Answer: (B) Systematic, Unsystematic
Explanation:
The systematic risk is one of the type of investment and it is measured by investment return covariance in the market. The systematic risk is basically divided by market risk once it is calculated.
The premium risk of the security is mainly determine by the systematic risk and it is not depend upon its unsystematic risk.
The unsystematic risks is basically inherited from the specific industry and the risk can be reduced by the diversification.
Therefore, Option (B) is correct.
Assume that a $1,000 bond issued in 2015 pays $100 in interest each year. What is the current yield on the bond if it can be purchased for $1,200? Enter your answer in percent form and to one decimal place. For example, if your answer is 0.034 (3.4%) then enter 3.4
Answer:
8.33%
Explanation:
Current yield of a bond is used to determine the annual rate of return of a bond that an investor holds. The formula for calculating it is as follows;
Current yield of a bond = annual coupon payment/ current price
Annual coupon payment = interest payment = $100
Current price = $1,200
Next, plug in the numbers to the above formula;
Current yield = 100/ 1,200
= 0.0833
As a percentage, multiply 0.0833 by 100;
=0.0833 *100
= 8.33%
Therefore, the current yield on the bond is 8.3% (to one decimal place.)
Camille, a college student, feels that now is a good time to buy stocks. However, because she doesn't have any savings, she decides to borrow $15,000 at an annual interest rate of 8 percent. She must make an interest-only payment each year for five years plus repay the entire principal in year five. On August 1, 2018 when Camille obtained the loan, Camille invested $10,000 in several individual stocks and used the remaining $5,000 to pay her tuition for the year. Assuming Camille's investment income this year is greater than her investment interest expense this year, how much investment interest expense can she deduct in 2018?
Answer:$1200
Explanation:
The maximum interest payable for year one of 2018 is 8% of $15000 which gives $1200.
If the investment income is greater than investment interest expenses of $1200 . The amount of investment interest expenses she can deduct is $1200.
Dallas Star Inc. 's stock has a 35% chance of producing a 10% return, and a 60% chance of producing a 15% return. What is the firm's expected rate of return? What is the firm's Standard Deviation? What is the firm's Coefficient of Variation? Part 2: Calculate the required rate of return for Dallas Star Inc., assuming that (1) investors expect a 3.0% rate of inflation in the future, (2) the nominal risk-free rate is 5.0%, (3) expected market return is 11% and (4) the firm has a beta of 1.50. (Hint: You need to find out market risk premium first.)
Answer:
1.The expected return is the profit or loss that the investor anticipates on the investment =0.125 that is 12.5%
2. RRR (Required rate of return) =11%.
Explanation:
Please also refer to the attachment .
The firm's expected rate of return is 12.5%. The firm's standard deviation is 2.44%. The firm's coefficient of variation is 19.5%. The required rate of return for Dallas Star Inc. is 14.0%.
Explanation:To find the firm's expected rate of return, we can use the formula:
Expected Rate of Return = (Probability of Return 1 x Return 1) + (Probability of Return 2 x Return 2)
Expected Rate of Return = (0.35 x 0.10) + (0.60 x 0.15)
Expected Rate of Return = 0.035 + 0.09
Expected Rate of Return = 0.125 or 12.5%
To calculate the firm's standard deviation, we need to use the formula:
Standard Deviation = √((Probability of Return 1 x (Return 1 - Expected Rate of Return)²) + (Probability of Return 2 x (Return 2 - Expected Rate of Return)²))
Standard Deviation = √((0.35 x (0.10 - 0.125)²) + (0.60 x (0.15 - 0.125)²))
Standard Deviation = √((0.35 x (-0.025)²) + (0.60 x 0.025)²)
Standard Deviation = √((0.35 x 0.000625) + (0.60 x 0.000625))
Standard Deviation = √(0.00021875 + 0.000375)
Standard Deviation = √0.00059375
Standard Deviation = 0.02437 or 2.44%
The coefficient of variation is calculated by dividing the standard deviation by the expected rate of return and multiplying by 100.
Coefficient of Variation = (Standard Deviation / Expected Rate of Return) x 100
Coefficient of Variation = (0.02437 / 0.125) x 100
Coefficient of Variation = 0.19496 x 100
Coefficient of Variation = 19.5%
For the second part of the question, we need to calculate the market risk premium first.
Market Risk Premium = Expected Market Return - Risk-Free Rate
Market Risk Premium = 11.0% - 5.0%
Market Risk Premium = 6.0%
The required rate of return can be calculated using the formula:
Required Rate of Return = Risk-Free Rate + Beta x Market Risk Premium
Required Rate of Return = 5.0% + (1.50 x 6.0%)
Required Rate of Return = 5.0% + 9.0%
Required Rate of Return = 14.0%
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You plan to work for 40 years and then retire using a 25-year annuity. You want to arrange a retirement income of $4500 per month. You have access to an account that pays an APR of 7.2% compounded monthly. What size nest egg do you need to achieve the desired monthly yield?
What montly deposits are required to achieve the desired monthly yield at retirement?
To achieve a retirement income of $4500 per month for 25 years, you would need a nest egg of approximately $625,357.24, and you would need to make monthly deposits of approximately $225.19 during your working years.
To calculate the size of the nest egg needed to achieve a desired monthly yield during retirement, as well as the monthly deposits required, we can use the present value of an annuity formula.
1. Size of the Nest Egg (Present Value, PV):
The formula for the present value of an annuity is given by:
[tex]P V=P M T \times\left(\frac{\left(1-(1+r)^{-n t}\right)}{r}\right)[/tex]
Where:
PV is the present value of the annuity (the size of the nest egg),
PMT is the periodic payment (monthly income during retirement),
r is the periodic interest rate, and
nt is the total number of periods.
In this case:
PMT = $4500 (desired monthly income during retirement),
[tex]r=\frac{7.2 \%}{12}[/tex] = 0.006 (monthly interest rate), and
nt=12×25 = 300 (monthly payments for 25 years during retirement).
Plug in these values and calculate PV.
[tex]P V=4500 \times\left(\frac{1-(1+0.006)^{-300}}{0.006}\right)[/tex]
First, calculate the value within the parentheses:
[tex]\left(1-(1+0.006)^{-300}\right)[/tex] ≈0.83380
Substitute this value back into the formula:
[tex]P V=4500 \times\left(\frac{0.83380}{0.006}\right)[/tex]
Calculate the expression within the parentheses:
[tex]\left(\frac{0.83380}{0.006}\right)\\[/tex] ≈ 138.968
Multiply by the monthly payment:
PV = 4500 x 138.968
The result is approximately PV ≈ 625,357.24
2. To find the monthly deposits required, we can use the future value of an annuity formula:
[tex]F V=P M T \times\left(\frac{\left((1+r)^{n t}-1\right)}{r}\right)[/tex]
Where:
FV is the future value (the size of the nest egg),
PMT is the periodic payment (monthly deposit),
r is the periodic interest rate, and
nt is the total number of periods.
In this case:
FV= the size of the nest egg calculated in step 1,
[tex]r=\frac{7.2 \%}{12}[/tex] = 0.006 (monthly interest rate), and
nt = 12×40 = 480 (monthly deposits for 40 years).
Plug in these values and calculate PMT:
[tex]P M T=\frac{\mathrm{PV}}{\left(\frac{\left((1+0.006)^{480}-1\right)}{0.006}\right)}[/tex]
[tex]\frac{\left((1+0.006)^{480}-1\right)}{0.006}[/tex] ≈ 2776.938
Divide PV by this value:
625,357.24 / 2776.938 ≈ 225.19
To achieve a $4500 monthly yield in retirement, a nest egg of approximately $404,035.5 is needed. The monthly deposits required to achieve this nest egg are approximately $32,850.3.
Size of Nest Egg (Future Value of Annuity):
The formula for the future value (FV) of an annuity is:
Future Value (FV) = Monthly Payment (P) × [(1 - (1 + Monthly Interest Rate)^(-Number of Payments)) / Monthly Interest Rate]
Given:
Monthly Payment (P) = $4500
Monthly Interest Rate = Annual Percentage Rate (APR) / 12 = 7.2% / 12
Number of Payments = 12 payments per year × 25 years
Calculating this gives us the size of the nest egg needed, which is approximately $404,035.5.
Monthly Deposits Required:
To find the monthly deposits required, we rearrange the annuity formula:
Monthly Payment (P) = [Nest Egg Size (FV) × Monthly Interest Rate] / [(1 - (1 + Monthly Interest Rate)^(-Number of Payments))]
Given:
Nest Egg Size (FV) = $404,035.5
Monthly Interest Rate = 7.2% / 12
Number of Payments = 12 payments per year × 40 years
Calculating this gives us the monthly deposits required, which is approximately $32,850.3.
Azure Company uses the multiplier method to estimate hidden quality costs. The multiplier is determined to be 3, based on experience. Accounting records show that the measured external failure costs are $330,000. Which of the following is the total external failure cost?
a. $110,000b. $330,000c. $339,900d. $990,000
Answer:
d. $990,000
Explanation:
The multiplier method assumes that the total external failure cost is a multiple of the measured external failure costs. In this case, based on experience, the company determined that the measured value must be multiplied by a factor of 3:
[tex]C=3* \$330,000\\C= \$990,000[/tex]
Therefore, Azure Company's total external failure cost is $990,000
BEG-5 Andrew and Emma Garfield invested $8,000 in a savings account paying 5% annual interest when their daughter, Angela, was born. They also deposited $1,000 on each of her birthdays until she was 18 (including her 18th birthday). How much was in the savings account on her 18th birthday (after the last deposit)
Answer:
$47,385.34
Explanation:
In this question, we use the future value formula which is shown in the spreadsheet.
The NPER represents the time period.
Given that,
Present value = $8,000
Rate of interest = 5%
NPER = 18 years
PMT = $1,000
The formula is shown below:
= -FV(Rate;NPER;PMT;PV;type)
So, after solving this, the answer would be $47,385.34
The sum in the savings account on Angela's 18th birthday would be a total of initial deposit plus interest and the sum of each birthday deposit with its respective compounded interest. This includes basic mathematical operations and the application of simple interest and future value of a series formulas.
Explanation:In order to calculate the total sum, we need to add the initial deposit with interest, and the sum of each birthday deposit with its respective compounded interest. The amount in the account after the initial deposit of $8,000 would be calculated using simple interest formula, A = P(1+rt), where P is principal amount, r is the rate, and t is the time (A = $8000*(1+0.05*18). For the birthday deposits, since they're deposited annually, we should use the formula for future value of a series (or an annuity), since the amount of each deposit and the interval between deposits are the same. The future value of an annuity formula is: A = PMT * (((1 + r)^t - 1) / r), where PMT is the amount deposited per period, r is the interest rate per period, and t is the number of periods.
Birthday deposits: PMT is $1,000, r is 0.05, and t is 1 to 18 years, calculated separately and summed up since every year has different compound period until their daughter turns 18.
Initial deposit: A = $8000*(1+0.05*18).
The total amount in the account is the sum of these two amounts.
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Asset A has an expected return of 20% and a standard deviation of 25%. The risk-free rate is 10%. What is the reward-to-volatility ratio?
Answer:
0.4 or 40%
Explanation:
The reward-to-volatility ratio, also known as the Sharpe ratio, is defined as the difference between the expected return rate and the risk-free rate divided by the standard deviation.
Expected return = 0.2
Risk-free rate = 0.10
Standard deviation = 0.25
[tex]S=\frac{0.2-0.1}{0.25}\\S=0.4= 40\%[/tex]
The reward-to-volatility ratio is 0.4 or 40%
Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for pepperoni are $10 per order, and carrying costs are 4 cents per pound per day. Lead time for each order is 3 days, and the pepperoni itself costs $3 per pound. .If she were to order 80 pounds of pepperoni at a time, what would be the length of an order cycle?
A. 4 days
B. 5 days
C. 3 days
D. 0 days
E. 25 days.
Answer: The correct answer is "A. 4 days.".
Explanation: Four days would be the lenght of an order cycle because the quantity of the order must be divided on the demand rate, that is,
80 (quantity of the order to be ordered) / 20 (normal demand rate) = 4 days.
The company uses units as the measure of activity in its budgets and performance reports. During October, the company budgeted for 5,100 units, but its actual level of activity was 5,090 units. The company has provided the following data concerning the formulas to be used in its budgeting:
Fixed element per month Variable element per tenant-day
Revenue $39.20
Direcr Labor $0 $5.40
Direct Materials $0 13.20
Manufacturing Overhead $45,800 1.70
Selling and Administrative Expenses $22,800 0.50
Total Expenses $68,600.00 $20.80The direct materials in the flexible budget for October would be closest to:
Answer:
Direct material= $67,188
Explanation:
Giving the following information:
During October, the company budgeted for 5,100 units, but its actual level of activity was 5,090 units. The company has provided the following data concerning the formulas to be used in its budgeting:
Direct Materials $13.20
Direct material= 5,090*13.20= $67,188
Suppose that a monopoly firm finds that its MR is $50 for the first unit sold each day, $49 for the second unit sold each day, $48 for the third unit sold each day, and so on. Further suppose that the first worker hired produces 5 units per day, the second 4 units per day, the third 3 units per day, and so on.
a. What is the firm’s MRP for each of the first five workers?
Worker MRP Unregulated
1 ----------------
2 ----------------
3 ----------------
4 ----------------
5 ----------------
Answer:
$240
$174
$120
$75
$36
Explanation:
MRP = Change in revenue/Change in Labour
1. The first worker;
From the question, the first worker has 5 units
So, his change in revenue is 50+49+48+47+46 for the 5 units
Change in Revenue = $240
Since the worker remains the same and available all through,the change in Labour = 1 worker
MRP = $240/1
MRP = $240
2.The second worker;
The second worker has 4 units(starting from where the first worker stopped)
So, his change in revenue is 45+44+43+42 for the 4 units
Change in Revenue = $174
Since the worker remains the same and available all through,the change in Labour = 1 worker
MRP = $174/1
MRP = $174
3.The third worker;
The third worker has 3 units(starting from where the second worker stopped)
So, his change in revenue is 41+40+39 for the 3 units
Change in Revenue = $120
Since the worker remains the same and available all through,the change in Labour = 1 worker
MRP = $120/1
MRP = $120
4.The fourth worker;
The second worker has 2 units(starting from where the third worker stopped)
So, his change in revenue is 38+37 for the 2 units
Change in Revenue = $75
Since the worker remains the same and available all through,the change in Labour = 1 worker
MRP = $75/1
MRP = $75
5.The fifth worker;
The second worker has 1 units(starting from where the fourth worker stopped)
So, his change in revenue is 36 for the 1 unit
Change in Revenue = $36
Since the worker remains the same and available all through,the change in Labour = 1 worker
MRP = $36/1
MRP = $36
The Chester Company has just purchased $40,900,000 of plant and equipment that has an estimated useful life of 15 years. Suppose at the end of 15 years this plant and equipment can be salvaged for $4,090,000 (1/10th of its original cost). What will be the book value of this purchase (excluding all other Plant and Equipment) after its first year of use? Use generally accepted (FASB) accounting principles.(A) $34,356,000(B) $38,446,000(C) $36,810,000(D) $38,173,333
Answer:
(B) $38,446,000
Explanation:
Assuming a linear depreciation model, depreciation will occur at the same rate each year. Since the total after 15 years is 90% of the original value, the percentage depreciated per year is given by:
[tex]P= \frac{90\%}{15} \\P=6\%[/tex]
The book value (V) of this purchase after the first year will be:
[tex]V=\$40,900,000*(1-0.06)\\V=\$38,446,000[/tex]
Therefore, the answer is (B) $38,446,000
Suppose the economywide demand for money is given by: M = P(0.2Y – 25,000i). The price level P equals 3, and real output Y equals 10,000.
a. At what value should the Fed set the nominal money supply if it wants to set the nominal interest rate at 4 percent?
The nominal money supply should be set at $ .
b. At what value should the Fed set the nominal money supply if it wants to set the nominal interest rate at 6 percent?
The nominal money supply should be set at $ .
Answer:
$3,000; $1,500
Explanation:
Demand for money: M = P(0.2Y – 25,000i)
Price level P = 3
Real output Y = 10,000
(i) If Fed wants to set the nominal interest rate at 4 percent, then
Nominal money supply = P(0.2Y – 25,000i)
= 3 ×[0.2(10,000) - 25,000(4%)]
= 3 ×[2,000 - 1,000]
= $3,000
Therefore, the nominal money supply should be set at $3,000.
(ii) If Fed wants to set the nominal interest rate at 6 percent, then
Nominal money supply = P(0.2Y – 25,000i)
= 3 ×[0.2(10,000) - 25,000(6%)]
= 3 ×[2,000 - 1,500]
= $1,500
Therefore, the nominal money supply should be set at $1,500.
To determine the nominal money supply, the equation M = P(0.2Y - 25,000i) is used. For a nominal interest rate of 4 percent, the nominal money supply should be set at $3,000. If the nominal interest rate is to be set at 6 percent, the nominal money supply should be set at $1,500.
Explanation:The economywide demand for money in the given equation is M = P(0.2Y - 25,000i). Here, M is the nominal money supply, P is the price level, Y is the real output, and i is the nominal interest rate.
To calculate the value at which the Fed should set the nominal money supply if it wants to set the nominal interest rate at 4 percent, we plug in the given values for P, Y, and i into the equation. So, M = 3(0.2*10,000 - 25,000*0.04), which simplifies to M = 3(2,000 - 1,000) = 3,000. Therefore, if the nominal interest rate is to be set at 4 percent, the nominal money supply should be set at $3,000.
If the Fed wants to set the nominal interest rate at 6 percent, we plug in the values for P, Y, and i into the equation again. This gives us M = 3(0.2*10,000 - 25,000*0.06), which simplifies to M = 3(2,000 - 1,500) = 1,500. So, if the nominal interest rate is to be set at 6 percent, the nominal money supply should be set at $1,500.
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Johansen Corporation has a target capital structure of 60 percent common stock and 40 percent debt. Its cost of equity is 14 percent, and the cost of debt is 8 percent. The relevant tax rate is 30 percent.What is the company's WACC?
Answer:
10.64%
Explanation:
The computation of the WACC is shown below:
= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of common stock) × (cost of common stock)
= (0.40 × 8%) × ( 1 - 30%) + (0.60 × 14%)
= 2.24% + 8.4%
= 10.64%
Simply we multiply the weightage with its capital structure so that the Accurate weighted cost of capital can be calculated
You are analyzing the cost of debt for a firm. You know that the firm’s 14-year maturity, 8.6 percent coupon bonds are selling at a price of $745.14. The bonds pay interest semiannually. If these bonds are the only debt outstanding for the firm, answer the following questions.What is the after-tax cost of debt for this firm if it has a 30 percent marginal and average tax rate?
Answer:
8.75%
Explanation:
Find the YTM which is the pretax cost of debt.
Using a financial calculator, input the following and adjust the coupon payment, time and interest rate to semi-annual basis.
Maturity of the bond; N= 14*2 = 28
Face value : FV = 1000
Price of the bond ; PV = -745.14
Semiannual Coupon payment; PMT = semiannual coupon rate* Face value
Semiannual Coupon payment; PMT = (8.6%/2)*1000 = 43
then compute the semiannual rate; CPT I/Y = 6.25%
Annual rate; YTM ; pretax cost of debt = 6.25*2 = 12.5%
Next, find aftertax cost of debt;
Aftertax cost of debt = pretax cost of debt (1-tax)
= 0.125 (1 -0.30)
= 0.0875 or 8.75% as a percentage
Therefore; aftertax cost of debt = 8.75%
Final answer:
The after-tax cost of debt is calculated by finding the bond's yield to maturity and adjusting it for the firm's tax rate. Without the actual calculation or a financial calculator, it's not possible to provide the exact YTM in this response. Once the YTM is found, the after-tax cost is YTM * (1 - Tax Rate), with a 30% tax rate in this scenario.
Explanation:
To calculate the after-tax cost of debt for the firm, we need to determine the yield to maturity (YTM) of the bond and then adjust it for the firm's tax rate. The bond in question has an 8.6 percent coupon rate, pays semiannually and is selling at a price of $745.14. We must use the present value of annuities formula to find the YTM, which is the interest rate that equates the present value of the future cash flows of the bond (interest payments and face value) to the current price of the bond. Once we find the YTM, we apply the tax rate to get the after-tax cost of debt.
Unfortunately, without a financial calculator or spreadsheet software, it's impractical to solve for the YTM in this response. Generally, the process involves using the present value formula:
PV = C * (1 - (1 + r)⁻ⁿ) / r + F / (1 + r)
Where PV is the current price of the bond ($745.14), C is the annual coupon payment, r is the YTM, n is the number of periods until maturity, and F is the face value of the bond. Once YTM is found, the after-tax cost of debt is calculated using the formula:
After-tax cost of debt = YTM * (1 - Tax Rate)
Given a 30 percent tax rate, the after-tax cost of debt would be
After-tax cost of debt = YTM * (1 - 0.30)
This reflects the actual cost to the firm of borrowing funds through the bond.
Answer the questions about Keynesian theory, market economics, and government policy.
Keynes believed that there were "sticky" wages and that recessions are caused by
A. decreases in aggregate demand (AD).
B. increases in unemployment.
C. increases in prices.
D. decreases in supply.
Answer: The correct answer is "A. decreases in aggregate demand (AD).".
Explanation: Keynes believed that there were "sticky" wages and that recessions are caused by decreases in aggregate demand (AD).
Keynes wondered how it was possible that having too many resources there were crises. What was your solution so that there was no excess of resources? Stimulate the demand for those excess resources to be consumed.
Keynesianism is based on state interventionism, defending economic policy as the best tool to get out of an economic crisis. Its economic policy is to increase public spending to stimulate aggregate demand and thus increase production, investment and employment.
Keynesian theory posits that recessions are caused by decreases in aggregate demand (AD), with wage and price 'stickiness' leading to unemployment. Government policy, according to Keynes, should either stimulate or contract the economy through fiscal measures to maintain stability.
Explanation:According to Keynesian theory, recessions are primarily caused by decreases in aggregate demand (AD), which is answer choice A. Keynesian economics is built on the premise that aggregate demand is often the main driver of economic events, such as recessions, in the short run. Additionally, the theory highlights that wages and prices can be sticky, meaning they do not adjust quickly to decreases in demand. This stickiness can result in increased unemployment during economic downturns, as firms are less able to reduce wages and thus resort to laying off workers instead. Keynesians also believe in the concept of the expenditure multiplier, where an initial change in spending leads to a larger change in overall economic output (GDP).
Moreover, Keynesian policy advocates for government intervention to stabilize the economy. In times of recession, expansionary fiscal policy, such as tax cuts or increased government spending, is recommended to shift the aggregate demand curve to the right. Conversely, during periods of high economic output above potential GDP, the prescription is contractionary fiscal policy, with higher taxes or reduced government spending, to control inflation and shift aggregate demand to the left. This reflects a Keynesian perspective on market forces and the role of government policy in economic stabilization.
Which relationship might suggest a heightened risk of fraud in the acquisition and payment cycle? a. Unexpected increases in the number of suppliers. b. Sales expenses growing in proportion to sales revenue. c. A reduction in raw material costs. d. Maturing capital assets with no plan for rep
Answer:
The correct answer is letter "A": Unexpected increases in the number of suppliers.
Explanation:
Frauds or money cleansing usually requires the help of a network of different business interconnected to clear the illegal funds with the excuse of having made commercial activities that never took place. In most cases, accounting documents are faked so that the proceeds of the questionable funds may seem as legal as possible.
In that case, if a company counts with more suppliers and fraud is taking place in the organization, they will have the excuse of making more payments so more funds can go out of the company.
Rational investors ________ fluctuations in the value of their investments.
A) are averse to
B) prefer
C) are indifferent to
D) are in favor of
Answer:
The correct answer is (A)
Explanation:
According to economics, consumers are rational; they spend money where they feel they can grow profits. A market where there is fluctuations in investment, a rational consumer will not prefer to invest in such markets and a rational investors are averse to fluctuations in the value of their investment. A person who is a risk lover who wants to gain a high return by bearing high risk will only be in favour of such investment.
Suppose that nominal GDP was $10000000.00 in 2005 in Orange County California. In 2015, nominal GDP was $12000000.00 in Orange County California. The price level rose 1.50% between 2005 and 2015, and population growth was 3.50%. Calculate the following figures for Orange County California between 2005 and 2015. a. Nominal GDP growth was %.
Answer:
50%
Explanation:
Here is important to know that when we have the inflation rate (1,50% in this case) this indicator is enough to get the effect of the prices in an economy and get the nominal GDP affected by prices, so if the price level is 1,50% after the comma we have the average of the growth.
Manufacturing overhead has an overallocated balance of $7, 500; raw materials inventory balance is $62.000, work in process inventory is $34,000; finished goods inventory is $25,000; and cost of goods sold is $ 135.000 After adjusting for the overallocated manufacturing overhead, what is cost of goods sold?
a. $135,000
b. $142, 500
c. $7, 500
d. $127, 500
Answer:
Option (b) is correct.
Explanation:
Manufacturing overhead has an overallocated balance = $7,500
Cost of goods sold = $135,000
The overallocated manufacturing overhead will be simply added to the cost of goods sold.
After adjusting for the overallocated manufacturing overhead,
Cost of goods sold:
= cost of goods sold + overallocated balance of manufacturing overhead
= $135,000 + $7,500
= $142,500
In a recent Sweetgreen survey about new menu items, one question is, "How much do you like the new seasonal salad on the menu? Check one: dislike, dislike slightly, do not dislike or like, like slightly, like a great deal." This is an example of a(n) ____ question.
a. open-ended
b. double-barreled
c. dichotomous
d. fixed-alternative response
e. Both a and d.
Answer:
I think the answer is D.
Explanation:
Gainesville Cigar stocks Cuban cigars that have variable lead times because of the difficulty in importing the product: lead time is normally distributed with an average of 6 weeks and a standard deviation of 2 weeks. Demand is also a variable and normally distributed with a mean of 200 cigars per week and a standard deviation of 25 cigars.
a) For a 90% service level, what is the ROP?
b) What is the ROP for a 95% service level?
c) Explain what these two service levels mean. Which is preferable?
Answer:
Please see attachment
Explanation:
Please see attachment
Final answer:
For a 90% service level, the ROP is approximately 1207.23 cigars. For a 95% service level, the ROP is approximately 1208.21 cigars. The service level represents the probability of satisfying demand during the lead time, with a higher service level indicating a lower risk of stockouts and unmet customer demand.
Explanation:
a) For a 90% service level, the ROP can be calculated using the formula:
ROP = (Demand × Lead time) + Z × √(Demand Variance × Lead time Variance)
where Z is the Z-score corresponding to the desired service level. For a 90% service level, Z is approximately 1.28. Plugging in the values, we have:
ROP = (200 cigars/week × 6 weeks) + 1.28 × √(25 cigars^2/week × 2 weeks^2) = 1200 cigars + 7.23 cigars = 1207.23 cigars
b) For a 95% service level, we use Z = 1.645 (corresponding to a 95% confidence interval). Plugging in the values as before:
ROP = (200 cigars/week × 6 weeks) + 1.645 × √(25 cigars^2/week × 2 weeks^2) = 1200 cigars + 8.21 cigars = 1208.21 cigars
c) The service level represents the probability that demand will be satisfied during the lead time. A higher service level indicates a lower risk of stockouts and unmet customer demand. In this case, the 95% service level is preferable as it provides a higher degree of confidence in satisfying customer demand.
On January 2, Year 3, Lake Mining Co.’s board of directors declared a cash dividend of $400,000 to shareholders of record on January 18, Year 3, payable on February 10, Year 3. The dividend is permissible under law in Lake’s state of incorporation. Selected data from Lake’s December 31, Year 2 balance sheet are as follows: Accumulated depletion $100,000 Capital stock 500,000 Additional paid-in capital 150,000 Retained earnings 300,000 The $400,000 dividend includes a liquidating dividend of
A) $0
B) $100,000
C) $150,000
D) $300,000
Answer:
I think the answer to this question is c
A term that describes a company that customizes its products and services based on data generated through interactions between the customer and the company would be described as being ______.
a. customer-centric
b. organization-centric
c. employee-centric
d. business-centric
Answer:
The correct answer is (A)
Explanation:
Customer driven, otherwise called customer-centric, is a way to deal with working together that spotlights on making a positive encounter for the client by amplifying administration as well as item contributions and building connections. A customer-centric method for working together is a way that gives a positive client experience when the deal so as to drive rehash business, upgrade client commitment and improve business development.
Final answer:
The term that best describes a company tailoring its services and products based on customer interactions and preferences is "customer-centric". This approach is exemplified by companies in the hospitality industry like Four Seasons and Ritz-Carlton, which keep detailed customer records to personalize services and enhance guest experiences.
Explanation:
A term that accurately describes a company which customizes its products and services based on customer-generated data, to better meet their preferences during interactions, is customer-centric. This approach is exemplified in the hospitality industry, where companies like Four Seasons Hotels Ltd. and the Ritz-Carlton Company LLC keep detailed records of customer preferences to enhance service quality. For instance, noting a guest's favorite newspaper or pillow type and greeting returning guests with personalized touches are practices that highlight a customer-centric approach. These actions are grounded in a culture that emphasizes detail and precision, leveraging customer data to tailor experiences and foster loyalty.
Woodpecker Co. has $299,000 in accounts receivable on January 1. Budgeted sales for January are $939,000 Woodpecker Co. expects to sell 20% of its merchandise for cash. Of the remaining 80% of sales on account, 75% are expected to be collected in the month of sale and the remainder the following month. The January cash collections from sales are Oa, $840,160 b. $1,349,200 OC. $630,120 d. $1,050,200
Answer:
D. $1,050,200
Explanation:
The January cash collections from sales are
Total Budgeted sales for January are $939,000
Cash sales = $939,000 x 0.20 = $187,800
Cash from customers for January sales = $939,000 x 0.80 x 0.75 = $563,400
Cash from december sales = $299,000
Total January cash collections from sales are = $187,800 + $563,400 + $299,000 = $1,050,200
Asset Management Ratios Mr. Husker’s Tuxedos Corp. ended the year 2015 with an average collection period of 32 days. The firm’s total sales for 2015 were $56.1 million. What is the year-end 2015 balance in accounts receivable for Mr. Husker’s Tuxedos?
To calculate Mr. Husker's Tuxedos year-end 2015 balance in accounts receivable, we can use the average collection period and the total sales for 2015. The average collection period is the average number of days it takes to collect payment from customers. We can calculate the year-end balance in accounts receivable by multiplying the average daily sales by the average collection period.
Explanation:To calculate the year-end 2015 balance in accounts receivable for Mr. Husker’s Tuxedos, we can use the average collection period and the total sales for 2015. The average collection period is the average number of days it takes to collect payment from customers. We can use this ratio to estimate the accounts receivable balance.
To calculate the average daily sales, we divide the total sales by the number of days in a year. Then, we multiply the average daily sales by the average collection period to calculate the year-end balance in accounts receivable.
In this case, the average collection period is 32 days and the total sales for 2015 are $56.1 million. Let's calculate the year-end 2015 balance in accounts receivable:
Average daily sales = Total sales / Number of days in a year = $56,100,000 / 365 = $153,698.63
Year-end balance in accounts receivable = Average daily sales × Average collection period = $153,698.63 × 32 = $4,911,156.16
The proper discount rate when using the dividend discount valuation model is the:
A) Weighted average cost of capital
B) Cost of equity capital
C) Cost of debt capital
D) Average borrowing rate
Answer:
B) Cost of equity capital
Explanation:
Dividend discount model is used to find the Price of a given stock by calculating the present value of expected future dividends.
The dividend discount formula for finding price(assuming zero growth rate);
P0 = D1/r
The rate; r is the discount rate which is the cost of equity since dividends are paid on equity capital.
Weighted average cost of capital (WACC) is used to discount free cashflows of potential projects.
Final answer:
The correct discount rate for the dividend discount valuation model is the cost of equity capital. This interest rate reflects the expected return for equity investors, based on the present value of anticipated dividends. The concept of present discounted value applies to bonds differently, taking into account the impact of changing interest rates on bond pricing.
Explanation:
The proper discount rate when using the dividend discount valuation model is the cost of equity capital. This is because the dividend discount model is used to estimate the value of a company's stock based on the hypothesis that the value equals the present value of all future dividend payments.
When valuing stocks or bonds, it is essential to choose the correct interest rate for discounting future payments to their present value. For a stock, this would typically reflect the cost of equity, which includes the expected rate of return for equity investors, as dividends are paid out of the company's profits which are attributable to shareholders.
When applying the concept of Present Discounted Value (PDV) to a bond, the investor needs to consider future interest rates, as these will directly affect the bond's price and yield. If interest rates fall after a bond is issued, the bond's price increases above face value, and if interest rates rise, the bond's price falls below face value. With stocks, expected future profits play a key role in determining their PDV, including potential capital gains and dividend payments.
Ren offers to pay Sara to pick up and deliver certain business documents within thirty minutes. Sara can accept the offer only by completing the task within the deadline.
If she does, Ren and Sara will have :
a. a bilateral contract.
b. a unilateral contract.
c. a void contract.
d. an executive contract.
Answer:
The correct answer is (B)
Explanation:
A unilateral contract is an agreement made by an offer that must be acknowledged by execution. To frame the agreement, the party making the offer makes a guarantee in return for the demonstration of execution by the other party. The offer must be acknowledged when the other party totally plays out the mentioned activity. The easy method to recollect this is to concentrate on "one-sided." "Uni" signifies one so one-sided contract enable just a single individual to settle on a guarantee or understanding.
Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following annual dividends over a six-year period: Year 1, $24,000; Year 2, $48,000; Year 3, $108,000; Year 4, $132,000; Year 5, $168,000; and Year 6, $216,000. During the entire period ended December 31 of each year, the outstanding stock of the company was composed of 20,000 shares of cumulative preferred 3% stock, $100 par, and 100,000 shares of common stock, $15 par.1. Determine the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of 20Y1. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0".
Answer:
Please see attachment
Explanation:
Please see attachment
The table summarizes the total and per-share dividends declared on each class of stock for each year, focusing on preferred and common stock.
Explanation:To determine the total dividends and per-share dividends declared on each class of stock for each of the six years, we need to calculate the dividends for the preferred stock and common stock separately. For the preferred stock, we multiply the number of preferred shares by the dividend rate. For the common stock, we divide the remaining dividend amount after paying the preferred stock dividends by the number of common shares.
The table below summarizes the data:
Year Total Dividends Pref. Dividends per Share Common Dividends per Share Year 1$24,000.00$1.20$0.20Year 2$48,000.00$2.40$0.40Year 3$108,000.00$5.40$0.90Year 4$132,000.00$6.60$1.10Year 5$168,000.00$8.40$1.40Year 6$216,000.00$10.80$1.80
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Zisk Co. purchases raw materials on account. Budgeted purchase amounts are April, $80,000; May, $110,000; and June, $120,000. Payments are made as follows: 70% in the month of purchase and 30% in the month after purchase. The March 31 balance of accounts payable is $22,000.Prepare a schedule of budgeted cash payments for Apri, May, and June.
Answer:
A schedule of cash payments for April, May, and June is prepared.
Explanation:
The following image shows the calculation and explanation of the cash payment schedule.
Zisk Co.'s budgeted cash payments are $62,600 for April, $101,000 for May, and $117,000 for June, which is worked out by making 70% of payments for the current month's purchases and the remaining 30% of the last month's purchases.
Explanation:To calculate the budgeted cash payments for Zisk Co. in each month, we need to consider both the purchases made in that month and the remaining payments for the previous month's purchases. The payments are split as follows: 70% is paid in the same month the purchases are made, and the remaining 30% is deferred to the following month.
For April, they will make payments for April purchases and the remaining amount from March. That will be (70% * $80,000) + 30% * $22,000 = $56,000 + $6,600 = $62,600.
For May, they will make payments for May purchases and the remaining amount from April. That will be (70% * $110,000) + 30% * $80,000 = $77,000 + $24,000 = $101,000.
For June, they will make payments for June purchases and the remaining amount from May. That will be (70% * $120,000) + 30% * $110,000 = $84,000 + $33,000 = $117,000.
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In an oligopoly situation, a wise marketing manager will probably set the firm's price level:
A. at the competitive level.
B. on a negotiated basis—that is, customer by customer.
C. above competitors' prices.
D. at least 10 percent below the price leader's price.
E. below competitors' prices.
Answer:
Letter A is correct. At the competitive level.
Explanation:
An oligopoly is a marketing structure that occurs when some companies come together to determine the supply of products or services.
In this type of market there is imperfect competition, where market control is exercised by few companies, capable of regulating the behaviors and market decisions of other companies.
Therefore in an oligopoly situation the ideal is that the price level of a company be defined at a competitive level, since the goods produced are homogeneous and the degree of differentiation occurs in the variables of service, quality, image and not so much in the variation of prices. price.