the budget should be devoted to needs and wants, respectively, and the remaining 20% should be devoted to savings or debt repayment.
The difference between budget needs and wants is relatively simple. Needs are things you need to live a healthy life, and wants are things you wish you had but ultimately don't have.
Why should we put our needs before our wants?Knowing what you need and want is essential in managing your finances. Categorizing your needs into your wants helps you track your spending and invest your extra money wisely. It also helps you cut costs.
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a majority of economists believe that in the long run, real economic variables and nominal economic variables behave independently of one another.
The statement means that changes in the nominal value of a good or service do not necessarily have a corresponding effect on real economic variables, such as:
EmploymentWagesProduction Real and Nominal Economic Variables: Behavior in the Long RunIn the long run, economists believe that the nominal value of a good or service is not necessarily indicative of changes in real economic variables. This means that changes in the nominal value of a good or service, such as an increase in the cost of living, do not necessarily lead to a corresponding increase in employment, wages, and production.
Instead, economists believe that these real economic variables are determined by other factors, such as the availability of resources, technology, and consumer demand. Therefore, although the nominal value of a good or service may fluctuate, the real economic variables can remain stable over the long run.
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True/False. Write a liability is a probable future payment of assets or services that a company is presently obligated to make as a result of past transactions or events.
The given statement is true. What a person or business owes is known as a liability, and the amount owed is typically monetary.
Over time, liabilities are resolved by the transmission of economic advantages like money, products, or services. Liabilities are items that are recorded on the left side of a balance sheet and consist of debts such as mortgages, accounts payable, loans, deferred revenue, warranties, bonds, and accrued expenses. Liabilities and assets can be compared. Assets are items you own or are owed money for, whereas liabilities are things you owe money for or have borrowed money for.
A liability, in general, is an obligation between two parties that hasn't been fulfilled or paid for. A financial liability is an obligation in the world of accounting, but it is more specifically characterised by previous business transactions, events, sales, exchanges of goods or services, or anything else that will generate income in the future. Non-current liabilities are typically viewed as long-term obligations because they are anticipated to last more than a year (12 months or greater).
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___ consists of all the activities concerned with obtaining money and using it effectively.
Financial management encompasses all activities that include obtaining and effectively using financial resources.
What does the term "financial management" mean?Simply expressed, financial management is the field of industry that is concerned with distributing the cash resources that are already available in order to maximize firm profit margin and return on invested (ROI).Financial management professionals plan, coordinate, and manage all corporate transactions.
What acts as the main goal of financial management?The main objective of financial management is to keep an agency's finances under control in a way that guarantees both corporate success and legal compliance. The method calls for extensive planning and successful execution. When done correctly, businesses grow their revenues and profits.
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the balances of the major classes of plant assets and accumulated depreciation by major classes should be disclosed in the balance sheet or notes. group of answer choices true false
This statement is true. The balances of the major classes of plant assets and accumulated depreciation by major classes should be disclosed in the balance sheet or notes.
What is balance sheet ?A balance sheet is a financial statement that presents a company's financial position at a specific point in time. It shows the balances of the major classes of assets, liabilities, and equity, and provides information about the company's assets, liabilities, and equity, as well as the net amount of assets and liabilities. The balance sheet is one of the three primary financial statements, along with the income statement and the statement of cash flows. These statements are important because they provide information about a company's financial position, performance, and cash flow, which can be useful to investors, creditors, and other stakeholders.To learn more about balance sheet refer :
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leadership is the ability to marshal human, informational, and other resources to get something done.a. trueb. false
Leadership is the ability to marshal human, informational, and other resources to get something done is false.
The Oxford Dictionary defines leadership as “the action of leading a group of people or an organization.” Leadership, put simply, is about taking chances and questioning the status quo. Leaders inspire followers to take new and improved actions.
A good leader is able to bring out the best qualities in his or her team members and inspire them to collaborate in order to achieve a common objective, so these abilities are crucial to possess. A good leader maintains the team’s focus and keeps them on task to prevent delays.
Leadership is the ability to marshal human, informational, and other resources to get something done is false.
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rustici says that most modern economists do not consider the smoot-hawley tariff a significant cause of the great depression. why reasoning do these economists give for their belief?
The Smoot-Hawley Tariff Act did not start the Great Depression, but it did make things worse.
Did the Smoot-Hawley Tariff cause the Great Depression?The Smoot-Hawley Tariff Act did not start the Great Depression, but it did make things worse. The Act raised tariffs, which put additional pressure on struggling countries—including those that owed money to the United States—and prompted other countries to retaliate by enacting their own levies.It significantly reduced the volume of exported goods and considerably increased the price of imports, making them expensive for all but the wealthy, which led to bank failures, particularly in rural areas.It became more difficult for the United States to emerge from its slump as a result of other nations' restrictions on international trade in response to the United States' tariffs.To learn more about Smoot-Hawley Tariff Act refer,
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if advertising reduces a consumer's price sensitivity between identical goods, it is likely to a. increase the elasticity of demand for differentiated products. b. reduce competition and reduce social welfare. c. encourage the consumption of all homogenous goods. d. enhance competition and encourage more product diversity.
If advertising reduces the price sensitivity of a consumer between identical goods, it is likely to B. 'reduce competition and reduce social welfare'.
Price sensitivity refers to the degree to which demand changes when the cost of a good or service changes. Price sensitivity is generally measured using the price elasticity of demand, which indicates that some consumers would not pay more if a lower-priced option is available. Price sensitivity is also known as price elasticity of demand which provides a way through which the cost of a good affects consumers' purchasing decisions.
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What is the largest expense of the government?
public welfare is the largest expense of the government. Government typically consists of the legislative, the executive branch.
An organized community is governed by a system or collection of people known as a government, which is typically a state.
Government typically consists of the legislative, the executive branch, and the judiciary, according to its broad associative meaning. Government is both a tool for deciding policy and a way to implement organizational policies. A constitution is a statement of a government's guiding ideas and ideology that is present in many nations.
Although all organizations have a governance structure, the term "government" is frequently used to refer more precisely to the roughly 200 autonomous national governments and subsidiary organizations.
Democracies, monarchies, and authoritarian and totalitarian regimes are the main categories of political structures in the contemporary.
[1] Monarchy, aristocracy, timocracy, oligarchy, democracy, theocracy, and tyranny are examples of historically common types of government.
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to some marketers and company executives, the only measure that should be used to evaluate marketing is:
To some marketers and company executives, the only measure that should be used to evaluate marketing is sales.
Sales are actions involving the exchange of products or the quantity of merchandise exchanged over a predetermined period of time. A service that is rendered for a charge is also included in a sale.
The term "sales" is used to describe all actions taken to sell a good or service to a customer or business. However, in actuality, it symbolizes much more. To close a sale successfully, a lot of work must be put into finding prospects, developing relationships, and offering consumers solutions.
Marketing metrics show how well marketing efforts adhere to important performance criteria and evaluate their effectiveness (KPIs). Without them, marketing teams would be unable to assess the success of their marketing strategy. They are among the most important elements of every campaign.
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the crash, inc. has an roe of 12%, a payout ratio of 60%, earnings next year of $8 per share, a required return of 18%, and a current price of $36.36 find the present value of growth opportunities for crash. multiple choice question. -$10.10 -$8.08 -$13.11 -$9.28
The present value of growth opportunities for crash is -$10.10.
The Present Value of Growth Opportunities (PVGO) is calculated by subtracting the present value of future dividends from the current stock price.
Given the information provided, the present value of future dividends can be calculated as follows:
Earnings/Share * (1 - Payout Ratio) * (1 + Required Return) = Future Dividend/Share
$8 * (1 - 0.60) * (1 + 0.18) = $4.32
The present value of future dividends can then be calculated using the following formula:
Future Dividend/Share * (1 / (1 + Required Return)^Number of Years) = Present Value of Future Dividends
$4.32 * (1 / (1 + 0.18)^1) = $3.59
The Present Value of Growth Opportunities can then be calculated by subtracting the present value of future dividends from the current stock price:
Current Stock Price - Present Value of Future Dividends = Present Value of Growth Opportunities
$36.36 - $3.59 = $32.77
Therefore, the Present Value
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which type of country is germany? a. global b. core c. semi-peripheral d. peripheral e. none of the above
Germany is a core country .Hence, option b. core is correct.
The core, semiperipheral, and periphery countries make up the hierarchy of the global economic system, according to Wallerstein.
Core nations (such as the United States, Japan, and Germany) are powerful capitalist nations distinguished by high levels of industrialization and urbanisation.
Germany unified in 1871 and quickly rose to prominence as the continent's top industrial nation. They became a core state because of their desire to rule the continent.
South Korea, Taiwan, Mexico, Brazil, India, Nigeria, and South Africa are examples of semi-peripheral countries that are more developed than peripheral countries but less developed than core countries. They act as a barrier between the core and the periphery of the world.
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define coupon and market/effective interest rates as they determine bond pricing at par, premium, or discount values.
When a coupon is greater than the prevailing interest rate, bond prices rise; when a coupon is lower, bond prices fall.
Is the bond's price set at its par value by the coupon rate? Compared to other bonds, a bond's coupon rate .Bond prices are significantly influenced by current market interest rates.The price of a bond increases when a coupon is greater than the current interest rate; when a coupon is lower, the price of the bond decreases.If the purchase price of a bond is equal to its par value, its yield to maturity is also equal to the coupon rate.The face value of a bond, also known as the stated value of the bond at the time of issuance, is what is known as the bond's par value.The typical par value for bonds is $100 or $1,000.The interest rate is the cost that the lender levies to the borrower in exchange for the amount that is borrowed.The bond's face value, which is being invested, is used to determine the coupon rate.The risk associated with lending the money to the borrower is taken into account when calculating the interest rate.To learn more about coupon rate refer
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fedex corporation reported the following rounded amounts (in millions): 2019 2018 accounts receivable $9,415 $8,880 allowance for doubtful accounts (300) (400) accounts receivable, net of allowance $9,115 $8,480 net sales (assume all on credit) $69,690 $65,450 required: determine the receivables turnover ratio and days to collect for 2019. do the measures calculated in requirement 1 represent an improvement (or deterioration) in receivables turnover, compared to 2018, when the turnover was 8.1?
The debtor's turnover ratio, sometimes referred to as the accounts receivable turnover ratio, is an efficiency ratio that assesses how effectively a.
What is a good turnover ratio for receivables?Companies should aim for a ratio of at least 1.0 to ensure they collect the whole amount of average accounts receivable at least once during a period. In general, a greater accounts receivable turnover ratio is advantageous.
Is an accounts receivable turnover ratio of 8 a good one?industry average turnover rates for the company.
If you can compare an AR turnover ratio of 7.8 to the average for your industry, it has greater analytical value. A ratio of 5.7 would indicate that Company X is performing better than its competitors than the industry average of 10, which is 10.
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a company had a market price of $38.90 per share, earnings per share of $1.95, and dividends per share of $1.10. its price-earnings ratio equals:
Its price-earnings ratio equals is $19.9
What is a price-earnings ratio?Cost to Income Price-to-Earnings Ratio The level was significantly how much a stock is worth in relation to EPS. Another of the more well valuation metrics is the PE rate. It indicates whether such a company is pricey or inexpensive at the present market price.
The ratio of Cost to Sales to Profitability The numerous calculates the value of a stock in connection to its EPS. The PE ratio is one of the most popular stock valuation indicators. It shows if a stock is overpriced or affordable at the current market price.
The formula that will be used will be:
Price Earnings Ratio:= Stock Price per Share / Earnings per Share
$38.90 / $1.95
= 19.9
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What are three responsibilities of the dental assistant during operative procedures?
They prepare trays of instruments for dental treatments, sterilize and clean tools and equipment, and advise patients on post-operative and general oral health care.
A crucial element of the oral healthcare team is a highly qualified dental assistant. Dental assisting is a vocation that demands devotion, self-control, morality, and a dedication to further education.
The dental assistant is skilled in dental procedures and carries out routine office tasks, such as a range of patient care, office, and laboratory tasks. As dentists assess and treat patients, dental assistants work at the patient's side. Dental assistants prepare patients for examinations, treatments, and surgeries while recording vital signs, dental histories, and medical information.
In addition to preparing dental materials and injections, they expose and generate dental radiographs.
Dental assistants are well-versed in the tools, materials, techniques, and equipment needed for every dental operation, as well as in the correct cleaning, sanitizing, and infection control procedures.
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Earnings per share is most useful in comparing earnings performance of one company with another.a. Trueb. False
Earnings per share are most useful in comparing the earnings performance of one company with another is False.
Earnings per share is not a useful way to compare the earnings performance of one company to another, as there are large differences in the number of shares outstanding between companies. Value stocks are stocks that are highly valued relative to their current earnings.
Earnings per share are computed as net income available to common shareholders divided by the weighted average number of common shares outstanding. Preferred dividends must be deducted from net income as this amount is not available to common shareholders. EPS is not a good measure of performance because it does not consider the opportunity cost of capital and can be manipulated by short-term actions.
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why are importing and exporting considered low risk compared to other international business strategies? give a specific example in comparison to an alternative strategy.
Importing and exporting are considered low risk compared to other international business strategies because they typically involve fewer risks due to their limited scope.
What is business strategy?A business strategy is a plan of action designed to achieve a particular goal or set of goals within an organization. It is a comprehensive roadmap of actions and decisions that a business will take to succeed generally, business strategies involve an analysis of the competitive environment, and several of the organization's competitive advantages, and the development of plans to exploit that advantage. The ultimate aim of business strategy is to help an organization gain a competitive advantage and remain competitive in its industry.
Importing and exporting are considered low risk compared to other international business strategies because they typically involve fewer risks due to their limited scope. For example, importing and exporting does not require a company to establish a presence in a foreign country, which can involve a number of legal and regulatory issues. In comparison, an alternative strategy such as setting up a foreign subsidiary or manufacturing plant in a foreign country can involve higher risk due to the complexities of establishing and operating a business in a foreign jurisdiction.
It can be concluded that importing and exporting are considered low risk compared to other international business strategies because they typically involve fewer risks due to their limited scope.
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medwig corporation has a dso of 34 days. the company averages $9,000 in sales each day (all customers take credit). what is the company's average accounts receivable? assume a 365-day year. round your answer to the nearest dollar.
The Medwig corporation's average amount receivables after rounding to the nearest dollar is $389.
The receivables turnover ratio, also known as the ratio of accounts receivable, is used in business accounting to quantify how well businesses are managing the credit that they extend to their customers. It does this by looking at how long it takes to collect the outstanding debt over the course of the accounting period. Two crucial business purposes are served by the accounts receivable ratio. Businesses must first comprehend how soon payments are gathered in order to pay their own expenses and efficiently plan upcoming investments. The ratio also enables companies to determine if their credit policies and practices support healthy cash flow and sustained business growth.
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with no inflation, a bank would be willing to lend a business firm $5 million at an annual interest rate of 2%. but if the rate of inflation was expected to be 4%, the bank would most likely charge the firm an annual interest rate of
If no inflation, a bank would be willing to lend a business firm $5 million at an annual interest rate of 2%. but if the rate of inflation was expected to be 4%, the bank would most likely charge the firm an annual interest rate of 6%.
How to find the annual interest rate?Using this formula to find the annual interest rate that the firm will be charge
Nominal interest rate = Annual interest rate + Rate of inflation
Where
Annual interest rate=2%
Rate of inflation =4%
Let plug in the formula
Nominal interest rate = 2% + 4%
Nominal interest rate =6%
Therefore we can conclude that the Nominal interest rate is 6%.
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Ip company pays for purchases of materials in full in the month following the purchase. during the previous month, ip had purchases of $25,000. during the current month, ip had purchases of $30,000.The amount that I will pay during the current month for purchases is: ________
I'll be spending $25,000 on goods in the current month.
What are transactions?A buy is when something is obtained in exchange for some type of payment, such as products or services. The typical forms of payment are cash of card (to be paid later). A purchase might also be made in return for taking on an obligation or as part of a barter exchange where various non-cash assets are traded.
What do business purchases entail?The quantity of items a corporation purchased throughout the course of this year is known as purchases in accounting. It also relates to details on the kind, caliber, amount, and pricing of purchased products that should be preserved. They are included in the stock. Purchase discounts and sales offset purchases.
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a firm that adopts a flexible short-term financial policy is more likely to have: multiple choice lower carrying costs than shortage costs. lower shortage costs than carrying costs. stricter limits on credit sales than the average firm. a relatively low level of current assets. greater short-term financing needs than if the firm adopted a restrictive policy.
A firm that adopts a flexible short-term financial policy is more likely to have lower carrying costs than shortage costs. A is the best option.
A set of rules known as financial policy has been put in place to ensure that organizations have the right management and control systems for their payment and receipt systems. These processes regulate a company's financial planning and, in most circumstances, give an overview of its financial operations.
When the carrying costs are lower and the shortage costs are higher, flexible short-term financial policy is typically the best option. Shortage costs are expenses spent by an organization when an investment does not generate enough revenue to cover its costs; as a result, the company must fill the gap. An organization must pay carrying expenses in order to keep inventories. Since this strategy is dependent on quick sales, there is typically little inventory on hand, which minimizes the company's carrying cost.
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