QUESTION ONE
ABC Ltd wishes to expand its business. On 31 Dec 2021, the company had
the following existing and proposed capital structures to support the
expansion programme.
1. The existing 8% debt capital has a book value of Ksh 50 000 000 and
matures in 10 years. The market value of debt at the close of business on
31 Dec 2021 was Ksh 40 000 000
2. A ten year loan of Ksh 300 000 000 is to be raised at an interest of 10
percent p.a. A cost of Ksh 20 000 000 will be incurred in raising this loan
3. A 12% preference stock capital stands in the books at Ksh 100 000 000
( 1 000 000 shares) and has a total market value of Ksh 150 000 000.
4. There are 40 000 000 ordinary shares with a current market price of Ksh
1500 each. The firm’s expected earnings per share (EPS) stand at Ksh
200, its growth rate is 6% and has a dividend payout of 60%.
5. The company plans to issue 10 000 000 ordinary shares at a market price
of Ksh 1 500 per share. The cost of floating the shares is estimated at Ksh
10 000 000.
Required:
i) Firm’s current weighted average cost of capital (10 marks)
ii) Firm’s expected weighted average cost of capital after the expansion
programme (i.e. marginal cost of capital) (5 marks)
QUESTION TWO
An investor intends to place Ksh 112,000,000 in the 91 days Treasury bill at a quoted rate/yield of 7.65%
p.a.
Required:
a) Compute the investor’s return, assuming that he is withholding tax-payer
b) Compute the investor’s return, assuming that he is non-withholding taxpayer (6 marks)
Answer:
rat
Explanation:
♡
Which of the following does not represent a copyright?
O a photograph
o a sketched floor plan
O painting by the numbers
o choreographing a dance step by step
Answer:
I think the answer is a sketched floor plan
Answer:
d- because you are teaching it but you dont have full ownership of it because it is a dance that you can learn
the format of a statement of cash flows includes reporting cash flows from three activities including:
Operating operations, investments, and financial activities are the three components of a cash flow statement.
How is cash flow generated?
The net balance of money entering and leaving a business at any one time is known as cash flow. Cash is always coming in and going out of a business. When a merchant purchases merchandise, for instance, money leaves the business and goes to its suppliers.
What is cash flow, and what does it look like?
Cash flow from operations includes costs that are incurred on a daily basis. Rent, utilities, salaries, and the cost of goods supplied are a few examples of these financial outflows. Cash outflows may fluctuate considerably for organizations that run predominantly on a seasonal basis.
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explain 5 ways in which business studies is a living subject
Five ways in which business studies is a living subject:
Evolving technologiesEconomic shiftsChanging consumer preferencesSustainability and ethical issuesGlobalizationHow is business studies a living object ?Business studies is an ever-evolving subject that continuously updates itself to reflect the latest developments and trends in the contemporary business environment. The dynamic global economy, characterized by recessions, inflation, and changing trade policies, can have significant consequences on businesses. It compels them to adapt quickly in order to remain profitable.
Furthermore, as society shows a growing inclination towards sustainability and ethical concerns, businesses must incorporate these principles into their practices. This highlights the importance of keeping up-to-date with these changes for students studying in business studies so they can gain success in today's innovative business world.
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The expected amount of time to recover the initial amount of an investment is called the: Multiple Choice Amortization period. Payback period. Interest period. Budgeting period. Discounted cash flow period.
Answer: Payback Period
Explanation:
Payback period refers to the length of time by which the initial cost of an investment is expected to be recovered or the break even point of which an investment expects to recoup the amount used up in an initial cost of investment.
A good payback period is one with the shortest Payback, time while longer payback periods are not desired for business investments.
To calculate Payback period, we use
amount of the investment / annual cash flow = Payback period.
Troy Juth wants to purchase new dive equipment for Underwater Connection, his retail store in Colorado Springs. He was offered a $63,000 loan at 8.5% for 24 months. What is his monthly payment by table lookup? (Use Table 14.2)
Note: Round your answer to the nearest cent.
If he was offered a $63,000 loan at 8.5% for 24 months. His monthly payment by table lookup is : $3071.
What is monthly payment?Monthly payment can be defined as the amount a person received on a monthly basis.
First step is to convert the month to year
Month to year = 24 / 12
Month to year = 2 years
Second step is to find the interest using this formula
I = P × R×T
Where:
I = Interest
P = Principal
R = rate
T = time
Hence
I = 63,000 × 2 × 8.5%
I = 10,710
So,
P+ I = 63,000 + 10,710
P+I = 73,710
Now let find the monthly payment:
Monthly payment = 73,710 / 24 months
Monthly payment = $3,071.25.
Monthly payment = $3,071 (Approximately)
Therefore the monthly payment is the amount of $3071
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Please help me with this question....
Answer:
C. I Believe
Explanation:
Jane is a marketing researcher of a cellular service providing firm. She is conducting market research before the firm decides to launch its new services. After deciding on the research approach and instruments, what is the next step that Jane should follow
The next step that Jane must take after deciding on the research approach and instruments is to design a sampling plan for the collection of sample data.
What is Sampling Plan?A sampling plan reefers to a detailed outline of which measurements will be obtained, the period it will be obtained, in what way, and who will obtain such information or data.
A sampling plan works based on the law of probability. If a researcher decides to make it effective, then he must allow the rules of probability to play out on the sample with zero interference.
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The general role of marketing in our private enterprise system is to link
Answer:
The general role of marketing in our private enterprise system is to coordinate.... In effect, marketing serves as the connecting link, or bridge, between producers and consumers. Selling, distribution, and pricing are marketing functions.
Explanation:
hope this helps you.
in Italy An overview of economic factors that could influence pricing strategies. A synopsis of costs that would influence the price of the good or service being proposed for global business operations. Recommend a pricing strategy (including specific prices) for the proposed enterprise. Provide evidence to support your proposal.
Some elements influencing foreign consumer behavior in international marketplaces include but are not limited to:
target market economics and political ideology;education and technical abilities;values and attitudessocial and cultural factors;languagereligion and beliefs; andlegal and competitive issues.The costs that could influence the price of the good or service being proposed for global business operations are?Some of the major costs that drive the price of goods these days at the international level are:
Cost of technologycost of informationCost of raw materialscost of regional labor etc.Taking cost of labor, for instance, China became the headquarters of production and large-scale manufacturing because thee readily provided cheap labor and had access to raw materials at a reasonable cost due to their global influence.
Thus, a principal strategy that would support a global enterprise must take into consideration sources of:
Cheap labor andCheap raw materials.Any global business that is able to achieve control over these two factors will dominate in terms of price.
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Jeannine is studying cultures and their respective attitude toward proxemics. What is she most likely to discover?
Question 5 options:
which cultures prefer having people stand close to one another
which cultures prefer to keep business interactions more formal
which cultures prefer to make eye contact when conversing
which cultures prefer all scheduled events to begin and end on time
Which cultures prefer having people stand close to one another attitude toward proxemics she is most likely to discover. Thus option A is correct.
What is culture?The term "culture" is a general one that refers to individual interaction, structures, and norms present in modern populations in addition to people that make up these communities as well as their skills, beliefs, including abilities.
Proxemics is the study of how people use space and how population size affects how they behave, communicate, and interact with others. the field of study that examines the distance that people feel they must maintain within themselves and others. Therefore, option A is the correct option.
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Organizations come across too many challenges or uncertainties about the human resource of the 21st century including globalization, the advent of the latest technology use, more and more innovations, economic and political instability, and ethical and ecological challenges.” With reference to the aforementioned statement, elaborate on how each of the above-mentioned factors related to dynamics changes can pose a challenge and a change in HRM practice. (15) Job analysis is considered as one of the critical processes that cannot be avoided during a recruitment process. Suggest some of the crucial factors that need to be considered when embarking on a job analysis process
HRM practises may be impacted by issues with globalization, technology, innovation, instability, ethics, and ecology. The work tasks, necessary skills, knowledge, and talents should all be taken into account while doing a job.
Why is human resource development so important to organisations' success in the twenty-first century?The goal of human resource management in the twenty-first century is to increase an organisation's productivity by giving its personnel the best working conditions. When working in a good environment, the employees can give their best performance.
What role does human capital play as one of the key drivers of organisational success?Human resources can be used to develop, strengthen, or change an organisation's culture. Pay, performance evaluation, training and development, hiring and onboarding, and reiterating the core principles.
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If Joanna is risk averse, then:__________.
a. her utility function exhibits the property of decreasing utility.
b. her utility function exhibits the property of increasing marginal utility.
c. she dislikes bad things more than she likes comparable good things.
d. she is unlike most people, because most people are not risk averse
Answer:
c. she dislikes bad things more than she likes comparable good things.
Explanation:
In business sense where this falls to place, a risk aversed person is someone who invests in stock, trades and other business with an aim to possibly minimize any form of losses in his or her tine in doing these businesses. S/he is likely or can comfortable do a business and be sure of little interest or returns rather than venturing or risking trying deals that outcomes or returns are totally uncertain to the investor. Therefore after evaluations of this kind, it is easily denoted that being a risk taker could possibly be the opposite of being risk averse.
Net profit after taxes of a firm is 100000 and its fixed interest charges on long term debt are 20000 what is the interest coverage ratio if the rate of income tax is 60%
the interest coverage ratio is 13. This means that the firm is earning enough to cover its interest payments 13 times over.
How to calculate?
The interest coverage ratio is calculated as follows:
Interest Coverage Ratio = (Net Profit + Fixed Interest Charges) / Fixed Interest Charges
First, we need to calculate the net profit before taxes, as this is what we will use to calculate the interest coverage ratio:
Net Profit Before Taxes = Net Profit After Taxes / (1 - Tax Rate)
Net Profit Before Taxes = 100000 / (1 - 0.6)
Net Profit Before Taxes = 250000
Now we can calculate the interest coverage ratio:
Interest Coverage Ratio = (Net Profit Before Taxes + Fixed Interest Charges) / Fixed Interest Charges
Interest Coverage Ratio = (250000 + 20000) / 20000
Interest Coverage Ratio = 13
Therefore, the interest coverage ratio is 13. This means that the firm is earning enough to cover its interest payments 13 times over.
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1. Why do you think that there’s a huge gap in theory (what we know we should do) and practice (what we’re actually doing) of leadership development?
2. What are some reasons that companies might not be addressing Gen Y leadership development programs?
Answer:
1. Theories are based on assumptions. It is practice that verifies the underlying assumptions behind every theory, using real-life experiences. If theories are not put to use, they remain theories with untested assumptions.
2. The current leadership does not understand the millennials. The millennials are operating with tools that look too sophisticated for the current leadership. There is much confusion between what the Gen Y millennials want to achieve and the expected achievement targets being set by the current leadership. Leadership development programs for the Gen Y can only be implemented when misunderstanding is removed.
Explanation:
Leadership development includes all the processes that expand the capacities of individuals to perform in leadership positions by facilitating the execution of a company's strategy, building alignments, and winning mindsets while growing the capabilities of others to succeed the current leaders.
There is a more gap between the theory and the practice because the theories are totally based on the assumptions whereas the practice is fully depending on the theory.
Why there is a gap between theory and practice?(1).
There is a huge gap in theory and practice in the leadership style because the theories are established or fully founded on assumptions.
But in the practice, it confirms the implicit premises or assumptions behind every theory by using real experiences of life.
Its theories are not taken place, then the practice is also not works.
(2).
The cutting-edge management does now no longer recognize the time period.
The time period is run away with power train, that visual aspect too state-of-the-art for the cutting-edge management.
Leadership improvement packages for the Gen Y can handiest be carried out whilst false impression is removed.
There is a lot of confusion among what the Gen Y millennials need to accomplish, and the expected fulfillment targets being set through the cutting-edge management.
Therefore, there are the difference between the theory and practice.
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00 For Market failures means that the market has not achieved its optimum production outcome. This means that it has not produced the correct quantity of goods and services. QUESTION 1 Conduct a research to any small business that is manufacturing goods in your community. Make an appointment to interview the owner for the purpose of collecting the information using the questionnaire below. 1.1 General information: ● Name of the firm / business Specify the type of goods or service ● ● Position of the person interviewed ● Date of the interview 1,2 Explain briefly the negative impact the following factors have in your business. (10) Lack of information: ● Price discrimination Immobility of factors of production with special reference to: Physical capital Structural changes ● ● (1) ● (1) (1) (1) [14] QUESTION 2: Interview 3-4 community members that reside near the business you have visited. 2.1 Ask them to name any TWO negative externalities and TWO positive externalities caused by the local business, (2 x 2) (4) 2.2 Request them to list any TWO characteristics of public goods. (2 x 1) (2) 2.3 Use the negative externality and positive externality graphs to explain the impact this business have to the society (10) [16]
The first step in researching a small business in your neighborhood is to find a suitable nearby manufacturing company.
Once you do, contact the manager or owner to arrange an interview. Gather general information during the interview, such as the name of the company or business, what types of products or services they provide, the interviewer's position, and the time and date of the interview.
Then, focus on the detrimental effects different situations can have on the company. Briefly describe the impact on business of informational gaps, price discrimination, immobility of production variables (with a focus on physical capital), and structural changes.
Interview three to four locals who live close to the establishment you just visited. Ask them to list two unfavorable and two beneficial externalities brought about by the neighborhood business. Ask them to add two properties of public goods to the list as well.
Finally, use the data from the interviews to create graphs showing the positive and negative externalities of business on society. These infographics will graphically describe the costs and benefits that the company's neighborhood has.
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On July 15, 2021, Ortiz & Co. signed a contract to provide EverFresh Bakery with an ingredient-weighing system for a price of $87,600. The system included finely tuned scales that fit into EverFresh’s automated assembly line, Ortiz’s proprietary software modified to allow the weighing system to function in EverFresh’s automated system, and a one-year contract to calibrate the equipment and software on an as-needed basis. (Ortiz competes with other vendors who offer ongoing calibration contracts for Ortiz’s systems.) If Ortiz was to provide these goods or services separately, it would charge $58,000 for the scales, $10,000 for the software, and $32,000 for the calibration contract. Ortiz delivered and installed the equipment and software on August 1, 2021, and the calibration service commenced on that date. Assume that the scales, software and calibration service are all separate performance obligations. How much revenue will Ortiz recognize in 2021 for this contract?
Answer:
Ortiz & Co.
Ortiz & Co will recognize $71,341 revenue in 2021 for this contract.
Explanation:
a) Data and Calculations:
Contract price = $87,600
Separate performance contracts:
Scale Software Calibration Total
Separate $58,000 $10,000 $32,000 $100,000
Percentage 58% 10% 32%
Contract $50,808 $8,760 $28,032 $87,600
2021 revenue
recognition 100% 100% 5/12 (42%)
Recognized
revenue $50,808 $8,760 $11,773 $71,341
2022 revenue 0 0 $16,259
b) The revenue for the calibration of the equipment and software will not be fully recognized in 2021 because it is a one-year contract. Since the calibration commenced on August 1, 2021, only revenue for 5/12 months or 42% (amounting to $11,773) will be recognized in 2021. The remaining 58% or 7/12 months' revenue of $16,259 will be recognized in 2022.
Gti two employees are paid weekly. As of the end if the year, two days salaries have accrued at the rate of 180 per day per per employee
The adjusting journal entry for GTI is as follows:
Adjusting Journal Entry:Date Account Titles Debit Credit
Dec. 31 Wages Expenses $720
Wages Payable $720
To accrue the two days' wages owed to two employees.What is an adjusting journal entry?An adjusting journal entry is a period-end journal entry to accrue expenses that have been incurred but not paid in cash.
Adjusting journal entries can also be used to record Depreciation Expenses, Earned and Unearned Revenues, Prepayments, and correction of accounting errors.
Transaction Analysis:Wages Expenses $720 Wages Payable $720
Two Employees' wages for two days = $720 (180 x 2 x 2)
Thus, the Wages Expenses account will be debited, while the Wages Payable account will be credited to show that GTI is owing two employee wages for 2 days.
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Question Completion:Prepare the adjusting journal entry to record the accrual.
(214) 1. Distinguish between technical efficiency and allocative efficiency. Use the two concepts of efficiency to compare a perfect market structure with a monopoly.
Technical efficiency refers to the ability to produce the maximum output from a given set of inputs or resources. It focuses on the production process and achieving the highest output level with the least amount of resources wasted. Technical efficiency emphasizes optimizing the production process to minimize costs and maximize productivity.
Allocative efficiency, on the other hand, relates to the allocation of resources in a way that maximizes overall social welfare. It refers to the ideal allocation of resources that matches consumers' preferences and demands. Allocative efficiency ensures that resources are allocated so that goods and services align with consumer preferences. This results in the best outcome for society.
When comparing an ideal market structure with a monopoly in terms of efficiency, there are significant differences. In an ideal market structure, characterized by complete competition, both technical and allocative efficiency is typically achieved. Many buyers and sellers exist, information is freely available, and no single entity controls the market. Competition drives firms to produce at the lowest cost and offer goods and services that match consumer preferences, leading to technical and economic efficiency.
In contrast, a monopoly represents a market structure where a single firm dominates the industry and has substantial market power. In terms of technical efficiency, a monopoly may not necessarily achieve the same level as a perfectly competitive market. Due to the lack of competition, a monopoly may not have the same incentive to minimize costs or innovate as efficiently as possible. This can result in higher production costs and lower technical efficiency.
Regarding allocation efficiency, monopolies often fail. Without competition, a monopolistic firm can set prices higher than the marginal cost of production, resulting in a suboptimal allocation of resources. The monopolist may prioritize maximizing profits rather than satisfying consumer preferences. This leads to a less efficient allocation of resources than in a perfectly competitive market.
Overall, an ideal market structure exhibits higher levels of technical and allocative efficiency than a monopoly. When true competition promotes resource optimization and consumer satisfaction, resulting in more efficient resource allocation.
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 the purpose of IDP
The basic purpose of IDP is to assist the employees in their career and personal development.
What do you mean by purpose?The purpose means the reason for which something can be done or created.
The basic purpose of IDP is to help employees for reaching short and long-term career goals as well as to improve their current job performance.
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I am better at my job than most of the other people who have the same job title agree or disagree
Disagreed. You cannot say that you are better at your job than others who have the same job title.
How to answer questionnaire questions?While providing the answer to a questionnaire, it is very important that a person would try to be as truthful as possible.
The reason they have to be truthful is so that they would be able to give the best answer that would be useful for the research.
In a question like this, I used disagreed because it is not possible that you have met all of the persons that have the same job description as you do.
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Tech Gadgets Co. distributes complex and relatively expensive goods, with customers typically requiring assistance before purchasing. The channels for these types of products are often structured to be a. intensive. b. comparative. c. pulled. d. selective.
Answer:
A). Intensively.
Explanation:
From the question, we are informed about, how Tech Gadgets Co. distributes complex and relatively expensive goods, with customers typically requiring assistance before purchasing. In this case , The channels for these types of products are often structured to be intensive. Intensive distribution channel could be regarded as a form of marketing strategy , it is apply when a company is making effort to sell out their goods/products to the range of small vendor and big store. As far this intensive is concerned, all available possible outlets is utilize to distribute the product.
.
On June 15, 2021, Allen sold land held for investment to Stan for $65,000 and an installment note of $300,000 payable in five equal annual installments beginning on June 15, 2022, plus interest at 10%. Allen’s basis in the land is $255,500. What amount of gain is recognized in 2021 under the installment method?
The amount of gain that will be recognized in 2021 under the installment method, is $27, 857 . 14
How to find the gain recognized?First, find the profit margin on the land sold by Allen to Stan:
= ( Selling price of land - Allen's basis in the land) / Allen's basis in the land
= ( ( 300, 000 + 65, 000) - 255, 500) ) / 255, 500
= 109, 500 / 255, 500
= 42. 857 %
The gain to be recognized, using the installment method is:
= Profit margin x Amount paid by Allen in 2021
= 42. 857 % x $ 65, 000
= $27, 857 . 14
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What are three possible problems that could be causing the Internet connection issue?
The three possible problems that could be causing the Internet connection issue is
Network Hardware IssuesService DisruptionConfiguration IssuesThe internet connection may be interrupted by hardware issues on the network. This can involve broken network cables, modems, or routers. Intermittent or poor connectivity may be caused by malfunctioning or obsolete equipment.
There could be a service Disruption or outage for your local internet service provider (ISP). This can be because of upkeep, technological difficulties, or infrastructural challenges.
Internet access can be affected by problems with program settings, network arrangements, or incompatible applications. This may entail obsolete network drivers, incorrectly configured network settings, or issues with a firewall or antivirus software.
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On December 31, 2020, Coolwear, Inc. had a balance in its prepaid insurance account of $59,400. During 2021, $97,000 was paid for insurance. At the end of 2021, after adjusting entries were recorded, the balance in the prepaid insurance account was $47,500. Insurance expense for 2021 was:
Answer:
$108,900
Explanation:
Opening balance in the prepaid insurance account = $59,400
Paid for insurance = $97,000
Balance in insurance account at the end = $47,500
Total amount paid ;
= Opening balance in the prepaid insurance account + paid for insurance
= $59,400 + $97,00
= $156,400
Insurance expense for 2021;
= Total amount paid - Balance at the end in the prepaid insurance account
= $156,400 - $47,500
= $108,900
Which of these might be an example of an advertiser's target group?
The example of an advertiser's target group is B.people the advertisers know nothing about.
What is advertiser's target group?The target audience an be desribed as the specific group of consumers that is in the position whereby they are the most likely to want the product or service, ther is been advertised and they can be considered as the people who should see the ad campaigns.
Ity shouldbe noted that the Target audience can be seen by using the gender, income, location, as well as interests and age which could depend on the product that is been advertised to them them.
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missing options;
A.People who have no access to media
B.people the advertisers know nothing about
C. People who watch a variety of TV shows
D. People who live in the same region of the country
Taisha operates equipment to transfer oil from one container to another. Her job title is best described as
Spencer manages the flow of electricity through substations and distribution lines. His job title is best described as
Mariko maintains cables and supporting structures for transmitting electricity. Her job title is best described as
Fred operates equipment to transfer hydrogen through pipelines. His job title is best described as
Answer:
she would be the pump opperater
Explanation:
Answer:pump operator
Power dispatcher
Electrical power-line repairer
Gas pumping station operator
Explanation:
Which of the following pairs of variables is most likely to be inversely related?
A. sales of toothpaste and sales of running shoes
B. the price of ice cream and the price of airline tickets
C. the number of children in a family and the number of toys the family owns
D. sales of tortilla chips and sales of salsa
Pairs of the number of children in a family and the number of toys the family owns are most likely to be inversely related variables. So, the correct answer is Option C.
•Two variables are inversely connected if the rise of one causes the decline of the other. For example, if a good's price increases, there are fewer of them available.
•A well-known example is the correlation between interest rates and consumer spending. Customers are less likely to make purchases when interest rates rise, so they are more prepared than they would be to save. Consumer spending decreases as unemployment increases because people have less money to spend.
• On the other hand, two variables in the data set make reference to one another, thus one is high while the other is low. Even though there is a strong negative correlation between two variables, neither variable's action can be said to have a measurable effect on the other. The relationship between two variables may evolve over time and occasionally exhibit an optimistic relationship.
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Which statement accurately describes a business plan?
A). It provides money to the business
B). It describes in detail the idea for the new business and how it will be operated.
C). It provides on how to use an exit strategy for the business.
D). It's meant to be a short summary.