Answer:
simple forecast combination = 339.66
Explanation:
given data
Mary sell = 316
Susan sell = 500
Sarah sell = 203
to find out
What would be the result of a simple forecast combination
solution
we get simple forecast combination will be express here as
simple forecast combination = ( Mary sell + Susan sell + Sarah sell ) ÷ 3 ....................1
put here value we get
simple forecast combination = [tex]\frac{316+500+203}{3}[/tex]
simple forecast combination = 339.66
_________ policy involves the decision to pay out earnings to shareholders or to retain and reinvest them in the firm. When distributing income to stockholders there are three key issues to consider: (1) How much should be distributed? (2) Should the distribution be in the form of dividends, or should the cash be passed on to shareholders by _________ stock?
(3) How stable should the distribution be? When deciding how much cash to distribute, a firm's managers must remember that the firm's objective is to_______ shareholder value. The target_______ ratio is defined as the percentage of net income distributed as cash dividends, and it should be based on investors' preferences for dividends versus capital gains. Any change in this ratio will have two opposing effects: (1) If dividends are increased, then taken alone this will cause the firm's stock price to_______ . (2) However, an increase in dividends will also cause the firm's expected growth rate to_______ and this will tend to _______the firm's stock price. The _______dividend policy is the one that strikes a balance between current dividends and future growth _______and the firm's stock price.
Answer:
The blanks anwers are below
Explanation:
Kindly consider blanks in order:
Payout policy
Repurchasing
Maximize
Payout
Rise/Increase
Decline
Decrease
Sustainaible
maximizes
Some blanks may not match. The answers are correct although.
Calculating Economic Value Added East Mullett Manufacturing earned operating income last year as shown in the following income statement: Sales $630,000 Cost of goods sold 380,000 Gross margin $250,000 Selling and administrative expense 174,400 Operating income $ 75,600 Less: Income taxes (@ 40%) 30,240 Net income $ 45,360 Total capital employed equaled $381,000. East Mullett's actual cost of capital is 8 percent. Required: Calculate the EVA for East Mullett Manufacturing. $
Answer:
$14,880
Explanation:
The formula to compute EVA is shown below:
= Net operating income or earnings after taxes - (Total capital employed × cost)
= $45,360 - ($381,000 × 8%)
= $45,360 - $30,480
= $14,880
We simply applied the economic value added formula so that the accurate value can come.
All other information which is given is not relevant. Hence, ignored it
Use this information for Chicks Corporation to answer the question that follow. Chicks Corporation had $1,100,000 in invested assets, sales of $1,210,000, income from operations amounting to $302,500, and a desired minimum return of 15%. The profit margin for Chicks is
a. 15%
b. 25%
c. 27.5%
d. 22%
Answer:
Option B.
Explanation:
Given information:
Assets = $1,100,000
Sales = $1,210,000
Income or profit = $302,500
Formula for profit margin is
[tex]\text{Profit margin}=\dfrac{Profit}{Sales}\times 100[/tex]
Substitute the given values in the above formula.
[tex]\text{Profit margin}=\dfrac{302500}{1210000}\times 100[/tex]
On simplification we get
[tex]\text{Profit margin}=25\%[/tex]
The profit margin for Chicks is 25%.
Therefore, the correct option is B.
Recently, some executives for highway construction companies agreed to stop competing with each other on price and to meet every three months to decide their price for the next quarter.
In this situation:
A. the Sherman Act has been violated.
B. the Robinson-Patman Act has been violated by price discrimination.
C. the executives are exercising their right to free trade.
D. the unfair trade practice acts have been violated.
E. as long as prices don't increase—the executives have done nothing wrong.
Prepare the journal entry to record Jevonte Company's issuance of 36,000 shares of its common stock assuming the shares have a:
a. $2 par value and sell for $18 cash per share.
b. $2 stated value and sell for $18 cash per share.
Final answer:
To record Jevonte Company's issuance of 36,000 shares of its common stock, the journal entry would be different depending on whether the shares have a par value or a stated value.
Explanation:
To record Jevonte Company's issuance of 36,000 shares of its common stock, both the par value and the stated value of the shares need to be considered.
a. If the shares have a $2 par value and sell for $18 cash per share, the journal entry would be:
Common Stock
Cash
(36,000 x $2)
(36,000 x $18)
72,000
648,000
b. If the shares have a $2 stated value and sell for $18 cash per share, the journal entry would be:
Common Stock ($36,000 x $2)
Paid-in Capital in Excess of Stated Value
Additional Paid-in Capital ($18 - $2) x 36,000
Cash
72,000
576,000
216,000
Paul, the HR manager, works in the Townsville plant and reports to the plant manager there, but he also reports to the corporate HR director in Cityburg. This reporting structure violates the principle of ________.
A. unity of purpose
B. unity of command
C. chain of command
D. division of authority
Answer:
Letter B is correct. Unity of command.
Explanation:
Unity of command is defined as the importance of respecting hierarchy within an organization. The orders are given by the superiors and the subordinates must comply with them, that is, the orders of those who are at the top of the hierarchy must always be respected and only the superiors are allowed to change them.
When there is a violation of the command unit, several related conflicts can arise, such as lack of consensus among teams, disorganization, failure in the communication process, which negatively impact organizational effectiveness.
Suppose a banking system receives a new deposit of $1,000. If the reserve requirement is 20%, by how much can the total volume of deposits in that banking system ultimately rise as a result, assuming all excess reserves are loaned out and all loan proceeds are re-deposited?
Answer:
Increase in initial deposit will be $4000
Explanation:
We have given initial deposit = $1000
Required reserve ratio = 20 % = 0.2
We have to find the total increase in deposit
We know that total increase in deposit = [tex]\frac{intial\ deposit}{required\ reserve\ ratio}-initial\ deposit[/tex]
So We know that total increase in deposit = [tex]\frac{1000}{0.2}-1000=$4000[/tex]
So increase in initial deposit will be $4000
he following information relates to a company’s defined benefit pension plan at December 31:
Accumulated benefit obligation: $1,035,000
Projected benefit obligation: 1,250,000
Prior service cost: 113,000
Net gain on plan assets: 167,000
Plan assets (fair value): 737,000
What amount should the company report as its pension liability at December 31?
Final answer:
The company should report a pension liability of $513,000 at December 31, calculated by subtracting the fair value of the plan assets ($737,000) from the Projected Benefit Obligation ($1,250,000).
Explanation:
To calculate the company's pension liability at December 31, we need to look at the Projected Benefit Obligation (PBO) and the fair value of the plan assets. The company's PBO is $1,250,000 and the plan assets are valued at $737,000. The pension liability is simply the PBO minus the fair value of plan assets. Therefore, the pension liability equals $1,250,000 - $737,000 = $513,000.
This means the company should report a pension liability of $513,000 at December 31. This is the amount by which the obligations exceed the plan's assets. Note that neither the accumulated benefit obligation, prior service cost, nor the net gain on plan assets affect the calculation of the pension liability.
Lars runs a cookie factory. His cookies are made with sugar, peanut oil, and soybean oil. The number of boxes of cookies that he produces is y = min{su, po+2so}, where su is the number of bags of sugar, po the number of canisters of peanut oil, and so the number of canisters of soybean oil that he uses. The price of a bag of sugar is $5. The price of a canister of peanut oil is $9. The price of a canister of soybean oil is $19. (a) If Lars makes 24 boxes of cookies, how many bags of sugar will he use? Will he use peanut or soybean oil? How many canisters? Calculate the minimum cost of producing 24 boxes of cookies. (b) Suppose the price of soybean oil decreases by $1 and the price of peanut oil increases by $1. How will these changes affect the minimum cost of producing 24 boxes of cookies?
Answer:
Check the following calculations
Explanation:
If Lars makes 24 boxes of cookies,
how many bags of sugar will he use? Answer- Lars will use 24 bags of of suger.
Will he use peanut or soybean oil ? Answer - Yes. He will use peanut & soybean oil
How many canisters - 24 number of canisters of peanut oil & 48 number of canisters of soybean oil
The minimum cost of producing 24 boxes of cookies. = 24(5+9+2x19) = 24(52) = $1,248
(b) Suppose the price of soybean oil decreases by $1 and the price of peanut oil increases by $1. How will these changes affect the ?
minimum cost of producing 24 boxes of cookies = 24[5+(9+1)+2x(19-1)] = 24 [51]= $ 1,224.
Lars's cookie production employs a mathematical model to determine the number of ingredients needed to make 24 boxes of cookies, considering the costs of sugar, peanut oil, and soybean oil. A price change in peanut and soybean oil will impact the minimum cost of production. The calculation involves finding the minimum of two functions and adjusting for price changes.
Explanation:To solve Lars's cookie production cost, we must find the minimum of two expressions: su (bags of sugar), and po + 2so (canisters of peanut oil and twice the canisters of soybean oil). Given that Lars wants to make 24 boxes of cookies, we have y = min{su, po + 2so} = 24. Assuming he uses only one type of oil for simplicity, and that oil is either peanut oil (po) or soybean oil (so), we can write two separate equations: su = 24 and po + 2so = 24.
We then calculate the minimum cost of producing 24 boxes of cookies using the given ingredient prices: $5 per bag of sugar, $9 per canister of peanut oil, and $19 per canister of soybean oil.
If the price of soybean oil decreases by $1 (to $18) and the price of peanut oil increases by $1 (to $10), these changes will affect the minimum cost of producing 24 boxes of cookies. The new costs for oils will potentially make soybean oil a more attractive option, depending on the quantities needed, hence, adjusting the formula for calculating the minimum cost.
A call option with an exercise price of $30 and four months to expiration has a price of $4.10. The stock is currently priced at $29.80, and the risk-free rate is 4 percent per year, compounded continuously. What is the price of a put option with the same exercise price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
price is $3.90
Explanation:
given data
exercise price = $30
four months to expiration price = $4.10
stock currently priced = $29.80
risk free rate = 4 % per year
to find out
What is the price of a put option with the same exercise price
solution
we know that put call parity that is express as
S + P = C + E × [tex]e^{-rt}[/tex] ........................1
here S is stock price and P is put price and R is risk free rate and C is call price and t is time to maturity and E is exercise price
so put here all these value in equation 1 we get
P = C + E × [tex]e^{-rt}[/tex] - S
P = 4.10 + 30 × [tex]e^{-0.04*\frac{4}{12}}[/tex] - 29.80
P = 3.90
so price is $3.90
The price of a put option with the same exercise price as the call option is $4.30.
Explanation:To find the price of a put option with the same exercise price as the call option, we can use the put-call parity formula. The put-call parity formula states that the price of a call option plus the present value of the exercise price equals the price of a put option plus the current stock price. We can rearrange this formula to solve for the price of the put option:
Put Price = Call Price + Exercise Price - Stock Price
Substituting the given values, we have:
Put Price = $4.10 + $30 - $29.80 = $4.30
Therefore, the price of a put option with the same exercise price is $4.30.
Learn more about Put Option here:https://brainly.com/question/34544956
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Franco owns a 60% interest in the Dulera LLC. On December 31 of the current tax year, his basis in the LLC interest is $128,000. The fair market value of the interest is $140,000. In a proportinate nonliquidating distribution, the LLC distributes $30,000 cash and equipment with an adjusted basis of $5,000 and a fair market value of $8,000 to him on that date. How much is Franco's adjusted basis in the LLC interest after the distribution and what is the amount of his basis in the equipment received?
Answer:
Please see attachment
Explanation:
Please see attachment
(Loan amortization) Mr. Bill S. Preston, Esq., purchased a new house for $170,000. He paid $25,000 down and agreed to pay the rest over the next 30 years in 30 equal end-of-year payments plus 11 percent compound interest on the unpaid balance. What will these equal payments be
Answer:
The equal payments amount is $16,678.57
Explanation:
Hi, first we need to determine what the loan amount is, we can do that by substracting $25,000 (down payment) from the cost of the new house, that would be $170,000 - $25,000 = $145,000.
Now, we need to solve for "A" the following equation, given a rate of 11% compounded annually, number of yearly payments equals 30 and a present value of $145,000
[tex]PresentValue=\frac{A((1+r)^{n}-1) }{r(1+r)^{n} }[/tex]
Everything should look like this.
[tex]145,000=\frac{A((1+0.11)^{30}-1) }{0.11(1+0.11)^{30} }[/tex]
[tex]145,000=A(8.693792573)[/tex]
Therefore, A = $16,678.57
Best of luck.
On a tropical island there are 100 potential boat builders, numbered 1 through 100. Each can build up to 16 boats a year, but anyone who goes into the boatbuilding business has to pay a fixed cost of $15. Marginal costs differ from person to person. Where y denotes the number of boats built per year, boat builder 1 has a total cost function c(y) = 15 + y. Boat builder 2 has a total cost function c(y) = 15 + 2y, and more generally, for each i, from 1 to 100, boat builder i has a cost function c(y) = 15 +iy. If the price of boats is 40, how many boats will be built per year? a. 624 b. 200 c. 936 d. 400 e. Any number between 640 and 656 is possible.
Answer:
a. 624
Explanation:
Please see attachment .
Lindsey exchanges investment real estate parcels with Donna. Her adjusted basis in the property is $400,000, and it is encumbered by a mortgage liability of $200,000. Donna assumes the mortgage. Donna's property is appraised at $1,000,000 and is subject to a $100,000 liability. Lindsey assumes the liability. If no cash is exchanged, what is the amount of gain recognized by Lindsey?
Answer:
$500,000
Explanation:
For Lindsey, the cost incurred in the acquisition of Donna's property via the exchange is
= $400,000 + $200,000
= $600,000
For Donna, the cost incurred in the acquisition of Lindsey's property via the exchange is
= $1,000,000 + $100,000
= $1,100,000
If no cash is exchanged, amount of gain recognized by Lindsey
= $1,100,000 - $600,000
= $500,000
An epidemiologic experiment is performed in which one group is exposed to a suspected factor and the other is not. All individuals with an odd hospital admission number are assigned to the second group. The main purpose of this procedure is to:a. ensure a double-blind study.b. prevent observer bias with respect to the factor.c. prevent observer bias with respect to the outcome.d. improve the likelihood that the two groups will be comparable with regard to known and unknown confounding factors.e. guarantee comparability of the two groups with regard to other relevant factors.
Answer:
d. improve the likelihood that the two groups will be comparable with regard to known and unknown confounding factors.
Explanation:
Epidemiology is the term that is used to define a study in which the study is done on a defined population for the health related issues, that is about answering the who, when and where related to this study.
In this given question also the experiment focuses on developing two different groups to understand and conduct the study and analysis properly, based on the suspected factor and how they react to it.
Thus, it will lead to compare the groups in order to make the analysis efficient keeping constant factors.
Kincaid Company's Retained Earnings balance on January 1 was $9,000. During the current year, Kincaid earned $3,100 in revenues and incurred $4,300 in expenses. Kincaid declared and paid $3,000 in dividends, all in cash. After the closing entries are made, Kincaid's Retained Earnings balance on December 31 will be:
A) $7,800.
B) $9,100.
C) $9,000.
D) $4,800.
Answer:
D) $4,800
Explanation:
Previous Retained Earnings + Revenue - Expenses - Dividends = Current Retained Earnings
Old Retained Earnings - $9,000
Revenue - $3,100
Expenses - ($4,300)
Dividends - ($3,000)
Current Retained Earnings = $4,800
Final answer:
Kincaid's Retained Earnings balance on December 31 will be $4,800 after accounting for the year's net loss and dividends paid.
Explanation:
After the closing entries are made, Kincaid's Retained Earnings balance on December 31 will be calculated based on the beginning balance, plus net income, and minus dividends paid. We start with the beginning balance of retained earnings on January 1, which was $9,000. During the year, Kincaid earned revenues of $3,100 and incurred expenses of $4,300, leaving us with a net loss of $1,200 ($3,100 - $4,300). This net loss will decrease retained earnings. Moreover, Kincaid declared and paid $3,000 in dividends, which will further decrease retained earnings.
To find the ending Retained Earnings balance, we subtract both the net loss and dividends from the beginning balance:
Beginning Retained Earnings: $9,000
Net Loss: -$1,200
Dividends Paid: -$3,000
Ending Retained Earnings: $9,000 - $1,200 - $3,000 = $4,800
Therefore, the answer is D) $4,800.
Marigold Company estimates that 2017 sales will be $42,500 in quarter 1, $53,700 in quarter 2, and $65,700 in quarter 3. Cost of goods sold is 50% of sales. Management desires to have ending finished goods inventory equal to 22% of the next quarter’s expected cost of goods sold. Prepare a merchandise purchases budget by quarter for the first 6 months of 2017.
Answer:
Prepare a merchandise purchases budget by quarter for the first 6 months of 2017.$ 50.652
Explanation:
Each month the company has to purchase the inventory to the next quarter and cover the cost of goods of the current quarter which is the costo of good of the months minus the initial inventory.
Quarter 1 - Quarter 2 - Quarter 3
$42,500 - $53,700 - $65,700 - Sales
$21,250 - $26,850 - $32,850 - Cost of Goods
$4,675 - $5,907 - $7,227 - Initial Inventory
$22,482 - $28,170 - ------------- Merchandises Purchases
Total Merchandise purchases for the first two quarters :
$50,562 = $22,482 + $28,170
$22,482 = $21,250 - $4,675 + $5,907
$28,170 = $26,850 - $5,907 + $7,227
Roger inherited 100 shares of Periwinkle stock when his mother, Emily, died. Emily had acquired the stock for a total of $60,000 on November 15, 2015. She died on August 10, 2019, and the shares were worth a total of $55,000 at that time. Roger sold the shares for $36,000 on December 22, 2019. How much gain or loss does Roger recognize? What is the nature of that gain or loss?
Answer:
Please see attachment
Explanation:
Please see attachment
Waymire Company sells a motor that carries a 60-day unconditional warranty against product failure. From prior years' experience, Waymire estimates that 3% of units sold each period will require repair at an average cost of $100 per unit. During the current period, Waymire sold 73,000 units and repaired 1,000 units.
(a) How much warranty expense must Waymire report in its current period income statement?(b) What warranty liability related to current period sales will Waymire report on its current period-end balance sheet?
Answer: Income statement $100,000
Balance sheet warranty liability $Nill
Explanation:
Since we are at the end of the period and all activities has been concluded with no expectation of claim of repairs. The firm will only record the cost incurred for current period on repairs which is $100,00 ( $100*1000) . The liability will be zero since the company has taken care of all repairs for the period.
Final answer:
Waymire must report a warranty expense of $219,000 on its income statement. The warranty liability related to current period sales to be reported on the balance sheet is $216,000, covering the estimated repairs for units still under warranty.
Explanation:
Waymire Company Warranty Expenses and Liabilities
To calculate the warranty expense Waymire must report in its current period income statement, we will use the information that Waymire estimates a 3% failure rate with an average repair cost of $100 per unit. Waymire sold 73,000 units during the current period. Therefore, the estimated warranty expense is 73,000 units imes 3% imes $100 = $219,000. This is the amount that should be recognized in the income statement as an expense.
As for the warranty liability, Waymire repaired 1,000 units. The cost for these repairs would already have been accounted for, so we need to determine the liability for units sold that have not yet failed but are still under warranty. Since 1,000 repairs have already been made, the remaining estimated repairs are for the units sold minus those repaired: 73,000 units - 1,000 repaired units = 72,000 units. The liability for these remaining units is 72,000 units imes 3% imes $100 = $216,000. This is the amount that Waymire should report on its balance sheet as a liability related to the current period sales.
Which of the following are advantages of the corporate form of organization?
I. Ability to raise large sums of equity capital
II. Ease of ownership transfer
III. Profits taxed at the corporate level
IV. Limited liability for all owners
A. I and II only
B.III and IV only
C.II, III, and IV only
D. I, II, and IV only
E. I, II, III, and IV
Answer:
D. I, II, and IV only
Explanation:
A corporation is a form of business where ownership can be acquired through purchase of shares.
The liability of shareholders also known as owners is limited to the amount invested in the business.
Corporations can raise capital through the issuance of shares, bonds and through borrowing.
The profits of a corporation can be taxed at the corporation and personal level. This is known as double taxation.
I hope my answer helps you
Answer:
A. I and II only
Explanation: don't get caught lackin.
When a perfectly competitive firm is in long-run equilibrium, the firm is:
A) producing at maximum average total cost.
B) producing at maximum average variable cost.
C) producing at minimum marginal cost.
D) producing at minimum long-run average total cost.
Answer:
D) producing at minimum long-run average total cost.
Explanation:
In long run equilibrium for a perfectly competitive firm, Price = MC = Minimum ATC.
The long-run equilibrium point for a perfectly competitive market occurs where the demand curve (price) intersects the marginal cost (MC) curve and the minimum point of the average cost (AC) curve.
Mandarin Company is authorized to issue 1,250,000 shares of $15 par value common stock. By November 15, 2019, the company had issued 60,000 shares at $36 per share. On November 15, 2019, the company declared a 50% stock dividend when the market price was $45 per share. What amount would be debited to the Stock Dividends account as a result of the stock dividend? Select one: a. 1,350,000 b. 450,000 c. 1,875,000 d. 900,000
Answer:
a. 1,350,000
Explanation:
The computation of the amount which is debited to the stock dividend account is shown below:
= Issued Number of shares × stock dividend percentage × market price
= 60,000 shares × 50% × $45
= $1,350,000
Simply we multiplied the issued number of shares with the stock dividend percentage and the market price so that the accurate amount can come.
All other information which is given is not relevant. Hence, ignored it
To carefully integrate and coordinate the company's many communications channels and produce greater sales impact, some companies appoint a(n) ________.
A) idea champion
B) marketing communications director
C) sales representative
D) business analyst
E) media planner
Answer: E - Media Planner
Explanation: Media Planners are tasked with the objective of maximising returns on advertisement and company's promotional activities for an improved sales.
Media planners are responsible for creatively thinking of different marketing strategies to get to their target customers.
They make use of different marketing communications such as radio, television, hand bills, online articles, billboards etc to communicate with their target customers.
You purchased 1,000 shares of the New Fund at a price of $23 per share at the beginning of the year. You paid a front-end load of 2.5%. The securities in which the fund invests increase in value by 9% during the year. The fund's expense ratio is 1.3%.
What is your rate of return on the fund if you sell your shares at the end of the year?
Answer:
5%
Explanation:
Front-end load = 2.5%
The cost of 1,000 shares:
= (1,000 × $23) ÷ (1 - 0.025)
= $23,590
NAV at the end of the year = NAV in the beginning × (1 + r - expense ratio)
= $23 × (1 + 0.09 - 0.013)
= $23 × 1.077
= $24.771
Value of 1,000 shares at the end of the year:
= NAV at the end of the year × 1,000 shares
= $24.771 × 1,000
= $24,771
Rate of return:
= (Value of shares at the end ÷ Value of shares in the beginning) - 1
= ($24,771 ÷ $23,590) - 1
= 0.05006 or 5%
Henry Crouch's law office has traditionally ordered ink refills 65 units at a time. The firm estimates that carrying cost is 40% of the $11 unit cost and that annual demand is about 245 units per year. The assumptions of the basic EOQ model are thought to apply. For what value of ordering cost would its action be optimal?
Answer:
The answer is: the ordering cost will be $38
Explanation:
We have the formula for economic order quantity is:
EOQ = Square root of ( 2 x S x D / H)
in which: S ordering cost;
D: Quantity demand
H: carrying cost
For the law office to act at optimal level by ordering EOQ at 65 units a time, The ordering cost will be found be the equation:
65 = square root of ( 2 x S x 245 / 4.4) <=> 4,225 = (2 x S x 245) / 4.4 <=> 4,225 = 1225S/ 11 <=> S = $38
Thus, the ordering cost will be $38.
Sunland Company had these transactions during the current period. June 12 Issued 84,000 shares of $1 par value common stock for cash of $315,000. July 11 Issued 4,000 shares of $105 par value preferred stock for cash at $113 per share. Nov. 28 Purchased 3,100 shares of treasury stock for $7,700.
Prepare the journal entries.
Answer:
Please see attachment
Explanation:
Please see attachment
Selected data taken from a recent year’s financial statements of trading card company Topps Company, Inc. are as follows (in millions). Net sales $326.7 Current liabilities, beginning of year 41.1 Current liabilities, end of year 62.4 Net cash provided by operating activities 10.4 Total liabilities, beginning of year 65.2 Total liabilities, end of year 73.2 Capital expenditures 3.7 Cash dividends 6.2 Compute the free cash flow
Answer:
$0.5 million
Explanation:
Given: Net sales= $326.7 million
Current liabilities, beginning of year $41.1 million
Current liabilities, end of year $62.4 million
Net cash provided by operating activities $10.4 million
Total liabilities, beginning of year $65.2 million
Total liabilities, end of year $73.2 million
Capital expenditures $3.7 million
Cash dividends $6.2 million
Now, compute free cash flow.
Formula: Free cash flow= [tex](\textrm{ Net cash provided by operating activities - capital expenditure - cash dividend})[/tex]
Free cash flow= [tex](10.4 - 3.7 - 6.2) = 10.4 - 9.9[/tex]
∴ Free cash flow= $0.5 million
Free cash flow of firm is useful to know the profitability of company excluding all non cash expense from firm´s income statement.
Which of the following statements is TRUE?
A) On average, smaller stocks have lower volatility than Treasury bills.
B) Portfolios of smaller stocks are typically less volatile than individual small stocks.
C) On average, smaller stocks have lower returns than larger stocks.
D) On average, Treasury bills have higher returns than stocks.
Answer:B. The portfolio of smaller stock are typically less volatile than individual small stock.
C. On average smaller stock have lower return than larger stock.
Explanation:
The larger stock most times have a higher volatility than smaller stock and usually have better records of performance, this therefore makes their returns higher than lower stock.
On an average the volatility of a smaller stock is greater than that of a portfolio of smaller stock for the portfolio stock will compensate for one another to limit the volatility.
A treasury bill has a government guarantee, their return is therefore lower and same applies to their volatility when compared to smaller stock.
A major DVD rental chain is considering opening a new store in an area that currently does not have any such stores. The chain will open if there is evidence that more than 5,000 of the 20,000 households in the area are equipped with DVD players. It conducts a telephone poll of 300 randomly selected households in the area and finds that 96 have DVD players. The decision on the hypothesis test using a 3% level of significance is
Answer:
Please see attachment
Explanation:
Please see attachment
Final answer:
The student's question involves performing a hypothesis test to determine if more than 5,000 of the 20,000 households in the area have DVD players, using a sample of 300 households where 96 have DVD players and a significance level of 3%. A z-test will be used to compare the sample proportion to the hypothesized population proportion.
Explanation:
The question asks us to decide whether to open a new DVD rental store based on the evidence obtained from a sample. A chain will open a new store if more than 5,000 out of 20,000 households have DVD players. In the sample of 300 households, 96 have DVD players. We need to perform a hypothesis test to make this decision.
To test the hypothesis, define the null hypothesis (H0) as the proportion of households with DVD players being 5,000 out of 20,000, which is 0.25. The alternative hypothesis (H1) is that the proportion is greater than 0.25. The sample proportion with DVD players is 96/300, which is 0.32. We can use a z-test to compare the sample proportion to the population proportion.
The level of significance is given as 3%. This is the probability of rejecting the null hypothesis if it is actually true. After calculating the z-score for the sample proportion, we would compare it to the critical value from the z-table that corresponds to 3% significance level. If the calculated z-score is greater than the critical value, we reject the null hypothesis.
The Wall Street Journal reports that the rate on three-year Treasury securities is 4.75 percent and the rate on four-year Treasury securities is 5.00 percent. The one-year interest rate expected in three years is E(4r1), 5.25 percent. According to the liquidity premium theory, what is the liquidity premium on the four-year Treasury security, L4?
0.0375 percent0.504 percent5.01 percent5.04 percent
Answer:
L4= 0.504%
Explanation:
1 +1R4= {(1 +1R3)(1 + E(4r1) +L4)}1/4
1.0500 = {(1.0475)^3(1 + 0.0525 +L4)}1/4
(1.0500)^4= (1.0475)3^(1 + 0.0525 +L4)
(1.0500)^4/(1.0475)^3= 1 + 0.0525 + L4
(1.0500)4/(1.0475)^3-1.0525
L4= .0050358564 = 0.504%