Financial information for Forever 18 includes the following selected data: ($ in millions except share data) 2021 2020 $ 105 $ 22 $ 141 Net income Dividends on preferred stock Average shares outstanding (in millions) Stock price 27 300 250 $11.62 $10.57 2-a. Calculate the price-earnings ratio in 2020 and 2021. (Enter your Price-earning ratio values to two decimal places. Enter your answers in millions (i.e. 5,550,000 should be entered as 5.55).) Price-Earnings Ratio 2020 2021 2-b. In which year is the stock priced lower in relation to reported earnings? 2021 2020

Answers

Answer 1

The financial information for Forever 18 provided includes net income, dividends on preferred stock, average shares outstanding, and stock price for the years 2020 and 2021. The price-earnings ratio for both years needs to be calculated and compared to determine in which year the stock was priced lower in relation to reported earnings.

The price-earnings ratio (P/E ratio) is a financial metric that measures the valuation of a company's stock relative to its earnings. It is calculated by dividing the market price per share by the earnings per share (EPS). In this case, the P/E ratio for Forever 18 needs to be calculated for the years 2020 and 2021 using the provided data.

To calculate the P/E ratio, the stock price needs to be divided by the earnings per share. The earnings per share can be calculated by dividing the net income by the average shares outstanding. Using this formula, the P/E ratio for 2020 and 2021 can be calculated as follows:

P/E ratio 2020 = Stock price 2020 / (Net income 2020 / Average shares outstanding 2020)
P/E ratio 2021 = Stock price 2021 / (Net income 2021 / Average shares outstanding 2021)

Plugging in the numbers provided, we get:

P/E ratio 2020 = 10.57 / (22 / 250) = 1.21 million
P/E ratio 2021 = 11.62 / (141 / 300) = 1.38 million

Therefore, the P/E ratio for 2020 is 1.21 million and for 2021 is 1.38 million, both to two decimal places.

Comparing the two ratios, we can see that the P/E ratio for 2021 is higher than that of 2020, indicating that the stock was priced higher in relation to earnings in 2021. Therefore, the stock was priced lower in relation to reported earnings in 2020 compared to 2021.

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Related Questions

If you apply for a store credit card, how do they determine whether to approve you - or turn you down - on the spot

Answers

The way through which a store credit card can determine whether to approve the credit card request - or turn you down - on the spot is:

They check your credit history

According to the given question, we are asked to show the way through which a store credit card can determine whether to approve the credit card request - or turn you down - on the spot

As a result of this, we can see that every individual has a credit history which enables credit card companies to determine their credit  worthiness so that  they would determine if you are eligible for a credit card loan.

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country a is a more developed country with a low birth rate, a low total fertility rate, a high life expectancy, and a high percentage of urban population. based on this information, which of the following outcomes is most likely to occur in country a?

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The outcome that is most likely to occur in country a, which is a more developed country, is pressures on pension and social security programs are at critical levels as the number of elderly increases.

What is a developed country?

A developed country is a sovereign state that has developed economy, a high quality of life, advanced technological infrastructure relative to other less industrialized nations. The criteria for evaluating the degree of economic development are, most commonly, gross domestic product (GDP), gross national product (GNP), level of industrialization, the per capita income, amount of widespread infrastructure and general standard of living.

The multiple choices of the question are probably these:

A) Guest workers coming from less developed countries are needed to fill the labor shortages in urban areas.B) Declining youth populations and falling birth rates result in an increase in school construction in urban areas.C) Social security programs and pressures on pension are at critical levels as the number of elderly increases.D) National and provincial politicians must tailor their political campaigns to appeal to rural voters.E) As elderly populations downsize and seek to be closer to urban amenities, suburban house construction declines.

In that case, C would be the correct option.

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Identify what happens during the production, processing, and delivery stages within each type of business responsible for the manufacturing and sale of a loaf of bread.

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The production, processing, and delivery stages within each type of business responsible for the manufacturing and sale of a loaf of bread involve several processes. The stages involved in the production, processing, and delivery of a loaf of bread.

1. Production stage: This stage is where the raw materials needed for the production of bread are sourced and acquired. The primary raw material needed for the production of bread is flour. Other raw materials that may be needed for the production of bread include yeast, salt, water, sugar, and other baking ingredients. The raw materials are then combined in a mixing bowl and kneaded to make the bread dough.

2. Processing stage: In this stage, the dough is allowed to rest and rise before it is shaped into the desired shape. The dough is then baked in an oven at a specific temperature and time. The bread is then removed from the oven, and the baking process is complete. The bread is then allowed to cool before being packaged for sale.

3. Delivery stage: This stage involves the transportation of the bread from the production site to the retail store. The bread is usually packaged in bags or bread boxes to ensure it is protected during transportation. Once the bread is delivered to the store, it is then placed on the shelves for customers to purchase.

The production, processing, and delivery stages involved in the manufacturing and sale of a loaf of bread are essential to ensure that the bread is of high quality and meets the needs of consumers. The production process must be efficient and meet food safety standards to ensure the bread is safe for human consumption. Additionally, the transportation and delivery process must be efficient to ensure that the bread is delivered fresh and in good condition.

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was the hospital decision to suspend consultant, correct? Explain why or why not?​

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The hospital's decision to suspend the consultant can be evaluated by considering several factors: patient safety, professional conduct, and due process.

Patient safety is paramount in a healthcare setting, and if the consultant demonstrated behavior or made decisions that compromised patients' well-being, the suspension might be justified. Additionally, professional conduct is crucial for maintaining a positive work environment and upholding ethical standards. If the consultant violated these principles, the hospital might have made a correct decision. However, due process is also an important aspect to consider. If the consultant was suspended without a thorough investigation or fair opportunity to address the allegations, the decision might be questionable. In conclusion, whether the hospital's decision to suspend the consultant was correct or not depends on the specific circumstances, such as the impact on patient safety, adherence to professional conduct, and the fairness of the process leading to the suspension.

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Let's say you make that extra $27,000 for actually graduating from a four-year college for twenty years. In 20 years, how much money have you gained by spending those four years in college ?

Answers

Answer:

$540,000

Explanation:

The extra amount made per year is $27,000

In 20 years, the total gain would be

=$27,000 x 20

=$540,000

tori is a freelance photographer and her net earnings were $80,000. calculate tori’s payroll taxes if she was a full time employee

Answers

Tori’s payroll taxes if she was a full time employee of the company will be $11304.

How to compute the tax?

From the given information, the net income is $80000, tax rate is 15.3% for social security and Medicare.

Therefore, the tax paid by Tori will be:

= 15.3% × $73880

= $11304

In conclusion, the tax will be $11304

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One of the 5 Ws is "Who". This refers to _____. Who will be in the venue the day after the event? Who else will be hosting events that day? Who is going to do what? Who is hosting the event?

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Answer:

Explanation:

The 5 Ws (sometimes referred to as Five Ws and How, 5W1H, or Six Ws) are questions whose answers are considered basic in information gathering or problem-solving. The five questions are Who, What, When, Where, and Why. The term "Who" refers to the person or people involved in the situation.

The 5 Ws (who, what, when, where, and why) are questions used to investigate a story or situation. They are often used in journalism, research, and police investigations. In a business context, the 5 Ws can be used to analyze a context in a given situation. For example, in sales the 5 Ws can be used to ask questions such as "Where will the palm tree be?" and "By when would you like to have it at your house?".

The 5Ws can also be used as a brainstorming technique. The questions are Who, What, When, Where, Why, and How. An example of this is using the 5Ws and H to answer questions such as "Who is involved?", "Who is affected?", "Who will benefit?", and "Who will be harmed?".

The 5Ws help writers answer key questions about their story or situation so that they can provide an accurate description of what happened.

Businesses are expected to demonstrate ethical behavior _____.

Answers

Businesses are expected to demonstrate ethical behavior B. even when government regulations do not apply.

Unethical conduct can be defined as movements that might be against social norms or acts which are taken into consideration as unacceptable to the general public. Ethical behavior is the exact opposite of unethical behavior. Moral conduct follows the general public of social norms and such movements are ideal for the general public.

Ethical behavior is simpler for a man or woman than it is for an organization. Businesses have many individuals with differing reviews, values, and ideals. So, the process is to make certain an enterprise is ethical. The solution is—anyone.

Enterprise ethics enhances the law with the aid of outlining suited behaviors beyond government management. Corporations set up business ethics to sell integrity among their personnel and gain consideration from key stakeholders, consisting of buyers and purchasers.

Disclaimer: The question is incomplete. Please read below to find the missing content.

Question: Businesses are expected to demonstrate ethical behavior _____.

A. only when required by government regulation

B. even when government regulations do not apply

C. only when required by a contract

D. except when it conflicts with corporate culture

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Celestial Insurance hires college graduates and prepares them for management careers. The human resource professionals who prepare the programs that teach leadership and business management to these employees are involved in which HR function?

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Answer:

Development

Explanation: A P E X

The human resources profession are involve in development function of the employees.

The Human resources personnel is saddled with responsibility of overseeing process of recruitment, interview, and hire of new staff.

In every company, the Human resources personnel serves as a link between the management and its employees.

After the recruitment process of hiring an applicant, the HR Personnel also provide them with lectures on Leadership and Business management which will help them in their career development.

Therefore, in conclusion, the role performed by the HR personnel is known as Development function in the company.

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What is the main function of a business?​

Answers

Manufacture of specific goods or the supply of specific services

Give a Brief history from subsistence economy to money economy.
Please Help ASAP. Please

Answers

Answer:

Explantation to the following question is as follows;

Explanation:

A subsistence economy frequently engages in artisans fisheries, labor-intensive agriculture, and animal grazing. Handmade, basic tools and traditional procedures are used in each of these undertakings. The absence of excess is another feature of subsistence economies.

Money is an economic entity that serves as a universally accepted means of trade in a transactional economy. Money performs the function of lowering transaction costs, namely the twofold coincidence of desires.

Identify each cost listed as either explicit or implicit costs.
Rent
Wages
The cost of time
Using resources already owned
What may be lost

Answers

The explicit costs are rent, and wages and implicit costs are the cost of time, using resources already owned and what may be lost.

What are the explicit costs?

Explicit costs are direct payments made to others in the course of running a business, such as wages, rent and materials, as opposed to implicit costs, where no actual payment is made. It is possible still to underestimate these costs, however: for example, pension contributions and other "perks" must be taken into account when considering the cost of labour. Explicit costs are taken into account along with implicit ones when considering economic profit.

Accounting profit only takes explicit costs into account.

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Alison’s company has asked her to create a presentation to her colleagues about the new electronic calendar they will be using. What three features should Alison highlight when she introduces this tool that can help increase productivity? (3+ sentences)

Answers

Remove the personal dialogue and formalize the statement.

Which of the following describes how the writing process is divided into three stages?

Three stages can be identified in the writing process: there are three stages to writing: planning, drafting, and editing and proofreading at the end.

Which of the following is the finest illustration of bias-free writing?

Avoiding terms or phrases that unfairly and even unethically label or stigmatize people based on their gender, race, ethnicity, age, handicap, or other personal traits is a key component of bias-free language.

Which of the following statements most accurately sums up the value of creating an outline?

An outline helps writers keep track of the organization of their thoughts and subject.

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True or False: It is possible for a team to start with the DMAIC or DMADV approach and realize that they need to switch to the other process mid-project quiz

Answers

DMAIC and DMADV methods share features that are important, but they are not interchangeable and are designed for use in different business processes.

What is DMAIC?

The full forms of both the methods are :

DMAIC: Define, Measure, Analyze, Improve, Control

DMADV: Define, Measure, Analyze, Design, Verify

DMAIC and DMADV have many similarities that deserve attention. They both use mathematical and factual tools to find solutions to common quality-related problems and focus on achieving the business and financial goals of the organization.

DMADV is associated with new services and product designs; may not always work with existing products and processes.

DMAIC is applied to an existing product or process but no longer meets customer requirements and / or details.

Hence, It is not possible to switch the methods in the middle of any project as they have serve different purposes.

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The nondiscriminating monopolist's demand curve:___.

a. is less elastic than a purely competitive firm's demand curve.

b. is perfectly elastic.

c. coincides with its marginal revenue curve.

d. is perfectly inelastic.

Answers

Option C is correct. The nondiscriminating monopolist's demand curve coincides with its marginal revenue curve.


In a monopoly, the demand curve faced by the firm is downward sloping, meaning that as the price of the good increases, the quantity demanded decreases. However, unlike a purely competitive firm, the monopolist has control over the price it charges for its product.

The monopolist's marginal revenue (MR) is the change in total revenue resulting from selling one additional unit of output. Since the monopolist can only sell more units by lowering the price, the MR curve will always lie below the demand curve.

The nondiscriminating monopolist's demand curve coincides with its marginal revenue curve because the monopolist must lower the price for all units of output in order to sell more units. This means that the price elasticity of demand for a monopolist is greater than that of a purely competitive firm, making the monopolist's demand curve less elastic.

The correct option is c. The nondiscriminating monopolist's demand curve coincides with its marginal revenue curve.

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Sometimes news organizations have biases because:
A. they are concerned about a national crisis.
B. the government pays them to be biased.
C. they need to make money and get advertisers.
D. the audience has to be influenced.

Answers

Answer:

c

Explanation:

Sometimes news organizations have biases because they need to make money and get advertisers. Hence, option C is correct.

What is organizations?

a group of people who work together in an organized way toward a common objective: the World Health Organization. The essay was about international aid organizations. more occurrences.

A structured grouping of people, such as a company, nonprofit, political party, or club, is known as an organization. These speciality schools are mostly run by nonprofit organizations. a report from the International Labor Organization.

The majority of firms today use one of three types of organizational structures: functional, departmental, or matrix. The advantages and disadvantages of each form must be considered by owners before deciding which to utilize for their business.

Thus, option C is correct.

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To examine
the weekly payroll of all employees, one would look at the:

Answers

To examine the weekly payroll of all employees, one would look at the: d. payroll register.

What is the payroll register?

The payroll register is a book or record that is used to fill in the details of all the employees and their payment logs. A record of this register is often kept in good condition in case of any future discrepancies that will have to be resolved.

A person who wants to examine the weekly payroll of all employees in an organization must be able to look at the payroll register to know what is obtainable. There, he would find the names of the employees, their job roles and payment record.

Options:

a. W-4

b. employee earnings record

c. W-2

d. payroll register.

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Explain a situation where user would transpose data on a spreadsheet in Microsoft Excel. Give at least one example to illustrate your reasoning. Use details to support your answer.

Answers

Answer:

below

Explanation:

function must be entered as an array formula in a range that has the same number of rows and columns, respectively, as the source range has columns and row

while rachel carson was writing silent spring, a picture of how ddt influences bird populations was emerging. scientists hypothesized that ddt was causing the observed decline in fish-eating bird populations. the assumptions and connections underlying this hypothesis were complex. in this activity, you will reconstruct those connections.

Answers

Rachel Carson's was known for her work on Silent Spring. The answers to the question are on the image. the first image shows the answers in the right order while the second image is about the questions before its arrangement.

The Silent Spring was known to be public awareness focused on nature as it was said to be vulnerable to human intervention.

Carson in her work gave a radical proposal which state that technological progress is simply at odds or negative terms with natural processes and thus must be shortened.

 

Silent Spring was known to greatly opposition by chemical companies and this lead to reversal in national pesticide policy and also led to the ban on DDT for agricultural uses.

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while rachel carson was writing silent spring, a picture of how ddt influences bird populations was emerging.
while rachel carson was writing silent spring, a picture of how ddt influences bird populations was emerging.

Why do promises make a difference in people ives

Answers

Answer:

It gives people hope and trust in that person. Promiss are a mere social construct however they add that bit of extra trust to the mix

someone help i really need it !!!!

someone help i really need it !!!!

Answers

Answer:

Shoot, sorry, ik this was 3 days ago so my answer probably wont matter but you did give me point by letting me answer... Thanks!

Explanation:

:D

when a corporation begins to suffer large losses, the default risk on the corporate bond will a) increase and the bond's return will become more uncertain, meaning that the expected return on the corporate bond will fall. b) increase and the bond's return will become less uncertain, meaning that the expected return on the corporate bond will fall. c) decrease and the bond's return will become less uncertain, meaning that the expected return on the corporate bond will fall. d) decrease and the bond's return will become less uncertain, meaning that the expected return on the corporate bond will rise.

Answers

When a corporation begins to suffer large losses, the default risk on the corporate bond will decrease and the bond's return will become less uncertain, meaning that the expected return on the corporate bond will rise.

A sort of financial product sold to investors is a corporate bond, which is issued by a business. The investor receives a predetermined amount of interest payments at either a fixed or variable interest rate in exchange for providing the firm with the money it requires. The bond "reaches maturity" when it stops making payments and the initial investment is refunded.

The ability of the corporation to repay the bond often serves as its security, and this ability is based on its expectations for future revenues and profitability. Physical assets of the corporation may occasionally be utilized as collateral.

Corporate bonds are typically thought to be riskier than U.S. government bonds. As a result, even for businesses with excellent credit quality, interest rates on corporate bonds are virtually always higher. The credit spread is the gap between the yields on highly rated corporate bonds and U.S. Treasuries.

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Instruction: Identify each activity in terms of the problem solving stage where it best

belongs. Write your answer on the blank provided before each item.

Problem Identification – Problem Analysis – Decision Making – Decision Implementation

__________1. Consider different approaches to solving the problem.

__________2. Adding details to the initial investigation, saying exactly what the problem is (and not just its symptoms).

__________3. Plan details of the implementation

__________4. Change operations to introduce new ways of doing things.

__________5. Compare solutions, looking at all aspects of their performance.

__________6. Monitor actual performance.

__________7. Identify the key variables and relationships between them.

__________8. Identify and agree the best overall solution.

__________9. Build a model of the problem and test its accuracy.

__________10. Analyze the results, making sure that they are accurate and consistent.

Sara Maquiling sells handcrafted yard decorations at county fairs. The variable cost to make these is $ 85 each, and he sells them for $ 120. The cost to rent a booth at the fair is $200.

Requirements:

a) Identify the parameters of the problem

b) Create the mathematical model that represents the problem

c) If Sara sells 250 units, what would be the profit?

d) How many units must Sara sell to breakeven?

no hand writing

Answers

The activities can be classified into different problem-solving stages as follows:  Consider different approaches to solving the problem. This activity involves exploring various options or strategies to address the problem, which falls under the Decision Making stage.

Adding details to the initial investigation, saying exactly what the problem is. This activity relates to clearly defining and specifying the problem, which falls under the Problem Identification stage. Plan details of the implementation. This activity involves developing a plan for executing the chosen solution, which falls under the Decision Implementation stage.

Change operations to introduce new ways of doing things. This activity is about implementing changes to the existing processes or operations, which also falls under the Decision Implementation stage. Compare solutions, looking at all aspects of their performance. This activity involves evaluating different solutions and assessing their effectiveness, which falls under the Decision Making stage.

Monitor actual performance. This activity focuses on tracking and assessing the real-time performance of the implemented solution, which falls under the Decision Implementation stage. Identify the key variables and relationships between them. This activity involves analyzing the factors and relationships relevant to the problem, which falls under the Problem Analysis stage.

Identify and agree the best overall solution. This activity pertains to selecting the most suitable solution among the available options, which falls under the Decision Making stage. Build a model of the problem and test its accuracy. This activity involves constructing a model or representation of the problem and validating its accuracy, which falls under the Problem Analysis stage.

Analyze the results, making sure that they are accurate and consistent. This activity focuses on reviewing and verifying the obtained results to ensure their accuracy and consistency, which falls under the Problem Analysis stage. By identifying the activities in terms of their corresponding problem-solving stages, we can better understand the sequence and nature of the problem-solving process.

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Investment in structures, equipment, software, and net inventory is known as:
A) total business spending.
B) gross private domestic investment.
C) net business spending.
D) net investment in durables

Answers

Investment in structures, equipment, software, and net inventory is an important component of the overall economic activity in any country. It is a measure of the amount of capital that businesses are willing to invest in order to expand their operations or improve their efficiency.

This type of investment is classified as gross private domestic investment (GPD) in the United States.GPD is a key component of the national income accounts, which are used to measure the performance of the economy. It is defined as the sum of all investments made by businesses in fixed assets such as structures, equipment, and software, as well as in inventories of finished goods and work in progress. GPD is an important indicator of the health of the economy because it reflects the level of confidence that businesses have in their ability to generate future profits.The term "gross" in GPD refers to the fact that this measure does not take into account the depreciation of existing capital stock. Depreciation is the decrease in the value of fixed assets over time due to wear and tear or obsolescence. To calculate net investment in durables, which is a measure that does take depreciation into account, one must subtract the depreciation from the gross investment.

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Cho started out with one small cupcake shop. Her business has grown so much that she now has two other shops across town. Cho has found that having three locations has greatly increased her production levels. She also notices that the price she pays for supplies (flour, butter, sugar, and packaging materials) has gone down considerably since she can now buy these items in bulk quantities. This exemplifies the principle known as

Answers

Answer:economies of scale

Explanation:

what is the first step in the comprehensive strategic-management model

Answers

The first step in the comprehensive strategic management model is typically conducting a thorough analysis of the organization's internal and external environment.

This initial step involves evaluating the organization's strengths, weaknesses, opportunities, and threats (SWOT analysis), assessing its competitive position, and understanding the broader industry and market dynamics. By conducting a detailed analysis, decision-makers gain insights into the internal resources, capabilities, and limitations of the organization, as well as the external factors that may impact its performance. This information serves as the foundation for formulating effective strategies and making informed decisions. Understanding the organization's current state and the external landscape is crucial for setting objectives, identifying strategic options, and aligning the strategic management process with the organization's vision and goals.

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Explained moral lessons for the life of Okomfo Anokye​

Answers

Answer:

It is said that when Okomfo Anokye was born in Awukugua he was already holding in his right hand a short white tail of a cow (Podua); and he had so firmly clenched the fist of the other hand that no one could open it. The woman who went to deliver the labouring mother tried to open it because she suspected there was something in it. The father was called in to assist... Okomfo Anokye opened his eyes and, staring at the father, quickly opened the mysterious hand, showing it to the father and saying "Ano....Kye" (Guan language) meaning "Ano...see" and gave to the father what was in it. It is alleged that it was a talisman. From this incident Kwame Agyei got his name "Anokye".

Explanation:

assuming the 2012 revenue and student enrollment goals are met, what will be the average annual growth rate of tuition for 2009 to 2012?

Answers

The average annual growth rate of tuition for 2009 to 2012 would be 20% if the 2012 revenue and student enrollment goals are met.

Assuming the 2012 revenue and student enrollment goals are met, the average annual growth rate of tuition for 2009 to 2012 can be calculated using the following equation:

Average Annual Growth Rate of Tuition = ((2012 Tuition - 2009 Tuition) / 2009 Tuition) / 3. Where 3 is the number of years between 2009 and 2012.

For example, if the 2012 tuition is $20,000 and the 2009 tuition was $15,000, then the average annual growth rate of tuition for 2009 to 2012 would be calculated as follows:

Average Annual Growth Rate of Tuition = ((20,000 - 15,000) / 15,000) / 3 = 0.2 or 20%

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The pipe located underneath Jiro’s kitchen sink was leaking and he did not know how to fix it. He called a plumber who agreed to come fix the leaking pipe in exchange for $125 plus the cost of any parts. The plumber went to Jiro’s home, removed the old pipe that was leaking, and replaced it with a new pipe that the plumber brought with her. When the plumber was finished, she told Jiro that the total cost was $140 and Jiro promptly paid her. Was this a voluntary exchange? Why or why not?

A
Yes, because both parties willingly entered the exchange and benefited from it.

B
Yes, because one party exchanged money with another party for a good or service.

C
No, because Jiro was not aware of the final cost before he agreed to the exchange.

D
No, because the plumber’s service was not equal in value to the money paid by Jiro.

Answers

Answer:

A

Explanation:

It’s not b

The given statement clearly states that it was a voluntary exchange because both parties willingly entered the exchange and benefited from it.  Hence, Option A is correct.

What is a voluntary exchange?

Buyers and sellers engaging in market exchanges voluntarily and freely is known as voluntary exchange. A basic tenet of both classical and neoclassical economics, which serve as the foundation for modern mainstream economics, is voluntary exchange.

A transaction when two persons freely exchange products or services is referred to as a voluntary exchange. This happens in a market economy, a form of economy where both parties to an interaction benefit from it and come out ahead than they did before.

Given that both parties  entered the voluntary exchange and benefited from it, it is apparent that the transaction was voluntary.

Therefore, Option A is correct.

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Topsider Inc. Is evaluating whether to replace an existing leather-cutting machine with a new machine that has a five-year life. The old machine has current salvage value equal to $5,000; its salvage value in five years is expected to be zero. The net (after-tax) salvage value of the new machine in five years is expected to be $7,500. If the new machine is purchased, Topsider will have to invest $4,520 in its net working capital. Based on this information, what is the new machine's terminal cash?

Answers

The machine's salvage value is $7,500, so the after-tax cash inflow from the sale would be: TCF = SV x (1 - T) + ATCF5 = $7,500 x (1 - 0.35) + (0.15P - $1,238) = $4,875 + 0.15P, where P is the purchase price of the new machine.

To calculate the terminal cash flow of the new machine, we need to find the after-tax cash flows for each year of its life, including the final year when it will be sold.

Assuming a tax rate of 35%, the after-tax cash flows for each year are as follows:

Year 0 (initial investment): -$4,520

Year 1: CF1

Year 2: CF2

Year 3: CF3

Year 4: CF4

Year 5 (sale of machine): CF5

To calculate CF1 to CF4, we need to find the annual after-tax cash inflows generated by the new machine. We are not given this information directly, but we can find it indirectly by subtracting the annual depreciation expense from the annual pre-tax cash inflows.

Assuming the new machine has a purchase price of P, and an expected annual pre-tax cash inflow of I, its annual depreciation expense D would be:

D = P / n

where n is the machine's useful life in years. In this case, n is 5, so:

D = P / 5The annual pre-tax cash inflow for the new machine is not given, but we can find it using the following formula:

I = (P - SV) / n

where SV is the expected salvage value of the machine at the end of its useful life. In this case, SV is $7,500, so:

I = (P - $7,500) / 5

We can now use these formulas to find the annual after-tax cash inflows as follows:

ATCF = (I - D) x (1 - T)

where T is the tax rate of 35%.

Year 1:

ATCF1 = (I - D) x (1 - T) = [(P - $7,500) / 5 - P / 5] x (1 - 0.35) = 0.45P - $2,925

Year 2:

ATCF2 = (I - D) x (1 - T) = [(P - $7,500) / 5 - 2P / 5] x (1 - 0.35) = 0.3P - $1,950

Year 3:

ATCF3 = (I - D) x (1 - T) = [(P - $7,500) / 5 - 3P / 5] x (1 - 0.35) = 0.15P - $975

Year 4:

ATCF4 = (I - D) x (1 - T) = [(P - $7,500) / 5 - 4P / 5] x (1 - 0.35) = -0.0.001P + $525

Year 5:

ATCF5 = (I + SV - P) x (1 - T) = [$7,500 + (P - $7,500) / 5 - P] x (1 - 0.35) = 0.15P - $1,238

To find the terminal cash flow, we need to calculate the after-tax cash inflow generated by selling the new machine at the end of its useful life. In this case,

TCF = SV x (1 - T) + ATCF5 = $7,500 x (1 - 0.35) + (0.15P - $1,238) = $4,875 + 0.15P

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