Answer:
$2
Explanation:
According to the given situation, the computation of the value of a right is shown below:-
Value of a right = (Market value of right + Subscription right) ÷ Number of rights 1
= ($60 - $48) ÷ (5 + 1)
= $12 ÷ 6
= $2
Therefore for computing the value of a right we simply applied the above formula and the same is to be considered
CEOs are limited in making policy changes regarding climate change by all of the following EXCEPT __________.
Answer: b. the necessity to think in the long term rather than the short term
Explanation:
There are policy changes that a company can make that will result in them having lower profits. For this reason, the CEO might face opposition or limitations from certain people or principles in implementing such changes.
The Board of Directors is one such limitation as they owe it to the shareholders to maximise their wealth and if climate change policy might hinder that, they might limit the policy. This reason is the same for any limitation from investor support which is linked directly to profits.
The CEO also has the same fiduciary responsibility to maximise shareholder wealth as well. The only option which is not a limiting factor therefore is the necessity to think in the long term rather than the short term.
uh hi . . . . . . . . BANNNA BANNNABANNNA BANNNABANNNA BANNNA BANNNA BANNNA :) B)
Answer:
banannanannanannanannananan
Answer:
BANNNA BANNNA BANNNA BANNNA BANNNA BANNNA
Explanation:
Your classmates from the University of Chicago are planning to go to Miami for spring break, and you are undecided about whether you should go with them. The round-trip airfare is $600, but you have a frequent-flyer coupon worth $500 that you could use to pay part of the airfare. All other costs for the vacation are exactly $900. The most you would be willing to pay for the trip is $1,400. Your only alternative use for your frequent-flyer coupon is for your trip to Atlanta two weeks after the break to attend your sister's graduation, which your parents are forcing you to attend. The Chicago-Atlanta round-trip airfare is $450. If the Chicago-Atlanta round-trip air fare were $350, should you use the coupon to go to Miami?
Answer:
You should use the discount coupon to pay for the Chicago-Miami trip. Not considering the personal motivations for the trip, the coupon is worth $500. The cost of flying is $600, so you will only pay $100 yourself. You will be spending $900 + $1000 = $1,000 in total.
The opportunity cost of using the coupon is $350 (the cost of the round trip to Atlanta). Even if you add the $350 to the $1,000 expense, the total is $1,350, less than your $1,400 maximum budget.
When the supply of a product increases but the demand for the product remains unchanged, the equilibrium price of the product will __________.
Answer:
The equilibrium price is expected to decrease
Explanation:
Here, we want to state what will happen to the equilibrium price when the supply go a product increases but the demand stays the same
What will happen is that the equilibrium price is expected to fall since in this particular case the supply of the product will actually exceed the demand for it
So all things being equal, the demand for the product at increased supply will drive a decrease in equilibrium price
Answer:
Fall to a lower price and equilibrium quantity will increase
Explanation:
The principle of demand and supply shows the relationship between the quantity of goods consumers are willing to buy and the quantity suppliers are willing to sell.
When supply is higher than demand prices tend to fall. This is because there is now a surplus of goods for the consumer to buy. They will have the choice of buying at lower prices from suppliers willing to let go of the excess goods.
On the other hand when supply is less than demand prices will rise. This is because goods will be scarce and consumers are willing to pay higher for the scarce goods
Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.6% × service years × final year's salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2007 and is expected to retire at the end of 2041 after 35 years' service. Her retirement is expected to span 18 years. Davenport's salary is $90,000 at the end of 2021 and the company's actuary projects her salary to be $240,000 at retirement. The actuary's discount rate is 7%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 2. Estimate by the projected benefits approach the amount of Davenport's annual retirement payments earned as of the end of 2021. 3. What is the company's projected benefit obligation at the end of 2021 with respect to Davenport? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) 4. If no estimates are changed in the meantime, what will be the company's projected benefit obligation at the end of 2024 (three years later) with respect to Davenport? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.)
Answer:
Kindly check explanation
Explanation:
Given the following :
Annual retirement benefit plan: (1.6% * service years * final years' salary
Year of hire = beginning of 2007
Retiremet year = 2041
Years of service = 35
Required: 2. Estimate by the projected benefits approach the amount of Davenport's annual retirement payments earned as of the end of 2021.
1.6% * service years * final years' salary
Service years = 2021 - beginning of 2007 = 15 years on service
Salary at the end of 2021 = $90000
Hence,
1.6% * 15 * 90000 = $21,600
3. What is the company's projected benefit obligation at the end of 2021 with respect to Davenport?
Period (n) = Retiremet span = 18 years ; rate (r) = 7% ;
Present value of ordinary annuity $1 ; n = 18 ; r = 7% = 10.0591
$21,600 * 10.0591 = $217,276.56
= $217,277
Present value of retirement benefit at the end of 2041
PV factor $1 ; period (2041 - 2021) = 20 ; r = 7% = 0.258
$217,277 * 0.258 = $56,057.466
$56,057
4. If no estimates are changed in the meantime, what will be the company's projected benefit obligation at the end of 2024 (three years later) with respect to Davenport?
1.6% × 18 years × $90000 = $25920
Present value of ordinary annuity $1 ; n = 18 ; r = 7% = 10.0591
$25920 × 10.0591 = $260732
PV factor $1 ; period (2041 - 2021) = 20 - 3 = 17; n = 17 ; r = 7% = 0. 317
$260732 × 0.317 = $82652.044 = $82652
The value of Investment A at the end of year 5 is $20,000. Assuming that interest is compounded annually, and the interest rate is 8%, what is the present value of this investment at the beginning of year 1
Answer:
PV= $13,611.66
Explanation:
Giving the following information:
Future Value (FV)= $20,000
Number of periods (n)= 5 years
Interest rate (i)= 8%
To calculate the present value, we need to use the following formula:
FV= PV*(1+i)^n
Isolating PV:
PV= FV/(1+i)^n
PV= 20,000 / (1.08^5)
PV= $13,611.66
Which of the following assets held by a manufacturing business is a §1231 asset?
A. A factory building used in the business and held more than one year.
B. Inventory.
C. Office furniture used in the business and held less than one year.
D. Accounts receivable.
E. All of these choices are correct.
Answer:
A factory building used in the business and held more than one year.
Explanation:
According to Section 1231. property are assets that are used in your trade or business and are held by the Taxpayer for more than one year.
The factory building has serve the purpose of the section. It is used for a trade and has been held by the taxpayer for more than a year, hence, the property can be termed an assets by a manufacturing business
Retepson, Inc. has been in business for over 50 years. Retepson is best known for its Guide to Colleges line of books designed for high school students seeking admission to undergraduate programs. Basic information about a program is included in the books at no charge to the colleges, but colleges may purchase additional advertising space in the books for a fee. Traditionally, Retepson has made money by selling advertising in its books and by charging students for the books themselves. Recently, however, profits are down, and the company is considering whether it needs to change its corporate culture. Which of the following, if true, supports the conclusion that Retepson's culture should emphasize innovation?
a) Anyone with Internet access can find any of the information included in the Guide to Colleges series.
b) At the time that Retepson was founded, there was no easy way for students to find out basic information about a wide range of undergraduate programs.
c) Most large colleges have found that the wide circulation of the Guide to Colleges line of books makes it worthwhile to purchase additional advertising space.
d) Retepson's sales force has been able to prevent imitators from duplicating its success.
e) Students seeking admission to selective colleges often adopt innovative approaches to their application essays in order to stand out from the group of applicants.
Answer:
a) Anyone with Internet access can find any of the information included in the Guide to Colleges series.
Explanation:
when we say innovation what we mean is a new idea, a new method, or a new way of doing things.
option A is the answer because using the internet to search for information is a form of innovation that has would bring about immense amount of changes from the former way of doing things. the internet itself is an innovative medium and it serves different purposes.
if anyone with internet can easily access information, then such an innovative ideas should be emphasized
A bank advertises it pays 4% annual interest, compounded daily, on savings accounts, provided the money is left in the account for 5 years. What is the effective annual interest rate
Answer:
effective annual rate= 0.04096 = 4.096%
Explanation:
Giving the following information:
Annual interest rate= 4% compounded daily
Number of periods= 365 days
To calculate the effective annual interest rate, first, we need to determine the nominal daily rate:
nominal daily rate= 0.04/365= 0.00011
Now, using the following formula, we calculate the effective annual rate:
effective annual rate= (1+nominal daily rate)^365 - 1
effective annual rate= (1.00011^365) - 1
effective annual rate= 0.04096 = 4.096%
The transactions listed below are typical of those involving New Books Inc. and Readers’ Corner. New Books is a wholesale merchandiser and Readers’ Corner is a retail merchandiser. Assume all sales of merchandise from New Books to Readers’ Corner are made with terms 3/10, n/30, and that the two companies use perpetual inventory systems. Assume the following transactions between the two companies occurred in the order listed during the year ended August 31.
a. New Books sold merchandise to Readers’ Corner at a selling price of $625,000. The merchandise had cost New Books $445,000.
b. Two days later, Readers’ Corner complained to New Books that some of the merchandise differed from what Readers’ Corner had ordered. New Books agreed to give an allowance of $11,000 to Readers’ Corner.
c. Just three days later, Readers’ Corner paid New Books, which settled all amounts owed.
Required:
1. Indicate the effect (direction and amount) of each transaction on the Inventory balance of Readers' Corner. (Enter all amounts as positive values.)
2. Prepare the journal entries that Readers’ Corner would record and show any computations. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Answer:
Readers' Corner
1. Effect of each transaction on the Inventory Balance:
a. $625,000 Purchase: Inventory balance is increased
b. $11,000 Allowance: Inventory balance is decreased.
c. $614,000 Payment: Inventory balance is not affected.
2.
a. Debit Inventory $625,000
Credit Accounts Payable (New Books) $625,000
To record the purchase of new books on account.
b. Debit Accounts Payable (New Books) $11,000
Credit Inventory $11,000
To record the allowance received from New Books.
c. Debit Accounts Payable (New Books) $614,000
Credit Cash Account $614,000
To record the payment on account.
Explanation:
Readers' Corner records its transactions with New Books Inc. by initially using the journal. The entries in the journal identify the accounts involved in each transaction. During the recording, the accounts to be debited and the ones to be credited in the general ledger are identified and recorded accordingly.
A certain company has purchased new swivel chairs for its employees. The company made the purchase on a credit plan at Buy Right. Their monthly payments are $1,000 for 4 years. Buy Right will charge 2.25% per year compounded monthly. How much was the original total price of the furniture
Answer: $45,862.29
Explanation:
This question relates to the Present value of an Annuity.
The original price would be the present value of the payments and since the payments are constant over a period, they are an annuity
Interest/ r = 2.25/12 months = 0.1875%
Periods/ n = 4 * 12 months = 48 months
= Payment * (( 1 - ( 1 + r) ^ n)/ r)
= 1,000 * (( 1 - ( 1 + 0.1875%)^48) / 0.1875%)
= $45,862.29
Answer the following questions on the basis of the following three sets of data for the country of North Vaudeville: (A) (B) (C) Price Level Real GDP Price Level Real GDP Price Level Real GDP 110 235 110 285 100 210 100 235 100 260 100 235 95 235 95 235 100 260 90 235 90 210 100 285 a. Which set of data illustrates aggregate supply in the immediate short run in North Vaudeville? (Click to select) The short run? (Click to select) The long run? (Click to select) b. Assuming no change in hours of work, if real output per hour of work decreases by 5 percent, what will be the new levels of real GDP in the right column of B?
Question attached
Answer and Explanation:
1a. We can see immediate short run aggregate supply in North vaudeville in column A. This is because the price is fixed while output increases
1b. We can see short run aggregate supply in North vaudeville in column c. This is because output increases with price increase.
1c we can see long run aggregate supply in North vaudeville in column B. This is because output is constant with price increase.
Assuming output per hour of work decreases by 25% for column C then for each price, output is:
2A. Given price P= 110, output is 285(1-0.25) = 213.75
2B. Given price P = 100, output is 260(1-0.25) = 195
2C. Given price P = 95, output is 235(1-0.25) = 176.25
2D. Given price P = 90, output is 210(1-0.25) = 157.50
3. The new data from question 2 reflects a decrease in aggregate supply.
The difference between total factory overhead cost incurred during a period and the total standard factory overhead cost assigned to production of the period is the:______________.
A) Flexible-budget variance.
B) Production-volume variance.
C) Total factory overhead variance.
D) Overhead efficiency variance.
E) Total overhead spending variance.
Answer: C. Total factory overhead variance
Explanation:
The difference between total factory overhead cost incurred during a period and the total standard factory overhead cost assigned to production of the period is the total factory overhead variance.
Flexible budget variance is the difference that occurs between the results that are gotten by the flexible budget model and the actual results gotten.
Production volume variance is the difference that occurs between the budgeted production volume for a particular company and the actual volume of goods produced.
The correct option is C.
"Assume that the scales, software and calibration service are all separate performance obligations. How much revenue will Ortiz recognize in 2021 for this contract?"
Answer: $77250
Explanation:
Your question isn't complete. I saw a similar question so here is it.
On July 15, 2021, Ortiz & Co. signed a contract to provide EverFresh Bakery with an ingredient-weighing system for a price of $79,200. The system included finely tuned scales that fit into EverFresh's automated assembly line, Ortiz's proprietary software modified to allow the weighing system to function in EverFresh's automated system, and a one-year contract to calibrate the equipment and software on an as-needed basis. (Ortiz competes with other vendors who offer ongoing calibration contracts for Ortiz's systems.) If Ortiz was to provide these goods or services separately, it would charge $51,000 for the scales, $10,000 for the software, and $39,000 for the calibration contract. Ortiz delivered and installed the equipment and software on August 1, 2021, and the calibration service commenced on that date. Assume that the scales, software and calibration service are viewed as one performance obligation. How much revenue will Ortiz recognize in 2021 for this contract?
This will be calculated as:
Scales = $51000
Add: Software = $10,000
Add: Calibration service = $39000 × 5/12 = $16250
The total revenue that will be recognized will be:
= $51000 + $10000 + 16250
= $77250
Compute Topp Company’s price-earnings ratio if its common stock has a market value of $29.04 per share and its EPS is $4.80. Considering Lower deck, its key competitor, has a PE ratio of 9.5, which company does the market have higher expectations of future performance?
Answer:
Since the Lower deck's price-earnings ratio of 9.5 is higher than Topp Company’s price-earnings ratio of 6.05, the market therefore have higher expectations of future performance of Lower deck.
Explanation:
Price-earnings ratio refers to the ratio of the market price per share (MPS) to the earning per share (EPS) of a company.
Topp Company’s price-earnings ratio can therefore, be computed using the following formula:
Topp Company’s price-earnings ratio = MPS / EPS ........... (1)
Where;
MPS = Common stock market value = $29.04
EPS = $4.80
Substituting into equation (1), we have:
Topp Company’s price-earnings ratio = $29.04 / $4.80 = 6.05
It should be noted that companies that have a high Price Earnings Ratio are usually referred as growth stocks. The implication of this is that there is a positive future performance which makes investors to have higher expectations for future earnings growth. As a result, the investors are ready to pay more for the stock of the firms.
Since the Lower deck's price-earnings ratio of 9.5 is higher than Topp Company’s price-earnings ratio of 6.05, the market therefore have higher expectations of future performance of Lower deck.
Topp Company’s price-earnings ratio is 6.05.
The company that has a higher expectations of future performance is Lower deck.
PE ratio is known as the price per earnings ratio. It the ratio of the price of the shares of a company to its earnings per share. The higher the PE ratio, the higher the prospects of higher future performance.
Topp Company’s price-earnings ratio = $29.04 / $4.80 = 6.05
Lower deck has a higher PE ratio compared with Topp Company’s price-earnings ratio, so it has a higher expectations of future performance.
A similar question was answered here: https://brainly.com/question/14528659
Your grandpa doesn't trust "young 'uns" so you are set to inherit a $1,000,000 trust fund on your 50th birthday. Your Grandpa also doesn't like banks so he has buried the cash somewhere on his 40-acre farm in a location that will be revealed to you by his lawyer since Grandpa will not be around when you turn 50. If you could possibly get your hands on it now (when you are 20), you could put it in a bank at 6% annual interest. If you were able to dig up the money now, how much would you have when you turn 50?
Answer:
FV= $5,743,491.17
Explanation:
Giving the following information:
Present value (PV)= $1,000,000
Number of periods (n)= 30 years
Annual interest= 6% = 0.06
To calculate the future value (FV), we need to use the following formula:
FV= PV*(1+i)^n
FV= 1,000,000*(1.06^30)
FV= $5,743,491.17
With yearly inflation of 8 % , prices are given by P = P 0 ( 1.08 ) t , where P 0 is the price in dollars when t = 0 and t is time in years. Suppose P 0 = 1 . How fast (in cents/year) are prices rising when t = 1 0 ? Round your answer to two decimal places.
Answer:
by 16.61 cents per year
Explanation:
P = Po(1.08)^t
How fast are prices increasing?
The rate of increase:
dP/dt = d/dt(Po(1.08)^t)
= d/dt((1.08)^t)
We use derivative formula of exponential function as we continue solving this problem
dP/dt = (1.08)^t x ln(1.08)
dP/dt = ln(1.08)x(1.08)^t
Now t value = 10,
P'(10) = ln(1.08)x(1.08)^10
= 0.07696x2.1589
= 0.1661 dollars and 16.61 cents per year
In conclusion, prices are rising by 16.61 cents per year.
How are the four areas of operations control interrelated?
What are some strategies that you can use to prepare to file taxes each year? What would be the benefits of these strategies?
Answer:
Single: this includes never-married, divorced, or legally separated persons who do not have any dependents during the tax year.
Married, Filing Jointly: this includes married individuals (with or without dependents) who combine their income on one tax return.
Married, Filing Separately: this includes married individuals (with or without dependents) who each file a separate tax return on only their own income.
Head of Household: this includes a single individual who maintains a household for one or more dependents (paying more than half of their support).
Qualifying Widow(er): this includes individuals whose spouse has died within the past two years and the individual is supporting at least one dependent.
Explanation:
Prepare your taxes on your own: If you have a simple return or some degree of tax knowledge, this may be a great option, as it can save you the cost of having someone else prepare them. Tax forms are available online and in locations such as libraries and post offices; however, it’s worth remembering it is a complicated process, and if you are not experienced with it, there may be a considerable learning curve and chance of error.
Prepare your taxes with the help of an electronic tax program: If you want to prepare your own taxes but need or want more guidance, there are a number of tax software programs available today to help you. By purchasing the right software or using an online site to prepare the forms, the process can be made much easier, guiding you through the areas of returns and deductions. These options may be less expensive than hiring a professional, and they do provide a lot more guidance. Online tax preparation sites also offer easy electronic filing, which can speed up any refunds you are owed. Just remember, even the best software may not identify all of the deductions or credits for which you may be eligible, and you may still have lingering questions.
Hire someone to prepare your taxes: Over 85 percent of people in the United States use a professional service every year. Depending on who you choose, this service can cost anywhere from $50 to $2,000 or more for extremely complicated returns. There are a few benefits to utilizing a professional preparation service, one being an expert is likely to be more up-to-date on tax laws and any deductions you might deserve. However, you are still responsible for supplying the tax professional with accurate information, and tax preparation services that offer “refund anticipation loans” often charge high interest rates on these credits.
Daisy, Inc., hopes to report a total book tax expense of $160,000 in the current year. This $160,000 expense consists of $240,000 in current tax expense and an $80,000 tax benefit related to the expected future use of an NOL by Daisy. If the auditors determine that a valuation allowance of $30,000 must be placed against Daisy's deferred tax assets, what is Daisy's total book tax expense
Answer:
$190,000
Explanation:
Calculation for total book tax expense
Using this formula
Total book tax expense=Total book tax expense+Valuation allowance
Let plug in the formula
Total book tax expense=$160,000+$30,000
Total book tax expense=$190,000
Therefore Daisy's total book tax expense will be $190,000
Donald is an agent representing Xmart, a large department store chain. Xmart has sent him to deal with Fred in regard to purchasing Fred's land in order to erect a new store. When Donald first meets Fred, Fred calls Xmart to verify that Donald is in fact an agent authorized to deal on Xmart's behalf. Xmart sends Fred a written confirmation of Donald's authorization to act as its agent and states that a contract signed by Donald will be honored by Xmart. Donald and Fred meet every other day during the negotiations. While the negotiations are still ongoing, Donald is fired by Xmart because it doesn't feel that he is making sufficient progress. Why is it important for Xmart to communicate with Fred regarding Donald's firing
Answer:
If Xmart doesn't notify Fred that Donald is not there agent anymore, then any agreement made between Donald and Fred will be valid and binding to Xmart.
Donald is no longer Xmart's agent, but unless Fred is notified, he still may act as an apparent agent. Apparent agents are people that someone could assume are acting on behalf of a principal, e.g. a person that wears a store's uniform inside a store is presumably a salesperson or someone that works for the store, therefore, he/she is an apparent agent. You do not ask for employment contracts when you enter a store.
The original cost of the truck was $32,000. What would be the journal entry for Combs Co. to record the disposal of the delivery truck
Answer:
Journal Entry for disposal (or) sale of Truck
Explanation:
Truck (asset) sold for cash, bank, or on credit {On loss}Cash ac dr (or) Bank ac (or) Debtor ac (Or) ac ... dr
P & L ac ... dr
to Truck ac ... 32000
Truck (asset) sold for cash, bank, or on credit {On gain}Cash ac dr (or) Bank ac (or) Debtor ac (Or) ac ... dr
to Truck ac ... 32000
To P & L ac
Item18 Time Remaining 22 minutes 25 seconds00:22:25 eBookItem 18Item 18 Time Remaining 22 minutes 25 seconds00:22:25 Moore Company purchased an item for inventory that cost $20 per unit and was priced to sell at $34. It was determined that the cost to sell is $22 per unit. Using the lower of cost or net realizable value rule, what amount should b
Answer:
$12
Explanation:
Moore Company purchased an item for inventory that cost $20 per unit and was priced to sell at $34. It was determined that the cost to sell is $22 per unit. Using the lower of cost or net realizable value rule, what amount should be?
Cost per Unit = $20
Sale per unit = $34
Disposal cost = $22
Net realizable value per unit = Sale per unit - Disposal cost
Net realizable value per unit = $34 - $22
Net realizable value per unit = $12
Using the LCM method, $12 should be reported on the balance sheet for inventory.
During 2019, Waterway Industries expected Job no. 59 to cost $300000 of overhead, $450000 of materials, and $200000 in labor. Waterway applied overhead based on direct labor cost. Actual production required an overhead cost of $245000, $520000 in materials used, and $170000 in labor. All of the goods were completed. How much is the amount of over- or underapplied overhead
Answer:
the overhead overapplied is $137,500
Explanation:
The computation of the overhead underapplied or overapplied is shown below:
Predetermined overhead rate is
= Expected overhead ÷ direct labour cost
= $450,000 ÷ $200,000
= 225% of direct labour cost
Now the applied overhead is
= $170,000 × 225%
= $382,500
And, the actual overhead is $245,000
So, the overhead pverapplied is
= $382,500 - $245,000
= $137,500
Hence, the overhead overapplied is $137,500
Suppose the banking system has $40 billion in reserves. Also assume that there are no cash leakages or excess reserves. If the central bank lowers the required reserve ratio from 20 percent to 16 percent, the money supply will
Answer:
Money supply increases by $1.6 billion
Explanation:
The reserve ratio is defined as the amount of a bank's reserves that the central bank of a country expects banks to keep as cash and not lend out.
Reserve ratio is also called cash reserve ratio.
This requirement is put in place in case customers decide to make mass withdrawals.
Central banks tend to control cash supply by increasing or reducing the reserve ratio.
When money to be supplied as loans is to be increased, the reserve ratio reduces so that banks can use more of their reserves for lending rather than for cash withdrawals.
In this instance reserve ratio reduced from 20% to 16%.
That is a 4% reduction
This means 4% of the reserves is freed up for lending or money supply to the public
Extra money supply = 0.04 * 40 billion = $1.6 billion
Money supply increases by $1.6 billion
Budget Preparation Reeves Company is preparing its master budget for July. Use the given estimates to determine the amounts necessary for each of the following requirements. (Estimates may be related to more than one requirement.) a. What should total sales revenue be if territories A and B estimate sales of 8,000 and 20,000 units, respectively, and the unit selling price is $55
Answer and Explanation:
Particulars A B Total
Sales units 8,000 20,000 28,000
Sales Price per unit $50 $50 $50
Total Sales revenue $400,000 $1,000,000 $1,400,000
We simply multiplied the sales units with the sales per unit so that the total sales revenue come
The risk-free rate is 4.2%, and the expected return on the market is 10%. A publicly-traded bond promises to return 8%. The expected return on the bond investment is 5.5%. What is the bond's implied beta?
a) 0.45
b) 0.22
c) 0.73
d) 1.38
Answer: the bond's implied beta= 0.22-b
Explanation:
According to Capital Asset Pricing Model CAPM, we have that
Expected return =Rf + β(Rm - Rf)
Rm is expected return on market
β= beta of bond
Rf=risk free return
therefore
Expected return =Rf + β(Rm - Rf)
5.5 = 4.2 + β(10-4.2)
5.5=4.2+ β5.8
5.5-4.2= β5.8
1.3=β5.8
β= 1.3/5.8=0.22
A project that incurs costs in early years and yields benefits in later years has been estimated to have costs just equal to benefits, in present value terms and ignoring risk factors. The project would be reevaluated as having greater benefits than costs if
Answer:
The discount rates were lowered
Explanation:
Discount rate is the rate that is used to determine the present value of future cash flows that will be spent in a project.
This is different from the cost of capital which is the amount that just meets the incurred cost of executing a project.
Discount rate determines of the benefits of the project are greater than the cost.
In the given scenario where benefits balance the cost, the project will be worthwhile is discount rate is lower.
That is there will be a lower cost of execution of the project so revenue will be higher than the cost
Calculate the annual cash flows of a $100,000, 10-year fixed-payment deferred annuity earning a guaranteed 3.6 percent per year if annual payments are to begin at the end of year 4 (beginning of year 5). (Hint: Grow the original investment for 4 years and then all payments are paid at the beginning of the year.)
Answer:
$13,437.53
Explanation:
Calculation for the annual cash flows
First step is to calculate the value of annuity after 3 years from today
Using this formula
Value of annuity = Present value*(1+Rate)^Time
Let plug in the formula
Value of annuity = $100,000*(1 +0.036)^3
Value of annuity = $100,000*1.111934656
Value of annuity = $111,193.4656
Second step is to calculate the present value annuity factor
Using this formula
PVIFA = [1 – (1 + Rate)-Number of periods]/ Rate
Let plug in the formula
PVIFA = [1 – (1 + 0.036)-10]/ 3.6%
PVIFA = 8.27484404349
Last step is to calculate the annual cash flows
Using this formula
Annual cash flows = Value of annuity/ Present value annuity factor
Let plug in the formula
Annual cash flows = $111,193.4656/ 8.27484404349
Annual cash flows = $13,437.53
Therefore the annual cash flows will be
$13,437.53
Which of the following is an example of an automatic stabilizer? Governments debate implementing tax cuts when the economy is in a recession. Spending on unemployment benefits falls when the economy enters a recession. Low-income households lose their food stamp benefits when unemployment rises. The amount of tax revenues collected rises when an economy is booming.
Answer:
D. The amount of tax revenues collected rises when an economy is booming.
Explanation:
Automatic stabilizers can be defined as changes in government spending or taxes and consequently, raises aggregate demand without the intervention of policy makers when an economy falls into recession.
In Economics, it is also referred to as built-in stability and this means that with given tax rates and expenditures policies such as fiscal and monetary policy; an increase in domestic income will reduce a budget deficit or produce a budget surplus, while a decline in income will result in a deficit or a lower budget surplus.
Hence, an automatic stabilizer is an economic system or policies that automatically shore up or strengthen the Gross Domestic Products (GDP) without specific government intervention for sustenance or creation of stability in the economic cycle of a country.
An example of an automatic stabilizer is the amount of tax revenues collected rises when an economy is booming. Also, personal and corporate income tax usually decline in the event of recession in a country because individuals and business owners or entities make less, thus leading to unemployment and an increase in social security funds or welfare.
