Suppose that in the production of a product, a company is polluting the local river that runs through a town. No other externalities exist. A. Draw a graph that shows marginal private benefit, marginal social benefit, marginal private cost, and marginal social cost. B. Identify the area of deadweight loss to society. C. Should the government subsidize or tax the production of this good? How would the graph be impacted based on the appropriate government response? D. Identify another method the government could use (outside of a subsidy or tax) that could remedy the situation. Explain.
Answers
When a company is polluting a local river, there are negative externalities imposed on society.
In order to draw the graph, we need to understand the concepts of marginal private benefit (MPB), marginal social benefit (MSB), marginal private cost (MPC), and marginal social cost (MSC).
Marginal private benefit (MPB) represents the additional benefit received by an individual consumer from consuming one more unit of the product.
Marginal social benefit (MSB) represents the additional benefit to society as a whole from consuming one more unit of the product. It is equal to the MPB plus any external benefits to third parties.
Marginal private cost (MPC) represents the additional cost incurred by the producer in producing one more unit of the product.
Marginal social cost (MSC) represents the additional cost to society as a whole from producing one more unit of the product. It is equal to the MPC plus any external costs imposed on third parties.
Now, let's draw the graph:
mathematica
Copy code
^
|
MSB |
| MSC
|
|
MPB | MPC
|_________________
Quantity of Product
B. The area of deadweight loss to society can be identified as the difference between the social optimum and the equilibrium quantity of the product. Deadweight loss occurs when the quantity produced and consumed in the market is not at the socially optimal level, resulting in a loss of overall welfare. In this case, the deadweight loss would be the area between the MSB and MSC curves, starting from the equilibrium quantity.
C. The government should tax the production of this good to internalize the external cost imposed on society. By imposing a tax equal to the external cost (i.e., the difference between the MPC and MSC), the government can incentivize the company to reduce pollution and produce the socially optimal quantity. The graph would be impacted by the tax through a leftward shift of the MPC curve, reflecting the additional cost imposed by the tax. This would result in a new equilibrium at a lower quantity, closer to the socially optimal level, and a higher price.
D. Another method the government could use to remedy the situation is by implementing regulations or standards for pollution control. The government could set a maximum allowable level of pollution that the company can emit into the river, and enforce penalties or fines for non-compliance. This would provide an incentive for the company to invest in pollution control technologies or change their production processes to reduce pollution levels. The graph would be impacted by the regulations through a downward shift of the MSC curve, reflecting the additional costs incurred by the company to comply with the pollution control standards. This would result in a new equilibrium at a lower quantity, closer to the socially optimal level, and a higher price.
In conclusion, when a company is polluting a local river, there are negative externalities imposed on society. In such a case, the government intervention is necessary to address the market failure.
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Related Questions
Data table Click on the icons located on the top-right corners of the data tables below to copy its contents into a spreadsheet. Giobal Corp. expects sales to grow by 8% next year, Using the percent of sales method and the data provided in the given tables forecast the following a. Costs e. Accounts receivable b. Depreciation f. Inventory c. Net income g. Property, plant, and equipment d. Cash h. Accounts payable (Note: Interest expense will not change with a change in sales. Tax rate is 26%.) a. Costs The forecasted costs except depreciation will be \& million. (Round to one decimal place, and enter all numbers as a positive
Answers
Giobal Corp. expects sales to grow by 8% next year. Using the percent of sales method and the data provided in the given tables, the following costs are forecasted:
Costs except depreciation: $1,008 million
Depreciation: $200 million
Net income: $252 million
Accounts receivable: $480 million
Inventory: $320 million
Cash: $240 million
Accounts payable: $360 million
The forecasted costs except depreciation are calculated by multiplying the current costs by 1.08. Depreciation is forecasted to be $200 million, the same as it is this year. Net income is calculated by subtracting costs, depreciation, and interest expense from sales. Interest expense is not forecasted to change, so it is the same as it is this year. Accounts receivable is forecasted to be 30% of sales, inventory is forecasted to be 20% of sales, cash is forecasted to be 10% of sales, and accounts payable is forecasted to be 25% of sales.
The percent of sales method is a simple way to forecast costs and expenses. It is based on the assumption that costs and expenses will vary in proportion to sales. This assumption is not always accurate, but it is a good starting point for forecasting.
The forecasted costs and expenses are used to create a budget for the next year. The budget helps Giobal Corp. to track its financial performance and to make sure that it has enough cash on hand to meet its obligations.
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The drawee is the
Question 4 options:
person who writes the check.
person who reconciles the account.
bank with which the drawer has an account.
person to whom the check is payable.
Answers
Answer:
C
Explanation:
The drawee is the bank with which the drawer has an account.
chou company has a net income of $50,000, assets at the beginning of the year are $257,000 and assets at the end of the year are $307,000. compute its return on assets.
Answers
17% is the return asset for a chou company has a net income of $50,000, assets at the beginning of the year are $257,000 and assets at the end of the year are $307,000.
The sum earned by a business or an individual after costs, allowances, and taxes is referred to as net income. Net income in trade is the amounts that exists after all expenditures, such as wages and wages, the cost selling goods and materials, and taxes, have been paid. Everything that would or already has economic value to a corporation is considered a asset. In summary, commodities for businesses have been any things that fall under the company's ownership and supervision and are either currently valuable or possess the potential to be profitable in the near future. Examples include finances, machinery, and patents.
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harry is trying to take one more class this semester. he is weighing the marginal benefit of taking one more class to the marginal cost of taking one more class. which economic concept is most closely related to harry's decision-making process? question 1 options: macroeconomics exchange rationing devices decisions made at the margin
Answers
The economic concept that is most related to Harry's style of decision-making is decision at the margin.
What is "decision at the margin"?When we make decisions at the margin, it means that we are considering the marginal aspects of the decision.
In clearer terms, we are considering things like how much the one additional unit of something will cost us, as well as what we stand to benefit from the additional unit like Harry is doing.
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in about 100 words explain who owns, controls and is responsible for any debt, in a sloe proprietorship and in a partnership.
Answers
Legally, sole proprietors bear unlimited responsibility for all business debts. Their assets, both personal and business, are at risk.
Who is the sole proprietor of a business?A sole proprietor is a person who owns an unincorporated business on their own. However, if you treat a domestic limited liability company (LLC) as a corporation, you will not be treated as a sole proprietor even if you are the LLC's sole member.
The term "limitless obligation" refers to the full legal liability that business partners and entrepreneurs anticipate for all business obligations. This chance isn't covered, and responsibilities can be paid through the seizure and proposition of owners' own special assets, which isn't equivalent to the renowned confined liability business structure.
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Jamie is a purchasing agent for a company that manufactures shoes. She
has just submitted a purchase order to a supplier for more leather. Which
step of the purchasing process comes next?
A. Quality check
B. Requisition
C. Bid soliciting
O D. Shipping
Answers
Answer:
D. Shipping
Explanation:
Shipping refers to the activity of physically moving goods from one location to another. The goods could be moving from one store to another, from manufacturers to distributors, or from retailers to customers. Shipping is 'carrying goods' and hence a component of logistics.
After Jamie has prepared a submitted a purchase order, the next thing is to wait to receive the goods she ordered. Her supplier should ship the goods to her. The supplier can deliver the goods by themselves or use a logistics company.
A new business should be based on an entrepreneur's individual interests because the entrepreneur must...
A. have sufficient confidence to succeed.
B. be willing to take personal responsibility.
C. have enough determination to work alone.
D. dedicate as many hours as needed to the work.
Will mark brainliest!
Answers
Answer:
A.................
Explanation:
look at my pokemon
Answer:
D
Explanation: because i said so but it might not be right
This organizational structure violates the unity of
command principles because of dual reporting
relationship
A. Functional organization
B. Line type organization
C. Matrix organization
D. Network organization
Answers
This organizational structure violates the unity of
command principles because of dual reporting
relationship.
Answer:C. Matrix Organization
Explanation:That's my opinion and I hope it helps ^_^
#CARRYONLEARNING #STUDYWELLThis organizational structure violates the unity of
command principles because of dual reporting
relationship.
Choosing:A. Functional organization
B. Line type organization
C. Matrix organization
D. Network organization
Answer:C. Matrix Organization
#READINGHELPSWITHLEARNING #CARRYONLEARNING #STUDYWELLThe computer accessories that Javier is making and
selling are bringing in a substantial amount of money
for him. Inspired by this success, he decides to hire two
people and expand his business.
A.international competition
B.consumer sovereignty
C.wealth creation
D.property rights
E.profit motive
Answers
Answer:
E. Profit motive
Explanation:
Profit motive can be defined as the intention, motivation or desire to form a business or engage in business ventures so as to generate financial (monetary) gains.
This ultimately implies that, profit motive is a desire for monetary gains (profits) which motivates a business owner to engage in the sales of finished goods or services.
Hence, profit motive is the premise on which all businesses are built on because the ultimate goal of every business is to achieve financial gains.
In this scenario, the computer accessories that Javier is making and selling are bringing in a substantial amount of money for him. Inspired by this success, he decides to hire two people and expand his business.
Thus, this is an example of profit motive.
what are the advantages and disadvantages of common stocks
Answers
Advantages:
You can invest in companies with limited liability. Common stocks offer a higher earning potential. You can easily purchase common stock on virtually any trading platform. Common stocks can provide dividends. You’ll get to take advantage of a growing economy.Disadvantages:
You are the last person to get paid during a company liquidation. You don’t have much control over your investment. Companies are not required to pay dividends on common stocks. It can take time to generate significant gains. You will face high levels of professional competition when investing in common stocks.Hopes this helps :)
After an assessment of needs, a marketing manager must translate ideas from consumers into concepts for products that a firm may develop. The concepts must then be converted into a tangible Multiple Choice mission statement. macromarketing agenda micromarketing ogendo marketing program. marketing concept.
Answers
After an assessment of needs, a marketing manager must translate ideas from consumers into concepts for products that a firm may develop. The concepts must then be converted into a tangible marketing program.
The marketing program consists of all the firm's marketing decisions regarding the product, price, promotion, and distribution.
The marketing program is the final stage of a marketing manager's effort to turn ideas from customers into a concrete, comprehensive strategy for a business.
A marketing program is a comprehensive plan that lays out all of the firm's marketing decisions about the product, price, promotion, and distribution.
The objective of a marketing program is to assist a firm in achieving its overall mission by selling its products and services to target consumers. It includes determining and selecting target markets, formulating a marketing mix, and designing a marketing strategy.
The marketing concept is a modern marketing-oriented business philosophy that entails a consumer-centered approach to designing and implementing a marketing strategy.
This strategy involves researching customer needs, developing products that meet those needs, and then advertising and promoting the product to the target market.
The marketing concept is an approach to conducting business that prioritizes meeting customer demands over the business's short-term objectives.
The end goal is to establish long-term relationships with customers by delivering high-quality goods that meet their needs.
Micro-marketing is the practice of tailoring products and services to meet the needs of individuals in a small, well-defined target market.
It is a business philosophy that emphasizes the importance of personalized marketing strategies and customer segmentation to achieve business objectives.
On the other hand, Macromarketing focuses on the entire marketing system, which is made up of consumers, businesses, and other organizations that work together to make products and services available to the market.
It examines the factors that influence the marketing system as a whole.
A marketing manager must be familiar with both macro- and micro-marketing concepts and use them to design a marketing program.
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Which should you finance first?
O your needs
O your wants
O your savings
O your investments
Answers
in my opinion, the last option. i would spell it out but it won’t let me lolz
How much does it cost to hike the appalachian trail?.
Answers
Trail ranges from $5,000 to $7,000 for a 5- to 7-month hike; that amount includes gear, trail resupply, and town expenses. Expect to spend about $1,000 a month per person.
The first paragraph of a business letter is the ____.
A. Introduction
B. Addresses
C. Conclusion
D. Supporting details
Answers
Answer:
A. Introduction is the first paragraph
Explanation:
You start with an introduction when writing a business letter
Bill has to write a report for this manager. He must do some background research, write the report, and present it to a group of 30 employees. Which factor will likely influence his list of priorities?
a.
Logic
b.
Importance
c.
Achievability
d.
Time
Answers
Answer:
A). Logic
Explanation:
As per the question, the factor that would most likely be included in Bill's list of precedences while preparing the report would be 'logic or reason.' A logical argument or claim in his report backed with sufficient details to substantiate it would not only establish the credibility of the claim but also appeal to the reason of the manager and make it more effective. It will help present the ideas or thoughts in a flow and justify the conclusion appropriately. Hence, option A is the correct answer.
Answer:
the answer is A
Explnation:
i just took the quiz
how do i get an egg out of my fridge????? HELP NEED TO KNOW ASAP
Answers
Answer:
open fridge!!!
Explanation:
STEP 1: open fridge
STEP 2: find the egg then grab with hand!!!!!!!!
(Its really hard!!)
a mortgage of $10,000 for 10 years at 5% has a monthly payment of $121.33. what is the balance of the loan after the first monthly payment?
Answers
the balance of the loan after the first monthly payment is $9,920.34.
How we got?
To calculate the balance of the loan after the first monthly payment, we can use the formula for the balance of a loan after a given number of payments:
Balance = Principal x (1 + r)^n - Payment x [(1 + r)^n - 1] / r
Where:
Principal = $10,000 (the initial loan amount)
r = (5/12)/100 = 0.0041667 (the monthly interest rate, calculated as the annual interest rate divided by the number of months in a year, divided by 100 to convert to a decimal)
n = 1 (the number of monthly payments made so far)
Payment = $121.33 (the monthly payment)
Plugging in these values, we get:
Balance = $10,000 x (1 + 0.0041667)^1 - $121.33 x [(1 + 0.0041667)^1 - 1] / 0.0041667
Balance = $10,000 x 1.0041667 - $121.33 x (1.0041667 - 1) / 0.0041667
Balance = $10,041.67 - $121.33 x 0.0041667 / 0.0041667
Balance = $9,920.34
Therefore, the balance of the loan after the first monthly payment is $9,920.34.
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needles suggests that making judgments about what earnings management is becomes difficult because: multiple choice A. it depends on management's intentions B. there is no clear limit beyond which a choice is clearly unethical C. a perfectly routine accounting estimate may be illegal and unethical D. all of the above
Answers
Needles suggests that making judgments about what earnings management is becomes difficult because it depends on management's intentions, there is no clear limit beyond which a choice is clearly unethical, and a perfectly routine accounting estimate may be illegal and unethical. The correct option is D.
It becomes difficult to make judgments about what earnings management is because it depends on management's intentions, there is no clear limit beyond which a choice is clearly unethical, and a perfectly routine accounting estimate may be illegal and unethical. Earnings management refers to the use of accounting techniques to produce financial reports that present a more favorable image of a company's financial performance than would otherwise be the case.
Earnings management is often practiced by managers to make the company's earnings appear to be better than they actually are. This can lead to issues because it can cause investors to make decisions based on false information about the company's financial performance. There is no clear limit beyond which a choice is clearly unethical when it comes to earnings management. This is because different accounting estimates may produce different financial results. Furthermore, a perfectly routine accounting estimate may be illegal and unethical in certain circumstances. This makes it difficult to determine when earnings management is truly unethical and when it is not.
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A business borrows money from the bank to carry out repairs in their shop. They borrow £10,000. The interest is 5%. They will pay off the loan in full in one year. How much is the total repayment?
Answers
Answer:
£10,500
Explanation:
Amount paid will the principal amount plus interest.
Principal amount = £10,000.
Interest = p x r x t
r = interest rate : 5% or 0.05
t= 1 year
= £10,000 x 0.05 x 1
=£500
Total payment
= £10,000 + £500
=£10,500
Why do countries pursue the macroeconomic goal of stable prices? O )A. Stable prices help businesses plan future economic decisions. OB. Stable prices result in a wealthier country overall O c. Stable prices create a lower per capita gross domestic product. D. Stable prices ensure that all citizens have jobs.
Answers
Answer:
A
Explanation:
Having a stable prices gives way for country to plan for future plans without any issue of inflation
Answer:
A
Explanation:
how have the careers grown due to c0vid 19
Answers
Answer:
They haven’t
Explanation:
Due to C0VID 19 numerous companies have been forced to shut down throughout the nation and therefore suggesting that the only companies that are growing are the ones whom benefit from other company shutdowns, if a lumber is currently producing over three tons of lumber per day and the lumber next to it is producing six tons. If the one of those mills shut down the other will gain the business that the previous mill had and possibly be able to also produce more lumber due to a more increased number in resources
Which statement is true regarding Check No. - 409?
Answers
The statement that is true regarding Check No. - 409 is b. This check was wri`en by John and paid to another person or business.
What is a check?A check can be described as the document that that serves as document which is been given to the user by the financial institution to be collecting money whenever they want from the institution, this institution can be a bank or other institution.
It should be noted that the Check No. - 409 is a type of check, and when someone want to pay another person, one can issue check for him to go and get the money on his behalf.
Therefore, option B is correct.
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Check the missing options:
a. This check likely came from John’s employer. b. This check was wri`en by John and paid to another person or business. c. This check caused John to overdraw his checking account. d. This check added $100 to John’s account.
a production possibilities curve indicates that when resources are being used efficiently
Answers
When resources are being used efficiently, a production possibilities curve indicates that the economy is operating on the curve itself, maximizing production with full resource utilization.
What does a production possibilities curve indicate about resource allocation?A production possibilities curve (PPC) is a graphical representation that shows the different combinations of two goods or services that an economy can produce using its available resources and technology.
It illustrates the trade-offs a society faces when allocating its limited resources between the production of different goods or services.
When resources are being used efficiently, it means that the economy is operating on the PPC, specifically on the curve itself. This indicates that the available resources are fully employed and allocated in the most optimal way to maximize production.
Here are a few key points to explain resource efficiency on a PPC:
Full resource utilization: The economy is utilizing all of its available resources, such as labor, capital, land, and technology, without any idle or underutilized resources. Every resource is put to productive use.Maximum production: The economy is producing the maximum possible output given its available resources and technology. It has achieved the highest level of production efficiency within the limits of its resources.Trade-offs and opportunity cost: The PPC illustrates the concept of trade-offs and opportunity cost. As an economy produces more of one good or service, it must sacrifice the production of another good or service. The PPC shows the alternative production possibilities and the opportunity cost associated with producing one additional unit of a good or service.Efficient allocation: The points on the PPC represent efficient resource allocation because they reflect the optimal combination of goods or services that can be produced. Any point inside the curve indicates an underutilization of resources, while any point outside the curve is unattainable given the current resources and technology.Technological efficiency: Efficiency on the PPC assumes that technology is used effectively to produce goods or services. Technological advancements can shift the entire PPC outward, indicating an increase in production possibilities.It's important to note that the PPC assumes fixed resources and technology, and it represents a snapshot of a specific point in time. Changes in resource availability, technological advancements, or improvements in efficiency can cause the PPC to shift or expand, reflecting new production possibilities.
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In relation to fuel property what i the requirement to be met for taxpayer to qualify foe alternative fuel refueling credit
Answers
Alternative Fuel Vehicle that is Eligible Credit for Refueling Property. During your tax year, you put the refuelling property into operation. You were the first user of the property. The property is not primarily used outside of the US.
The capacity to obtain goods or services on credit is the ability to borrow money with the promise to repay it later. A credit is a record that indicates that money has been received in personal banking or financial accounting. Debits (amounts spent) are typically on the left side of a checking account register, whereas credits (deposits) are typically on the right. What you borrow on credit from a bank or other financial organization is money. Debt is how much you have borrowed. You must repay your obligation, typically with additional charges for interest and fees. A deal between a lender and a borrower is how credit is typically defined. A person's or a company's creditworthiness or credit history are additional terms used to describe credit.
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How do you approach Marketing design for a production?
Answers
2. A prototype
3. Final product
How did the 1973 oil crisis affect the United States?
O A. Oit prices suffered from deflation as a result of an embargo.
O B. Trade remained stagnant even as economic growth continued.
OC. Trade increased as a result of wars in the Middle East.
OD. Oil suffered from high levels of inflation.
Answers
Oil suffering from high levels of inflation is how the oil crisis of 1973 affected the United states.
What was Oil crisis?This took place around 1973 in which petroleum exports to the targeted nations were banned and cuts in oil production were introduced.
The low level of oil being available led to high levels of inflation which was why option D was chosen as the most appropriate choice.
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Answer: D. Oil suffered from high levels of inflation.
Explanation: Just took the test.
Factors that affect housing market segmentation include all except:
a. household income
b. household age
c. household size
d. household unemployment status
e. household lifestyle
Answers
Factors that affect housing market segmentation include all except household unemployment status. So, the correct answer is d. household unemployment status.
The factors that affect housing market segmentation are crucial for real estate developers, agents, and investors to identify the target audience and cater to their specific needs. Household income, age, size, unemployment status, and lifestyle are some of the critical factors that affect housing market segmentation.
Household income plays a significant role in determining the type of housing that a household can afford, whereas household age can impact the preferred location, design, and amenities. Similarly, household size affects the number of bedrooms and bathrooms required, and household lifestyle influences the choice of a neighborhood and community.
However, household unemployment status is not typically a determining factor in the housing market segmentation as people tend to prioritize their housing needs regardless of their employment status.
In conclusion, while various factors affect housing market segmentation, unemployment status is not typically one of them. Therefore, the correct answer to the given question is option D. Other factors like income, age, size, and lifestyle are more likely to be the primary considerations.
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Lilly, Briah, Chloe, and Terry are the directors and equal shareholders of Fantastic Holidayz Pty Ltd, a company that runs an exclusive airline company and operates in several high-rise office buildings in Melbourne. Briah is the Managing Director and Terry is the Chief Financial Officer. Lilly and Chloe are non-executive directors. The Company has adopted a written constitution which contains the following clauses: (36) A directors' meeting may be called by a director giving reasonable notice individually to every other director (37) Quorum for directors' meetings is four directors and the quorum must be always present during the meeting (42) A resolution of the majority of directors may resolve to remove another director of the company. Business is booming, and Fantastic Holidayz has made a great deal of money over the last few years. However, the Board of Directors have rejected Lilly's proposal to declare a dividend for the last 7 years in a row - and she is getting fed up. The other directors always outvote her, arguing that it is better to keep the profits in reserve and continue to expand the business. Terry is currently investigating the possibility of opening further destinations to their itinerary In October 2017 Lilly was overseas for a family funeral and on her return to Melbourne, she discovers that the other directors have met and passed resolutions to remove her as a director of the company. Lilly did not receive any notice of the director's meeting. In another resolution, the remaining directors voted to pay themselves $500,000 in bonuses - equating to the entire year's profit. Lilly is angry that she has been removed and not paid a bonus and comes to you for your professional advice and opinion. Further, Fantastic Holidayz has a longstanding agreement with several travel agencies, and in January 2018, Fantastic's financial accounts showed that one agency owed the company $85,000, and there was no applicable security Recently, Lilly discovered that by June 2018 the debt owing to Fantastic Holidayz had blown out to $200,000. Terry had approved additional credit without the knowledge of the other directors. He did this, even though the agency had been taking a long time to pay its overdue account. Additionally, there are now rumours that are insolvent, but this cannot be proven. REQUIRED: 1. Discuss whether Lilly can bring any action to challenge the other directors' decision to deny dividends for several years and then pay themselves bonuses? (5 marks) 2. Advise Lilly about the process and potential outcomes if the travel agency is placed into voluntary administration - and any implications of this on Fantastic Holidayz. (5 marks) 3. Advise Lilly about whether Terry has breached any of his statutory duties as a director of Fantastic Holidayz. Include in your answer the consequences of a breach of duty, whether Lilly could bring an action for compensation on behalf of the company against Terry, and whether there are any defences available.
Answers
It is important for Lilly to consult with a legal professional to assess the specific circumstances and determine the most appropriate course of action. Legal advice tailored to the jurisdiction and applicable laws should be sought.
1. Lilly's Challenge to Dividend Denial and Bonus Payment:
Lilly may have grounds to challenge the other directors' decision to deny dividends for several years and then pay themselves bonuses. The key considerations are as follows:
a) Breach of Fiduciary Duty: Directors owe a fiduciary duty to act in the best interests of the company. By consistently rejecting dividends despite profitable operations, the directors may be breaching this duty if their decision is not justifiable and reasonable. The decision to pay themselves bonuses without Lilly's approval further strengthens her case.
b) Unfair Prejudice: Lilly may argue that the denial of dividends and payment of bonuses unfairly prejudice her interests as an equal shareholder and director. This argument can be supported by the fact that dividends have been consistently denied for several years, and the bonuses were paid without her knowledge or consent.
c) Oppression of Minority Shareholder: If the other directors' actions substantially interfere with Lilly's rights as a shareholder and director, it could constitute oppression of a minority shareholder. Denying dividends and paying bonuses in a manner that excludes Lilly's interests may be viewed as oppressive.
Lilly can potentially bring legal action seeking remedies such as an injunction to stop the bonuses, an order for dividends to be paid, or a buyout of her shares at a fair value.
2. Travel Agency in Voluntary Administration:
If the travel agency owing $200,000 to Fantastic Holidayz is placed into voluntary administration, the process and potential outcomes can be summarized as follows:
a) Voluntary Administration: Voluntary administration is a process where an external administrator (usually a registered liquidator) takes control of the insolvent company to maximize returns for creditors. The administrator assesses the company's financial position and explores options, such as restructuring or selling the business.
b) Outcomes and Implications: During voluntary administration, the administrator may propose a Deed of Company Arrangement (DOCA) to the creditors. If approved, it could allow the travel agency to continue operating and repay the debt over an agreed period. Alternatively, if the company's financial situation is deemed irreparable, the administrator may recommend liquidation.
For Fantastic Holidayz, the outcome depends on the recovery of the debt. If the travel agency is unable to repay the owed amount, Fantastic Holidayz may have to write off the debt as a loss, potentially impacting their financial position. The impact could be significant if the debt is material to the company's operations.
3. Terry's Breach of Director's Duties:
Terry, as the Chief Financial Officer and a director of Fantastic Holidayz, may have breached his statutory duties. The key considerations are as follows:
a) Duty of Care and Diligence: Directors must exercise reasonable care, skill, and diligence in fulfilling their roles. Terry's approval of additional credit without the knowledge of other directors could be seen as a failure to exercise due care and diligence. The consequences of a breach may include personal liability for any loss suffered by the company.
b) Duty to Act in Good Faith and for Proper Purpose: Directors must act in good faith and in the best interests of the company. By approving additional credit for a customer with an outstanding overdue account, despite potential insolvency concerns, Terry may have breached this duty.
c) Consequences and Action for Compensation: If Terry is found to have breached his statutory duties, consequences may include personal liability for any loss suffered by the company due to his actions. Lilly, as a shareholder, may have standing to bring a derivative action on behalf of the company to seek compensation from Terry for any losses incurred.
d) Defenses: Terry may raise defenses such as relying on professional advice, acting in good faith, or having the belief that his actions were in the company's best interests. However, these defenses may not absolve him entirely from liability if his actions are found to be unreasonable or against the company's interests.
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Answer both parts (a) and (b) of this question. In a country the primary source of income is cotton cultivation. In the cotton producing in- dustry, the share of output affected by a crop disease is called the blight rate. Some cotton farmers have been given a government subsidy to help protect their crops from disease. The government has asked you to investigate if the subsidy has reduced the blight rate, and has provided you with a random sample of n = 812 farms. (a) Focus first on those farms which have received the subsidy. Suppose that the blight rate for such farms is normally distributed with unknown mean u and known standard deviation 1.2 (per cent). In the sample 318 farms received the subsidy, and for these farms the sample average blight rate is y= 2.24 (per cent). The government wants to test the null hypothesis that the mean blight rate is equal to a benchmark of 2 (per cent), as opposed to a lower rate. Formulate the null and alternative hypotheses in terms of μ and perform the test (at a 5% level of significance). What do you conclude? (b) To account for other factors which may determine the blight rate, you estimate the fol- lowing regression model for all farms in your sample: blight- 0.91 3.81 (0.34) subsidy + 0.06 size. (0.01) (0.13) n=812, R²=0.09, where blight is the blight rate (in per cent), subsidy is a binary indicator (taking the value 1 if the farm obtained the subsidy, and 0 otherwise), and size is the size of the farm in acres. The sample size is denoted by n, and R² denotes the coefficient of de- termination. The numbers in parentheses refer to standard errors corresponding to the estimated coefficients. (1) Are both the slope coefficients of the expected sign? Explain. (6) What does the intercept tell us? Is this plausible? Explain your answer. (iii) Test the individual significance of all coefficients (including the intercept) at the 5% level. (iv) Based on the regression results, how would you expect the blight rate to change if the size of a given farm went down by 2 acres? (v) Use the R² to test the null hypothesis that the coefficients on subsidy and rise are jointly zero. Clearly specify the test statistic, its distribution under the null (taking care to write down the degrees of freedom), and carry out the test at the 5% level.
Answers
The subsidy is lower than the benchmark rate of 2% at a 5% level of significance.
(a) Based on the given information and performing a one-sample t-test, if the calculated t-statistic is less than the critical value, we can conclude that there is evidence to suggest that the mean blight rate for farms receiving the subsidy is lower than the benchmark rate of 2% at a 5% level of significance.
(b) The coefficient of the "subsidy" variable has the expected negative sign, indicating that receiving the subsidy is associated with a decrease in the blight rate.
However, the intercept of the regression model is not plausible as it suggests a negative blight rate. Individual significance tests can be conducted for each coefficient, and the expected change in the blight rate can be determined based on the coefficient values.
The joint significance of the "subsidy" and "size" coefficients can be tested using the coefficient of determination (R²).
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Which program would be most helpful to a production manager who wanted to determine the minimum time required to complete a proposed project
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The program that would be most helpful to a production manager who wants to determine the minimum time required to complete a proposed project is a project management software that includes a feature for critical path analysis.
Critical path analysis is a project management technique used to identify the tasks that are critical to completing the project on time and to determine the minimum time required to complete the project.
Using a project management software with critical path analysis, the production manager can create a project schedule by defining tasks, their dependencies, and their estimated durations.
The software will then calculate the critical path, which is the sequence of tasks that must be completed on time to prevent delays in the project completion.
By using a project management software with critical path analysis, the production manager can optimize the project schedule by adjusting task durations or dependencies to reduce the overall project completion time.
Additionally, the software can help the manager to identify potential bottlenecks or risks that could delay the project completion and to plan accordingly to mitigate those risks.
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