The one that might be expected fiscal policies under a keynesian approach is option F. cutting both taxes and spending
What is a keynesian approach?Keynesians is of the opinion that since prices are somewhat rigid, fluctuations in any component of spending say consumption, investment, or government expenditures will cause output to change. If government spending increases, and all other spending components remain constant, then output will increase.
Therefore, the correct answer is as given above
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Write a short report on ethical business dilemmas, and give examples of ethical dilemmas faced by businesses.
this is the edmentum answer and ill put my answer as well
Explanation:
edmentum: Ethical dilemmas are very common in the workplace. The employees of an organization are under pressure to deliver an expected level of performance. They need to perform to meet the organization’s goals without compromising on quality or giving in to temptation, such as opportunities to share confidential company data. When an organization provides training and guidance to its employees, it helps them to make appropriate ethical decisions.
The cultures of organizations vary. Some businesses do not look beyond their own profits, and their leaders often ignore their own standards of ethics. Employees who do not agree to certain practices may hesitate to protest because they don’t want to risk losing their jobs or for management to single them out as untrustworthy.
Ethical dilemmas are common in business processes; for example, when employees manipulate work reports to obtain recognition and appreciation, or when employees fudge financial statements to depict false increases in sales.
Another example of an ethical business dilemma would be an employee finding out that a senior manager is misusing company resources for personal gain. The employee may receive an offer from the manager to share in the unethical gains.
my answer: Ethical business dilemmas are growing more important over the years now that people have realized businesses should be treating their employees as human beings. Applying for a job you should be aware of common ethical dilemmas business faces and how well they handle them. Some common dilemmas are health and safety, diversity and discrimination policies, employee privacy, unethical pricing, and sadly sexual harassment.
Outline why it is important for a business owner to respond to technological and global issues when establishing a business?
Technology enables an increase in the efficiency of systems, products, and services. It helps track and streamline strategies, hold records go with the flow, and control contacts and employee records.
In reality, this expanded efficiency in operation enables lessened costs as well as allows the commercial enterprise to develop swiftly.
Technology has vital consequences on commercial enterprise operations. Irrespective of the scale of your business enterprise, technology has both tangible and intangible advantages that will help you make money and produce the results your customers demand. Technological infrastructure affects the subculture, performance, and relationships of a business.
The use of technology has made commercial enterprises and clients closer in many areas. E-mail and Social Media are getting used for answering queries related to products and services with clients. Giving customers all feasible methods to contact the agency is simple with the latest technology and packages over the internet.
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How do worker organizations influence wages?
A. They fight for higher pay for workers.
B. They lower the market value of workers.
C. They enforce regulations raising the minimum wage.
D. They require workers to have more education.
SUBMIT
Answer:
A.
Explanation:
In many industries wages are linked to enterprise cost of living which ensures a fair wages to workers. The wage rates are directly influenced by cost of living of a place. The workers will accept a wage which may ensure them a minimum standard of living. Wages will also be adjusted according to price index number.
They fight for higher pay for workers is the way organizations influence workers for wages. In many businesses, wages are tied to the cost of living of the company, ensuring that workers are paid fairly.
What is wage employment?In both the official and informal economies, wage employment encompasses any salaried or compensated position under contract to another person, organization, or company. Finding decent-paying work for those with impairments is often difficult.
Thus, option A, They fight for higher pay for workers is correct.
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The cost of interest of a $500 loan for 12 months is $21.88. What is the interest rate charged for the loan per year?
Answer:
4.19%
Explanation:
((500/(500+21.88)-1)*100
como hacen las siclas para que uno no se caiga
con materials duro que aguantan bastante peso.
Answer:
lo que dijo thay
Explanation:
Lincoln Lodging Inc, estimates that if its sales increase 10.00% then its net income will increase 21.00%. The company's EBIT equals $2.6 million, and its interest expense is $600,000. The company's operating costs include fixed and variable costs. What is the level of the company's fixed operating costs? Do not round intermediate calculations. a $780,000 b. $1,000,000 C. $1,600,000 d. $2,200,000 . e. $2,260,000
The level of the company's fixed operating costs is $2,200,000 (option D).
To find the level of fixed operating costs, we need to use the formula for the contribution margin:
Contribution Margin = (Sales - Variable Costs) / Sales
Since we know that a 10.00% increase in sales leads to a 21.00% increase in net income, we can set up the following equation:
21.00% = (10.00% / (Sales - Variable Costs)) * (Sales - Variable Costs - Fixed Costs)
Simplifying the equation and substituting the given values:
21.00% = 10.00% * (Sales - Variable Costs) / Sales
By cross-multiplying and rearranging the equation, we find:
1.1 * (Sales - Variable Costs) = Sales
Simplifying further:
Sales - Variable Costs = Sales / 1.1
Since EBIT is equal to $2.6 million and interest expense is $600,000, the remaining operating costs (including fixed and variable costs) can be calculated as:
Operating Costs = EBIT + Interest Expense = $2.6 million + $600,000 = $3.2 million
Using the relationship between sales and operating costs:
Sales - Variable Costs = $3.2 million / 1.1
Now, we can determine the level of fixed operating costs:
Fixed Operating Costs = Operating Costs - Variable Costs = $3.2 million / 1.1 - ($3.2 million / 1.1) / 1.1 = $2.2 million
Therefore, the level of the company's fixed operating costs is $2,200,000 (option D).
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Name the FIVE documents that must be covered by the auditor's report?
Answer:
The auditor's report typically covers the following five documents:
1)Financial Statements: The auditor's report provides an opinion on the fairness and accuracy of the financial statements prepared by the company. This includes the balance sheet, income statement, cash flow statement, and statement of changes in equity.
2)Management's Discussion and Analysis (MD&A): MD&A is a section of the annual report where management provides an analysis of the company's financial performance, results of operations, and future prospects. The auditor's report may reference or provide assurance on specific information contained in the MD&A.
3)Notes to the Financial Statements: The notes to the financial statements provide additional information and explanations regarding specific items in the financial statements. The auditor's report may refer to the notes and provide assurance on their presentation and disclosure.
4)Internal Control Report: In some cases, companies are required to provide an internal control report, which outlines management's assessment of the effectiveness of internal controls over financial reporting. The auditor's report may include a reference to the internal control report and provide assurance on its reliability.
5)Other Supplementary Information: The auditor's report may also reference or provide assurance on other supplementary information included in the annual report, such as schedules, disclosures, or additional financial data that accompany the financial statements.
It's important to note that the specific documents covered by the auditor's report may vary depending on the reporting requirements and regulations applicable to the company or organization being audited.
Market failure associated with the free-rider problem is a result of.
Market failure associated with the free-rider problem is a result of benefits that accrue to those who don't pay.
What is market failure?Market failure refers to a situation when there's an inefficient distribution of resources in the market.
Market failure occurs when the free market does not distribute resources efficiently. This leads to rational outcomes for the group as a whole.
Hence, market failure associated with the free-rider problem is a result of benefits that accrue to those who don't pay.
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Explain why managers need to aling organizational culture,
structure, and HR to support strategy?
Managers need to align organizational culture, structure, and HR with strategy to ensure cohesive execution and maximize the organization's chances of success.
Managers need to align organizational culture, structure, and HR with strategy because these elements are interconnected and mutually reinforcing. Organizational culture represents the shared values, beliefs, and behaviors that shape employee attitudes and actions. When the culture aligns with the strategic goals, it creates a supportive environment where employees understand and embrace the strategy. This alignment fosters employee engagement, commitment, and motivation, leading to enhanced performance and the ability to execute the strategy effectively. On the other hand, a disconnect between culture and strategy can create resistance, conflict, and lack of clarity, hindering strategy implementation. Organizational structure provides the framework for how tasks, roles, and responsibilities are organized and coordinated. An aligned structure ensures that the right people are in the right roles and that communication and decision-making channels support the strategic objectives. For example, if the strategy requires agility and innovation, a flat and decentralized structure may be more suitable than a hierarchical one. By aligning the structure with the strategy, managers can create an environment that facilitates collaboration, efficient execution of strategic initiatives, and adaptability to changing market conditions.
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Which statement best summarizes the law of demand ?
A. Sellers only supply goods that are in high demand from buyers.
B. Buyers are more likely to buy a products that is supplied in large quantities.
C. Sellers can easily substitute a product in high demand with another product.
S. Buyers are more interested in purchasing products as those products decline in price.
Thank you :)
Buyers are more likely to buy a product that is supplied in large quantities.
What is the law of demand?The law of demand states that the quantity purchased varies inversely with the price. In other phrases, the better the rate, the lower the quantity demanded.
What are the types of demand?Individual and Market DemandOrganization and Industry DemandAutonomous and Derived DemandDemand for Perishable and Durable GoodsShort-term and Long-term DemandLearn more about the law of demand here https://brainly.com/question/24019366
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Baby you’re too controllin’
Ima feed you too the wolves when
You get nasty, back at me
But baby don’t distract me
I’m a goner, I lost her
Like why the hell yhu wanna play me that way
You’re bad babe, You double-faced enternare
LiFe GoEs On AnD oN aNd On AnD oN AnD oN aNd
Tharpist can help you.
Explanation:
They specialize in mental health and illness care and treatment.
On January 10, 2017, a man in Lebanon, Virginia, frustrated with the DMV bureaucracy, paid his DMV bill with 300,000 pennies that he carted into the DMV office in five wheelbarrows. The DMV had to count all these pennies and deposit them into the DMV bank account. After the DMV deposit and assuming a reserve requirement of 8 percent, calculate the initial change in
a. Money supply. $ 0
b. Deposits. $ 3,000 c. Total reserves. $ 3,000 d. Excess reserves. $ 2,760 e. Calculate the cumulative change in the banking system in lending capacity. $ 34,500 ± 100
the man's payment in pennies did not directly impact the money supply since the pennies were already in circulation. However, it did result in an increase in deposits held by the DMV and an increase in total reserves held by the bank.
a. The initial change in money supply is $0. The man's payment in pennies did not increase the overall money supply in the economy. The pennies were already in circulation, so there was no new money created.
b. The initial change in deposits is $3,000. The man's payment of 300,000 pennies, equivalent to $3,000, resulted in an increase in the deposits held by the DMV.
c. The initial change in total reserves is $3,000. The 300,000 pennies, equivalent to $3,000, were deposited into the DMV's bank account, which increased the total reserves held by the bank.
d. The initial change in excess reserves is $2,760. Excess reserves are calculated by subtracting the required reserves from the total reserves. Assuming a reserve requirement of 8 percent, the required reserves on the $3,000 deposit would be $240, so the excess reserves would be $2,760 ($3,000 - $240).
e. The cumulative change in the banking system's lending capacity is $34,500 ± $100. This can be calculated by applying the money multiplier. With a reserve requirement of 8 percent, the money multiplier is 1/0.08 = 12.5. Multiplying the excess reserves of $2,760 by the money multiplier gives us $34,500. The ±$100 indicates a range of potential lending capacity due to rounding and possible variations in the reserve requirement and other factors.
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How does saving influence economic activity?
How does saving influence economic activity? by making more money available to be used by individuals, businesses, and the government. When the borrowed money is spent, the demand for goods and services is increased, which creates more jobs and spending for workers.
Art teacher Monica earns time and a half for the number of hours she works over 40 hours. One week she worked 48 hours. How many hours of overtime did she work?
Answer:
8 hours
Explanation:
Here, we want to know the number of overtime hours worked.
From the question, we are told that the pay is slightly different and higher if she worked for some hours over 40 hours
What this means is that the regular number of hours is 40; then the number of hours in this case 8 over 40 is her over time
Question: A Trader Buys A Set Of Ornaments That Is Listed At 6,000 With Trade Discounts Of 20 % And 10 %. If He Sells The Set At A Net Profit Of 15 % Based On Cost And The Operating Expenses Are 5 % On Retail, Find: (I) The Cost {3 Marks} (Ii) The Gross Profit {4 Marks} (Iii) The Selling Price {4 Marks} (Iv) The Breakeven Price {3 Marks} (V) The Maximum Markdown
A trader buys a set of ornaments that is listed at 6,000 with trade discounts of 20 % and 10 %. If he sells the set at a net profit of 15 % based on cost and the operating expenses are 5 % on retail, find:
(i) the cost {3 marks}
(ii) the gross profit {4 marks}
(iii) the selling price {4 marks}
(iv) the breakeven price {3 marks}
(v) the maximum markdown that could be given without incurring any loss. {1 mark}
Given, listed price = 6,000 and trade discount of 20% and 10%.To calculate the cost, we need to calculate the net price. Net price = listed price - trade discount 1 - trade discount 2= 6000 - (20/100) × 6000 - (10/100) × 6000= 6000 - 1200 - 600= 4200
(i) Cost = Net Price = Rs. 4200 Given that the trader sells the set at a net profit of 15% based on cost. (ii) Gross Profit = 15% of cost= 15/100 × 4200= Rs. 630 (iii) Selling Price = Cost + Gross Profit + Operating Expenses= 4200 + 630 + 5% of retail= 4200 + 630 + 5/100 × 4620= Rs. 5445
(iv) Break even price = Selling Price - Gross Profit= 5445 - 630= Rs. 4815 (v) Maximum markdown = Gross Profit / Selling Price= 630 / 5445= 0.1158 or 11.58%Therefore, the maximum markdown that could be given without incurring any loss is 11.58%.
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based on the following posed trade policy scenario: The US increases trade restrictions with a country.
How does this affect Aggregate Demand and Supply?
What are the corresponding effects on Unemployment and Inflation as a result?
What fiscal and or monetary policies would you recommend to bring the economy back to Long Run Equilibrium? Give examples
Why would or why wouldn't you support this trade policy?
In answering these questions, the student should be able to:
Correctly interpret the impact of the discussed trade policy scenario on aggregate supply & demand.
Use appropriate economic reasoning in the critique of trade policy scenario.
Correctly identify the given trade policy scenario's impact on unemployment and inflation.
Recommend the appropriate fiscal and or monetary policies, given the trade policy scenario examined.
When the US increases trade restrictions with a country, it will directly impact the aggregate supply and demand in the economy. A decrease in demand will lower the overall supply in market because producers will lower their output, resulting in a decrease in aggregate demand.
Also, due to the restricted trade policies, there will be less competition and less innovation in the market, leading to reduced overall productivity and a decrease in aggregate supply. As a result, the economy will experience a shortage of goods and services, a reduction in employment opportunities, and a subsequent increase in unemployment. Meanwhile, inflation will increase since supply cannot keep up with demand, leading to an increase in prices. In the long run, this will further discourage investments and lead to even higher levels of unemployment and inflation. Therefore, it is critical to implementing fiscal and/or monetary policies to bring the economy back to Long Run Equilibrium. For instance, the government could pursue expansionary fiscal policy, reducing taxes and increasing government spending to stimulate demand and increase aggregate demand. The government could also use monetary policy by reducing interest rates to encourage borrowing, increase spending and investment, and ultimately increase aggregate demand. It is important to note that it is best not to support this trade policy since it may lead to increased unemployment and inflation and negatively impact the overall economy. Instead, the government should look for alternative solutions that protect the economy's interest while maintaining global trade relationships.
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Step 3: Creating a Balanced Family Budget
a) Search for a "family budget estimator" and calculate the monthly expenses for a family living
in your city.
Insert a screenshot of the calculator you used, as well as all of the information you entered
into it. If you are unable to insert a screenshot, then list the information below. (10 points)
b) State the minimum monthly income and hourly wage per worker needed to cover monthly
expenses for the family you used in part a. Then, explain how to calculate the hourly wage
Show we’re u found your information
The family budget calculator use is attached accordingly. See relevant definition below.
What is the minimum monthly income and hourly wage per worker required to cover the monthly expenses indicated in the budget?The total budget indicated is $7,304. Hence to cover for the above expenses, one would need to work for at least 8 hours per day, and 5 days a week at the minimum income wage of $50 dollars/Hour.
This translates to:
50 x 8 x 20
= $8,000
What exactly is a family budget?A family budget is a plan for your household's incoming and outgoing funds for a specific time period, such as a month or year.
What is the definition of a Family Budget Calculator?The Family Budget Calculator calculates the amount of money required for a family to maintain a modest but decent level of life.
The budgets project community-specific expenses for ten different family types (one or two adults with zero to four children) across all counties and metro regions in the United States.
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{20 points} HELP ASAP
What can nonprinting characters tell you? Check all that apply.
A) whether a large space was created with the spacebar or the tab key
B) whether the author misspelled any words
C) how long it took the author to create the document
D) where the author pressed the return key
Answer:
A and D
Explanation:
edge 2021
other things constant, how will an increase in the wages of teenagers affect the market for fast food hamburgers?
With all else remaining constant, a rise in teens' income will have an impact on the market for fast food hamburgers by increasing the supply and lowering the cost of hamburgers.
How does the pricing change when the supply increases?While all other factors remain constant, an increase in supply will cause the equilibrium price to fall while increasing the amount required. Due to a decrease in supply, the amount sought will decrease, raising the equilibrium price.
When demand is constant, the connection between prices and supply for products and services is inverse. When the supply of those goods and services increases while the demand for those goods and services remains constant, prices frequently decline to a lower equilibrium price and a larger equilibrium quantity of those products and services.
When the cost is reduced, what happens to supply?A price increase almost invariably leads to the delivery of more of that good or service, whereas a price decrease typically results in the delivery of less of it.
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what makes the most practical sense to measure pressures realative to speech production
In the context of measuring pressures relative to speech production, the most practical and commonly used method is through the use of a device called a transducer.
A transducer is a sensor that converts physical pressure into an electrical signal, which can then be measured and analyzed. In speech production, transducers are often used to measure air pressure at different points in the vocal tract, such as the oral cavity or nasal cavity. This allows researchers and clinicians to assess various aspects of speech production, including articulation, voicing, and airflow.
Transducers used in speech research may include devices such as pressure-sensitive microphones or pressure sensors placed at specific locations within the vocal tract. These transducers capture changes in air pressure during speech production and provide valuable information for studying speech disorders, assessing vocal function, and evaluating the effectiveness of therapeutic interventions.
By measuring pressures relative to speech production, researchers and clinicians can gain insights into the mechanics and dynamics of speech production, aiding in the diagnosis and treatment of speech-related disorders and enhancing our understanding of the complexities of human communication.
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The graph presents a production possibilities curve, or frontier, PPF for the nation of New Carnitas. Each point on this curve represents a combination of steak and potatoes that this country can produce given its resources and technology. Based on the information in the graph, place the points as indicated.
Point A is an attainable and efficient combination of steak and potatoes.
Point B is consistent with the full employment of available resources.
Between points C and D, the opportunity cost of 1 pound of steak is 2 pounds of potatoes.
Between points E and F, the opportunity cost of 1 pound of potatoes is 3 pounds of steak.
Point G represents an unattainable combination of steak and potatoes.
Point H represents an inefficient use of New Carnitas's resources.
Given that the graph is not shown here these are the basic points in a production possibility curve.
The attainable point in a production possibility curve
This is the point that lies on the curve of the PPC. This point can be produced by the resources that are available at the moment.
The full employment of resources on the PPCThis is the point that has all the resources in the economy being used in the production of goods and resources.
The unattainable point in a PPCThe unattainable point in the curve is the point that is outside of the curve. At this point the resources available cannot be used for production.
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true or false? higher opportunity costs equal a greater comparative advantage.
The statement "higher opportunity costs equal a greater comparative advantage." is a False statement
What are opportunity costs?Generally, In the context of microeconomic theory, the opportunity cost of a certain action refers to the value or gain that is lost as a result of participating in that activity as opposed to participating in an alternative activity.
To put it another way, if you decide to participate in one activity rather than another, it indicates that you will not be able to take advantage of another chance.
In conclusion, It is not true that "more opportunity costs equal a bigger comparative advantage." This assertion has been shown to be false.
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Answer:
false
Explanation:
Learn to manipulate the hair with the fingers and comb instead of relying on:
The hair texture
a.
b.
с.
d.
Mechanical aids
The setting lotion
Hair lacquer
Learn to manipulate the hair with the fingers and comb instead of relying on: "Mechanical aids" (Option A)
How to care for the hairMost people's hair-care procedures consist of four key components: cleaning, conditioning, heat style, and air drying. This is not to say that your hair-care routine must include all of these elements. For example, you should never apply heat on your hair.
Straight hair (or type 1 hair as it is generally known to) dries straight without a bend or curl. Wavy hair (type 2) is defined as hair that dries with a little curve or "S" form. You have one of two curl types if your hair dries with a definite curl or loop pattern.
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What happens to your 401 K plan when you leave your job?
Depending on the terms of your 401Kplan, you can decide to leave the funds in your former employer’s plan, roll them over into a new employer’s plan, or roll them over into an IRA when you leave your job.
Each of these options has its own pros and cons, so it’s important to consider all of your options carefully before making a decision.
If you decide to leave the funds in your former employer’s plan, you’ll still be able to access the funds at any time, but you’ll no longer be able to make contributions. Additionally, you may be subject to higher fees or may not have access to the same range of investment options as you did when you were employed.
Rolling over your 401 K into a new employer’s plan can provide more flexibility and may also be less costly. However, you may have to wait until you’ve been employed with the new employer for a certain period of time before you’re eligible to make contributions.
Finally, you can roll your 401 K over into an IRA. An IRA provides the most flexibility, and you’ll have full control over the funds. However, you’ll likely have to pay taxes on any withdrawals you make prior to age 59½ unless you qualify for an exception.
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name 5 types of business farms
Answer:
sole proprietorshiplimited liability companypartnershipcorporationcooperative.
Answer: sole proprietorship
limited liability company
partnership
corporation
cooperative.
non profit corparation
Explanation:
How important is money
Answer:
very important
Explanation:
money is a global income source for everyone. we all have different types but it is all still money. now say one country got rid of money and had people pay for stuff using other things. if china did that lots of different countries wouldn't be able to get stuff from there unless they had so much of that product they could just give it up.
Which of the following is an example of the U.S. agreeing to allow imports from selected countries at the lowest
custom duty rates?
A free-trade zone
A most-favored nation status
A common market
A free trade agreement
The Free Trade Agreement of the U.S. is an example of the US agreeing to reduce barriers to imports and exports by lowering tarries. The correct answer thus is D.
What is an example of a Free Trade Agreement?The agreement between the U.S. and Mexico and Canada are examples of the Free Trade Agreement.
The agreement described above is called North American Free Trade Agreement (NAFTA)
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In general, which TWO characteristics define a "small" business?
A. Fewer than 1,500 employees
B. Non-profit
C. Between 500 and 2,500 employees
D. Less than $35.5 million revenue
E. No more than $200,000 in sales
Small business includes business privately owned, through partnership or sole proprietorship and has fewer employees and revenue lesser than a regular-sized business.
Examples of Small business are Personal Trainers, Local Auto Repairs, Fair Online Stores, Home care services etc
The major characteristic of small business are
Lower Revenue and Profit Lower EmployeesSmall Market Area Sole or Partnership OwnershipLearn more about small business here
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Answer:
A. Fewer than 1,500 employees
D. Less than $35.5 million revenue
Explanation:
-These characteristics define a small business
(I took a test and got it right, sorry that I don't have a further explanation)
Agnestorm, a game designing company, has one opening each for the positions of game designer, game programmer, and game artist. The company decides to invite walk-ins to find the right candidates to fill these positions. In this scenario, Agnestorm is engaged in the process of _____.
Answer:
External recruiting
Explanation:
External recruitment is the evaluation made with respect to the pool of job candidates without considering the existing staff to watch whether there is skilled or qualified candidate to fill existing job vacancies. Basically it is a process of searching outside so that they could fill the vacancies of the organization
So according to the given situation Agnestorm would be engaged in the process of external recruiting
Billiton is the world's largest mining firm BHP expects to produce 2.00 billion pounds of copper next year, with a production cost of $0.85 per pound. a. What will be BHP's operating profit from copper next year if the price of copper is $1.20, $1.50, or $1. 80 per pound, and the firm plans to sell all of its copper next year at the going price? b. What will be BHP's operating profit from copper next year if the firm enters into a contract to supply copper to end users at an average price of $1.45 per pound? c. What will be BHP's operating profit from copper next year if copper prices are described as in part (a), and the firm enters into supply contracts as in part (b) for only 50% of its total output? d. For each of the situations below, indicate which of the strategies (a), (b), or (c) might be optimal.
a)If the price of copper is $1.20 per pound, the operating profit will be: $700 million
If the price of copper is $1.50 per pound, the operating profit will be: $1.3 billion
If the price of copper is $1.80 per pound, the operating profit will be: $1.9 billion
b) If BHP enters into a contract to supply copper to end users at an average price of $1.45 per pound, its operating profit will be: $1.2 billion
c)The total operating profit will be the sum of these two profits.
d) Tt might be optimal to adopt a combination of both strategies (strategy c) to hedge against price fluctuations.
a. BHP's operating profit from copper next year can be calculated as follows:
Operating profit = (Price - Production cost) * Production
If the price of copper is $1.20 per pound, the operating profit will be:
Operating profit = ($1.20 - $0.85) * 2.00 billion
Operating profit = $0.35 * 2.00 billion
Operating profit = $700 million
If the price of copper is $1.50 per pound, the operating profit will be:
Operating profit = ($1.50 - $0.85) * 2.00 billion
Operating profit = $0.65 * 2.00 billion
Operating profit = $1.3 billion
If the price of copper is $1.80 per pound, the operating profit will be:
Operating profit = ($1.80 - $0.85) * 2.00 billion
Operating profit = $0.95 * 2.00 billion
Operating profit = $1.9 billion
b. If BHP enters into a contract to supply copper to end users at an average price of $1.45 per pound, its operating profit will be:
Operating profit = (Contract price - Production cost) * Production
Operating profit = ($1.45 - $0.85) * 2.00 billion
Operating profit = $0.60 * 2.00 billion
Operating profit = $1.2 billion
c. If BHP enters into supply contracts as in part (b) for only 50% of its total output, and the remaining 50% is sold at the going price, the operating profit will be a combination of the profits from parts (a) and (b).
For the 50% of output sold at the going price, the operating profit will be:
Operating profit = (Price - Production cost) * Production * 50%
For the other 50% of output sold at a contract price, the operating profit will be:
Operating profit = (Contract price - Production cost) * Production * 50%
The total operating profit will be the sum of these two profits.
d. The optimal strategy depends on the future price of copper. If BHP expects the price of copper to increase, it might be optimal to sell its copper at the going price (strategy a) and not enter into any contracts. If BHP expects the price of copper to decrease, it might be optimal to enter into contracts to lock in a higher price (strategy b). If BHP is unsure about the future price of copper, it might be optimal to adopt a combination of both strategies (strategy c) to hedge against price fluctuations.
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