Answer:
Expected Return = 10.80%
Standard Deviation = 19.72%
Explanation:
Amount invested in Standard & Poor’s Depository Receipts = 60%
Expected return of Standard & Poor’s Depository Receipts = 10%
standard deviation of Standard & Poor’s Depository Receipts = 20%
Amount invested in MSCI EAFE Index Fund = 40%
Expected return of MSCI EAFE Index Fund = 12%
Standard deviation of MSCI EAFE Index Fund = 30%
Correlation between the two investments = 35%
Now,
Expected Return = ∑(Amount invested × Expected rate of return)
= 0.60 × 0.10 + 0.40 × 0.12
or
= 10.80%
Standard Deviation = √(∑(Amount invested × Standard deviation))²
= √[(0.60)²(0.20)² + (0.40)²(0.30)² + 2(0.60)(0.40)(0.20)(030)(0.35)]
or
Standard Deviation = 19.72%
The expected return of your portfolio is 10.8% and the standard deviation is 19.72%. These values are derived based on weighted averages and the combined risk metrics of the individual investments.
Expected Return and Standard Deviation of the Portfolio
To calculate the expected return of your portfolio, you need to take the weighted average of the expected returns of the individual investments.
Expected Return of SPDR: 10%Expected Return of MSCI EAFE: 12%Weight of SPDR: 60%
Weight of MSCI EAFE: 40%
Expected Return of Portfolio:
0.60 * 10% + 0.40 * 12% = 10.8%
Calculating Standard Deviation
The formula for the standard deviation of a two-asset portfolio is:
σp = √[ (w1² × σ1²) + (w2² × σ2²) + 2 × w1 × w2 × σ1 × σ2 × ρ12 ]
Where:
w1 = weight of SPDR = 0.60
w2 = weight of MSCI EAFE = 0.40
σ1 = standard deviation of SPDR = 20%
σ2 = standard deviation of MSCI EAFE = 30%
ρ12 = correlation between SPDR and MSCI EAFE = 35% = 0.35
Plugging in the values:
σp = √[ (0.60² × 0.20²) + (0.40² × 0.30²) + 2 × 0.60 × 0.40 × 0.20 × 0.30 × 0.35 ]
= √[ 0.0144 + 0.0144 + 0.01008 ]
= √[ 0.03888 ]
= 0.1972 or 19.72%
The **expected return** of your portfolio is 10.8% and the **standard deviation** is 19.72%.
Accounts Receivable has a balance of $33,000, and the Allowance for Bad Debts has a credit balance of $3,300. The allowance method is used. What is the net realizable value of Accounts Receivable before and after a $2,300 account receivable is written off?
Final answer:
The net realizable value of Accounts Receivable is $29,700 both before and after a $2,300 account receivable is written off using the allowance method, as the write-off reduces both the Accounts Receivable and the Allowance for Bad Debts balances, leaving the net value unchanged.
Explanation:
The question involves calculating the net realizable value of Accounts Receivable both before and after writing off a bad debt when using the allowance method. Initially, the Accounts Receivable has a balance of $33,000, and the Allowance for Bad Debts has a credit balance of $3,300. To find the net realizable value, you subtract the allowance from the total Accounts Receivable.
Initially, the net realizable value is:
$33,000 (Accounts Receivable) - $3,300 (Allowance for Bad Debts) = $29,700 (Net Realizable Value before write-off).
After writing off a $2,300 account receivable, the Accounts Receivable balance decreases by that amount, but the Allowance for Bad Debts also reduces to absorb the write-off, leaving the net realizable value unchanged:
$33,000 (Accounts Receivable) - $2,300 (write-off) = $30,700 (New Accounts Receivable Balance)
$3,300 (Allowance for Bad Debts) - $2,300 (write-off) = $1,000 (New Allowance for Bad Debts Balance)
$30,700 (New Accounts Receivable Balance) - $1,000 (New Allowance for Bad Debts Balance) = $29,700 (Net Realizable Value after write-off)
Therefore, the net realizable value of Accounts Receivable remains $29,700 before and after the $2,300 account receivable is written off.
Before: $29,700. After writing off $2,300: $27,400.
To find the net realizable value (NRV) of accounts receivable before and after a $2,300 account receivable is written off, we'll use the allowance method.
Given:
- Accounts Receivable balance: $33,000
- Allowance for Bad Debts credit balance: $3,300
- Amount to be written off: $2,300
Before Writing Off the Account:
1. Calculate the Net Realizable Value (NRV) before writing off the account:
[tex]\[ \text{NRV before} = \text{Accounts Receivable} - \text{Allowance for Bad Debts} \][/tex]
[tex]\[ \text{NRV before} = \$33,000 - \$3,300 = \$29,700 \][/tex]
After Writing Off the Account:
1. Write off the account from both accounts receivable and allowance for bad debts:
- Deduct $2,300 from both Accounts Receivable and Allowance for Bad Debts.
2. Calculate the Net Realizable Value (NRV) after writing off the account:
[tex]\[ \text{NRV after} = (\text{Accounts Receivable} - \text{Write-off}) - \text{Allowance for Bad Debts} \][/tex]
[tex]\[ \text{NRV after} = (\$33,000 - \$2,300) - \$3,300 \][/tex]
[tex]\[ \text{NRV after} = \$30,700 - \$3,300 \][/tex]
[tex]\[ \text{NRV after} = \$27,400 \][/tex]
Summary:
- Before Writing Off the Account:
- Net Realizable Value (NRV) = $29,700
- After Writing Off the Account:
- Net Realizable Value (NRV) = $27,400
Answer:
The net realizable value (NRV) of accounts receivable:
- Before writing off the account: $29,700
- After writing off the account: $27,400
Which of the following is an example of expansionary monetary policy?
(A) The president signing an executive order to raise the minimum wage of government employees.
(B) The Fed increasing the money supply to push interest rates lower.
(C) The Fed raising the discount rate for member banks.
(D) Congress passing a new government stimulus package.
Answer:
The correct answer is ( b)
Explanation:
Expansionary monetary policy is the point at which fed utilises its resources to decrease or increase the money supply. Fed usually increases the money supply to lower the interest rate. Expansionary fiscal policy is applied to improve the economic situation of a country as it increases GDP and reduces the interest rate. Monetary policy is an important tool to monitor and control the interest rate of a country.
The Fed increasing the money supply to push interest rates lower is an example of expansionary monetary policy. This method encourages spending and can stimulate the economy.
Explanation:The correct answer to the question is: (B) The Fed increasing the money supply to push interest rates lower. This action is an example of expansionary monetary policy. In this case, the Federal Reserve (the "Fed") increases the amount of money in the economy aiming to encourage consumer and business spending. Lower interest rates make it cheaper to borrow money, which can encourage spending and stimulate the economy. Options A, C and D are not examples of monetary policy as they do not involve actions by the central bank to manage the economy's money supply.
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Marigold Corp. sells two types of computer hard drives. The sales mix is 30% (Q-Drive) and 70% (Q-Drive Plus). Q-Drive has variable costs per unit of $120 and a selling price of $180. Q-Drive Plus has variable costs per unit of $135 and a selling price of $225. The weighted-average unit contribution margin for Marigold is
(A) $81.
(B) $180.
(C) $69.
(D) $90.
Answer:
(A) $81
Explanation:
Sales mix: 30% QD and 70% QD+.
QD Variable costs per unit = $120
QD selling price = $180
QD+ Variable costs per unit = $135
QD+ selling price = $225
The unit contribution for the Q-Drive is:
[tex]U_{QD} = 180-120 = \$ 60[/tex]
The unit contribution for the Q-Drive+ is:
[tex]U_{QD+} = 225-130 = \$ 90[/tex]
The weighted-average unit contribution margin for Marigold is
[tex]UC= (0.3*U_{QD})+(0.7*U_{QD+})\\UC= (0.3*60)+(0.7*90)\\UC =\$ 81[/tex]
The answer is (A) $81.
On September 1, year 1, Jackson borrowed $400,000 to refinance the original mortgage on her principal residence. Jackson paid 2 points to reduce her interest rate from 7.5 percent to 7 percent. The loan is for a 30-year period. How much can Mary deduct in year 1 for her points paid?
Answer:
$88.88 or $89 (Approx)
Explanation:
Each point is equal to the 1 percent so, 2 points is equal to the 2%.
Amount of points paid = Borrowed amount × Points percentage
= $400,000 × 2%
= $8,000
Total number of months = Year × Months in a year
= 30 × 12
= 360
Number of months in the deduction year = September to December
= 4
Amount of deduction:
= (Amount of points paid ÷ Total number of months) × Number of months in the deduction year
= ($8,000 ÷ 360) × 4
= $32,000 ÷ 360
= $88.88 or $89 (Approx)
In assessing the competence of a client's internal auditor, an independent auditor most likely would consider the:A. Internal auditor's compliance with professional internal auditing standards.B. Client's policies that limit the internal auditor's access to management salary data.C. Evidence supporting a further reduction in the assessed level of control risk.D. Results of ratio analysis that may identify unusual transactions and events.
Answer:
A. Internal auditor's compliance with professional internal auditing standards.
An independent auditor is likely to consider the internal auditor's compliance with professional internal auditing standards when assessing their competence.
Explanation:When assessing the competence of a client's internal auditor, an independent auditor is most likely to consider the internal auditor's compliance with professional internal auditing standards. This means evaluating whether the internal auditor follows the established guidelines and best practices for audit procedures. The independent auditor will look for evidence that the internal auditor is carrying out their responsibilities correctly and adhering to the required standards.
Palmer Products has outstanding bonds with an annual 8 percent coupon. The bonds have a par value of $1,000 and a current price of $1,295.00. The bonds will mature in 11 years. What is the yield to maturity on the bonds?
a. 10.09%
b. 7.50%
c. 4.53%
d. 3.90%
e. 2.54%
Answer:
4.53%
Explanation:
You can solve this using a financial calculator with the following inputs;
Maturity of the bond; N = 11
Face value of the bond = 1,000
Current price of the bond ; PV = -1,295
Annual coupon payment ; PMT = coupon rate * face value
PMT = 8% *1000 = 80
Next, use the above inputs to find the Yield to maturity(YTM) of the bond by computing I/Y;
CPT I/Y = 4.53%
Therefore, YTM = 4.53%
The controller of the Red Wing Corporation is in the process of preparing the company’s 2021 financial statements. She is trying to determine the correct balance of cash and cash equivalents to be reported as a current asset in the balance sheet. The following items are being considered:
Balances in the company’s accounts at the First National Bank; checking $15,300, savings $23,900. Undeposited customer checks of $7,000. Currency and coins on hand of $760. Savings account at the East Bay Bank with a balance of $580,000. This account is being used to accumulate cash for future plant expansion (in 2023).$56,000 in a checking account at the East Bay Bank. The balance in the account represents a 20% compensating balance for a $280,000 loan with the bank. Red Wing may not withdraw the funds until the loan is due in 2024. U.S. Treasury bills; 2-month maturity bills totaling $33,000, and 7-month bills totaling $38,000.
Determine the correct balance of cash and cash equivalents to be reported in the current asset section of the 2021 balance sheet.
Answer:
$77,960
Explanation:
The computation of the cash and cash equivalent balance is shown below:
= Balance in checking accounts + balance in saving accounts + Undeposited customer checks + Currency and coins on hand + U.S. Treasury bills; 2-month maturity
= $15,300 + $23,900 + $7,000 + $760 + $33,000
= $77,960
The remaining items values are not considered in the cash and cash equivalents
Hence, All other information which is given is not relevant. Hence, ignored it
Henrique Correa's bakery prepares all its cakes between 4 A.M.and 6 A.M.so they will be fresh when customers arrive. Day-old cakes are virtually always sold, but at a 50% discount off the regular $8 price. The cost of baking a cake is $5, and demand is estimated to be normally distributed, with a mean of 20 and a standard deviation of 7. What is the optimal stocking level?
Answer:
24.7215
Explanation:
Given;
Discount = 50%
Regular price, p = $8
cost of cake, c = $5
salvage value, s = 50% of $8 = $4
Mean = 20
Standard deviation, σ = 7
Now,
Underage cost, Cu = p - c
= $8 - $5
= $3
Overage cost, Co = c - s
= $5 - $4
= $1
P ≤ [tex]\frac{C_{u}}{(C_{u}+C_{o})}[/tex]
P ≤ [tex]\frac{3}{(3+1)}[/tex]
P ≤ 0.75
The Z value for the probability 0.75 is 0.6745
The optimal stocking level = Mean + ( z × σ )
= 20 + 0.6745 × 7
= 24.7215
Jeffrey's preferences are described by U(R.C) = R"C", where R denotes leisure and c denotes consumption. Assume the price of consumption is 1, the wage rate is w, non-labor income is C, and Jeffrey has a total time available (for either work or leisure) equal to R. a. Draw the budget line and write its equation. b. Find the demand function for R' in terms of w, C and R. Hint: imagine you extend the budget line until it crosses the leisure axis. Use the shortcut seen in class to find demands when we have Cobb-Douglas preferences. c. Find the labor supply function, that is, R-R as a function of w, C and R. Is it positively or negatively related to w? Hint: define L' =R-R'. Compute Ollow and check its sign. Assume leisure is defined in hours. What is the value of w that will make Jeffery work eight hours? Express it in terms of C and R. Humans are living longer and longer. If we define R in terms of years of productive life, we can say that is becoming larger. What is the effect of a greater R on optimal leisure and consumption, ceteris paribus? f. Two presidential candidates are proposing alternative policies to increase labor income. Candidate A is proposing a cut in social programs that would decrease C by 20%. Candidate B is proposing a tax cut that would increase w by 20%. Which one would more effective? Explain your answer.
Which of the following is correct? Use letters in alphabetical order to select options
A Sometimes recessions are close together.
B Recessions have never occurred very close together.
C Spending, income, and production do not fluctuate closely with real GDP.
D Economic fluctuations are easily predicted by competent economists.
Answer:
The correct answer is letter "A": Sometimes recessions are close together.
Explanation:
Recessions are downturn economic periods that are declared after two consecutive quarters with negative results. Recessions are not necessarily long-term periods. They sometimes are two consecutive slowdowns in the overall economy that last six months that later are followed by an uptrend. In some other cases, it takes years until there is a sign of recovery. For instance, in the U.S. during the '70s and '80s, there were two consecutive recession periods.
Which of the following is NOT a systematic risk?
A) the risk that oil prices rise, increasing production costs
B) the risk that the economy slows, reducing demand for your firmʹs products
C) the risk that your new product will not receive regulatory approval
D) the risk that the Federal Reserve raises interest rates
Answer:
C. the risk that your new product will not receive regulatory approval
Explanation:
First, let me try to clarify the difference between systematic and unsystematic risk.
Systematic risk is one that is inherent or prevalent and affects the entire market. A risk that is embedded in the economic system. Once changes occur in factors that are woven into the fabric of an economy, it affects the entire economy, there is no way to avoid or predict their outcome or effect. They are risks that cannot be mitigated through diversification.
Unsystematic risks on the other hand are those that affect or are influenced by specific factors in an industry. They can be referred to industry specific risks.
From the question, the only industry specific risk is that of the new product not receiving regulatory approval which can be mitigated by ensuring that the new product meets the required benchmark, and thus, mitigated or prevented.
However, the other risks such as oil price rises, economic slow down, and rising interest rates are systemic risks.
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Consider a hypothetical closed economy in which households spend $0.70 of each additional dollar they earn and save the remaining $0.30. The marginal propensity to consume (MPC) for this economy is , and the spending multiplier for this economy is . Suppose the government in this economy decides to decrease government purchases by $300 billion. The decrease in government purchases will _______
Answer:
1. 0.7
2. 3.3
3. -$210
Explanation:
1. The marginal propensity to consume refers to the amount that is spent on consumption for each of the extra income earned. Therefore, the marginal propensity to consume (MPC) is equal to 0.7.
2. The multiplier is calculated as follows:
Multiplier = 1 ÷ (1 - MPC)
= 1 ÷ (1 - 0.7)
= 3.33
3. A reduction in the government purchases by $300 billion then this will reduce the income level of the consumers and change the consumption level as follows:
= Change in government purchases × MPC
= $300 billion × 0.7
= -$210
A bicycle tire company performed a web-based study of a popular tire retail price over time. The study indicated that price is set at $16.00 per tire, it was expected to increase to $19.00 over the next 5 years
a. Determine the annual rate of inflation over 5 years to increase the price from $16.00 to $19.00.
b. Determine the market interest rate that must be used in economic equivalence computations if inflation is considered and an 8% per year real interest rate is expected by this company.
Answer:
(a) inflation rate will be 0.0349
(B) Nominal interest will be 8.0349 %
Explanation:
We have given final price of the bicycle F=$19
Initial price of the bicycle P=$16
(a) Time is given t = 5 years
We know that [tex]F=P(1+i)^T[/tex], here i is inflation rate
[tex]19=16(1+i)^5[/tex]
[tex](1+i)^5=1.1875[/tex]
[tex](1+i)=1.0349[/tex]
[tex]i=0.0349[/tex]
So inflation rate will be 0.0349
(b) We have given real interest = 8 %
We know that nominal interest rate = real interest rate + inflation rate = 8+0.0349 = 8.0349 %
The annual rate of inflation over 5 years is equal to 3.5%.
Given the following data:
Future value = $19.00
Principal = $16.00.
Time = 5 years.
Real interest rate = 8% = 0.08.
How to calculate the annual rate of inflation.In order to determine the annual rate of inflation over 5 years, we would use the compound interest formula:
[tex]A=P(1+r)^t[/tex]
Where:
A is the future value.P is the principal or starting amount.R is the interest rate.T is the time measured in years.Substituting the given parameters into the formula, we have;
[tex]19.00=16.00(1+r)^5\\\\\frac{19.00}{16.00} =(1+r)^5\\\\1.1875 =(1+r)^5\\\\\sqrt[5]{1.1875} =1+r\\\\1.0350=1+r\\\\r=1.0350-1\\\\[/tex]
r = 0.0350 = 3.5%.
How to determine the market interest rate.Market interest rate = Real interest rate + Inflation rate
Market interest rate = 0.08 + 0.0350
Market interest rate = 0.115.
Market interest rate = 11.5%.
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According to _____, people measure outcomes such as pay in terms of their inputs.A. expectancy theoryB. equity theoryC. retributive justice theoryD. progressive justice theoryE. economic theory
Answer:
Letter B is correct. Equity theory.
Explanation:
The equity theory created by J. Stacy Adams refers to the belief that for every effort there must be proportional and equal reward for all.
In an organization, individuals look at their benefits, such as salary, growth opportunities, bonuses, promotions, and other variables, and judge whether they match their competencies and compare with the group.
According to equity theory, individuals measure outcomes such as pay in relation to their inputs, seeking fairness in their relationships.
Explanation:According to equity theory, people measure outcomes such as pay in terms of their inputs. Equity theory, developed by John Stacey Adams in 1963, is based on the principle that individuals seek to achieve fairness in their relationships. When people feel that their ratios of inputs to outcomes are equal to those of referent others, they perceive their situation as fair. Inputs can include effort, loyalty, hard work, commitment, skill, ability, adaptability, flexibility, tolerance, determination, heart and soul, enthusiasm, trust in superiors, support from coworkers and colleagues, and personal sacrifice, whereas outcomes can be pay, recognition, reputation, responsibility, sense of achievement, praise, thanks, stimulation, and sense of advancement/growth.
A company reported cost of goods sold of $1,760,000 for the year.
During the year, inventory increased from a $92,000 beginning balance to a $140,000 ending balance, and accounts payable increased from a $48,000 beginning balance to a $56,000 ending balance.
How much is the cash paid for merchandise purchased during the year?
a) $1,660,000
b) $1,800,000
c) $1,808,000
d) $1,704,000
Final answer:
The cash paid for merchandise purchased during the year by the company is $1,800,000. This is determined by adding the increase in inventory to the cost of goods sold and then subtracting the increase in accounts payable.
Explanation:
When calculating the cash paid for merchandise purchased during the year, it is important to account for changes in inventory and accounts payable that occurred during the same period. The company reported a cost of goods sold (COGS) of $1,760,000.
The inventory increase indicates that the ending inventory is greater than the beginning inventory; it rose by $48,000 ($140,000 - $92,000). This means the company must have paid cash for additional inventory that is not reflected in COGS. On the other hand, the increase in accounts payable of $8,000 ($56,000 - $48,000) suggests that there is an amount of purchases that have not been paid in cash yet by the end of the year. To adjust COGS to reflect the cash paid for purchases, we need to take these changes into account.
Step-by-step calculation:
Add the inventory increase to COGS: $1,760,000 + $48,000 = $1,808,000.
Subtract the increase in accounts payable from the result: $1,808,000 - $8,000 = $1,800,000.
The correct answer to how much cash was paid for merchandise purchased during the year is $1,800,000.
A landowner is looking to develop a coal mine on their property. She determines that a surface mine is the best option, as the coal seam she is targeting is close to the surface. The cost to start the mine is $20 million and the annual cost to operate is $16 million. She estimates that they can remove 450,000 tons of coal a year and sell the coal for $38.50 per ton. How long will it take before she is able to pay off her investment and start to make a profit?
Answer: It will take her 15 years to repay the loan and start making profit.
Explanation: Kindly see attached schedule.
From the schedule, you will see that it will take her 15 years to repay the loan and she will start making profit in the 16th year.
On January 1, 2017, Doone Corporation acquired 70 percent of the outstanding voting stock of Rockne Company for $672,000 consideration. At the acquisition date, the fair value of the 30 percent noncontrolling interest was $288,000 and Rockne's assets and liabilities had a collective net fair value of $960,000. Doone uses the equity method in its internal records to account for its investment in Rockne. Rockne reports a net income of $370,000 in 2018. Since being acquired, Rockne has regularly supplied inventory to Doone at 25 percent more than cost. Sales to Doone amounted to $430,000 in 2017 and $530,000 in 2018. Approximately 40 percent of the inventory purchased during any one year is not used until the following year.a. What is the non-controlling interest's share of Rockne's 2018 income?b. Prepare Doone's 2018 consolidation entries required by the intra-entity inventory transfers.
Final answer:
The non-controlling interest's share of Rockne's 2018 income is $111,000, calculated as 30% of Rockne's net income. To prepare Doone's 2018 consolidation entries, the intra-entity inventory profits need to be removed by adjusting the inventory values and cost of goods sold.
Explanation:
The student is dealing with an accounting scenario where consolidation and non-controlling interest calculations are involved, typically in an advanced accounting or business degree course.
a. Non-controlling interest's share of Rockne's 2018 income
The non-controlling interest's share is calculated based on the percentage of the company they own. In this case, non-controllers own 30% of Rockne. The formula to calculate their share of the net income would be:
Net income × Non-controlling interest percentage = Non-controlling interest's share
Rockne's net income for 2018 is $370,000, so:
$370,000 × 30% = $111,000
b. Doone's 2018 consolidation entries
To prepare Doone's consolidation entries for the intra-entity inventory transfers, we need to:Determine the inventory sold above cost from Rockne to Doone: $530,000 × 25% markup.Calculate the amount of 2018 inventory still on hand by the end of the year: $530,000 × 40%.Adjust the beginning inventory to remove the markup from 2017's ending inventory that was sold in 2018.To remove the excess markup from 2018's ending inventory, Doone must credit Inventory and debit Cost of Goods Sold (COGS) or an Inventory Profit Elimination account for the markup amount.
A firm is considering two location alternatives. At location A, fixed costs would be $4,000,000 per year, and variable costs $0.30 per unit. At alternative B, fixed costs would be $3,600,000 per year, with variable costs of $0.35 per unit. If annual demand is expected to be 10 million units, which plant offers the lowest total cost?A) plant A, because it is cheaper than Plant B for all volumes over 8,000,000 units B) plant B, because it is cheaper than Plant A for all volumes over 8,000,000 units. C) Plant A, because it is cheaper than Plant B for all volumes D) plant B, because it has the lower variable COM per unit E) Neither Plant A nor Plant B, because (he crossover point is at 10 million units.
Answer:
A) plant A, because it is cheaper than Plant B for all volumes over 8,000,000 units
Explanation:
Please see attachment.
The plant that offers the lowest total cost is plant A, because it is cheaper than Plant B for all volumes over 8,000,000 units.
Which plant should be chosen?In order to determine the plant that would be chosen, the total cost of each plant has to be determined.
Total cost = fixed cost + (variable cost x total output)
Total cost of plant A = $4,000,000 + (0.3 x 10 million) = $7million
Total cost of plant B = $3,600,000 + (0.35 X 10 million) = 7.1 million
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In _____, the organization purchases insurance as a means to compensate for any loss.
a. Risk acceptance
b. Risk analysis
c. Risk mitigation
d. Risk management
e. Risk transference
Answer:
The correct answer is letter "E": Risk transference.
Explanation:
Risk transference is a risk management method in which the liability of a potential loss is transferred from one party to another with a contract in between where the coverage terms and limits are specified. A typical is a company buying an insurance policy. There the policyholder is transferring his liabilities to the insurance company.
Anne wants to better understand the customer profile of those who choose to finance their car purchases through the dealerships. She wants the dealership managers to ask three questions of these customers during the upcoming month and then provide her with the responses. Which of the following components is she most likely to put in this message?a. Claim, rationale, call to action, goodwill b. Request, rationale, call to action, goodwill c. Goal, directions, goodwill d. Attention, announcement, details, call to action, goodwill
Answer:
The answer is letter B
Explanation:
Request, rationale, call to action, goodwill. Because this message is considered a request. She is gathering information for herself with the dealership managers. If she could come up with a rationale call to action, she would succeed in gathering reliable informations from the dealership managers.
the correct answer is option b. Anne's message likely includes a request, rationale, call to action, and goodwill. This is the best way to gather the needed customer profile data. A clear and polite message will facilitate successful data collection.
Anne wants to gather information to understand the customer profile of those who finance their car purchases through dealerships. Therefore, she is likely to structure her message with request, rationale, call to action, and goodwill. Here’s why:
Request: Anne's primary goal is to ask dealership managers to gather specific information.Rationale: She needs to explain why this data is important for understanding customer profiles.Call to Action: She will need the dealership managers to carry out these tasks over the upcoming month.Goodwill: A polite and professional tone will encourage cooperation and positively influence the managers.For example, Anne might say, "Please ask these three questions to customers financing their car purchases: 1) Have you financed a car before? 2) What factors made you choose financing this time? 3) How satisfied are you with the financing terms? Gathering this information will help us better tailor our services to our customers' needs. Thank you for your assistance and cooperation."
You own a stock which has produced annual returns of 11 percent, 3 percent, 8 percent, and 14 percent over the past four years, respectively. The arithmetic rate of return is _____ percent and the geometric rate of return is _____ percent.A) 8.50; 8.92B) 8.50; 18.92C) 9.00; 8.92D) 9.00; 9.92E) 9.00; 18.92
Answer:
C) 9.00; 8.92
Explanation:
The arithmetic rate of return is given by:
[tex]R_{A} = \frac{11+3+8+14}{4} \\R_{A} = 9.00[/tex]
The geometric rate of return is given by:
[tex]R_{G} = (\sqrt[4]{(1.11*1.03*1.08*1.14)} -1) *100 \%\\R_{G} = (1.0892-1) *100 \%\\R_{G} = 8.92[/tex]
Therefore, the arithmetic rate of return is 9.00 percent and the geometric rate of return is 8.92 percent
The answer is C) 9.00; 8.92.
If a corporation operates two divisions that supply one another, and each division is located in a different country, then transfer prices are: ___.
Answer:
The correct answer is: set to allocate profit to the low tax rate country.
Explanation:
Transfer pricing is the amount the one division of a company charges another for goods or services provided. Those divisions could be subsidiaries or affiliates of the same organization. To obtain the highest level of profit possible, firms tend to establish their divisions in low tax rate countries so they transfer price is the lowest available.
Open-end mutual funds are the most common type of investment company. Which of the following statements characterize these funds?
Check all that apply.
A. Make automatic reinvestment easy.
B. Allow shareholders to convert shares from one fund to another within the same fund family.
C. Always publicly traded on exchanges.
D. Good choices only if you have lots of capital to invest.
E. Convenient to own but difficult to set up.
Answer:
The answers are letter A and B.
Explanation:
A. Make automatic reinvestment easy, because the capital gains are automatically used to buy more shares.
B. Allow shareholders to convert shares from one fund to another within the same fund family, it is an interesting low rate exchange transaction. It costs $5 to $10 per transaction.
Open-end mutual funds are characterized by making automatic reinvestment easy and allowing shareholders to convert shares within the same fund family. They are not always publicly traded, are not only for those with lots of capital, and are generally both convenient to set up and to own.
Explanation:Open-end mutual funds, the most common type of investment company, have certain distinguishing characteristics. Statements A and B are accurate with regard to these funds. A. Open-end mutual funds typically allow for automatic reinvestment.
This means that any gains or dividends are automatically used to purchase additional shares. B. They also typically allow shareholders to convert shares from one fund to another within the same fund family. However, C, D and E are not necessarily accurate. Contrary to statement C, Open-end funds are not always publicly traded on exchanges. They are transacted directly with the fund company.
Statement D is also not true because these funds are available for all levels of investors, not only those with significant capital to invest. Lastly, statement E is not necessarily true as open-end funds are generally both convenient to own and set up.
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A merchandising company's budget includes the following data for January: Sales: $400,000; COGS: $270,000; Administrative salaries: $1,250; Sales commissions: 5% of sales; Advertising: $10,000; Salary for sales manager: $30,000; Miscellaneous administrative expenses: $5,000. The total selling expenses on the January selling expense budget will be
Answer: 60000
Explanation:
400,000 • 5% = 10,000+ 30,000= 60000
Answer: $61,250
Explanation:
A merchandising company's budget includes the following data for January: Sales: $400,000; COGS: $270,000; Administrative salaries: $1,250; Sales commissions: 5% of sales; Advertising: $10,000; Depreciation on store equipment: $25,000; Rent on administrative building: $30,000; Miscellaneous administrative expenses: $5,000. The total general and administrative expenses on the January general and administrative expense budget will be
a:
Administrative salaries: $1,250
+ Sales commissions: 5% of sales ($400,000.00) =$20,000
+ Advertising: $10,00
+ Rent on administrative building: $30,000
Broadway, Inc.âs trial balance was in balance at the end of the period and showed the following accounts: Account Balance Accounts Payable $ 27,600 Cash 45,000 Common Stock 21,800 Equipment 10,800 Land 42,600 Notes Payable 49,000 What is the balance of the credit column on Broadway's trial balance?
Answer:
$98,400
Explanation:
A trial balance shows the balances of all the accounts of an entity at the end of a period. It is basically grouped into debits and credit balances with the debits being the asset and expense while the credit balances are common stock, Income and liabilities. The trial balance of Broadway, Inc.âs is as shown below
Accounts Balances Debit Credit
Cash 45,000.00
Equipment 10,800.00
Land 42,600.00
Accounts Payable 27,600.00
Notes Payable 49,000.00
Common Stock 21,800.00
Therefore, total credits
= 27600 + 49000 + 21800
= $98,400
Exercise 11-10 Tamarisk, Inc. was organized on January 1, 2021. During its first year, the corporation issued 2,400 shares of $50 par value preferred stock and 135,000 shares of $10 par value common stock. At December 31, the company declared the following cash dividends: 2021, $5,800; 2022, $12,400; and2023, $28,300.Show the allocation of dividends to each class of stuck, assuming the preferred stock dividend is 5% and noncumulative.
Answer:
(1) $5,800; $0
(2) $6,000; $6,400
(3) $6,000; $22,300
Explanation:
Annual preferred dividend:
= Number of shares × par value × preferred stock dividend percent
= 2,400 × $50 × 5%
= $6,000
In 2021:
Allocation to preferred stock = $5,800
Allocation to Common Stock = $0
In 2022:
Allocation to preferred stock = $6,000
Allocation to Common Stock = $12,400 - $6,000
= $6,400
In 2023:
Allocation to preferred stock = $6,000
Allocation to Common Stock = $28,300 - $6,000
= $22,300
Getting merchandise floor-ready entailsA. distributing and dispatching.B. ticketing and marking.C. vertical supply chain wholesaling.D. intensive cross-docking.E. selective checking.
Answer:
B. ticketing and marking
Explanation:
Floor ready is the term used to refer to the merchandise which is ready to sale and that the merchandise is detailed with every description required.
That means it is ready with the size, quality, and quantity that is required to be marked.
Along with that it is even priced more properly and is already tagged with the label of description and price.
This all labeling and ticketing is basically done in the retail store before it is offered to the customer.
Determine the maximum annual benefis payable to a participant from a defined benefit plan in the following independent situations:a. Frank, age 66, has been a partiipant for 17 years, and his highest average compensation for 3 years is $127,300.b. Ellen, age 65, has bee a partiipant for 9 years (11 years of service), and her highest average compensation for 3 years is $102,600.
Answer:
a.The maximum annual benefits for Frank is $7500.
b. The maximum annual benefits for Ellen is $11400.
Explanation:
a. The first question requires us to determine the maximum annual benefits payable to a participant from a defined benefit plan. Since we are given that Frank, age 66, has been a participant for 17 years, and his highest average compensation for 3 years is $127,300. We can simply calculate the annual benefit by dividing the highest average compensation for 3 years is $127,300 by the 17 years. Which is 27300/17= 7500 .Therefore the maximum annual benefits for Frank is $7500.
b. The second question requires us to determine the maximum annual benefits payable to a participant from a defined benefit plan .Since we are given the that Ellen, age 65, has been a participant for 9 years (11 years of service), and her highest average compensation for 3 years is $102,600 .We can simply calculate the annual benefit by dividing highest average compensation for 3 years which is $102,600 by 9 years. Which is annual benefit= 102600/9= $11400 .Therefore the maximum annual benefits for Ellen is $11400.
Vandelay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $3,130,000 and will last for six years. Variable costs are 35 percent of sales, and fixed costs are $270,000 per year. Machine B costs $5,351,000 and will last for nine years. Variable costs for this machine are 30 percent of sales and fixed costs are $200,000 per year. The sales for each machine will be $11.6 million per year. The required return is 8 percent, and the tax rate is 21 percent. Both machines will be depreciated on a straight-line basis. The company plans to replace the machine when it wears out on a perpetual basis. Calculate the EAC for each machine. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.)
The equivalent annual cost (EAC) for Machine A is -$191,929.34 and for Machine B is -$162,787.02. Hence, Machine B is more cost-effective despite its higher initial cost due to having a lower EAC.
Explanation:To calculate the equivalent annual cost (EAC) of each machine, we need to first calculate their respective net present values (NPV) and then spread this cost over the life of the machine.
For Machine A, the depreciation per year is $3,130,000 / 6 = $521,666.67. After-tax operating profit each year would be: ($11,600,000 - $4,060,000 (variable cost) - $270,000 (fixed cost) - $521,666.67 (depreciation)) * (1 - 0.21) = $4,809,083.33. The tax shield provided by the depreciation would be $521,666.67 * 0.21 = $109,550. Now, we find the NPV of these cash flows for 6 years, minus the initial cost of the machine. Using an 8% discount rate, this comes out to -$879,016.04. Spreading this over 6 years gives an EAC of -879,016.04 / (1 - (1 + 0.08)^-6) / 0.08) = -$191,929.34.
Since the calculations for the NPV and EAC of Machine B follow the same steps, we only replace the respective values. The EAC of Machine B comes out to be -$162,787.02. Therefore, despite the higher initial cost, Machine B is the more cost-effective choice because it has a lower equivalent annual cost.
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A service auditor's report on a service center should include a(n) :A. Detailed description of the service center's internal control.B. Statement that the user of the report may assess control risk at the minimum level.C. Indication that no assurance is provided.D. Opinion on the operating effectiveness of the service center's internal control.
Answer:
The answer is letter A.
Explanation:
Detailed description of the service center's internal control.