Outline an effective strategy for writing routine replies and positive messages
What will be an ideal response?
Answer: Readers receiving routine replies and positive messages will generally be interested in what you have to say, so you will usually use the direct approach. Place your main idea (the positive reply or the good news) in the opening. Use the body to explain all the relevant details, and close cordially, perhaps highlighting a benefit to your reader. By opening with the main idea or good news, you prepare your audience for the details that follow. Make your opening clear and concise. Use the body to explain your point completely so that your audience won't be confused or doubtful about your meaning. As you provide the details, maintain the supportive tone established in the opening. However, if the routine message is mixed and must convey mildly disappointing information, put the negative portion of your message into as favorable a context as possible. However, if the negative news is likely to be a shock or particularly unpleasant for the reader, you will want to use the indirect approach. Your message is more likely to succeed if it leaves your readers with the feeling that you have their best interests in mind. You can accomplish this by highlighting a benefit to the audience or by expressing appreciation or goodwill. If follow-up action is required, clearly state who will do what next.
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Indicate whether the statement is true or false
On September 12, Ryan Company sold merchandise in the amount of $7600 to Johnson Company, with credit terms of 2.00/10, n/30. The cost of the items sold is $4900. Johnson uses the periodic inventory system and the net method of accounting for purchases. The journal entry that Johnson will make on September 12 is:
A.
| Purchases | 7448? | |
| Accounts payable | 7448? |
B.
| Merchandise inventory | 7448? | |
| Accounts payable | 7448? |
C.
| Purchases | 7600? | |
| Accounts payable | 7600? |
D.
| Merchandise inventory | 4900? | |
| Accounts payable | 4900? |
E.
| Accounts payable | 7600? | |
| Merchandise inventory | 7600? |
Your boss, Sally Maloney, treasurer of Fred Clark Enterprises (FCE), asked you to help her estimate the intrinsic value of the company's stock. FCE just paid a dividend of $1.00, and the stock now sells for $17.50 per share. Sally asked a number of security analysts what they believe FCE's future dividends will be, based on their analysis of the company. The consensus is that the dividend will be increased by 10% during Years 1 to 3, and it will be increased at a rate of 5% per year in Year 4 and thereafter. Sally asked you to use that information to estimate the required rate of return on the stock, rs, and she provided you with the following template for use in the analysis. Estimated rs =10.00% (must be changed to force Calculated Price to equal the Actual Market Price) Actual Market
Price, P0:$17.50 ? Rapid growthNormal growthYear 0 1 2 3 4 5 Dividend growth rate (insert correct values) ? 10% 10% 10% 5% 5%Calculated dividends (D0 has been paid) ? $1.00 ? ? ? ? ?HV3 = D4/(rs - g4). Find using Estimated rs.? ? ? ? ? ? Total CFs ? ? ? ? PVs of CFs when discounted at Estimated rs ? ? ? ? Calculated Price = P0 = Sum of PVs = ? ? $0.00 ? ? A positive number will be here when dividends are estimated.The Calculated Price will equal the Actual Market Price once the correct rs has been found. Sally told you that the growth rates in the template were just put in as a trial, and that you must replace them with the analysts' forecasted rates to get the correct forecasted dividends and then the estimated HV. She also notes that the estimated value for rs, at the top of the template, is also just a guess, and you must replace it with a value that will cause the Calculated Price shown at the bottom to equal the Actual Market Price. She suggests that, after you have put in the correct dividends, you can manually calculate the price, using a series of guesses as to the Estimated rs. The value of rs that causes the calculated price to equal the actual price is the correct one. She notes, though, that this trial-and-error process is quite tedious, and that the correct rs could be found much faster with a simple Excel model, especially if you use Goal Seek. What is the value of rs? A. 12.44% B. 9.83% C. 13.97% D. 10.54% E. 11.84%
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Indicate whether the statement is true or false