Answer:
ROE = 9.6% , ROIC = 8.17%
Explanation:
1) ROE = Net Income / Common Equity
ROE = $24,000 / $250,000
ROE = 0.096
ROE = 9.6%
2) ROIC = [EBIT * (1-tax rate)] / Total Invested capital
EBT = Net income *100 / (100% - T)
EBT = $24,000 * 100% / 75%
EBT = $24,000 * 1.3333
EBT = $31,999
EBIT = EBT + interest = $31,999 + $6,000
EBIT = $37,999
Invested capital =Notes payable + Long term Debt + Common stock
Invested capital = $24,000 + $75,000 + $250,000
Invested capital = $349,000
ROIC = [$37,999 * (1 - 0.25)] / $349,000
ROIC = [$37,999 * 0.75] / $349,000
ROIC = $28,499.25 / $349,000
ROIC = 0.081660
ROIC = 8.17%
The principal differences between capital markets and money markets are that:__________.
A. money and capital markets deal in the same securities, the only difference is term.
B. capital markets deal in long-term debt and equity securities, while money markets deal only in short-term debt.
C. money markets deal only in short-term government debt.
D. both markets deal in short-term debt securities; however, capital markets deal also in equity securities which have an indefinite term.
Answer:
B. capital markets deal in long-term debt and equity securities, while money markets deal only in short-term debt.
Explanation:
Most Company uses money market to raise short term funds and capital markets for long term funds. Money market is a market for short term borrowings. Usually the securities are held for less than or up to a year. And capital market on the contrary is where securities are held for a long term i.e more than a year. Money market is concerned with liquid fund requirement and capital market is for long term capital fund requirement.
Barnes Corporation manufactures two models of office chairs, a standard and a deluxe model. The following activity and cost information has been compiled: Number of Number of Number of Product Setups Components Direct Labor Hours Standard 22 8 375 Deluxe 28 12 225 Overhead costs $20,000 $40,000 Number of setups and number of components are identified as activity-cost drivers for overhead. Assuming an activity-based costing system is used, what is the total amount of overhead costs assigned to the standard model?
Answer:
Standard= $24,800
Explanation:
Giving the following information:
Number of: Setups Components
Standard 22 8
Deluxe 28 12
Overhead costs $20,000 $40,000
First, we need to calculate the predetermined overhead rate for each activity:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Setups= 20,000 / (22+28)= $400per setup
Components= 40,000 / (8+12)= $2,000 per component
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Standard= 400*22 + 2,000*8
Standard= $24,800
Which of the following are microeconomic problems? (You may select more than one answer.)(a) Work/leisure choice.(b) Marketing strategy.(c) Recession.(d) Inflation.(e) Federal budget deficit.
Answer:
(a) Work/leisure choice
(b) Marketing strategy
Explanation:
Microeconomic issues relate to those that are within the scope and power of individuals, households and firms which means that problems here will relate to decisions that these participants make in relation to resource allocation.
Choices relating to leisure or work have to do with the individual and the resources they would need or derive from either work or leisure and so are a microeconomic problem.
The marketing strategy that a firm should pursue is related to an individual firm and so is a microeconomic problem as well.
At the beginning of the call, the team members ask how one another is doing and mention the weather. What piece of advice for virtual meetings does
this best match?
Answer:
At the beginning of the virtual meeting it is okay to start with small talks such as the weather.
Explanation:
No option was given here so I think the answer is to make room for small talk. Opening up straight with the meetings agenda is not a very good way to start. By using small talks, each member of the meeting would be more open and flow better with the meetings agenda. Before the meeting starts a few minutes of small talk such as these would get everyone warmed up. And members would feel more comfortable.
The piece of advice for virtual meetings does this best match should be like small talks like how was the weather there.
Virtual meeting:The meeting that should be conducted online is known as the virtual meeting. By starting with the main thing of meeting should not give the good impact.
So its better to start with the small talks so that everyone in the meeting should be feel comfortable first and according to the conversation, the agenda of the meeting should be come with.
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ABC private limited as given the dividend of $5 last year and has promised to increase the dividend by 8% each year for the next four years.
a. Find out the dividend of each of the next four years. [2 marks]
b. If the stocks are selling at $120 at the end of fourth year, find out the price of stock today, assuming expected return as 12%.[2 marks]
c. Write a detailed comment on what will happen to the today’s selling price of the stock if the expected return is increased from 12% to 16%.[3 marks]
d. If the stocks are selling at $90 today, find out the price of stock at the end of fourth year, assuming expected return as 12%. [2 marks]
e. Write a detailed comment on what will happen to the selling price of the stock at the end of fourth year if the expected return is decreased from 12% to 8%.
Answer:
a. Year 1 dividend - $5.40; Year 2 dividend = $5.83; Year 3 dividend = $6.30; and Year 4 dividend = $6.80
b. Price of stock today = $76.26
c. When the the expected return is increased from 12% to 16%, the price of stock today will fall from $76.26 to $66.27. This indicates a 13% decrease in price. Therefore, there is a negative relationship between the price of stock today and the expected return. That is, as the expected return increases, the price of stock today decreases.
d. The price of stock at the end of fourth year is $141.62.
e. When the the expected return is decreased from 12% to 8%, the price of stock the end of fourth year falls from $141.62 to $122.44. This indicates a 14% decrease in price. Therefore, there is a positive relationship between the price of stock today and the expected return. That is, as the expected return decreases, the future price of stock also decreases.
Explanation:
a. Find out the dividend of each of the next four years. [2 marks]
Growth rate = 8%, or 0.08
Year 1 dividend = Last year dividend * (1 + Growth rate) = $5 * (1 + 0.08) = $5 * 1.08 = $5.40
Year 2 dividend = Year 1 dividend * (1 + Growth rate) = $5.40 * (1 + 0.08) = $5.40 * 1.08 = $5.832, or $5.83
Year 3 dividend = Year 2 dividend * (1 + Growth rate) = $5.832 * (1 + 0.08) = $5.832 * 1.08 = $6.29856, or $6.30
Year 4 dividend = Year 3 dividend * (1 + Growth rate) = $6.29856 * (1 + 0.08) = $6.29856 * 1.08 = $6.8024448, or $6.80
b. If the stocks are selling at $120 at the end of fourth year, find out the price of stock today, assuming expected return as 12%.[2 marks]
To calculate this, we use the present value (PV) formula as follows:
PV = FV / (1 + r)^n ..................... (1)
Where,
PV = Price of stock today = ?
FV = Stock selling price at the end of fourth year = $120
r = expected return = 12%, or 0.12
n = number of years = 4
Substitute the values into equation (1), we have:
PV = $120 / (1 + 0.12)^4 = $120 / (1.12)^4 = $120 / 1.57351936 = $76.26
Therefore, the price of stock today is $76.26
c. Write a detailed comment on what will happen to the today’s selling price of the stock if the expected return is increased from 12% to 16%.[3 marks]
To calculate the price of stock today, we use equation (1) in part b above and change r to 16%, or 0.16; while other values remain the same. Substituting the values into equation (1), we have:
PV = $120 / (1 + 0.16)^4 = $120 / (1.16)^4 = $120 / 1.81063936 = $66.27
Percentage change in price = ($66.27 - $76.26) / $76.26 = -0.13, or -13%
Comment:
When the the expected return is increased from 12% to 16%, the price of stock today will fall from $76.26 to $66.27. This indicates a 13% decrease in price. Therefore, there is a negative relationship between the price of stock today and the expected return. That is, as the expected return increases, the price of stock today decreases.
d. If the stocks are selling at $90 today, find out the price of stock at the end of fourth year, assuming expected return as 12%. [2 marks]
To calculate this, we use the future value (FV) formula as follows:
FV = PV * (1 + r)^n ..................... (2)
Where,
FV = Stock selling price at the end of fourth year = ?
PV = Price of stock today = $90
r = expected return = 12%, or 0.12
n = number of years
Substitute the values into equation (2), we have:
FV = $90 * (1 + 0.12)^4 = $90 * (1.12)^4 = $90 * 1.57351936 = $141.62
Therefore, the price of stock at the end of fourth year is $141.62.
e. Write a detailed comment on what will happen to the selling price of the stock at the end of fourth year if the expected return is decreased from 12% to 8%.
To calculate the price of stock at the end of fourth year, we use equation (2) in part c above and change r to 8%, or 0.08; while other values remain the same. Substituting the values into equation (2), we have:
FV = $90 * (1 + 0.08)^4 = $90 * (1.08)^4 = $90 * 1.36048896 = $122.44
Percentage change in price = ($141.62 - $122.44) / $141.62 = -0.14, or -14%
Comment:
When the the expected return is decreased from 12% to 8%, the price of stock the end of fourth year falls from $141.62 to $122.44. This indicates a 14% decrease in price. Therefore, there is a positive relationship between the price of stock today and the expected return. That is, as the expected return decreases, the future price of stock also decreases.
The three (3) key components in creating a financial plan are: Select one: a. The sales forecast, proforma financial statement and external financing plan b. Strategic plan, corporate purpose and corporate scope c. Cash, short term investments and accounts receivable d. Free cash flow, Economic Value Added, sales forecast e. None of the above
Answer:
The correct answer is the option D: Free cash flow, economic value added, sales forecast.
Explanation:
To begin with, in the field of business, a financial plan consists of an strategy that the managers of the company must follow in order to have every money aspects established and on guard of what can happen straight ahead regarding the conditions and circumstances of the organization's environment and context as well. Therefore that a financial plan's major three components are the cash flow statement where the managers must see how the money is flowing in and out, also the sales forecast that will encourage the company itself to try to achieve that expectations and the economic value added could also be very important when it comes to matters of money and how the business will value their products for sale according to the costs structure that the enterprise has.
A stock that sold for $ per share at the beginning of the year was selling for $ at the end of the year. If the stock paid a dividend of $ per share, what is the simple interest rate on the investment in this stock? Consider the interest to be the increase in value plus the dividend.
Answer:
137.77%
Explanation:
obviously the numbers are missing, so I looked for a similar question:
"A stock that sold for $26 per share at the beginning of the year was selling for $52 at the end of the year. If the stock paid a dividend of $9.82 per share, what is the simple interest rate on the investment in this stock? Consider the interest to be the increase in value plus the dividend."
total interest received (your gain) = (year end market value - purchase price) + dividends received = ($52 - $26) + $9.82 = $35.82initial investment (purchase price) = $26simple interest rate of return on investment = total interest received / initial investment = $35.82 / $26 = 1.3777 or 137.77%
At the end of this clip, Neville has defined the degree to which the information he shared has ________ when he says that he is not ready for everyone else to know the information.
Answer: Boundary permeability
Explanation:
Boundary Permeability is a term in psychology ( as well as other fields such as business and technology) that is meant to describe the amount and limits of information that a person is willing to share with others.
By saying that he is not ready for everyone else to know the information he told the people, he is stating the amount of information he is willing to share with others which means the information has boundary permeability.
Between quarter 10 and quarter 11, real GDP grew by what percentage?
a. 5%
b. 6%
c. 3%
d. 4%
e. –5%
Incomplete question.
However, let's assume the real GDP for quarter 10 was $45,000and for quarter 11 is $47,250.
Answer:
a. 5%
Explanation:
First, remember that the real GDP refers to the total value of all of the final goods and services produced in an economy during a given period (usually a year) after taking into account inflation.
To find the percentage increase, we subtract
$47250-$45,000 = $2250
Next, we find the percentage of the amount on $45,000
$2250/$45000 * 100 = 5%
Item 12Item 12 During October, a firm had the following transactions involving revenue and expenses. Paid $1,275 for rent for October Provided services for $2,900 in cash Paid $280 for the October telephone service Provided services for $2,050 on credit Paid salaries of $1,750 to employees Paid $380 for the monthly office cleaning service Calculate the net income or net loss for the period?
Answer:
$1,265
Explanation:
Net income is the excess of revenue over expenses while Net loss is the excess of expenses over revenue.
We can calculate the net income/net loss for the firm as seen below.
Revenue $
Service. 2,900
Service 2,050
Less : Expenses
Rent $1,275
Telephone $280
Salaries. $1,750
Cleaning $380. (3,685)
Net income. 1,265
Suitable options to solve the financial problem of a restaurant owner
Answer:SBA Loans for Restaurants. ...
Restaurant Equipment Financing. ...
(Unsecured or Secured) Business Lines of Credit. ...
Unsecured Restaurant Business Loans. ...
Restaurant Cash Advances.
Explanation:
Several years ago,Doran Corp.issued 100,000 of its $2 par value stock for a total of $800,000.This is the only time that it has sold stock.This year it purchased 1,000 shares of its own stock for $10 a share.As a result of acquiring treasury stock:
A) its stockholders' equity decreases by $10,000.
B) it will recognize a loss of $2,000.
C) its common stock account decreases by $10,000.
D) its retained earnings decrease by $10,00
Answer:A) its stockholders' equity decreases by $10,000.
Explanation:
Account Debit Credit
Treasury stock $10,000
Cash $10,000
Calculation:
Stock = Shares x Price per share =1000 x $10 = $10,000
Therefore, the stockholders equity will decrease by $10000.
Hence the correct option is A.
Which of the following brand names lacks an inherent meaning?a. Coca-Colab. Nike
c. Trump Towersd. Geek Squad
The answer is c Trump Tower. Because it is not considered a brand while Coca-Cola, Nike, and Geek Squad all are brands from companies. While Trump Tower is a building.
Hope this helps ! <3
Which of the following is NOT a part of the listening process? A. Hearing
B. Understanding C. Focusing
D. Talk
Answer:
D
Explanation:
The listening process should not be the part of the talk.
The listening process involves following parts:
Understanding. Focusing. Hearing.If we talk so we can't listen to it via understanding, focusing, and hearing.
Therefore we can conclude that option d is correct.
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A company’s assets consist of $254,478 of cash, $579,445 of accounts receivable, $487,009 of inventory, and $2,478,554 of plant and equipment. Its liabilities consist of $332,887 of accounts payable, $139,877 of accruals, and $1,275,000 of long-term debt. The company’s annual sales are $4,765,889, it paid $165,750 of interest, its earnings before taxes are $453,816, and its net income is $272,289. In its industry, the average profit margin is 6.83%, the average total asset turnover is 1.25, and the average equity multiplier is 1.85. Using DuPont analysis, determine if the company’s return on equity is above or below the industry average and what factor causes the difference?
Answer:
The company's Return on Equity is 18.49% therefore is above the industry average of 15.79%
Explanation:
DU PONT ANALYSIS
ROE = PROFIT MARGIN X ASSET TURNOVER X EQUITY MULTIPLIER
Industry average ROE
0.0683 x 1.25 x 1.85 = 0,15794375 = 15.79%
Company Dupont:
Profit margin:
income 272,289
sales 4,765,889
profit margin: 0,05713288
Assets Turnover:
Sales 4,765,889
Total assets:
Cash 254,478
A/R 487,009
PEE 2,478,554
total 3,220,041
Turnover: 1.48
Equity Multiplier:
Assets 3,220,041
Liabilities:
A/P 332,887
Accrued 139,877
long-term 1,275,000
total 1,747,764
Equity: 3,220,041 - 1,747,764 = 1,472,277
Equity multiplier: 3,220,041 / 1,472,277 = 2.187116
Company's Dupont Calculation:
ROE = PROFIT MARGIN X ASSET TURNOVER X EQUITY MULTIPLIER
0,05713288 x 1.48 x 2.187116 = 0,184935229 = 18.49%
If the required reserve ratio is 10 percent, what is the simple deposit multiplier? a. 20 b. 100 c. 5 d. 10
Answer:
D.) 10
Explanation:
Given the question:
Required reserve ratio equals 10 percent, Calculate the simple deposit multiplier?
Given that :
Reserve ratio (RR) = 10% = 0.1
The simple deposit multiplier is the reciprocal of the required reserve ; mathematically expressed as :
Simple deposit multiplier = 1 / RR
Simple deposit multiplier = 1 / 0.1
Hence simple deposit multiplier = 10
First City Bank pays 6 percent simple interest on its savings account balances, whereas Second City Bank pays 6 percent interest compounded annually. If you made a deposit of $15,000 in each bank, how much more money would you earn from your Second City Bank account at the end of 8 years? (
Answer:
Difference= $1,707.72
Explanation:
Giving the following information:
First City Bank pays 6 percent simple interest on its savings account balances
Second City Bank pays 6 percent interest compounded annually.
Investment= $15,000
n= 8
To calculate the future value of investing in First City, we need to use the following formula:
FV= PV*(1+i*n)
FV= 15,000*(1+0.06*8)
FV= $22,200
To calculate the future value of investing in Second City, we need to use the following formula:
FV= PV*(1+i)^n
FV= 15,000*(1.06^8)
FV= $23,907.72
The difference between banks:
Difference= 23,907.72 - 22,200= $1,707.72
which of the following statement is correct? a. Process group is the same as project phases, b. each process group has a mapped project phase, c. process group are not project phases, d. the monitoring and control process group applies only in the monitoring and control phase
Answer:
The answer is C
Project groups are NOT project phases.
Which of the following is NOT an example of an incentive?
a. stock options
b. commissions
c. profit-sharing plans
d. bonuses
e. education reimbursements
Answer:
e. education reimbursements
Explanation:
Incentives can be defined as a financial motivation, rewards or compensations which are given to either employees working in an organization or a group of people in order to motivate them to do more or take certain steps (actions) and give their best. Some examples of an incentive are profit-sharing plans, signing bonus, stock options, bonuses, commissions, raises etc.
However, education reimbursements is not an example of an incentive.
The other items are examples of an incentive scheme with the exemption of e. education reimbursements.
Education reimbursements are compensations paid to employees who are not earning the normal emoluments like salaries and wages.
Incentives encourage increased performance. Examples of incentive include stock options, profit-sharing plans, bonuses, and commissions.
Thus, the item that is NOT an example of an incentive is e. education reimbursements.
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Choose the cultures that display the Latin American enthusiasm for dance. Brazil Mexico Scotland Wales
Answer:
Mexico and Brazil
Explanation:
They are both countries known for Latin America
________ is what is left after a firm pays its variable costs and fixed costs
Profit is what is left after a firm plays its variable costs and fixed costs.
Aldricus is a shutterbug. He takes his camera everywhere he goes. He has hung hundreds of pictures on his walls. For Aldricus, photography is a _____.
hobby
career
bore
job
Answer:
hobby
Explanation:
just took the test
A successful employee at Gawker media has to be able to smell a great story, uncover the facts of the story, and professionally weave it all together into a great story. The ability to uncover the facts of a story requires good journalists to set aside their own ______________ component of attitude.
Answer:
Behaviorial.
Explanation:
The behavioral component of an individual's attitude is defined by the way the individual behaves influenced by their attitudes. In the case of a professional who needs to discover facts of a story in a professional way so that he can publish a great story, his behavioral component of attitude will be neglected by the fact that the actions taken will be in favor of a job that requires the individual has a certain type of behavior, and not because this is a behavioral attitude that he would have if he were in a personal situation of his life.
After 1989, Donna purchased series EE savings bonds for $2,500 at the age of 25. This year she redeemed the bonds for $5,000 and paid qualified higher education expenses for her daughter in the amount of $3,000. How much interest will Donna be required to include in her gross income this year
Answer:
$1,000
Explanation:
Donna purchased series of savings bond for $2,500 at the age of 25
This year Donna redeemed the bond of $5,000
She paid $3,000 as expenses for her daughter education
The first step is the calculate the interest income
= $3,000/$5,000 × $2,500
= 0.6 × $2500
= $1,500
Therefore the interest that will be required by Donna to include in her gross income this year can be calculated as follows
= $2,500-$1,500
= $1,000
Hence Donna is required to include an interest of $1,000 in her gross income this year
M2-28. Computing and Comparing Income and Cash Flow MeasuresPenno Corporation recorded service revenues of $200,000 in 2020, of which $170,000 were on credit and $30,000 were for cash. Moreover, of the $170,000 credit sales for 2020, Penno collected $20,000 cash on those receivables before year‑end 2020. The company also paid $25,000 cash for 2020 wages. Its employees also earned another $15,000 in wages for 2020, which were not yet paid at year‑end 2020. (a) Compute the company’s net income for 2020; and (b) how much net cash inflow or outflow did the company generate in 2020? Explain why Penno’s net income and net cash flow differ.
Answer:
Explanation:
M2-28. Computing and Comparing Income and Cash Flow MeasuresPenno Corporation recorded service revenues of $200,000 in 2020, of which $170,000 were on credit and $30,000 were for cash. Moreover, of the $170,000 credit sales for 2020, Penno collected $20,000 cash on those receivables before year‑end 2020. The company also paid $25,000 cash for 2020 wages. Its employees also earned another $15,000 in wages for 2020, which were not yet paid at year‑end 2020. (a) Compute the company’s net income for 2020; and (b) how much net cash inflow or outflow did the company generate in 2020? Explain why Penno’s net income and net cash flow differ.
Helga runs a website on which she sells houseplants. She also earns through pay-per-click advertising that allows search engines to show targeted ads on her site. Which of these products are likely to be advertised on her website? Please select all answers that apply. Select all that apply.
Answer:
Gardening gloves
Terracotta planters
Garden scissors
Watering cans
Explanation:
In the context, Helga owns and runs a online business. She has a website where she sells online houseplants. There are various houseplants available on her site from where people can buy it and get it delivered to their house.
She also makes earnings by the advertisement of various gardening products whose add runs on her sire and she earns through a pay per click basis. Some of the products that are likely to be advertised in her website are gardening gloves, garden scissors, terracotta planters, watering cans, manures and fertilizers,etc.
Which of the following activities also contributes to your financial success? Check all that apply. Self-awareness and knowledge of your own values, as well as attitudes and behaviors regarding money, spending, and saving. Knowledge of the general condition and events occurring in the local, state, regional, national, and international economic environments. The development of an effective plan that is consistently applied until it is revised in accordance with changes in your goals and life circumstances. Knowledge of what other average people believe and how they behave, because they affect the same financial markets and economic conditions that affect you.
Answer:
The correct answers are the first, second and third options. All of them but the last one.
Explanation:
To begin with, when it comes to terms of financial success regarding someone personal matters, the majority of activities that can strength up those financial thoughts are the ones that improve yourself as a financial thinker, like the self-awareness and knowledge of the person's own values when it comes to money and its spending and saving because that will make the person see the importance of keeping it sometimes to spending it other times for better thing that can give him better future opportunities. Moreover, the development of an effective plan that shows to him how he must spend those saving and how he must control himself from the waste of money will also help as well as the fact that he knows and understand the conditions and circumstances that affect the local, national and international economy that will eventualy end up affecting the person's financial life.
The activities that contribute to financial success include the following:
A. Self-awareness and knowledge of your own values, as well as attitudes and behaviors regarding money, spending, and saving.
B. Knowledge of the general condition and events occurring in the local, state, regional, national, and international economic environments.
C. The development of an effective plan that is consistently applied until it is revised in accordance with changes in your goals and life circumstances.
What is financial success?
Financial success involves making consistent financial efforts to achieve a better financial position.
Thus, to achieve financial success, one must not know the belief and behavior of other average people but must become self-aware, know the economic environments, and develop an effective plan.
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4. Firm E must choose between two alternative transactions. Transaction 1 requires a cash outlay of $9,000; this expense would be non-deductible in the computation of the firm’s taxable income. Transaction 2 requires a cash outlay of $13,500, all of which would be a deductible expense. Determine which transaction has the lesser after-tax cost, assuming: a) Firm E’s marginal tax rate is 20 percent. b) Firm E’s marginal tax rate is 40 percent.
Answer:
a. Transaction 1
It is not deductible so the Taxable income is $9,000
Transaction 2
It is deductible, taxable income would be;
= 13,500 * ( 1 - Tax)
= 13,500 * ( 1 - 20%)
= $10,800
b. Transaction 1
It is not deductible so the Taxable income is $9,000
Transaction 2
It is deductible, taxable income would be;
= 13,500 * ( 1 - Tax)
= 13,500 * ( 1 - 40%)
= $8,100
Which is considered to be an economic resource by economists?
A. Rent
B. Money
C. labor
Answer:
C. labor
Explanation:
there are four economic resources or factors of production. They are :
1. Land are natural resources used to produce goods and services e.g. gold mine
2. Labor is the effort used by people in the production of goods and services.
3. Capital includes machinery and man made resources used in production e.g. hammer
4. An entrepreneur is a person who combines the other factors of production together
When considering marketing's place in the economy, what is the most important role the marketing function plays?
A. Bringing products to market.
B. Creating value for customers.
C. Contributing to shareholder wealth.
D. Employing a workforce.
Answer:
B. Creating value for customers.
Explanation:
Marketing is all about building values for customers. Its about creating customer relationships which are profit generating. Any company or brand has a value proposition. It is the set of benefits the company promises to deliver to the consumer to satisfy his/her needs. Thus marketing is the bridge which connects the brand with the customers perceived value of the brand. It makes sure the customer pledges loyalty to the brand, by delivering on its promises on the value proposition. Thus, the most important role that marketing plays in the economy is Creating Value for Customers.