# on 25-Jul-2017 (Tue)

#### Flashcard 1435598458124

Tags
#2-1-types-of-profit-measures #cfa #cfa-level-1 #economics #microeconomics #reading-15-demand-and-supply-analysis-the-firm #section-2-objectives-of-the-firm #study-session-4
Question
Accounting or explicit costs are [...] to [...] parties for [...] supplied to the firm.
payments to non-owner

services or resources

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Accounting or explicit costs are payments to non-owner parties for services or resources that they supply to the firm.

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2. OBJECTIVES OF THE FIRM
he firm’s efficiency in producing that level of output when utilizing inputs, and resource prices as established by resource markets. TR is a function of output and product price as determined by the firm’s product market. <span>2.1. Types of Profit Measures The economics discipline has its own concept of profit, which differs substantially from what accountants consider profit. There are thus two basic types of profit—accounting and economic—and analysts need to be able to interpret each correctly and to understand how they are related to each other. In the theory of the firm, however, profit without further qualification refers to economic profit. 2.1.1. Accounting Profit Accounting profit is generally defined as net income reported on the income statement according to standards established by private and public financial oversight bodies that determine the rules for financial reporting. One widely accepted definition of accounting profit—also known as net profit, net income, or net earnings—states that it equals revenue less all accounting (or explicit) costs . Accounting or explicit costs are payments to non-owner parties for services or resources that they supply to the firm. Often referred to as the “bottom line” (the last income figure in the income statement), accounting profit is what is left after paying all accounting costs—whether the expense is a cash outlay or not. When accounting profit is negative, it is called an accounting loss . Equation 2 summarizes the concept of accounting profit: Equation (2)  Accounting profit = Total revenue – Total accounting costs When defining profit as accounting profit, the TC term in Equation 1 becomes total accounting costs, which include only the explicit costs of doing business. Let us consider two businesses: a start-up company and a publicly traded corporation. Suppose that for the start-up, total revenue in the business’s first year is €3,500,000 and total accounting costs are €3,200,000. Accounting profit is €3,500,000 – €3,200,000 = €300,000. The corresponding calculation for the publicly traded corporation, let us suppose, is $50,000,000 –$48,000,000 = \$2,000,000. Note that total accounting costs in either case include interest expense—which represents the return required by suppliers of debt capital—because interest expense is an explicit cost. 2.1.2. Economic Profit and Normal Profit Economic profit (also known as abnormal profit or supernormal profit ) may be defined broadly as acc

#### Flashcard 1439748721932

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Question
There are accepted measures of [...] that are used by regulators of financial institutions to judge whether or not a planned merger or acquisition will harm the competitive nature of regional banking markets.
market concentration

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Section 7 reviews techniques for identifying the various forms of market structure. For example, there are accepted measures of market concentration that are used by regulators of financial institutions to judge whether or not a planned merger or acquisition will harm the competitive nature of regional banking markets. Financial ana

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1. INTRODUCTION
tes. Sections 3, 4, 5, and 6 analyze demand, supply, optimal price and output, and factors affecting long-run equilibrium for perfect competition, monopolistic competition, oligopoly, and pure monopoly, respectively. <span>Section 7 reviews techniques for identifying the various forms of market structure. For example, there are accepted measures of market concentration that are used by regulators of financial institutions to judge whether or not a planned merger or acquisition will harm the competitive nature of regional banking markets. Financial analysts should be able to identify the type of market structure a firm is operating within. Each different structure implies a different long-run sustainability of profits. A summary and practice problems conclude the reading. <span><body><html>

#### Flashcard 1446872485132

Tags
#3-1-profit-maximization #cfa-level-1 #economics #microeconomics #reading-15-demand-and-supply-analysis-the-firm #section-3-analysis-of-revenue-costs-and-profit #study-session-4
Question

Overall, the functions of profit are as follows:

• Stimulates [...] and [...]

economic growth.

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ent use; input factors flow from sectors with economic losses to sectors with economic profit, where profit reflects goods most desired by society. Spurs innovation and the development of new technology. Stimulates <span>business investment and economic growth.<span><body><html>

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3. ANALYSIS OF REVENUE, COSTS, AND PROFITS
Total variable cost divided by quantity; (TVC ÷ Q) Average total cost (ATC) Total cost divided by quantity; (TC ÷ Q) or (AFC + AVC) Marginal cost (MC) Change in total cost divided by change in quantity; (∆TC ÷ ∆Q) <span>3.1. Profit Maximization In free markets—and even in regulated market economies—profit maximization tends to promote economic welfare and a higher standard of living, and creates wealth for investors. Profit motivates businesses to use resources efficiently and to concentrate on activities in which they have a competitive advantage. Most economists believe that profit maximization promotes allocational efficiency—that resources flow into their highest valued uses. Overall, the functions of profit are as follows: Rewards entrepreneurs for risk taking when pursuing business ventures to satisfy consumer demand. Allocates resources to their most-efficient use; input factors flow from sectors with economic losses to sectors with economic profit, where profit reflects goods most desired by society. Spurs innovation and the development of new technology. Stimulates business investment and economic growth. There are three approaches to calculate the point of profit maximization. First, given that profit is the difference between total revenue and total costs, maximum profit occurs at the output level where this difference is the greatest. Second, maximum profit can also be calculated by comparing revenue and cost for each individual unit of output that is produced and sold. A business increases profit through greater sales as long as per-unit revenue exceeds per-unit cost on the next unit of output sold. Profit maximization takes place at the point where the last individual output unit breaks even. Beyond this point, total profit decreases because the per-unit cost is higher than the per-unit revenue from successive output units. A third approach compares the revenue generated by each resource unit with the cost of that unit. Profit contribution occurs when the revenue from an input unit exceeds its cost. The point of profit maximization is reached when resource units no longer contribute to profit. All three approaches yield the same profit-maximizing quantity of output. (These approaches will be explained in greater detail later.) Because profit is the difference between revenue and cost, an understanding of profit maximization requires that we examine both of those components. Revenue comes from the demand for the firm’s products, and cost comes from the acquisition and utilization of the firm’s inputs in the production of those products. 3.1.1. Total, Average, and Marginal Revenue This section briefly examines demand and revenue in preparation for addressing cost. Unless the firm is a pu

#### Flashcard 1447318916364

Tags
#sister-miriam-joseph #symbols-from-reality #trivium
Question
A [...] is like a portrait being painted by the artist while she looks at the model.

percept

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he imaginat ion, produce a phantasm or mental image of the individual object perceived, and this phantasm is retained and can be reproduced at will in the absence of the object. ILLUSTRATION : Percept and phantasm A <span>percept is like a portrait being painted by the artist while she looks at the model. A phantasm is like that same portrait possessed and looked at whenever one wishes for years af

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#### Flashcard 1479993855244

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Question
Under US GAAP, when the seller has completed the [...] in the [...] and is either assured of collecting the selling price, a sale of real estate is reported at the time of sale using the normal revenue recognition conditions.
significant activities

earnings process

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Under US GAAP, when the seller has completed the significant activities in the earnings process and is either assured of collecting the selling price or able to estimate amounts that will not be collected, a sale of real estate is reported at the time of sale using the normal reve

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3.2.2. Installment Sales
for some installment sales. An example of such deferral arises for certain sales of real estate on an installment basis. Revenue recognition for sales of real estate varies depending on specific aspects of the sale transaction.19 <span>Under US GAAP, when the seller has completed the significant activities in the earnings process and is either assured of collecting the selling price or able to estimate amounts that will not be collected, a sale of real estate is reported at the time of sale using the normal revenue recognition conditions.20 When those two conditions are not fully met, under US GAAP some of the profit is deferred. Two of the methods may be appropriate in these limited circumstances and relate to the amou

#### Flashcard 1598492380428

Tags
#cfa-level-1 #financial-reporting-and-analysis #non-recurring-non-operating-items #understanding-income-statement
Question
Does the Disposal of a portion of a business component qualify as discontinued operations?
No way jose

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Disposal of a portion of a business component does not qualify as discontinued operations. Instead, this is recorded as an unusual or infrequent item.

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Subject 6. Non-Recurring Items and Non-Operating Items
f analysis, an important issue is to assess whether non-recurring items are really "non-recurring," regardless of their accounting labels. There are four types of non-recurring items in an income statement. <span>1. Discontinued operations Discontinued operations are not a component of persistent or recurring net income from continuing operations. To qualify, the assets, results of operations, and investing and financing activities of a business segment must be separable from those of the company. The separation must be possible physically and operationally, and for financial reporting purposes. Any gains or disposal will not contribute to future income and cash flows, and therefore can be reported only after disposal, that is - when realized. Subsidiaries and investees also qualify as separate components. Disposal of a portion of a business component does not qualify as discontinued operations. Instead, this is recorded as an unusual or infrequent item. 2. Extraordinary items Extraordinary items are BOTH unusual in nature AND infrequent in occurrence, and material in amount. They must be reported separately (b

#### Flashcard 1622130167052

Tags
#fucked-up-questions
Question
An increase in prepaid expenses must be added to the other operating expenses to calculate [...] .
calculate the cash payments

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In calculating the cash payments for other operating expenses, which of the following items must a company add to the other operating expenses reported on the income statement?
An increase in prepaid expenses must be added to the other operating expenses reported on the income statement to calculate the cash payments for other operating expenses. An increase in prepaid expenses represents an outflow of cash that is not yet reported on the income statement as an expense.

#### Flashcard 1622712913164

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Question
Cost of Goods sold may include labour and material costs, [...] , some salaries (e.g., [...] ), and other direct sales related expenses
depreciation

salespeople’s

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An example of grouping by function would be grouping together expenses into a category such as cost of goods sold, which may include labour and material costs, depreciation, some salaries (e.g., salespeople’s), and other

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2. COMPONENTS AND FORMAT OF THE INCOME STATEMENT
nature or function. Grouping together expenses such as depreciation on manufacturing equipment and depreciation on administrative facilities into a single line item called “depreciation” is an example of a grouping by nature of the expense. <span>An example of grouping by function would be grouping together expenses into a category such as cost of goods sold, which may include labour and material costs, depreciation, some salaries (e.g., salespeople’s), and other direct sales related expenses.8 Both Danone and Kraft present their expenses by function, which is sometimes referred to “cost of sales” method. One subtotal often shown in an income statement is gross

#### Flashcard 1637198728460

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Question
To understand the meaning of a probability in investment contexts, we need to distinguish between two types of probability: [...]
unconditional and conditional.

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#### Flashcard 1641164705036

Tags
#has-images #quantitative-methods-basic-concepts #statistics
Question
The special cases of n = 3 for the Harmonic Mean are given by:

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Harmonic Mean The harmonic mean of n numbers x i (where i = 1, 2, ..., n) is: The special cases of n = 2 and n = 3 are given by: and so on. For n = 2, the harmonic mean is related to arithmetic mean A and geometric mea

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Subject 4. Measures of Center Tendency
, therefore, is not recommended for use as the only measure of central tendency. A further disadvantage of the mode is that many distributions have more than one mode. These distributions are called "multimodal." <span>Harmonic Mean The harmonic mean of n numbers x i (where i = 1, 2, ..., n) is: The special cases of n = 2 and n = 3 are given by: and so on. For n = 2, the harmonic mean is related to arithmetic mean A and geometric mean G by: The mean, median, and mode are equal in symmetric distributions. The mean is higher than the median in positively skewed distributions and lower than the median in negatively skewed dist

#### Flashcard 1644853071116

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Question
Probabilities that generally do not vary from person to person; includes a priori and empirical probabilities.
Objective probability

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#### Flashcard 1644882693388

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Question
A = the portfolio earns a return of 10 percent

B = the portfolio earns a return below 10 percent.

Which one is an event and which one an outcome?
A= outcome

B= event

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#### Flashcard 1644884528396

Tags
Question
A = the portfolio earns a return of 10 percent

B = the portfolio earns a return below 10 percent.

Which one is an event and which one an outcome?
Both are events but A has only one outcome

A= outcome

B= event

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#### Flashcard 1645014551820

Tags
#quantitative-methods-basic-concepts #statistics
Question
Is the Geometric mean and Geometric mean returns calculated the same way?
No

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Harmonic Mean The harmonic mean of n numbers x i (where i = 1, 2, ..., n) is: The special cases of n = 2 and n = 3 are given by: and so on.

#### Original toplevel document

Subject 4. Measures of Center Tendency
, therefore, is not recommended for use as the only measure of central tendency. A further disadvantage of the mode is that many distributions have more than one mode. These distributions are called "multimodal." <span>Harmonic Mean The harmonic mean of n numbers x i (where i = 1, 2, ..., n) is: The special cases of n = 2 and n = 3 are given by: and so on. For n = 2, the harmonic mean is related to arithmetic mean A and geometric mean G by: The mean, median, and mode are equal in symmetric distributions. The mean is higher than the median in positively skewed distributions and lower than the median in negatively skewed dist

#### Annotation 1645046009100

 It is well known that the most popular way of vilifying a man in Arab society was, and still is, to impugn the sexual mores of his female relatives, preferably his mother or sisters, implying that the man is unable to control them and preserve his honour. It is still done using common vulgar expletives that one may hear on th street; it was also employed in high-status poetry.

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#### Annotation 1645047581964

 Until recently, modem scholarship has largely ignored these passages even though Jarir has always been highly valued, especially by literate Arabs And even now, many scholars refrain from actual quotation.

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#### Annotation 1645049154828

 Jayyusi admits that the satire is often full of comical imagery, but condemns Umayyad satire about women as being generally 'excessively gross and obscene', too grotesque and lacking humour: 'they cross the frontiers of satire into pornographic fantasies that arrive at absurdity' . 6 Apparently condemning both pornography and absurdity, she does not mention that these two things were precisely what the poet intended.

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#### Annotation 1645051514124

 At least some examples must be given in this article. Jarir mentions the inci- dent involving Jicthin in some thirty of his poems, either very briefly or in more extended passages. All the passages occur in longer poems, in which he inveighs against al-Farazdaq and his clan,

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#### Annotation 1645053086988

 The two words majarr Jicthin, 'the dragging of Jicthin', occur seven times in J arir' s verse; they are meant to evoke the event or rather the more elaborate pas- sages of the fictionalised, imagined rape, such as the following:

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#### Annotation 1645054659852

 The man from Minqar says, after they have made her kneel, 'That's a cheap bride-price for JiCthin, not expensive!' She says, 'You've killed me!', but he says, 'My death? Even if al-Farazdaq would humble himself I don't care!' You praised the Banu 1-Ashadd but they left her with wide-open private parts and a broad piss-hole. When she called for al-Farazdaq they made her moan with many a knob of an enormous prick.

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#### Annotation 1645057019148

 one is disposed to believe, with Yiinus b. I:Iabib (d. 1821798), that when al-Farazdaq covered his chin, Jarir improvised the image on the spot.1

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#### Annotation 1645058592012

 It was this line, too, that prompted al-Jfilfi'.? to remark, in a passage on leprous people: 20 This is merely silliness and obscenity (safah wa-tafaJ:iJ:iush) by means of which one seeks to anger the person to which it is attributed. Angry and silly people, when annoyed, often say similar things. However, when someone says to another, 'You son of such-and-such a woman!' he does not expect people to take his words as a true testimony; he merely vents his anger, wanting to utter obscenities and to infuriate the other. Jarir does not merely want to vent his anger or infuriate and humiliate his opponent, he wants to amuse others. Many of his naqa:ii##BAD TAG##

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#### Annotation 1645060427020

 But almost without exception hij' a) refers to poetry.

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#### Flashcard 1645061999884

Question
But almost without exception hijāʾ refers to [medium].
poetry

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But almost without exception hij' a) refers to poetry.

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#### Annotation 1645063572748

 This is another reason why 'satire' is an unsatisfactory translation; hija' excludes the various forms of satirical prose, whether short sketches or lengthy 'epistles'.

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#### Annotation 1645065145612

 Another disadvantage of the word 'satire' lies in the several undesirable associa- tions with literary concepts from the Classical and European world, such as the formal verse satire tradition of Horace and Juvenal.