Answer:
a. It is not a fair deal for me.
The question is how much is $1,000 today when received in 12 months' time from now. The present value of $1,000 at 5% effective interest rate is $952 ($1,000 * 0.952). The other repayment of $1,100 in 2 years' time from now is worth $997.70 today at the 5% effective interest rate. This implies that my friend is repaying me $1,949.70 in present value terms.
For friendship sake, I may lend her the money, but in economic analysis terms, the NPV value will yield a negative value of $50.30 ($2,000 - $1,949.70). My friend is not actually paying me back the amount I would lend to her. She is paying me less than I actually would lend to her.
b. Cash Flow Diagram:
Year 1 Year 2
F1 F2
$1,000 $1,100 (Inflows)
Fo⇵.................⇵.......................⇵...........................⇵n period
Year 0
$2,000 (outflows)
Explanation:
The cash flow diagram for this loan is the graphical representation of the timing of the cash flows with a clear marking of the repayments made by my best friend in two instalments and the $2,000 that I lent to her. This cash flow diagram presents the flow of cash as arrows on a timeline scaled to the magnitude of the cash flow, where outflows are down arrows and inflows are up arrows.
The Net present value (NPV) of this loan shows the difference between the present value of repayments by my best friend and the present value of $2,000 that I lent to her over a period of 2 years. To obtain this difference, the present values of cash inflows of $1,000 in a year's time and $1,100 in two years' time are determined using the discount factor table based on the given interest rate of 5%.
a. if the company had fewer than 20 employees
b. if Darwin needed a reasonable accommodation to perform his job due to a disability
c. if Darwin planned to retire in less than five years
d. if Darwin was unable to perform the essential functions of his job
e. if Darwin had another job offer elsewhere
f. if the company was a private (non-governmental) organization
g. if there were more highly skilled workers in the organization who could take his place
2. Which law prevents employees like Darwin from discrimination in employment?
a. ADEA
b. Title VII
c. Affirmative action
d. ADA
3. Are the company’s actions permissible, considering its mission and vision?
a. No, because Darwin was treated less favorably than younger employees based solely on his age.
b. Yes, because age is not a protected class in employment law.
c. No, because Darwin was not given compensation or allowed adequate time to find another job.
d. Yes, because the company is private and therefore has the right to hire or fire whomever they want to.
Answer:
Darwin and Compuserve, Inc.
1. d. if Darwin was unable to perform the essential functions of his job
e. if Darwin had another job offer elsewhere
2. b. Title VII
3. a. No, because Darwin was treated less favorably than younger employees based solely on his age.
Explanation:
Title VII of the Civil Rights Act of 1964 is a federal law that protects employees against discrimination based on certain specified characteristics: race, color, national origin, sex, and religion. Under Title VII, an employer may not discriminate with regard to any term, condition, or privilege of employment.
Federal employment laws prohibit discrimination of persons who are over 40 years.
Answer:
C) Would decrease
Explanation:
Answer:
Please refer the detail answer in the memo below
Explanation:
Date: 24 January 20XX
Subject: Review of Impairment of Goodwill
From: External Auditors
To: Chief Accountant, Plush Corporation
Upon review of the investment made by your company in Common Corporation, we believe that there are possible indications of the impairment of the goodwill initially recognized in the books upon acquisition.
At the time of Acquisition:
Consideration = $450,000
Fair Value of Net Assets = $430,000
Goodwill = $450,000 - $430,000 = $20,000
The new guidance issued by FASB, requires only a one-step quantitative impairment test, whereby a goodwill impairment loss will be measured as the excess of a reporting unit’s carrying amount over its fair value.
However, if we follow the previous guidance of FASB, we have to test the impairment with the following three steps:
Step 1: We will compare the carrying amount of the net assets with the Fair value of Reporting Unit, and if the carrying amount exceeds the fair value, we will record the impairment.
Step 1: We will compute, implied value of goodwill by comparing the fair value of the reporting unit with the fair value of the identifiable net assets, if FV of net assets are higher, then there is no impairment, otherwise we will jump to Step 3.
Step 3: If the calculated implied value of the goodwill is lower than the actual goodwill at acquisition, than the difference is the impairment loss, however in case the implied value of the goodwill is higher than the actual goodwill at acquisition, no impairment shall be recorded.
Apparently, since the fair value of Common had increased to $485,000, there is no need to recognize the impairment loss on goodwill; however we believe that the estimated fair value of Common is less than the $430,000 and therefore impairment should be recorded.
Answer:
4.76% and 0.5
Explanation:
The computation is shown below:
Average borrowing rate is
= Cost of debt capital ÷ (1 - tax rate)
= 3% ÷ (1 - 0.37)
= 4.76%
And, the market beta is
Cost of equity = Risk free rate of return + Beta × (Market risk premium - risk free rate of return)
5% = 2.5% + Beta × 5%
So, the beta is 0.5
The (Market risk premium - risk free rate of return) is also known as market risk premium
The average pre-tax borrowing rate for Abbott Laboratories is 4.8%. The market beta cannot be calculated without additional information.
The computations for the average pre-tax borrowing rate and market beta for Abbott Laboratories (NYSE: ABT) require different approaches. The estimate provided in the question, 3.0%, is an after-tax cost of debt capital so to find the pre-tax cost of debt, we need to adjust this rate for the tax impact. You would use the formula: pre-tax cost of debt = after-tax cost of debt / (1 - tax rate). Plugging the given values in, we get:
3.0% / (1 - 0.37) = 4.76%,
rounded to 4.8%.
As for the market beta, additional information would be needed that was not provided in the question, such as the covariance of ABT's stock return with the return on the overall market, and the variance of the market's return. Because of this, the market beta cannot be calculated with the provided information. This underlines the importance of clear and detailed information in solving financial analysis problems.
#SPJ3
Answer:
5
Explanation:
15 - 10 = 5
Answer:
Well, it depends on the product. But, I'd say, first, an idea for the product. Creating/designing and refining the product is next. Then, when finally satisfied, begin mass production
Explanation: