Bill Thompson is the new manager of a retail sporting goods store in Vermont that is part of a national chain. Bill, who is 25 years old, has been working for the company for four years. Before his promotion, he was the assistant manager for two years at a company store in Delaware. Last week his boss, the regional manager, briefly introduced him to the employees. The profit performance of this store is below average for its location, and Bill is looking forward to the challenge of improving profits. When he was an assistant manager, he was given mostly minor administrative duties and paperwork, so this assignment will be his first opportunity to show he can be an effective manager. The company sets the base salaries of the 20 employees who work in Bill’s store, but appraisal ratings by the store manager influence the size of an employee’s annual merit raise. These recommendations must be justified to the regional manager, especially if they are not consistent with individual and department sales. Bill can suspend or fire employees with the approval of his boss, but in practice it is difficult to do so unless the recommendation is supported by a strong case. The headquarters office sets the store layout and most prices. However, the store manager can affect store performance to a limited extent. One way is to keep the cost of employees low is by making sure they are working efficiently and not taking excessive sick days. Another way is to ensure that employees are providing a high level of customer service so that customers will return to make other purchases rather than going to a different store next time. Customer service depends on knowing the products well, being polite, providing prompt service, and making sure that inventories of popular goods are maintained so that customers can find what they want. Pay is low for this type of retail selling job, turnover is high, and it takes a few months for a new employee to learn the merchandise well enough to be helpful to customers. Thus, it is also desirable to keep competent employees satisfied enough to stay with the company. Although it is only his first week on the job, Bill believes that he has already discovered some of the problems at this store. Among the various departments in the store, the ski department has the highest potential profits during the winter, because skiing and snowboarding are popular winter sports in Vermont. At the current time the department’s sales are about average for company stores in the Northeast region, with potential for considerable improvement. On several occasions Bill noticed a line of customers waited to be served in the ski department, and he overheard some of them grumbling about how long it takes to get served. One customer said he was leaving to go to another store that didn’t make him “wait all day to have the privilege of spending hundreds of dollars on ski equipment.” Bill observed that Sally Jorgenson, the department manager, spends a lot of time socializing with her salespeople and with customers, including friends who drop in to visit and talk about ski conditions, resorts, fashions, equipment, racing, and so forth. Bill, who doesn’t ski, cannot understand what they find so interesting to talk about. He wonders why anybody in their right mind would want to spend a small fortune and risk permanent injury to hurtle down a mountain in blizzard conditions, and then stand in long lines and ride up a freezing chairlift just to do it all over again! Questions
a. How much of each type of power does Bill have at this time?
b. What influence tactics could be used in this situation to influence Sally? Explain what you would actually say to Sally in the process of using each tactic.
c. What should Bill do to improve store performance?
In: Accounting
Charles Maxwell is starting a cheesecake bakery, Able Baker Charlie Company, to produce and sell different flavored cheesecakes to restaurants and the general public. He has just begun his study of accounting, and is a bit confused about the many types of reports he has read about and how they will help him run his business. He asks you to help him clarify what the differences between managerial accounting and financial accounting are. He’s also wondering how to set up his inventory, how to classify the costs of his business, and how to fill in some missing information.
| Required: | |
| 1. | Choose whether the characteristics on the Managerial vs. Financial panel are most often associated with managerial accounting or financial accounting. |
| 2. | Charles has provided some of the costs he expects to incur on the Cost Classification panel. Decide on the classifications that could be applied to each of these costs using the table provided. The cost object in each case is the cheesecake. |
| 3. | Charles found some sample income statements and balance sheets on the Internet, and asked which of them might be most appropriate for a manufacturing business like his. Review income statements A and B on the Income Statements panel, and balance sheets C and D on the Balance Sheets panel. Determine which income statement and balance sheet would be most appropriate for a manufacturing business like Able Baker Charlie. Then, on the Financial Statements panel, denote which income statement and balance sheet would be most appropriate for a manufacturing business. |
| 4. | At the end of February, after the second month of operations of Able Baker Charlie Company, Charles shows you the data he’s collected, but he was unable to figure out some of the amounts. On the Costs and Balances panel, determine the missing amounts. Note: It may be helpful to use T accounts to map the flow of the amounts through the manufacturing accounts and solve for the missing dollar values. |
Managerial vs. Financial
Choose whether the following characteristics are most often associated with managerial accounting or financial accounting.
|
Managerial Accounting |
Financial Accounting |
||
|---|---|---|---|
| Primarily used for internal decision making | |||
| Generally Accepted Accounting Principles (GAAP) must be used | |||
| Prepared statements usually pertain to the company as a whole rather than individual departments or products | |||
| Information provided will often be subjective, such as estimated future results | |||
| Often prepared on an as-needed basis rather than at fixed intervals | |||
| Use principles of the Sustainability Accounting Standards Board (SASB) to provide sustainability information to external financial statement users | |||
| Consideration of sustainability practices to contribute to the company’s long-term success | |||
| Using eco-efficiency measures to reduce expenses |
Cost Classification
Charles has provided some of the costs he expects to incur as follows. Decide on the classifications that could be applied to each of these costs using the table provided. The cost object in each case is the cheesecake.
|
Cost |
Product |
Period |
Direct |
Direct |
Factory |
Selling |
Administrative |
Direct |
Indirect |
Prime |
Conversion |
|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Cost |
Cost |
Materials |
Labor |
Overhead |
Expense |
Expense |
Cost |
Cost |
Cost |
Cost |
||
| Eggs used to make cheesecakes | ||||||||||||
| Baker’s wages | ||||||||||||
| Delivery driver wages | ||||||||||||
| Depreciation of office computers | ||||||||||||
| Power to run the cheesecake ovens | ||||||||||||
| President’s salary | ||||||||||||
| Sales commissions | ||||||||||||
| Factory supervisor salary |
Financial Statements
Charles found some sample income statements and balance sheets on the Internet, and asked which of them might be most appropriate for a manufacturing business like his. Review income statements A and B on the Income Statements panel, and balance sheets C and D on the Balance Sheets panel. Determine which income statement and balance sheet would be most appropriate for a manufacturing business like Able Baker Charlie Company.
Which income statement is most appropriate for a manufacturing business?
Income statement A
Income statement B
Which balance sheet is most appropriate for a manufacturing business?
Balance sheet C
Balance sheet D
Income Statements
Income Statement A (scroll down for Income Statement B):
|
Sample Company A |
|
Income Statement |
|
For the Year Ended December 31, 20Y8 |
|
1 |
Sales |
$42,000.00 |
|
|
2 |
Beginning finished goods inventory |
$5,250.00 |
|
|
3 |
Plus cost of goods manufactured |
6,400.00 |
|
|
4 |
Cost of finished goods available for sale |
$11,650.00 |
|
|
5 |
Less ending finished goods inventory |
400.00 |
|
|
6 |
Cost of goods sold |
11,250.00 |
|
|
7 |
Gross profit |
$30,750.00 |
|
|
8 |
Operating expenses: |
||
|
9 |
Selling expenses |
$6,400.00 |
|
|
10 |
Administrative expenses |
5,250.00 |
|
|
11 |
Total operating expenses |
11,650.00 |
|
|
12 |
Net income |
$19,100.00 |
Income Statement B:
|
Sample Company B |
|
Income Statement |
|
For the Year Ended December 31, 20Y8 |
|
1 |
Sales |
$42,000.00 |
|
|
2 |
Beginning merchandise inventory |
$5,250.00 |
|
|
3 |
Plus net purchases |
6,400.00 |
|
|
4 |
Merchandise available for sale |
$11,650.00 |
|
|
5 |
Less ending merchandise inventory |
400.00 |
|
|
6 |
Cost of merchandise sold |
11,250.00 |
|
|
7 |
Gross profit |
$30,750.00 |
|
|
8 |
Operating expenses: |
||
|
9 |
Selling expenses |
$6,400.00 |
|
|
10 |
Administrative expenses |
5,250.00 |
|
|
11 |
Total operating expenses |
11,650.00 |
|
|
12 |
Net income |
$19,100.00 |
Balance Sheets
Balance Sheet C (scroll down for Balance Sheet D):
|
Sample Company C |
|
Balance Sheet |
|
December 31, 20Y8 |
|
1 |
Assets |
||
|
2 |
Cash |
$20,800.00 |
|
|
3 |
Accounts receivable (net) |
10,000.00 |
|
|
4 |
Merchandise inventory |
6,000.00 |
|
|
5 |
Supplies |
2,100.00 |
|
|
6 |
Land |
17,000.00 |
|
|
7 |
Total assets |
$55,900.00 |
|
|
8 |
Liabilities |
||
|
9 |
Accounts payable |
$17,800.00 |
|
|
10 |
Stockholders’ Equity |
||
|
11 |
Common stock |
$19,000.00 |
|
|
12 |
Retained earnings |
19,100.00 |
|
|
13 |
Total stockholders’ equity |
38,100.00 |
|
|
14 |
Total liabilities and stockholders’ equity |
$55,900.00 |
Balance Sheet D:
|
Sample Company D |
|
Balance Sheet |
|
December 31, 20Y8 |
|
1 |
Assets |
||
|
2 |
Cash |
$20,800.00 |
|
|
3 |
Accounts receivable (net) |
10,000.00 |
|
|
4 |
Inventories: |
||
|
5 |
Finished goods |
$2,000.00 |
|
|
6 |
Work in process |
1,500.00 |
|
|
7 |
Materials |
2,500.00 |
6,000.00 |
|
8 |
Supplies |
2,100.00 |
|
|
9 |
Land |
17,000.00 |
|
|
10 |
Total assets |
$55,900.00 |
|
|
11 |
Liabilities |
||
|
12 |
Accounts payable |
$17,800.00 |
|
|
13 |
Stockholders’ Equity |
||
|
14 |
Common stock |
$19,000.00 |
|
|
15 |
Retained earnings |
19,100.00 |
|
|
16 |
Total stockholders’ equity |
38,100.00 |
|
|
17 |
Total liabilities and stockholders’ equity |
$55,900.00 |
Costs and Balances
At the end of February, after the second month of operations of Able Baker Charlie Company, Charles shows you the data he’s collected, but he was unable to figure out some of the amounts. Review the following data and fill in the missing amounts on the chart for Able Baker Charlie Company. Note: It may be helpful to use T accounts to map the flow of the amounts through the manufacturing accounts and solve for the missing dollar values. It may also be helpful to review the steps for determining the cost of materials used, total manufacturing cost incurred, and cost of goods manufactured.
| Data for February | |
|---|---|
| Decrease in materials inventory | $3,300 |
| Materials inventory on Feb. 28 | 50% of materials inventory on Jan. 31 |
| Direct materials purchased | $12,600 |
| Direct materials used | 3 times the direct labor incurred |
| Total manufacturing costs incurred in period | $29,400 |
| Total manufacturing costs incurred in period | 70% of Cost of Goods Manufactured |
| Total manufacturing costs incurred in period | $7,000 less than Cost of Goods Sold |
| Account |
Account Balances |
Costs Incurred |
||
|---|---|---|---|---|
| Jan. 31 | Feb. 28 | |||
| Materials Inventory | Direct Materials Used | |||
| Work in Process Inventory | $27,000 | Direct Labor Incurred | ||
| Finished Goods Inventory | $16,000 | Factory Overhead Incurred | ||
| Cost of Goods Sold | ||||
In: Accounting
I'll rate posting for sec times just do last parts like cost and balance sheet ( account balance and cost incurred ) that's it ready question carefully then answer all last part thanks
Charles Maxwell is starting a cheesecake bakery, Able Baker Charlie Company, to produce and sell different flavored cheesecakes to restaurants and the general public. He has just begun his study of accounting, and is a bit confused about the many types of reports he has read about and how they will help him run his business. He asks you to help him clarify what the differences between managerial accounting and financial accounting are. He’s also wondering how to set up his inventory, how to classify the costs of his business, and how to fill in some missing information.
| Required: | |
| 1. | Choose whether the characteristics on the Managerial vs. Financial panel are most often associated with managerial accounting or financial accounting. |
| 2. | Charles has provided some of the costs he expects to incur on the Cost Classification panel. Decide on the classifications that could be applied to each of these costs using the table provided. The cost object in each case is the cheesecake. |
| 3. | Charles found some sample income statements and balance sheets on the Internet, and asked which of them might be most appropriate for a manufacturing business like his. Review income statements A and B on the Income Statements panel, and balance sheets C and D on the Balance Sheets panel. Determine which income statement and balance sheet would be most appropriate for a manufacturing business like Able Baker Charlie. Then, on the Financial Statements panel, denote which income statement and balance sheet would be most appropriate for a manufacturing business. |
| 4. | At the end of February, after the second month of operations of Able Baker Charlie Company, Charles shows you the data he’s collected, but he was unable to figure out some of the amounts. On the Costs and Balances panel, determine the missing amounts. Note: It may be helpful to use T accounts to map the flow of the amounts through the manufacturing accounts and solve for the missing dollar values. |
Managerial vs. Financial
Choose whether the following characteristics are most often associated with managerial accounting or financial accounting.
|
Managerial Accounting |
Financial Accounting |
||
|---|---|---|---|
| Primarily used for internal decision making | |||
| Generally Accepted Accounting Principles (GAAP) must be used | |||
| Prepared statements usually pertain to the company as a whole rather than individual departments or products | |||
| Information provided will often be subjective, such as estimated future results | |||
| Often prepared on an as-needed basis rather than at fixed intervals | |||
| Use principles of the Sustainability Accounting Standards Board (SASB) to provide sustainability information to external financial statement users | |||
| Consideration of sustainability practices to contribute to the company’s long-term success | |||
| Using eco-efficiency measures to reduce expenses |
Cost Classification
Charles has provided some of the costs he expects to incur as follows. Decide on the classifications that could be applied to each of these costs using the table provided. The cost object in each case is the cheesecake.
|
Cost |
Product |
Period |
Direct |
Direct |
Factory |
Selling |
Administrative |
Direct |
Indirect |
Prime |
Conversion |
|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Cost |
Cost |
Materials |
Labor |
Overhead |
Expense |
Expense |
Cost |
Cost |
Cost |
Cost |
||
| Eggs used to make cheesecakes | ||||||||||||
| Baker’s wages | ||||||||||||
| Delivery driver wages | ||||||||||||
| Depreciation of office computers | ||||||||||||
| Power to run the cheesecake ovens | ||||||||||||
| President’s salary | ||||||||||||
| Sales commissions | ||||||||||||
| Factory supervisor salary |
Financial Statements
Charles found some sample income statements and balance sheets on the Internet, and asked which of them might be most appropriate for a manufacturing business like his. Review income statements A and B on the Income Statements panel, and balance sheets C and D on the Balance Sheets panel. Determine which income statement and balance sheet would be most appropriate for a manufacturing business like Able Baker Charlie Company.
Which income statement is most appropriate for a manufacturing business?
Income statement A
Income statement B
Which balance sheet is most appropriate for a manufacturing business?
Balance sheet C
Balance sheet D
Income Statements
Income Statement A (scroll down for Income Statement B):
|
Sample Company A |
|
Income Statement |
|
For the Year Ended December 31, 20Y8 |
|
1 |
Sales |
$42,000.00 |
|
|
2 |
Beginning finished goods inventory |
$5,250.00 |
|
|
3 |
Plus cost of goods manufactured |
6,400.00 |
|
|
4 |
Cost of finished goods available for sale |
$11,650.00 |
|
|
5 |
Less ending finished goods inventory |
400.00 |
|
|
6 |
Cost of goods sold |
11,250.00 |
|
|
7 |
Gross profit |
$30,750.00 |
|
|
8 |
Operating expenses: |
||
|
9 |
Selling expenses |
$6,400.00 |
|
|
10 |
Administrative expenses |
5,250.00 |
|
|
11 |
Total operating expenses |
11,650.00 |
|
|
12 |
Net income |
$19,100.00 |
Income Statement B:
|
Sample Company B |
|
Income Statement |
|
For the Year Ended December 31, 20Y8 |
|
1 |
Sales |
$42,000.00 |
|
|
2 |
Beginning merchandise inventory |
$5,250.00 |
|
|
3 |
Plus net purchases |
6,400.00 |
|
|
4 |
Merchandise available for sale |
$11,650.00 |
|
|
5 |
Less ending merchandise inventory |
400.00 |
|
|
6 |
Cost of merchandise sold |
11,250.00 |
|
|
7 |
Gross profit |
$30,750.00 |
|
|
8 |
Operating expenses: |
||
|
9 |
Selling expenses |
$6,400.00 |
|
|
10 |
Administrative expenses |
5,250.00 |
|
|
11 |
Total operating expenses |
11,650.00 |
|
|
12 |
Net income |
$19,100.00 |
Balance Sheets
Balance Sheet C (scroll down for Balance Sheet D):
|
Sample Company C |
|
Balance Sheet |
|
December 31, 20Y8 |
|
1 |
Assets |
||
|
2 |
Cash |
$20,800.00 |
|
|
3 |
Accounts receivable (net) |
10,000.00 |
|
|
4 |
Merchandise inventory |
6,000.00 |
|
|
5 |
Supplies |
2,100.00 |
|
|
6 |
Land |
17,000.00 |
|
|
7 |
Total assets |
$55,900.00 |
|
|
8 |
Liabilities |
||
|
9 |
Accounts payable |
$17,800.00 |
|
|
10 |
Stockholders’ Equity |
||
|
11 |
Common stock |
$19,000.00 |
|
|
12 |
Retained earnings |
19,100.00 |
|
|
13 |
Total stockholders’ equity |
38,100.00 |
|
|
14 |
Total liabilities and stockholders’ equity |
$55,900.00 |
Balance Sheet D:
|
Sample Company D |
|
Balance Sheet |
|
December 31, 20Y8 |
|
1 |
Assets |
||
|
2 |
Cash |
$20,800.00 |
|
|
3 |
Accounts receivable (net) |
10,000.00 |
|
|
4 |
Inventories: |
||
|
5 |
Finished goods |
$2,000.00 |
|
|
6 |
Work in process |
1,500.00 |
|
|
7 |
Materials |
2,500.00 |
6,000.00 |
|
8 |
Supplies |
2,100.00 |
|
|
9 |
Land |
17,000.00 |
|
|
10 |
Total assets |
$55,900.00 |
|
|
11 |
Liabilities |
||
|
12 |
Accounts payable |
$17,800.00 |
|
|
13 |
Stockholders’ Equity |
||
|
14 |
Common stock |
$19,000.00 |
|
|
15 |
Retained earnings |
19,100.00 |
|
|
16 |
Total stockholders’ equity |
38,100.00 |
|
|
17 |
Total liabilities and stockholders’ equity |
$55,900.00 |
Costs and Balances
At the end of February, after the second month of operations of Able Baker Charlie Company, Charles shows you the data he’s collected, but he was unable to figure out some of the amounts. Review the following data and fill in the missing amounts on the chart for Able Baker Charlie Company. Note: It may be helpful to use T accounts to map the flow of the amounts through the manufacturing accounts and solve for the missing dollar values. It may also be helpful to review the steps for determining the cost of materials used, total manufacturing cost incurred, and cost of goods manufactured.
| Data for February | |
|---|---|
| Decrease in materials inventory | $3,300 |
| Materials inventory on Feb. 28 | 50% of materials inventory on Jan. 31 |
| Direct materials purchased | $12,600 |
| Direct materials used | 3 times the direct labor incurred |
| Total manufacturing costs incurred in period | $29,400 |
| Total manufacturing costs incurred in period | 70% of Cost of Goods Manufactured |
| Total manufacturing costs incurred in period | $7,000 less than Cost of Goods Sold |
| Account |
Account Balances |
Costs Incurred |
||
|---|---|---|---|---|
| Jan. 31 | Feb. 28 | |||
| Materials Inventory | Direct Materials Used | |||
| Work in Process Inventory | $27,000 | Direct Labor Incurred | ||
| Finished Goods Inventory | $16,000 | Factory Overhead Incurred | ||
| Cost of Goods Sold | ||||
In: Accounting
Question 11 pts
In a Pareto efficient allocation,
Group of answer choices
there are gains from trade still not captured in the economy.
there is no way to make any person better off without making someone else worse off
Some people can be made better off without making others worse off, but there is no way to make most people better off without making some others worse off.
Total utility in society is maximized.
Flag this Question
Question 21 pts
The result that a perfectly competitive price system brings about an efficient allocation of resources is known as:
Group of answer choices
The First Theorem of Welfare Economics.
The Second Theorem of Welfare Economics
Gresham's Law.
The Principle of Market Failure.
Flag this Question
Question 31 pts
All of the following are considered to produce inefficiency in markets EXCEPT:
Group of answer choices
Public Goods
Externalities
Imperfect Competition
All of the above result in market failure.
Flag this Question
Question 41 pts
A model in which all markets in the economy clear simultaneously is a ___________ equilibrium model.
Flag this Question
Question 51 pts
A model which examines how one market in the economy clears is a _____________ equilibrium model.
In: Economics
Let X denote the distance (m) that an animal moves from its birth site to the first territorial vacancy it encounters. Suppose that for banner-tailed kangaroo rats, X has an exponential distribution with parameter λ = 0.01452.
(a) What is the probability that the distance is at most 100 m? At most 200 m? Between 100 and 200 m? (Round your answers to four decimal places.)
| at most 100 m | ||
| at most 200 m | ||
| between 100 and 200 m |
(b) What is the probability that distance exceeds the mean distance
by more than 2 standard deviations? (Round your answer to four
decimal places.)
(c) What is the value of the median distance? Hint: Find a such
that
P(X≤a)= 0.50
(Round your answer to two decimal places.)
(d) Only 5% of animals will move farther than what distance? Hint:
Find a such that
P(X≤a)= 0.95
. (Round your answer
In: Statistics and Probability
Turing machine A that does the following:
• On its first and second tape, A receives two strings w and v, w, v ∈ {0, 1}? , representing two integer numbers. When machine A is started, the tape heads are located on the left-most position, on the most significant bits of w and v.
• If none of the inputs w and v is the empty word, the Turing machine A writes the binary representation of the sum of the two integer numbers w and v on the third tape and then accepts the input. If one of w or v is the empty word, the Turing machine does not write anything on the third tape and rejects the input. If machine A outputs something, it outputs the binary representation of the sum in such a way that the left-most bit contains the most significant bit of the sum. Be careful: w and v may be of different length.
Q: Define a 3-tape Turing machine M that implements multiplication, in a manner similar to how A implements addition
In: Computer Science
CASE STUDY 1: Lloyds Banking Group Monetary Policy
Committee
You are a voting member of Lloyds Banking Group Monetary Policy
Committee (MPC) and are expected to make a policy decision at the
next MPC meeting in January 2021. The current Repo rate is 4.25%
and the allowable inflation target ranges between 3% to 5%. The
Research department has presented the following global and domestic
market update for your consideration.
Key extracts of the presentation are summarized below:
Extract 1: Global update
According to the IMF’s World Economic Outlook (WEO) for October
2020, the global economy is expected to recover substantially in
2021 following the negative effects of COVID-19. The impact of
COVID-19 outbreak has lessened significantly since the first cases
were made public at the beginning of the year 2020. To curb the
spread of the pandemic, governments worldwide imposed severe
restrictions and lockdown measures, subsequently bringing economic
activities to a virtual standstill in the process. According to the
latest WEO, the global economy is now projected to recover and grow
by 3.8 percent in 2021, which is an upward revision from a 2.3
percent growth published in the WEO update for January 2021. The
upward revision is on the back of successful easing of lockdown
restrictions and resumption of economic activities in both advanced
and emerging market economies. The global output is then projected
to expand by 5.8 percent in 2021.
Extract 2: Emerging market update
Emerging market and developing economies (EMDEs) improved
moderately in the second half of 2020 and are expected to recover
strongly in 2021. Overall, EMDEs are projected to grow by 2.0
percent in 2020, before recovering to a strong growth of 6.6
percent in 2021. Going forward EMDEs are expected to experience a
sharp recovery in 2021 once the adverse effects from this economic
shock subside.
Extract 3: Domestic market update
1. Domestic growth remained positive during the last
quarter of 2020, supported by construction, wholesale and retail
trade, as well as the communication sectors. In contrast,
activities such as livestock farming and uranium mining performed
weakly.
2. Going forward, the domestic economy is forecasted to
improve in the remainder of 2021, also supported by construction
activities, as well as strong growth in demand. Declining
international commodity prices remain a concern, as it may
negatively affect mineral production.
3. Inflation has shown an upward trend for the past
five months. Annual inflation rose from 4.9 percent in June 2020 to
6.1 percent in January 2021, mainly due to increases in food and
transport prices. As a result, this recent trend of inflation is
expected to average around 7 percent for the year.
4. The annual growth rate in domestic private sector
credit increased steadily to 17.8 percent in December 2020,
compared to 14.3 percent in December 2019. Growth in private sector
credit resulted from higher demand by both individuals and
businesses. The rise in household debt largely reflected strong
growth in unproductive instalment credit and overdraft loans which
remains a concern for the MPC.
5. During the last quarter of 2020, the trade deficit
increased significantly. A rapid growth in imports of vehicles,
partly financed by instalment credit, remains a concern. The total
number of vehicles sold during the last four months of 2020
increased by more than 50 percent, compared to the same period in
2019. The value of imported vehicles amounted to N$2.2 billion,
which is a significant amount in relation to the total import bill
of goods of N$15.9 billion. Unproductive imports have put pressure
on international reserves of the country and require
monitoring.
Extract 4: Key domestic sector updates
Construction Sector update:
The contraction in the construction sector is expected to deepen
during 2020 as projects anticipated to kickstart earlier are likely
to be delayed. The construction sector is expected to contract by
16.3 percent and 1.5 percent in 2020 and 2021, respectively. The
deeper contraction for 2020 is based on expectations that some of
major projects, which were expected to commence in 2020 are likely
to be delayed, mainly due to COVID-19 induced travel restrictions.
This assertion is supported by the recent directive by the Minister
of Finance to SOEs and Government Ministry to suspend capital
projects until further notice.
Uranium Sector update
Uranium mining is similarly projected to contract during 2020,
followed by a mild recovery in 2021. The uranium mining sector is
expected to contract by 22.4 percent in 2020, before expanding by
4.6 percent in 2021. The sector is first and foremost grappling
existing factors that include insufficient supply of water required
for their operations and persistently low uranium prices, viewed
together with the reduction in long-term supply contracts. This
means that uranium mines are more exposed to spot prices, which
squeezes their margins. There is, however, an indication that
COVID-19 and resulting travel restriction have not prevented the
mines from exporting their output thus far and it may not
constitute a major factor in the foreseeable future. The volumes
produced during the first three months of 2020, were 26.4 percent
lower than the production for the corresponding three months of
2019, making any prospects to catch up with 2019 production levels
unlikely.
CASE STUDY 1 QUESTIONS
1. Based on Extracts 1-3 in the case facts presented
above, Recommend the monetary policy stance and decision that
Lloyds Banking Group should take and Justify your recommendation
with three (3) reasons found in Case study 1 above
Justification should include specific facts related to the case study!!!
2. Based on Extract 4 above, Identify one reason for
the expected contraction in the construction sector and two reasons
for expected contraction in the Uranium sector
In: Economics
A 3-year bond carrying 3.4% annual coupon and $100-par is putable at par 1 year and 2 years from today. Calculate the value of the putable bond under the forward rate curve below.
1-year spot rate: 2.1%;
1-year spot rate 1 year from now: 2.5%;
1-year spot rate 2 years from now: 3.8%.
Assume annual compounding. Round your answer to 2 decimal places (nearest cent).
In: Finance
You are considering the purchase of a new stock. The stock is forecasted to pay a dividend next year (D1) of $3.49. In addition, you forecast that the firm will have a stable growth rate of 3.8% for the foreseeable future. The current risk-free rate of return is 1.4%. The expected return on the market is 11.4% and the standard deviation for the market is 13%. The stock has a correlation to the market of 0.21. Finally, the stock has a standard deviation of 24%.
Given this information, what is the value of this stock? (Hint: Use the constant growth pricing model)
In: Finance
How much time per week do students spend on their assignments and review at home? A random sample of 36 USC (University of Southern California) students indicates that the mean time spent on studying at home is equal to 15.3 hours per week, with a population standard deviation equals to 3.8 hours. 1) Form a 95% CI estimate for the population mean time spent on studying at home. 2) What sample size is needed to be 90 % confident of being within only one third of the margin of error in 1).
In: Statistics and Probability