Wii Brothers, a game manufacturer, has a new idea for an adventure game. It can market the game either as a traditional board game or as an interactive DVD, but not both. Consider the following cash flows of the two mutually exclusive projects for the company. Assume the discount rate is 12 percent.
Year Board Game DVD
0 -$1,200 -$2,700
1 690 1,750
2 950 1,570
3 210 800
Required:
a. What is the payback period for each project?
b. What is the NPV for each project?
c. What is the IRR for each project?
d. What is the incremental IRR?
Answers
Answer:
a. Payback period:
Board game:
= Year before payback + Amount left / Cashflow in year of payback
= 1 + (1,200 - 690) / 950
= 1.54 years
Game DVD:
= 1 + (2,700 - 1,750) / 1,570
= 1.61 years
b. NPV
Board Game
= 690 / 1.12 + 950 / 1.12² + 210 / 1.12³ - 1,200
= $322.88
Game DVD
= 1,750 / 1.12 + 1,570 / 1.12² + 800 / 1.12³ - 2,700
= $683.52
c. IRR
Look at attached picture
Board Game IRR = 29%
Game DVD IRR = 28%
d. Incremental IRR
Look at attached picture
= 27%
Related Questions
On January 1, 2016, Tessa loaned $12,000 to another company on a three-year, 4% note. No interest was accrued in 2016. Cash will not be received for the interest until the end of the three-year period. The error was discovered before adjusting and closing entries were posted on December 31, 2017. Ignoring income taxes, what should be the correct journal entry on December 31
Answers
The journal entry is as follows:
On December 31
Interest Receivable ($12,000 × 4% × 2 years) $960
To Interest Revenue ($12,000 × 4% × 1 year) $480
To Retained Earnings ($12,000 × 4% × 1 years $480
(Being the correct journal entry is recorded)
Here the interest receivable should be debited as it increased the assets and credited the interest revenue & the retained earnings as it increased the revenue and the stockholder equity
Therefore we can conclude that the above journal entry should be recorded.
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Your company is considering a project that will cost $100. The project will generate after-tax cash flows of $37.50 per year for five years. The WACC is 10 percent and the firm's D/A ratio is 0.70. The flotation cost for equity is 6 percent, the flotation cost for debt is 3 percent, and your firm does not plan on issuing any preferred stock within its capital structure. If your firm follows the practice of incorporating flotation costs into the project's initial investment, what is the weighted average flotation cost for the firm
Answers
Answer:
3.9%
Explanation:
Calculation to determine the weighted-average flotation cost for the firm
Using this formula
Weighted-average flotation cost =D/A ratio(Flotation cost for debt)+ Flotation cost for debt(Flotation cost for equity)
Let plug in the formula
Weighted-average flotation cost=.7(3%) + .3(6%)
Weighted-average flotation cost=.0021+.0018
Weighted-average flotation cost=.0039*100
Weighted-average flotation cost= 3.9%
Therefore the weighted-average flotation cost for the firm is 3.9%
Prove shylock is stubborn
Answers
If people refused to use banks to create checkable deposits, the banking system would:__________
a) be able to expand the money supply by more than the money multiplier indicates.
b) not be affected in the money creating process.
c) not be able to create new money.
d) not have a way to loan out excess reserves.
Answers
Answer:
The banking system would definitely not be able to to create new money.
The banking system could not print fresh money if individuals refused to use banks to make checkable deposits. As a result, choice (C) is the best way to respond.
What is checkable deposits?Any demand deposit account that permits the writing of checks or drafts of any sort is referred to technically as having checkable deposits. An account with a demand deposit allows the owner to take money out immediately and without warning.
A negotiable order of withdrawal (NOW) or Super NOW account are examples of a negotiable draft that falls under this category. (Withdrawing money from NOW accounts may need a seven-day written notice; however, this is rarely necessary.)
With a checkable deposit account, the consumer has constant access to cash. There may be a monthly withdrawal restriction on some checkable deposit account types, such as money market accounts.
Hence, option (C) is accurate.
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A bank has agreed to lend you $53,000 for a home loan. The loan will be fully amortized over 39 years at 13.50%, with .44 points. The loan payments will be monthly. The closing cost is estimated to be $3,894 and you plan to refinance the mortgage in 8 years. Calculate the actuarial rate.
Answers
Answer:
the actuarial rate is $599.44
Explanation:
The computation of the actuarial rate is given below:
= $53000 × 1.13% × (1+1.13%)^468) ÷ ((1 + 1.13%)^468 - 1)
= $599.44
The 1.13% comes from
= 13.50% ÷ 12
= 1.13%
And, the 468 comes from
= 39 × 12
= 468
Therefore the actuarial rate is $599.44
The same is to be relevant
The following is the data for Lauren Enterprises:
Selling and administrative expenses $75,000
Direct materials used 265,000
Direct labor (25,000 hours) 300,000
Factory overhead application rate $16 per DLH
Inventories
Beginning Ending
Direct materials $50,000 $45,000
Work in process 75,000 90,000
Finished goods 40,000 25,000
What is the cost of goods manufactured?
a. $1,115,000
b. $965,000
c. $955,000
d. $950,000
Answers
Answer:
b. $965,000
Explanation:
Calculation of Cost of Goods Manufactured
Particulars Amount
Direct material used $265,000
Direct labor $300,000
Factory overhead $400,000
Total manufacturing cost $965,000
Mewing Company net sales revenue of $100,000, operating expenses of $50,000, and net income of $25,000. What is the percentage that will be shown for operating expenses in the vertical (common size) income statement
Answers
Answer:
poop is the place to go. as long a as there is a bathroom nearby
Joss is a marketing consultant. Iris and Daphne are potential customers interested in commissioning Joss to undertake a market survey and compile the findings in a report. Iris is willing to pay $500 for the service while Daphne is willing to pay $800. Suppose that the opportunity cost of Joss's time is $1,200. Assume that Iris and Daphne do not know each other. Which of the following statements is true?
a. only Iris will purchase Joss's services and Joss will undertake the job for her.
b. only Daphne will purchase Joss's services and Joss will undertake the job for her.
c. both Iris and Daphne will purchase Joss's services and Joss will undertake the job.
d. both Iris and Daphne will want to purchase Joss's services but Joss will not be willing to undertake the job.
Answers
Answer: d. both Iris and Daphne will want to purchase Joss's services but Joss will not be willing to undertake the job.
Explanation:
Iris will want Joss's services but they will be unable to afford them as Iris is only willing to pay $500 whereas Joss wants $1,200 for the job.
The same goes for Daphne who is only willing to pay $800.
Both of them will therefore want to hire Joss but will be unable to.
Joss could however charge both of them their willingness to pay and then sum the cash up and give them both the research whilst still making a profit.
Ransom Widgets allocates the estimated cost of its accounting department, $200,000, to its production and sales departments since the accounting department supports these departments with regard to payroll and accounts payable functions. The accounting department costs will be allocated based on the number of employees using the direct method. Information regarding employees follows:
Department Employees
Accounting 4
Production 36
Sales 12
How much of the accounting department costs will be allocated to the production and sales departments, respectively?
a. Production Sales
$150,000 $50,000
b. Production Sales
$180,000 $60,000
c. Production Sales
$1,800,000 $600,000
d. Production Sales
$22,222 $66,667
Answers
Answer:
a. Production Sales
$150,000 $50,000
Explanation:
Given that
Number of employees in Production Dept. 36
Number of employees in Sales Dept. 12
So,
Total Number of employees is
= 36 + 12
=48
Now
Cost allocated to Production Dept. is
= $200,000 × 36 ÷ 48
= $150,000.00
And, the Cost allocated to Sales Dept. is
= $200,000 × 12 ÷ 48
= $50,000.00
Which of the following statements about the monetary aggregates is true?
a. The growth rates of M1 and M2 always track each other closely.
b. M1 is greater than M2.
c. When the growth rate of M2 increases, the growth rate of M1 must also increase.
d. When you transfer funds from your savings account to your checking account, M1 increases and M2 stays the same.
Given that, in billions of U.S. dollars, we have in currency, in demand deposits, in traveler's checks, in savings deposits, and in other checkable deposits. The total M1 amount in this economy is $__________
Answers
Answer: D. When you transfer funds from your savings account to your checking account, M1 increases and M2 stays the same.
Explanation:
1. Since M2 = M1 + Saving deposit + Time deposits + Money Market deposit of individuals, then from the options given, the true statement about the monetary aggregate is that when you transfer funds from your savings account to your checking account, M1 increases and M2 stays the same. Therefore, the fire option is D.
2. Your second question isn't well written but let's assume some figures in order to solve the question.
Let's say,
Currency = $863.2 billion
Demand deposit = $573.5 billion
Traveler's cheque = $3.8 billion
Savings deposit = $5237.8
Other checkable deposit = $319
Therefore, the total M1 amount in this economy will be:
M1 = Currency + Demand deposit + Travelers check + Other checkable deposits
= 863.2 + 573.5 + 3.8 + 319
= $1759.5 billion
What is the difference between independent and dependent demand. Group of answer choices independent iemand is based on market forces while Dependent demand is based on production schedule dependent demand is what determines independent demand independent demand is based on dependent demand dependent demand is based on sales while independent demand is based on management decisions
Answers
Answer:
independent demand is based on market forces while Dependent demand is based on production schedule
Explanation:
Independent demand is the demand for a finished product bought by a consumer e.g. the demand for a textbook by a student
independent demand is based on market forces e.g. the price of the good
Consumers would be more willing to purchase a good that is cheaper compared to other goods
Dependent demand is the demand for the factors of productions that are needed in the production of the final good or service. e.g. the demand for labour , purchase of inventory needed to produce a good
If consumers do not demand for the finished product, there would be no demand for the inventory
You purchased an automobile a year ago for $10,000. Its current market price is $6,000, and the expected market value one year from now is $4,000. If the interest rate is 10 percent, how much will it cost you to keep the car for an additional year (over and above operation and maintenance costs)
Answers
Answer: $2600
Explanation:
From the information given, the cost price of the automobile is $10000 but the current market price is $6000. If the automobile is old now for $6000 and the money is kept in a bank for.one year at an interest rate of 10%, then the interest gotten on it will be:
= $6000 × 10% × 1
= $600
In a situation whereby the automobile is sold the following year, then the price will be $4,000 and I will get $4,000. Therefore, the cost for keeping the car for an additional year will then be:
= (Current price - Future price) + Interest amount
= ($6,000 - $4,000) + $600
= $2,600.
The Assembly Department produced 1,000 units of product during March. Each unit required 1.25 standard direct labor hours. There were 1,300 actual hours used in the Assembly Department during March at an actual rate of $12 per hour. The standard direct labor rate is $12.5 per hour.
Required:
Assuming direct labor for a month is paid on the fifth day of the following month, journalize the direct labor in the Assembly Department on March 31.
Answers
Answer:
Debit Work in process for $15,625
Debit Direct labor time variance for $625
Credit Direct labor rate variance for $650
Credit Wage payable for $15,600
Explanation:
Before preparing the journal, the following calculations are done first:
Wage payable = Actual hours * Actual rate per hour = 1,300 * $12 = $15,600
Direct labor time variance = (Actual hours - Standard hours) * Standard direct labor rate = (1,300 - (1,000 * 1.25)) * $12.50 = $625 Unfavorable
Note: Direct labor time variance is Unfavorable because Actual hours is greater than Standard hours.
Direct labor rate variance = (Actual rate - Standard rate) * Actual hours = ($12 - $12.50) * 1,300 = -$650 Favorable
Note: Direct labor rate variance if Favorable because Actual rate is lower than the Standard rate.
Work in process = Wage payable + Absolute value of direct labor rate variance - Direct labor time variance = $15,600 + $650 - $625 = $15,625
The journal entries will now look as follows:
Date Particulars Debit ($) Credit ($)
Mar. 31 Work in process 15,625
Direct labor time variance 625
Direct labor rate variance 650
Wage payable 15,600
(To record the direct labor in the Assembly Department.)
Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment. Project H represents an investment in a hydraulic lift. Keller wishes to use a net present value profile in comparing the projects. The investment and cash flow patterns are as follows:
Project E Project H
($30,000 Investment) ($28,000 Investment)
Year Cash Flow Year Cash Flow
1 $8,000 1 $17,000
2 11,000 2 12,000
3 12,000 3 10,000
4 15,000
Required:
a. Determine the net present value of the projects based on a zero percent discount rate.
b. Determine the net present value of the projects based on a discount rate of 11 percent.
Answers
a. The net present value of project E based on a 0% discount rate is $16,000
The net present value of project H based on an 11% discount rate is $11,000
b. The net present value of project E based on a 0% discount rate is $4,790.32
The net present value of project H based on an 11% discount rate is $4,366.70
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
Only projects with a positive NPV should be accepted. A project with a negative NPV should not be chosen because it isn't profitable.
When choosing between positive NPV projects, choose the project with the highest NPV first because it is the most profitable.
NPV can be calculated using a financial calculator
Project E
Cash flow in year 0 = -30,000
Cash flow in year 1 = $8,000
Cash flow in year 2 = $11,000
Cash flow in year 3 = $12,000
Cash flow in year 4 = $15,000
NPV when I is 0% = $16,000
NPV when I is 11% = $4,366.70
Project H
Cash flow in year 0 = $-28,000
Cash flow in year 1 = $17,000
Cash flow in year 2 = $12,000
Cash flow in year 3 = $10,000
NPV when I is 0% = $11,000
NPV when I is 11% = $4,366.70
To determine NPV using a financial calculator take the following steps:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
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Use the cost information below for Laurels Company to determine the manufacturing costs added during the current year:
Direct materials used $5,000
Direct labor used 7,000
Total factory overhead 5,100
Beginning work in process inventory 3,000
Ending work in process inventory 4,000
Answers
Answer:
$17,100
Explanation:
Calculation to determine the manufacturing costs added during the current year
Direct materials used $5,000
Add Direct Labor $7,000
Add Total Factory overhead $5,100
Total manufacturing $17,100
($5,000+$7,000+$5,100)
Therefore the manufacturing costs added during the current year is $17,100
If sales are $798,000, variable costs are 72% of sales, and operating income is $258,000, what is the contribution margin ratio?
a. 72%
b. 68%
c. 28%
d. 32%
Answers
Summarize the Product Development Process
Answers
Give examples if operational conflicts that could occur in a cross- cultural context because of different attitudes towards:1) time, 2) individualism. Give a country or region that would be different from the US for each of the two variables.
Answers
The correct answer to this open question is the following.
Give examples of operational conflicts that could occur in a cross-cultural context because of different attitudes towards:1) time, 2) individualism.
Well, let's start with time. In the United States, time is of the utmost importance. There we have the old saying: "Time is money."
In the workplace, everything is based on the smart and efficient use of time. No time must be wasted in the workplace.
Individual effort is important in the American culture, but the team effort, the concept of being a good team player is very important under the following premise: teams can accomplish more than individuals.
What most Americans desire is individual recognition through team effort.
That is why team sports are so good in the United States because they exemplify the way teams function and what they can accomplish. For instance, college and pro football, basketball, and baseball.
The region that has a different approach, is Latin America. This does not mean that is better than the other, just that there are major differences between the two.
The management of time is very different in Latin American countries. It is not as important as the US. People in Latin America approach the concept of time in a more relaxed way. In Latin America, there is a more relaxed approach to time. Nothing is urgent, Things take time. Things are made at a different pace compared to the US.
And regarding individualism, Latin American people tend to prefer to be more individualistic to do things trying to get some recognition, The team concept is not as developed as in the US.
If contribution margin is $220000, sales is $400000, and net income is $180000, then variable and fixed expenses are:________
Answers
Answer:
Total variable cost= $180,000
Fixed costs= $40,000
Explanation:
Giving the following information:
Contribution margin= $220,000
Sales= $400,000
Net income= $180,000
The contribution margin formula is as follow:
Total Contribution margin= sales - total variable cost
Therefore, we need to isolate the total variable cost and replace the variable with the data:
Total variable cost= sales - total contribution margin
Total variable cost= 400,000 - 220,000
Total variable cost= $180,000
Finally, the fixed costs:
Fixed costs= total contribution margin - net income
Fixed costs= 220,000 - 180,000
Fixed costs= $40,000
Daphne Inc., a steel manufacturing company, is planning to buy a new plant at $1,090,000. The life of the plant is estimated to be 5 years and has cash flows of $109,000, $218,000, $327,000, $436,000, and $545,000. Calculate the payback period for the new plant.
a. 5 years
b. 2 years
c. 4 years
d. 3 years
Answers
Answer:
The payback period is exactly 4 years.
Explanation:
Giving the following information:
Initial investment= $1,090,000
Cf1= 109,000
Cf2= 218,000
Cf3= 327,000
Cf4= 436,000
Cf5= 545,000
The payback period is the time required to cover the initial investment:
Year 1= 109,000 - 1,090,000= -981,000
Year 2= 218,000 - 981,000= -763,000
Year 3= 327,000 - 763,000= 436,000
Year 4= 436,000 - 436,000= 0
The payback period is exactly 4 years.
Job enlargement tends to deter an employee's development because:_________
a. it is so time-consuming.
b. means adding new challenges and responsibilities to an employee's current job.
c. means moving the position up the organizational hierarchy.
d. refers to hiring more people for the same job category.
Answers
Answer:
b. means adding new challenges and responsibilities to an employee's current job.
Explanation:
Job enlargement refers to rise in the scope of the job via extending the range with respective to the duties and responsibilities of the job normally at the similar level. It means it added the different kind of activities at the similar level and the same is to be added in the existing job
So here the fear in the employee development is that they need to add the new challenges and responsibilities
Therefore the option b is correct
Your boss asked you to analyze Green Hamster Manufacturing's performance for the past three years and prepare a report that includes a benchmarking of the company's performance. Using the company's last three years of financial reports, you've calculated its financial ratios, including the ratios of Green Hamster Manufacturing's competition-that is, comparable ratios of other participants in the industry-and submitted the report.
Along with calculating the ratios, what else is needed for your report?
a. Making observations and identifying trends that are suggested by the ratio analysis
b. Identifying the factors that drive the trends in the ratios
c. Both of the above
Most decision makers and analysts use five groups of ratios to examine the different aspects of a company's performance. Indicate whether each of the following statements regarding financial ratios are true or false?
Statements
One possible explanation for an increase in a firm's profitability ratios over a certain time span is that the company's income has increased.
Market-value or market-based ratios help analysts figure out what investors and the markets think about the firm's growth prospects or current and future operational performance.
A company exhibiting a high liquidity ratio means it is likely to have enough resources to pay off its short-term obligations.
Debt or financial leverage ratios help analysts determine whether a company has sufficient cash to repay its short-term debt obligations.
Asset management or activity ratios provide insights into management's efficiency in using a firm's working capital and long- term assets.
Ratio analysis is an important component of evaluating company performance. It can provide great insights into how a company matches up against itself over time and against other players within the industry. However, like many tools and techniques, ratio analysis has a few limitations and weaknesses. Which of the following statements represent a weakness or limitation of ratio analysis?
A. A firm may operate in multiple industries.
B. A firm's financial statements show only one period of financial data.
C. Different firms may use different accounting practices.
Ratio analysis is an important component of evaluating company performance. It can provide great insights into how a company matches up against itself over time and against other players within the industry. However, like many tools and techniques, ratio analysis has a few limitations and weaknesses.
Answers
Answer:
1. c. Both of the above
2. a. False
b. True
c. True
d. False
e. True
f. True
3. c. Different firms may use different accounting practices.
Explanation:
Ratio Analysis is one of the method to evaluate a company performance. It helps to analyse a company performance based on different financial metrics. Profitability ratios help to understand company profits position and identify reason for their increase or decrease. Liquidity ratios help understand company's ability to payoff its short term debt obligations.
(b). Cassava is the main commodity in the economy of Dumpusi. Given the hardship in the intervention, the number of cassava producers also increased in the community. In a class discussion, your Economics Lecturer said these two events would result in an increase in With the aid of a diagram, explain the possible effects of the two events on equilibrium price equilibrium price of cassava. Mary, your classmate, argues that the price will rather decrease. and quantity, assuming the salary increase has a greater impact and cassava is a normal good.
Answers
Answer:
prices decrease actually
Explanation:
with that much of cassava producers the market of the product just loses its value as it is that common that the only way to making money would be to say something about based on the communities beliefs to raise attention like "Buy some cassava to make the gods happy" something most common in African society
Selected current year company information follows:
Net income $15,953
Net Sales 712,855
Total liabilities, beginning-year 83,932
Total liabilities, end-of-year 103,201
Total stockholders' equity, beginning-year 198,935
Total stockholders' equity, end-of-year 121,851
Total asset turnover is:________.
a. 2.24 times
b. 2.81 times
c. 3.64 times
d. 4.67 times
e. 6.28 times
Answers
Answer:
b. 2.81 times
Explanation:
Calculation to determine Total stockholders' equity, end-of-year 121,851
Total asset turnover is:
First step is to calculate the Total assets
Beginning Ending
Total liabilities $83,932 $103,201
Total equity 198,935 121,851
Total assets $282,867 $225,052
Now let determine the Total asset turnover
Total asset turnover = $712,855/[($282,867 + $225,052)/2]
Total asset turnover= 2.81 Times
Therefore Total stockholders' equity, end-of-year 121,851
Total asset turnover is:2.81 Times
On December 28, I. M. Greasy, Catering completed $600 of catering services. As of December 31, the customer had not been billed nor had the transaction been recorded. Demonstrate the required adjusting entry by choosing the correct statement below.
Credit Acciunts receivable for $600.
Credit Catering revenue for $600.
Debit Unearned revenue for $600.
Debit Accounts receivable for $600.
Answers
Answer: Debit Accounts receivable for $600.
Explanation:
The customer had not been billed so that means that they still owe the company. This would make them an accounts receivable so the adjusting entry will have to debit the Accounts Receivable account for $600 to show that it is increasing.
This amount will be credited to the Accrued revenue account to show that the cash has not yet been received.
phân tích phạm trù hàng hoá sức loa động theo quan điểm cua chủ nghĩa mác.Thực trạng thị trường sức lao động ở nước ta hiện nay. Là sinh viên trường đại học anh chị nhận thấy mình có trách nhiệm gì trong việc nâng cao chất lượng nguồn nhân lực đáp ứng yêu cầu của sự nghiệp công nghiệp hoá đất nước
Answers
Kết luận sự thích ứng tâm lý của sinh viên năm nhất
Answers
Answer:
I think I should ask in English language
Which of the following are steps in process costing? Select one: A. Visualize the physical flow of units B. Calculate the equivalent units C. Determine the per-unit costs D. Calculate the Cost of Goods Manufactured and the Ending WIP Inventory E. All of the above
Answers
Answer: E. All of the above
Explanation:
In process costing, all of the above are used. Process costing is used for the production of goods that a re homogenous so the cost is the same for all the goods.
First one must visualize the flow of the goods to see the costs they incur at each stage. The equivalent units should then be calculated as this would show the number of units that the cost is being assigned to. Next is to divide the costs incurred by the equivalent units to find the cost per unit. Then calculate the cost of goods manufactured based on the manufactured and ending inventory
What are the purposes of the Democratic leadership style?
Answers
Answer:
#It brings peace in the society.
#It increases the growth/development of a society.
#It enables civilians of a society to express themselves.
Answer:
Democratic leadership is a type of leadership in which the Group's members play a more participatory role.
Explanation:
This leadership style allows everyone to participate, discuss ideas, hear their views, and encourage debate. However, the group leader still needs guidance and guidance to achieve the goals and goals.
Members of the Group are encouraged to share opinions and ideas, even if the leader retains the last say in decisions.Group members feel more committed to the process.Creativity is promoted and recompensed.As there is group engagement and discussion, more thoughts and ideas lead to better ideas and solutions, the main benefit of a democratic leadership style.
The participants in a group participate more in and engage in projects that increase their investment in the final results. In essence, they care more and increase productivity.
Emmitt uses his leadership and position to produce effects on others and influence his followers. What term is used to describe this ability of leadership?
a. Coercion
b. Force
c. Power
d. Authority
Answers
Answer:
c. Power
Explanation:
Leadership can be defined as a process which typically involves motivating, encouraging and inspiring employees working under an individual to be innovative and create positive changes that will foster growth and enhance the success of a business firm or company in the future.
A leader can be defined as an individual who is saddled with the responsibility of controlling, managing and maintaining a group of people under him or her. Some types of power expressed by leaders are referent power, legitimate power, coercive power, etc.
Generally, leaders use their powers to get other people to follow them. Some forms of power result from a formalized position in the organization while others are derived from personal characteristics or knowledge.
In this scenario, Emmitt uses his leadership and formal position to produce effects on others and influence his followers. Thus, the terminology which is used to describe Emmit's ability of leadership is power.
In conclusion, power is based on three (3) main factors, which are leader, follower and situation.
