Fin 370 Week 2 Chapter Problems Essay Example

Fin 370 Week 2 Chapter Problems Essay What are financial markets? What function do they perform? How would an economy be worse off without them? Financial markets report price for each good; they are institutions and procedures that facilitate transactions in all types of financial claims (securities). They exist in order to allocate the supply of savings from those economic units with a surplus to those with a deficit. Each financial market has a different function that they perform. For example, the stock markets primary function is to provide a platform for investors to buy shares of ownership of a public corporation which are sold to investors to allow the companies to raise a lot of cash at once. The investors profit when the companies increase their earnings which keeps the United States economy growing. With mutual funds give you the ability to buy a lot of stocks at once. In a way this makes them an easier tool to invest in than individual stocks. By reducing stock market volatility, they have also had a calming effect on the United States economy. In commodities, such as oil, the price is determined in the commodities futures market. The futures market are a way to pay for something today that is delivered tomorrow, which helps to remove some of the volatility in the United States economy. However, futures also increase the trader’s leverage by allowing him to borrow the money to purchase the commodity. Hedge funds are supposed have higher returns for high-end investors. Since edge funds invest heavily in futures, some argue that they have decreased the volatility of the stock market and the United States economy. Bonds also provide some of the liquidity that helps keep the United States economy lubricated. However, when stock prices go up the bond prices go down. The economy would suffer without a developed financial market system because the wealth of the economy would be less without them. Rate of capital formation would not be as high, followed by the slowed rate of stock contribution to (1) dwellings, (2) productive plant and equipment, (3) inventory, and (4) consumer durables. We will write a custom essay sample on Fin 370 Week 2 Chapter Problems specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Fin 370 Week 2 Chapter Problems specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Fin 370 Week 2 Chapter Problems specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Normal business activities would be funded slowly or not at all. Business firms in the aggregate usually spend more during a specific period than they earn. Households in the aggregate spend less on current consumption than they earn. As a result, some mechanism is needed to facilitate the transfer of savings from those economic units with a surplus to those with a deficit. That is precisely the function of financial markets. Financial markets exist in order to allocate the supply of savings in the economy to the demanders of those savings. The central characteristic of a financial market is that it acts as the vehicle through which the forces of demand and supply for a specific type of financial claim are brought together. If, specifically, the United States did not have a financial market then there would not be a way for the economy to move money around to facilitate progress and profit. Question 14-3 Distinguish between the money and capital markets. Money Markets facilitates transactions using short-term financial instruments; whereas, Capital Markets facilitates transactions using long-term financial instruments. A money market is a market for short term debt securities such as banker’s acceptances, commercial paper, repos, negotiable certificates of deposit, and Treasury Bills with a maturity of one year or less and often 30 days or less. Money market securities are generally very safe investment which returns a relatively low interest rate that is most appropriate for temporary cash storage or short-term time horizons. A capital market is where debt or equity securities are traded. Question 14-4 What major benefits do corporations and investors enjoy because of the existence of organized security exchanges? a) continuous market – price volatility reduced b) establishing publicizing fair security prices – objective auction-type determination of price c) helping business raise new capital – new firms have a place to publicize security offerings whose price will be subjected to a competitive determinant rather than having to assign prices Question 15-12 A You are a hard-working analyst in the office of financial operations for a manufacturing firm that produces a single product. You have developed the following cost structure information for this company. All of it pertains to an output level of 10 million units. Using this information, find the break-even point in units of output for the firm. |Return on operating assets |= 25% | |Operating asset turnover |= 5 times | |Operating assets |= $20 million | |Degree of operating leverage |= 4 times | 1) Compute the operating profit margin: Margin) x (Turnover) = Return on operating assets (M) x (5) = 0. 25 M = . 05 2) Compute the sales level associated with the given output level: [pic] [pic] = $100,000,000 3) Compute EBIT: (. 05) ($100,000,000) = $5,000,000 4) Compute revenue before fixed costs. Since the degree of operating leverage is 4 times, revenue before fixed costs (RBF) is 4 times EBIT as follows: RBF = (4) ($5,000,000) = $20,000,000 5) Compute total variable costs: (Sales) (Total variable costs) = $20,000,000 100,000,000 (Total variable costs) = $20,000,000 Total variable costs = $80,000,000 6) Comput e total fixed costs: RBF Fixed costs = $5,000,000 $20,000,000 fixed costs = $5,000,000 Fixed costs = $15,000,000 7) Find the selling price per unit, and the variable cost per unit: [pic] = $10 [pic] = $8 8) Compute the breakeven point: [pic] = 7,500,000 Units[pic] Question 15-13 A Allison Radios manufactures a complete line of radio and communication equipment for law enforcement agencies. The average selling price of its finished product is $180 per unit. The variable cost for these same units is $126. Allison Radios incurs fixed costs of $540,000 per year. a. What is the break-even point in units for the company? [pic] [pic] = 10,000 units b. What is the dollar sales volume the firm must achieve in order to reach the break-even point? = 10,000 ? $180 = $1,800,000 c. What would be the firms profit or loss at the following units of production sold: 12,000 units? 15,000 units? 20,000 units? Allison Radios |Â   | |Unit |Price |Total |Fixed |Unit |Total |Total |Total Profit (Loss) | |Sales | |Sales |Costs |Variable Cost |Variable Costs |Costs | | |12000 |$180 |$2,160,000 |$540,000 |$126 |$1,512,000 |$2,052,000 |$108,000 | |15000 |$180 |$2,700,000 |$540,000 |$126 |$1,890,000 |$2,430,000 |$270,000 | |20000 |$180 |$3,600,000 |$540,000 |$126 |$2,520,000 |$3,060,000 |$540,000 | d. Find the degree of operating leverage for the production and sales levels given in part c. |Unit s |Contribution Margin |EBIT |DOL | |12000 |$648,000 |$108,000 |6 | |15000 |$810,000 |$270,000 |3 | |20000 |$1,080,000 |$540,000 |2 |

How To Overcome Makeshift Marketing With New Marketing Superpowers

How To Overcome Makeshift Marketing With New Marketing Superpowers It’s hard to be productive when you don’t realize the forces working against you. It’s even tougher when habits you viewed as assets are actually liabilities. In modern marketing, this is the game we’re all playing. And there’s a lot riding on us to get results. When we fail, our companies don’t grow. When we’re ineffective, our brand suffers. Not to mention we’re unhappy with ourselves when we underperform. The good news is these unseen forces actually have a face, a name, and are easy to spot once unveiled. Better still, they have a single source we can outpace if we focus in the right place. In this post, I will share with you: The most common cause of poor productivity  in modern marketing, Exactly how it harms our personal and team results by 40% or more, And how to acquire the superpower you need to beat it. To begin, let’s further dissect the problem of Makeshift Marketing I introduced in this post. How To Overcome Makeshift Marketing With New Marketing Superpowers via @The Many Faces Of Makeshift Marketing In marketing, we need to move quickly. We need to launch campaigns with speed†¦ Run effective ads the first time around Publish content that produces results And do this all to the tune of providing real business value. However, our overwhelming tide of tools and demands presses hard against our mission. The modern marketing stack makes staying organized hard. The reality is that today’s marketing landscape is flooded with single-function tools. You’ve got your planning tools, social stack, tools for content marketing, and then productivity tools to manage your team. Problem is, none of them play well together. This makes your life more difficult and actually costs you  results. Around here, we call it Makeshift Marketing, and what we mean is many of the teams we talk to end up adopting a variety of tools just to get their work done†¦ They’ll use one tool for social, and another for task management, and then before they know it they end up adding a spreadsheet to the mix to TRY and tie it all together†¦ How You’re Losing Productivity + Results So let’s talk about why this actually costs us marketers so much. One of makeshift marketing’s worst effects is called context switching. It’s a way of describing the productivity tax of changing from one activity to another. Psychologically, it involves two stages: goal shifting and rule activation. Stage one is goal shifting, which is a function of choosing a new task to focus on. Stage two is rule activation, which means your brain is turning off the rules of the old task and turning on the rules for the new one. For example, let’s say you’re in a meeting about an upcoming marketing campaign. Your team is walking through the launch brief, everyone’s roles, and those all-important deadlines. However, while Fred is talking about the the key metrics you’ll be measuring, your phone buzzes with an email notification. Your habit of immediately responding  nudges you to check it on the sly beneath the conference table. (C’mon, we’ve all done it. It’s NOT like you’re driving.) The email is from your boss, and it’s in reply to an email from her boss asking about the status of a project. The simple question she asked is: â€Å"Where are we at on this?† #ugh Is she mad? Does she think the delay is your fault, even though you’re waiting on another team? You reply with: â€Å"Have it on my radar for today. Will follow up ASAP.† Then quickly open your todo app and add that to your ever-growing list. You were going to do this later this afternoon anyways, but unfortunately she beat you to it. This project is a killer. And you’re the only conduit of communication between your boss, external stakeholders, internal teams, and of course your own team. Why? Because there is no central version of truth for everyone to check and keep on the same page. But that’s another project for another day You lock your phone and you’re back to Fred. However, not only did you miss a few details, you’re trying to catch up to the entire thrust of what he was saying to begin with. In fact, you probably forgot all about Fred while reading this little email episode. What Really Happened While Fred Was Talking In this not-so-imaginary example,  it wasn’t simple distraction that took place. When you turned your attention from the meeting to read your email, your mind entered goal-shift mode, expending energy to focus on a new task. While you thought you could listen to Fred and email at the same time, your biological limitations said differently - because multitasking is a myth. Next, upon reading and replying to the email, the next stage took place. It’s called new rule activation, meaning your brain crunched all of the parameters of your relationship with your boss, the project, and its multiple stakeholders. This has to happen so you have the necessary context to make decisions. Your working relationships outside of this meeting operate by different criteria than inside of it. Because there are different expectations, and therefore different rules. Even though your brain can make this context switch with incredible speed, there is still a cost. In this interview with Forbes, productivity expert Todd Herman  explains this cost in a variety of ways. Worse, according to studies by Gloria Mark, an ‘interruption scientist’ at the University of California: â€Å"When people are frequently diverted from one task to another, they work faster, but produce less.† When people are frequently diverted from one task to another, they work faster, but produce less.The True Cost Of Context Switching Does working faster but producing less sound like a familiar trend? Here’s the unveiled cost of context switching. Every time we work on multiple projects, we pay a productivity tax. What About This Superpower? As a marketer, there are myriad factors in beating constant context switching. But the single biggest productivity win you can make is getting organized. While there is a major downside  to interruption and disorganization, there is only upside  to focus and organization. As Herman points out in the video above, if you change the way you work, you can get dramatically different results. But not by working harder - simply by working more efficiently. While it’s not sexy, organization is actually the key superpower to defeat the impact of makeshift marketing, the cost of context switching, and the mental drain it creates. It’s mission critical because marketing today collaborates with nearly every facet of the business spectrum. We work with developers, designers, project managers, sales, customer support, and even our operations folks. Modern marketing becomes an untethered yarn ball if we don’t relentlessly organize our entire program. The path is simple, focus on just one thing: organization. Why should organization be the one thing marketers focus on most?The Superpower Of Focusing On Just One Thing One of my favorite books is The One Thing  by Gary Keller, founder of the largest real-estate company in the world. He sums up the power of focusing on just thing nicely. â€Å"If everyone has the same number of hours in the day, why do some people seem to get so much more done than others? How do they do more, achieve more, earn more, have more? If time is the currency of achievement, then why are some able to cash in their allotment for more chips than others? The answer is they make getting to the heart of things the heart of their approach. They go small. Going small is ignoring all the things you could do and doing what you should do. It’s recognizing that not all things matter equally and finding the things that matter most. It’s a tighter way to connect what you do with what you want. It’s realizing that extraordinary results are directly determined by how narrow you can make your focus.† This works in every arena of life, too. Just ask author and leadership coach Peter Bregman, who attributes  focusing on just one thing to  losing 18 pounds  in just over a month to designing better leadership programs for Fortune 100 companies. From your personal life to working at scale in a global organization, focusing on one impactful thing is the most successful driver of change. Here’s why organization  should immediately become your one thing (and therefore transform into your superpower): The average office employee  spends over one hour each day just looking for things.  Makeshift marketing is a primary driver of stats like this because of endless spreadsheets, single-function tools, and communication channels. Forbes ASAP reports  that they typical executive wastes 150 hours per year searching for lost information.  By having a single source of truth for your entire marketing program, you can gain weeks  of time back†¦ Not simply hours, but weeks! The Wall Street Journal showed  that workers waste an average of 40% of our work days because of poor organizational skills.  As illustrated before, context switching and makeshift marketing alone account for the majority of this time in a marketing context. The truth is, you and your team can stop losing results to the mayhem of makeshift marketing today.