crossfade corp. has a bond with a par value of $2,000 that sells for $1,962.90. the bond has a coupon rate of 6.90 percent and matures in 14 years. if the bond makes semiannual coupon payments, what is the ytm of the bond? group of answer choices 7.11% 5.30% 7.06% 6.71% 6.36% 3.53%

Answers

Answer 1

To calculate the yield to maturity (YTM) of the bond, we need to find the discount rate that equates the present value of the bond's future cash flows to its current market price. In this case, the bond has a per value of $2,000, sells for $1,962.90, and matures in 14 years.

The bond has a coupon rate of 6.90 percent, which is paid semiannually. Since the bond makes semiannual coupon payments, it will have a total of 28 coupon payments (14 years x 2). Each coupon payment can be calculated as 6.90% of $2,000/2 = $69.

Now, let's calculate the present value of the bond's cash flows. The present value of the coupon payments can be computed using the annuity formula: PV = C * [(1 - (1 + r)^(-n)) / r], where C is the coupon payment, r is the semiannual yield rate, and n is the number of periods.

Using the above formula, we can solve for r, the semiannual yield rate. Given that PV = $1,962.90, C = $69, and n = 28, we can use trial and error or a financial calculator to find the semiannual yield rate. The YTM of the bond is approximately 7.06%, which corresponds to the closest answer choice provided.

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Related Questions

granting a pharmaceutical company a patent for a new medicine will lead to

Answers

Doing such to a pharmaceutical company would lead to option b:  (i) and (ii) only:

A product that is priced higher than it would be without the exclusive rights.Incentives for pharmaceutical companies to invest in research and development.

When a pharmaceutical company gets a patent, they will become a monopoly for the medicine in question. This will allow them to charge a higher price for the drug seeing as they have no competition.

It will also act as an incentive to other companies to develop more drugs because they will get a chance to benefit alone from the drug.

In conclusion, such a patent would lead to a higher price and act as an incentive.

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granting a pharmaceutical company a patent for a new medicine will lead to

hat are the strategically relevant components of the U.S. Retail, Family Clothing Stores industry macroenvironment? 2. What is competition like in the family fashion industry?

Answers

The macroenvironmental elements that affect the clothing industry are those that do not belong to small businesses or their competitors.

Customers now have more options to pick from as there are more companies in the fashion sector. The fashion industry has become more competitive as a result of the variety of business models.

The factors which influence fashion are:

Social Factors.Cultural Factors.Political Factors.Environmental Factors.Psychological Factors.

The availability of resources, demand, and production are three resource macroenvironmental elements that affect the fashion sector.

A fantastic illustration of monopolistic competition is the fashion business. The fast food and apparel industries are most likely to have perfect competition because, in a fully competitive market, firms are free to enter and leave at any time, and buyers and sellers have complete information about the market and its current prices.

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Select the correct answer.
Which of the following is a good resource to help you find a job opening?
A.
Employment offices
B.
Online sources
C.
Family, friends, and other contacts
D.
All of the above

Answers

Answer:

D All of the above

Explanation:

Which occupations are expected to earn between $55,000 and $74,999? Select three options.

Postsecondary Teachers
Carpenters
Dental Hygienists
Firefighters
Childcare Workers
Librarians

Answers

Answer:

postsecondary teachers , dental hygienist , librarians

Explanation:

ed class test

Which statements apply to a certificate of deposit (CD)? Check all that apply. It is always purchased as a short-term investment. It can be purchased from a banking institution. It is always purchased as a long-term investment. It can be purchased for almost any amount. It is purchased through an individual's employer.

Answers

The statements that apply to a certificate of deposit include;

It can be purchased from a banking institution. It can be purchased for almost any amount.

A certificate of deposit is a low-risk investment where the depositor fixes a sum of money in an account for a period of time after which he can collect the investment along with interest accrued. Banks and credit unions are the main financial institutions known for issuing certificates of deposits. It is quite similar to opening a bank account.

The flexibility obtainable from this investment plan allows depositors to fix amounts that are commensurate to their budgets. However, some financial institutions have minimum amounts that are required for certificates of deposit. Different institutions have varying interest rates, therefore, it is necessary to make proper research before opting for an institution.

Summarily, the statements that apply to a certificate of deposit are;

It can be purchased from a banking institution. It can be purchased for almost any amount.

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Answer:

              -It can be purchased from a banking institution.

              - It can be purchased for almost any amount.

Explanation: just took the test

What type of special title insurance policy is used when a property is being purchased through a land sales contract, purchase money mortgage, or purchase money trust deed

Answers

Answer:

A vendee policy.

Explanation:

A vendee policy is a type of special title insurance policy that is used when a property is being purchased through a land sales contract, purchase money mortgage, or purchase money trust deed.

This ultimately implies that, a vendee policy is an equitable buyer's lien issued to the purchaser of a real estate property in order to protect them in terms of repayment of the money being made as payment. It serves as a form of security for the buyer of a real estate property and as such it is enforceable by a court of competent jurisdiction.

True or False. Liquidity means that your money is tied up and unavailable.

Answers

Answer: True

Explanation:

Will the grading period effect what college you will go to later on?
A (True)
B (False)

Answers

Answer: A

Explanation:

Answer:

NO

Explanation:

rod wants to avoid paying large amounts for car repairs if he is in an accident, so what should he include in his budget?

Answers

Vehicle insurance

Hope this helps have a nice day :)

13. The directors of a firm have to discuss the following topics. Which topic is least likely to be directly affected by
the government's influence on the firm?
A) health and safety laws
B) the interest it pays on borrowed money
C) the minimum wage it must pay its workers
D) the replacement of the director of finance​

Answers

Answer:

D) the replacement of the director of finance​

Explanation:

The replacement of the director of finance is an internal affair on the company. It is not subject to any government regulations, unlike the other options. In choosing the director of finance, the company directors will select the best candidate for the job according to their judgment. In deciding who will the next director of finance, the directors don't need to consult any other person or regulations.

A) Health and safety laws,  interest on loans, and the minimum wages are subject to regulation by government agencies such as OSHA for health and safety and the Federal Reserve for interest rates.

Monetary policy deals with tax revenues and expenditures at the national level

true or False

Answers

False.

Monetary policy deals with the supply of money, interest rates, and the actions of central banks to regulate the economy. Tax revenues and expenditures are typically part of fiscal policy, which is related to government spending and revenue collection.

Consider a 3-month call option on 100 shares of a stock then trading at $45 per share. The option premium on the day of sale was $2.50 per share and rge exercise price of the call option was $50 per share.
At the end of three months the stock is at $52 per share. Calculate your profit (or loss) for the party that purchased the call option.
O $200 gain
O gain of $450
O loss of $50
O break even (no gain or loss)

Answers

To calculate the profit (or loss) for the party that purchased the call option, we need to consider the initial cost of the option premium and the payoff from exercising the option.

The initial cost of the option premium is $2.50 per share, and since the call option represents 100 shares, the total initial cost is $2.50 x 100 = $250.If the stock is at $52 per share at the end of three months, the option holder can exercise the option and buy 100 shares at the exercise price of $50 per share. This means the option holder can buy the shares at a lower price than the market price, resulting in a profit.Profit from Exercising the Option = Market Price - Exercise PriceProfit from Exercising the Option = $52 - $50 = $2 per shareSince the call option represents 100 shares, the total profit from exercising the option is $2 x 100 = $200.

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You estimate your annual revenue to be 50,000 + 20,000y, where y is the number of years in business. What is your estimated revenue in 5 years?

Answers

Answer:

D.) 150,000

Explanation:

Multiply 20,000 by 5 =100,00 then add 50,000

Explain the functions of a vice- president of India.?

Answers

Answer: Voila j'espère que sa t'aideras.

Explanation: Il exerce les fonctions du président en cas de vacance et jusqu'à ce qu'un nouveau président soit élu ou en cas d'incapacité temporaire, jusqu'à la fin de l'incapacité.

The Vice- President performs the following normal functions as Chairman of the Rajya Sabha:

1. He is the ex-officio Chairman of the Rajya Sabha . At such , he regulates the proceedings of this House.

2. He decides about the admissibility of a question or a resolution in the Rajya Sabha.

3. The Vice- President decides about the serial order amd time limit of speech of a member.  

4. He may suspend the proceedings of the House, in case of grave disorder.

5. He issues directions to the Chairmen of different committees of the House.

As  Vice- President has no significant function, except ceremonial,  i.e., to receive certain categories of VIP's from abroad . He undertakes goodwill missions abroad. He takes over a the President in case of :

A. Death of the President in office,

B. Resignation of the President

C. Removal of the President

D. Incase of illness,  absence.

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QUICKLY PLEASE ITS TIMED!!!!
Which of the following approaches measures team performance by the team's ability to meet specific, predefined goals
O the results approach
the behaviors/process approach
the goals approach
the outcome approach

Answers

Answer:

the results approach.

Explanation:

This is because this approach emphasises on the results and outcomes produced by the team.

The approaches that measures team performance by the team's ability to meet specific, predefined goals is: results approach.

What is result approach?

Result approach is a performance evaluation approach and can be defined as the type of approach that is used to determine a person perfomance based on the outcome of their tasks.

Most companies tend to make use of result approach to know how well an employee perform on the tasks they are assigned especially when the employee meet or achieved the set goals.

Therefore  the approaches that measures team performance by the team's ability to meet specific, predefined goals is: results approach.

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a new use for a product is identified on social media, or those in a target market would like to shop online. what are these examples of?

Answers

A new use for a product is identified on social media, or those in a target market would like to shop online are examples of Identification of an opportunity.

Social media and online shopping can be a great way to uncover potential new uses for products and services. By targeting a specific market, you can gain invaluable insight into what potential customers are looking for and capitalize on opportunities you may have otherwise overlooked.

Social media can be a great resource to identify new uses for existing products or to provide an online shopping experience tailored to your target market.

With the right strategy, you can make the most of the opportunities available to you. Take advantage of the potential that exists with the right approach and you’ll be well on your way to success.

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Which statement is the best example of the inelasticity of supply?
A. a wheat farmer must harvest his own crop when it is ripe
B. a pizza parlor makes twice as many pizzas on Saturdays than on Wednesdays
C. a grocery store expands its produce section
D. a barber shop changes it’s hours of operation

Answers

Answer:

I think the letter B.????????

Explanation:

pa brainliest nalang po kung tama

Answer:

Explanation:

The Answer is A: a wheat farmer must harvest his own crop when it is ripe

3.4 3 Practice Analyzing Visuals in Business Documents
P L Z help me with this
Synthesize
Determine and design the best visuals for a progress report, including appropriate graphs, tables, illustrations, text boxes, and other visuals. You will need to think about how the visuals relate to the information presented in the progress report and how the visuals will aid readers’ understanding.

1. Using the graphs above, which would you choose to include in the Costs section of your progress report to show how project spending compares to the budget so far? Explain why.

2. Using the graphs above, which would you chose to include in the Costs section of your progress report to show how much of the total budget remains for the project? Explain why.

3. Examine the table in the section above.

a. Recreate the exact table shown above in a separate document. Submit this document to your teacher with your worksheet.

b. Explain how you created the table.

4. In your progress report, you want the Work Completed section to follow your Summary of Costs. To date, the company has rewritten the home page content, created a new logo, and updated the overall structure of the site. Currently, an idea for site navigation has been proposed but not yet confirmed. You want to include a visual of the navigation option in the progress report.

a. The navigation option includes these links from the Home Page: About, Services, Customer Reviews, and Contact. The About section would include links to History and Our Mission; the Services section would also include links to Pricing, Scope, and Timeline. Show an example of a simple, custom graphic to display the navigation.

b. Explain how you created your graphic.

5. Once you finish your progress report, your manager wants to look it over before distributing it to everyone in the company. What is the best way to give this report to your manager and why?

6. Your manager looks over the report and decides that because you did such a thorough job with the report, your next project will be to help update the company's business cards. Create a sample business card that includes a graphic to represent the law firm, Stevens & Patterson.

Answers

Graphics are employed as visual representations to support the text in a report, proposal, set of instructions, or other similar papers in corporate writing and technical communication. Charts, diagrams, sketches, figures, graphs, maps, pictures, and tables are examples of several graphic types.

What is the purpose of using visuals in a professional document?

Visuals are an important aspect of any documentation approach because they may make complicated ideas and procedures easier for readers to comprehend. They let readers envision linkages and occurrences, although it may be more challenging to understand the same information when presented in the text.

Place the graphic as near to the relevant text as you can. Assign a number and a precise descriptive title to each image. When describing the content of the graphic, refer to the number or title in the body text. Give the graphic ample white space around it to draw attention to the picture and improve readability.

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complete the template below to help you plan out your letter
my product it’s a custom can of Pringle’s and I made the flavor of Pringle’s popcorn

I. Paragraph one- Introduction
1. (introduce yourself and explain your experience related to the product) _____________________________________________________________________


2. (explain why you are writing) _____________________________________________________________________


3. (briefly describe your food product and name for your food) _____________________________________________________________________


II. Paragraph two- Describe your Food Product
1. ( describe the flavors, ingredients, texture) _____________________________________________________________________

2. (what does your food look like) _____________________________________________________________________

3. (how is your food unique – what makes it different than other products out there) _____________________________________________________________________

III. Paragraph three- Describe the Packaging
1. (describe the colors in your packaging )____________________________________________________________

2. (describe any images, art, or photos on the package) _____________________________________________________________________

3. (describe the size and materials used in the package) ______________________________________________


IV. Paragraph four- Convince The Company
1. (describe the target population who will buy the food (ex. Moms, diabetics, vegetarians, teens) _____________________________________________________________________

2. (why should they make and market your food?)________________________________________
_______________________

3. (how much will you sell your food for? Sold individually or in larger quantities?) _____________________________________________________________________

V. Paragraph five- Conclusion
1. (Tell what you want the company to do) ______________________________________________
_____________________________________________________________________

2. (Restate what makes your food delicious) ____________________________________________
_______________________

3. (Restate what makes your food unique) ______________________________________________
_______________________

Answers

Answer:

Paragraph 1-

Introducing myself-

1.)

Hey, my name is... and I absoultey *love* Pringles, my favorite flavor is...because...(explain here<why you love that flavor and what you like most about it)...*add things about you and pringles to make the paragraph complete*

2.)

I have made such an outstanding flavor of Pringles, it is made of the most loved food by every human on Earth, POPCORN!

I can assure you that you will want to try my product by the time my presentation has come to an end, and boy-oh-boy do I want to as well!

3.)

Pringles are amazing. Though how would you love Popcorn Pringles? Huh, you do? Yup, I bet your pupils dilated and I got your taste buds alert!

4.)

What does my product contain? It consists of the delicious flavor of popcorn and (include your ingredients and texture of food)

5.)

What do my simple yet intricate Pringles look like? They look like *add your answer,

Any questions that have to do with describing your product would be up to you since I don't have the slightest idea of what it looks like...**

Convincing the Company-

You are looking at consumers from various categories starting from Children ranging to Elders. Vegetarians to Carnivores. I guarantee this will also include popcorn dislikers.

Why should they make the market?

Simply because they are tasty and different...all you see now is Pizza flavored Pizza, BBQ flavored brisket, Soy sauce flavored noodles. My product will be an attraction to all stores! Popcorn flavored Pringles, I mean are you kidding me, its genius, and anyone who thinks otherwise is someone who has not tried them.

How much will I sell it for?

*add your answer* Why? The reasons being, I want my product to be available to everyone.

What I want the company to do is...add your answer

The simple thought of a taste of a popcorn flavored on a Pringle makes me want to jump on a pogo stick and complete a world record!!!

The uniqueness is simple noone has made Popcorn flavored pringles and.. *add another statement on why your product is unique*

I DID MOST OF THE QUESTIONS FOR YOUR SLIDES, I HOPE THIS HELPED YOU AND MADE YOUR ASSIGNMENT EASIER FOR YOU :)

I KNOW HOW IT FEELS TO HAVE A PROJECT DUE AND POSTING IT AND FOR NONE TO HELP YOU OUT, THATS WHY I ANSWERED, THIS IS MY TROLL ACCOUNT BUT THANK ME ON MY OTHER ACCOUNT SamHdzBxby.

Your Welcome :)

The FHA was designed to pay off mortgage insurance for homes that were going into foreclosure.
True
False

Answers

Answer:

TRUE FHA meaning federal housing administration

What type of material is a land resource in the production process?

Answers

Everything that derives from the land, including all natural resources needed to create goods and services, is referred to as "land." Natural resources such as water, oil, copper, natural gas, coal, and forests are examples of common land. The production process uses land resources as its raw materials.

What is production process?Industrial processes are actions that involve chemical, physical, electrical, or mechanical phases to help with the production of an object or things, typically done on a very large scale. The foundation of heavy industry is industrial processes. In order to offer consumers with goods and services, a production process is a way of using economic input or resources, such as labour, expensive machinery, or land. A production process typically entails all the processes a facility might take to establish production quotas, develop and assemble products, and then distribute them to clients or independent retailers. Various manufacturing methods and procedures, such as 3D printing, joining, or casting, may be included.

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The stock price for PS Industries is currently $88.75. The company’s PE ratio is expected to remain between 10 and 12 for the next five years. The current dividend is $4.28 per share annually and is expected to grow at 5% over the next five years. The current EPS is $6.47 and is expected to grow 2.5% over the next five years. The company’s required return is 12.5%. Estimate the PV of the company’s stock price and its dividends and determine the company’s current value per share. Based on this information and your estimate of value, is the company over or under-valued?

Answers

To determine if the company is over or under-valued, we compare the current value per share with the current stock price ($88.75). If the current value per share is higher, the stock may be undervalued. If it is lower, the stock may be overvalued.

Please note that the exact calculations require the precise values, but I have provided the general steps and formula for you to calculate the estimated values.

To estimate the present value (PV) of the company's stock price and dividends, we can use the Dividend Discount Model (DDM). The DDM formula is:

PV = (D1 / (r - g)) + (D2 / (1 + r)^2) + ... + (Dn / (1 + r)^n)

Where:
- D1, D2, ..., Dn are the expected dividends for each year
- r is the required return rate
- g is the growth rate of dividends

Let's calculate the PV of the stock price and dividends for PS Industries over the next five years:

Step 1: Calculate the expected dividends for each year:
Year 1: D1 = $4.28
Year 2: D2 = D1 * (1 + 5%) = $4.28 * 1.05
Year 3: D3 = D2 * (1 + 5%) = $4.28 * 1.05^2
Year 4: D4 = D3 * (1 + 5%) = $4.28 * 1.05^3
Year 5: D5 = D4 * (1 + 5%) = $4.28 * 1.05^4

Step 2: Calculate the PV using the DDM formula:
PV = (D1 / (r - g)) + (D2 / (1 + r)^2) + (D3 / (1 + r)^3) + (D4 / (1 + r)^4) + (D5 / (1 + r)^5)

Substituting the given values:
PV = ($4.28 / (0.125 - 0.05)) + ($4.28 * 1.05 / (1 + 0.125)^2) + ($4.28 * 1.05^2 / (1 + 0.125)^3) + ($4.28 * 1.05^3 / (1 + 0.125)^4) + ($4.28 * 1.05^4 / (1 + 0.125)^5)

Step 3: Calculate the PV of the stock price:
PV of stock price = PV + (EPS * (PE ratio - g)) / (1 + r)^5

Substituting the given values:
PV of stock price = PV + ($6.47 * (10 - 0.025)) / (1 + 0.125)^5

Finally, to determine the company's current value per share, we add the PV of the stock price and the PV of the dividends:

Current value per share = PV of stock price + PV

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The add-on method is less expensive than the simple interest method when the stated rates of interest are identical.a. Trueb. False

Answers

b. False. The add-on method is generally more expensive than the simple interest method when the stated rates of interest are identical. In the add-on method, interest is calculated based on the initial principal amount for the entire loan term, while in the simple interest method, interest is calculated on the remaining balance after each payment. This results in higher overall interest payments using the add-on method as compared to the simple interest method.

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Cain Company reports net cash provided by operating activities of $35,000. It also reports the following information under “Adjustments to reconcile net income to net cash provided by operating activities” on its statement of cash flows (using the indirect method).

Cain Company reports net cash provided by operating activities of $35,000. It also reports the following

Answers

It can be seen from the solutions given that Cain's net income is $24,000.

Here is the solution:

Net income = Net cash provided by operating activities - Adjustments

= $35,000 - $6,000 - $10,000 + $4,000 + $7,000 + $4,000

= $24,000

Therefore, Cain's net income is $24,000.

Here is a breakdown of the adjustments:

To determine cash flow from operations, it is necessary to include the gain on equipment sales in the net income as it is a non-cash entry.

A rise in accounts receivable implies that customers are prolonging payment of their invoices, resulting in decreased cash flow from the company's activities.

The depreciation expense is classified as a non-cash expense, hence it must be included in the calculation of cash from operations by adding it back to the net income.

A decrease in inventory indicates that the company is experiencing faster turnover of its inventory, leading to increased cash flow generated by its operations.

A rise in prepaid expenses denotes that the company is channeling more funds towards prepaid expenditures like insurance and rent, implying a reduced cash inflow from its operational activities.

A decline in the amount of wages that the company owes indicates that it is not promptly compensating its workforce. Consequently, this implies that the company's operational cash flow is reduced.

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Reginald buys a six-pack of soda. The amount of satisfaction he derives from his purchase is described in terms of

Answers

The amount of satisfaction he derives from his purchase is described in terms of total utility.

What is total utility?

Total utility is the total satisfaction that is derived from the consumption of a good or service. Total utility is measured in utils. Total utility is usually the highest for the first unit consumed. As more of a product is consumed, total utility increases at a decreasing rate.

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Among the risks associated with an extended period of Fed accommodation: Among the risks associated with an extended period of Fed accommodation: Creation of financial imbalances

Much higher inflation

Complications associated with the Fed ultimate Exit

All of the above

Answers

An extended period of Fed accommodation poses several risks, including the creation of financial imbalances, higher inflation, and complications related to the central bank's exit strategy.

Among the risks associated with an extended period of Fed accommodation, all of the mentioned factors play a significant role. These factors include the creation of financial imbalances, much higher inflation, and complications associated with the Fed's ultimate exit.

Firstly, extended Fed accommodation can lead to the creation of financial imbalances. This occurs when the market starts to rely heavily on the central bank's support, leading to misallocation of resources, excess risk-taking, and inflated asset prices. These imbalances can eventually destabilize the financial system and contribute to economic downturns.

Secondly, much higher inflation can be a consequence of extended accommodation. As the Fed maintains low interest rates and continues its bond-buying programs, it increases the money supply and can cause prices to rise. Prolonged periods of low interest rates may also result in an overheating economy, causing inflation to surge. High inflation erodes purchasing power and can have adverse effects on the overall economy.

Lastly, complications associated with the Fed's ultimate exit can emerge when it eventually decides to withdraw its support. Unwinding its bond-buying program or raising interest rates might lead to market turbulence, as investors adjust to the new economic environment. Moreover, the timing and execution of the exit strategy are crucial, as a poorly executed exit may exacerbate financial imbalances and trigger economic instability.

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A detailed analysis of competitors is an important part of a firm's formal marketing plan.
a. True
b. False

Answers

"A detailed analysis of competitors is an important part of a firm's formal marketing plan" is True which is given in option a. This is because understanding your competitors allows you to identify their strengths and weaknesses, develop strategies to counter them, and find opportunities for growth in the market.

A detailed analysis of competitor is also referred to as a competitive analysis, it is the process of identifying competitors in your industry and researching their different marketing strategies. You can use this information as a point of comparison to identify your company's strengths and weaknesses relative to each competitor which will help in getting proper analytics about the strength and weaknesses of your organization as compared to others and which will help your organisation to gain a competitive advantage over other firms.

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Which of the following refers to concept of economic growth Mcq? A. Increase in per capita production B. Increase in per capita real income C. Structural Change in the economy D. All of the above

Answers

An increase in the amount of goods and services produced per head of the population over a period of time is called economic growth.

Which four production factors are there?

The materials employed in the manufacturing of a good or service in order to generate revenue are referred to as the factors of production. Land, labor, capital, and entrepreneurship are considered the four main components of production by economists. These can be viewed as the foundational elements of an economy.

What does economic production look like?

Making cars is an illustration of production. Parts are assembled to create cars. For instance, metal bodywork with rubber tires are fitted with seats before the automobile rolls off the assembly line.

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For each of the following situations, tell which of the five internal control activities or procedures was lacking. More than one control may be lacking. Also, recommend how procedures should be changed to avoid the problem in the future.
Johnny stole over $10,000 from his employer by writing checks made payable to himself and was able to hide the theft by showing the checks as outstanding on the bank reconciliation he prepared each month. The department manager is supposed to review the bank reconciliations but is "too busy" to be bothered and just initials the reconciliations without reviewing them.
Bob is the foreman of a loading dock. Bob is also lazy and does not prepare receiving or shipping reports until days after goods are received or shipped. Austin is the manager of a warehouse and has unlimited access to the warehouse.
Austin maintains the warehouse inventory shipping and receiving records, fills inventory orders, stocks inventory, and counts the inventory. He also steals inventory from the warehouse and conceals the fraud by overstating inventory records.
Acme Inc. has a policy that requires credit sales over $10,000 to be approved by a credit supervisor. In an effort to increase sales, supervisors are allowing credit sales over the limit without performing the required review, which includes reviewing the credit worthiness of the customer.
Acme Inc. uses high-cost items in making its world-famous widgets. The high-cost items are kept in a special room in the manufacturing area. The room is unlocked, and anyone can go into the room at any time to get items so that the manufacturing line is not delayed. Management is perplexed that a number of the high-cost items are consistently missing

Answers

Inadequate Segregation of Duties and Lack of Review: The control activities lacking in this situation are segregation of duties and review of bank reconciliations.

Johnny was able to steal money and conceal it by manipulating the bank reconciliations. To avoid this problem, the company should implement a segregation of duties by assigning different individuals to handle check writing, bank reconciliation preparation, and review. The department manager should be required to thoroughly review and reconcile the bank statements, ensuring the accuracy and legitimacy of the outstanding checks.

Inadequate Documentation and Supervision: The control activity lacking here is timely preparation of receiving and shipping reports. Bob's delay in preparing these reports could lead to potential errors or discrepancies in inventory records. To address this issue, the company should enforce a policy that requires immediate documentation of all receiving and shipping activities. Regular supervision and monitoring should be conducted to ensure compliance and timely reporting.

Inadequate Segregation of Duties and Lack of Oversight: The control activities lacking in this situation are segregation of duties and oversight. Austin has unrestricted access to the warehouse and performs multiple tasks related to inventory management, which creates an opportunity for theft and fraud. To mitigate this risk, the company should implement a segregation of duties by assigning different individuals to handle inventory counting, order fulfillment, and inventory record maintenance. Regular independent audits and spot checks should be conducted to detect any discrepancies or irregularities.

Non-compliance with Credit Approval Policies: The control activity lacking here is the review and approval of credit sales over a certain limit. Supervisors are bypassing the required review, leading to potential credit risks and losses for the company. To address this issue, strict enforcement of the credit approval policy should be implemented, including thorough credit reviews for sales exceeding the limit. Management should provide proper training and oversight to ensure compliance with the policy.

Inadequate Physical Security and Access Control: The control activity lacking in this situation is proper physical security and access control over the high-cost items in the special room. The unlocked room allows unrestricted access, leading to consistent missing items. To prevent theft and ensure accountability, the company should enhance physical security measures such as locking the room and implementing access controls. Only authorized personnel should be granted access, and a log should be maintained to track item removals and returns.

Effective internal controls are crucial for mitigating risks, preventing fraud, and ensuring the accuracy of financial records. The identified control weaknesses in each situation can be addressed by implementing appropriate control activities and procedures, such as segregation of duties, review and oversight, documentation requirements, policy enforcement, and physical security measures. By strengthening internal controls, companies can enhance operational efficiency, safeguard assets, and maintain the integrity of their financial processes.

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Which of these can be considered “online banking?”

I. A brick-and-mortar bank that allows its customers to transfer money online.
II. A bank that has only a few branches but has customers depositing money online.
III. A bank that does not exist as a real building, but only has an internet presence.

Answers

Answer:

D

Explanation:

l, ll, & lll

All the given statements are examples of online banking. Thus, all the given statements are correct statements.

What is online banking?

Online banking, often known as internet banking, online banking, or home banking, is a type of electronic payment system that allows clients of banks and other financial institutions to carry out a variety of financial transactions via the website of the financial institution. In order to offer consumers access to banking services in addition to or in substitute for traditional branch banking, the online banking system will normally link to or be a component of the core banking system run by a bank.

Online banking provides greater convenience to some customers by reducing the need to visit a branch bank and the convenience of being able to conduct banking transactions even when branches are closed. It also significantly lowers operating costs for banks by decreasing their reliance on a branch network.

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