Answer: add me on brainly @itsamulaa
Explanation:
What is a stock that reinvests its earnings in the business instead of paying regular dividends called?
Answer:
growth stock.
Explanation:
Growth stock is the title through which the company usually reinvests the profits that guarantee growth and this is manifested in the prices that are publicly traded.
Growth stocks are shares of companies that are growing and are usually from innovative or expanding sectors that, against the value actions, distribute very few dividends or none. By not distributing benefits does not decrease its equity value and, therefore, the behavior of the action if the company generates benefits is that its value must grow. Hence, its denomination. Naturally, these companies are less mature and stable and, in many cases, part of the value granted to them is in the perspectives that exist to generate benefits in the future but that have not yet been realized. Companies of new technologies, biotechnology or research and development of innovative projects are the most characteristic examples of this type of actions.
Fielder Company obtained by issuing 2,000 shares of its $10 par value common stock. The land was recently appraised at $85,000. The Common Stock is actively traded at $40 per share. Prepare the journal entry to record the acquisition of land.
When Fielder Company acquires land by issuing 2,000 shares of its $10 par value common stock, the journal entry would show a debit to the Land account and a credit to the Common Stock account, both for $20,000. The appraisal value of the land and the traded market price of the common stock are ignored.
Explanation:The subject at hand pertains to accounting, more specifically the process of journalizing the acquisition of an asset (in this case, land) by issuing common stock. The Company, Fielder, is buying the land by issuing 2,000 shares of its $10 par value common stock. Here, we disregard the recent appraisal value of the land and the common stock's traded market price in favor of the par value of the common stock, as per the 'par value method' used in accounting for such transactions.
The journal entry for this transaction would be:
Debit: Land (Asset) 20,000 (2,000 shares * $10) Credit: Common Stock (Equity) 20,000 Learn more about Journal Entry here:https://brainly.com/question/33762471
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What is the present value of an annuity of $6,000 per year, with the first cash flow received three years from today and the last one received 25 years from today? Use a discount rate of 7 percent.
Answer:
The present value will be of 85,714.29 dollars
Explanation:
We write the formula for the annuity and then, we place the values for our case:
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 6,000.00
time 2500
rate 0.07
[tex]6000 \times \frac{1-(1+0.07)^{-2500} }{0.07} = PV\\[/tex]
PV $85,714.2857
The present value will be of 85,714.29 dollars
One way to interpret the change in Blue Hamster's accounts receivable balance from Year 1 to Year 2 is that more customers purchased new items on credit rather than paying off existing credit accounts. This statement is , because: _______.
Answer:
The balance of account receivable for year 2 is increase from the balance of year 1.
Explanation:
The balance of account receivable for year 2 is increase from the balance of year 1. This means the thee are more credit sales and less receipts from the customers in year 2 as compared to Year 1. Credit sales increases the account receivable balance but it should be settlement in the form of receipts from the customers.
In Step 1 of developing an EFE Matrix, how many opportunities and threats should be included in the full and narrow lists, respectively? A. 200, 20 B. 100, 20 C. 50, 10 D. 200, 10 E. 100, 10
Answer:
Option B. 100, 20
Explanation:
The full list should not be more than 100 because we would not like to have any opportunity/threat having less than 1% contribution so The sum of percentages should be 100.
At least 20 opportunities and threats should be there in the narrow list.
If the value of an investment is $1500 in 12 years and the interest rate is 6%, how much is the investment worth now?
Answer:
$745.45
Explanation:
The expression that describes the future value of an investment (P) at an annual rate (r) for a period of n years, compounded annually is:
[tex]FV = P*(1+r)^n[/tex]
If the future value of an investment is $1,500 after 12 years at a rate of 6%, the present value (P) is:
[tex]1500 = P*(1+0.06)^{12}\\P=\$745.45[/tex]
The investment is worth $745.45 today.
A company has a $36 million portfolio with a beta of 1.2. The futures price for a contract on the S&P index is 900. Futures contracts on $250 times the index can be traded. What trade is necessary to achieve the following. (Indicate the number of contracts that should be traded and whether the position is long or short.)
a. Eliminate all systematic risk in the portfolio
b. Reduce the beta to 0.9
c. Increase beta to 1.8
Answer:
Explanation:
A:
Number of contracts required:
= (0-1.2)×36,000,000÷(900×$250)
= -192
Since negative value, short 192 contracts.
B:
= (0.9 - 1.2)×36,000,000÷(900×$250)
= -48
Since negative value, short 48 contracts.
C:
= (1.8 - 1.2)×36,000,000÷(900×$250)
= 96
Since positive value, long 48 contracts.
The number of futures contracts and whether to go long or short depends on the desired change in beta. To eliminate beta, short 144 contracts. To reduce beta to 0.9, short 72 contracts. To increase beta to 1.8, go long on 144 contracts.
Explanation:The company's current beta indicates the amount of systematic risk present in its portfolio. The changes to the beta will determine the number of contracts needed, and whether to go long or short.
To eliminate the systematic risk (bring beta to 0), the company would need to short 144 contracts ($36 million x 1.2 ÷ $250,000). To reduce the beta to 0.9, the company should short 72 contracts ($36 million x (1.2-0.9) ÷ $250,000). To increase beta to 1.8, the company would need to go long on 144 contracts ($36 million x (1.8-1.2) ÷ $250,000).Learn more about Systematic Risk Management here:https://brainly.com/question/33111032
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Ajax, Inc., issued callable bonds with a par value of $1,000,000 that require the payment of a call premium of $10,000. The bonds have a carrying value of $990,000. We call these bonds prior to maturity on September 30. Complete the necessary journal entry by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
Answer:
The journal entry is as follows:
On September 30,
Bonds payable A/c Dr. $1,000,000
Loss on bonds retirement A/c Dr. $20,000
To Discount on bond $10,000
To cash A/c $1,010,000
(To record the bonds payable and retirement)
Workings:
Loss on bonds retirement:
= (Cash + Discount on bonds) - Par value of callable bonds
= ($1,010,000 + $10,000) - $1,000,000
= $1,020,000 - $1,000,000
= $20,000
Adjusting items:
1. A physical inventory shows supplies on hand of $3,000 at year end. 2. The prepaid rent covers December 2016 thru March 2017 rents. 3. December depreciation on equipment is $11,000 per month. 4. At year end Wages of $10,000 were earned but unpaid.Use this information to prepare the general Journal entry
This is an uncompleted question. Here, is a completed question
The following is the Bravo Unlimited unadjusted Trial Balance. Bravo Unlimited Unadjusted Trial Balance December 31, 2016 Account Title Debit Credit $88,450 Cash Accounts Receivable 231,860 Supplies 6,255 Prepaid Rent 11,000 Equipment 395,285 Accumulated Depreciation $224,260 Accounts Payable 72,555 Wages Payable 0 220,000 Capital Stock Retained Earnings 111,145
Service Revenue 893,105 Interest Income 1,500 Rent Expense 60,500 Wages Expense 527,260 Supplies Expense 42,520 Utilities Expense 8,595 Depreciation Expense 144,000 Interest Expense 6,840 $1,522,565 $1,522,565 Totals Adjusting Items: 1. A physical inventory shows supplies on hand of $3,000 at year end. 2. The prepaid rent covers December 2016 thru March 2017 rents. 3. December depreciation on equipment is $11,000 per month 4. At year end Wages of $10,000 were earned but unpaid. Use this information to prepare the General Journal entry (without explanation) for the required end of the month adjustment.
Explanation:
The adjusting entries are shown below:
1. Supplies expense A/c Dr $3,255
To supplies A/c $3,255
The supplies expense is computed by
= Supplies balance - supplies on hand
= $6,255 - $3,000
= $3,255
2. Rent expense A/c Dr $2,750 ($11,000 ÷ 4 months)
To Prepaid rent A/c $2,750
3. Depreciation Expense A/c Dr $11,000
To Accumulated Depreciation - Equipment A/c $11,000
4. Wages Expense A/c Dr $10,000
To Wages payable A/c $10,000
Suppose five workers died because of exposure to a toxic chemical. Calculate the YPLL for these five workers, given their ages at death were 20, 25, 30, 35, and 40. Use age 65 years as the endpoint.
Answer:
175 years
Explanation:
YPLL is years of potential life lost. Represents number of years a person would have lived if they didn't die early.
To calculate the YPLL use the following formula
YPLL= Σ(age at endpoint - age of death)
YPLL= (65-20)+(65-25)+(65-30)+(65-35)+(65-40)
YPLL= 45+ 40+ 35+ 30+ 25
YPLL= 175 years
Final answer:
To calculate the YPLL, we subtract each worker's age at death from the endpoint age of 65 and sum the results, giving a total YPLL of 175 years for all five workers.
Explanation:
The concept being discussed is the Years of Potential Life Lost (YPLL), which is a measure of premature mortality. To calculate the YPLL for the five workers who died at ages 20, 25, 30, 35, and 40, with the endpoint age set to 65, we subtract each individual's age at death from the endpoint age.
For the worker who died at age 20: 65 - 20 = 45 YPLL
For the worker who died at age 25: 65 - 25 = 40 YPLL
For the worker who died at age 30: 65 - 30 = 35 YPLL
For the worker who died at age 35: 65 - 35 = 30 YPLL
For the worker who died at age 40: 65 - 40 = 25 YPLL
Adding these together gives us the total YPLL for all five workers:
Total YPLL = 45 + 40 + 35 + 30 + 25 = 175 Years.
This is a significant measure as it provides more weight to deaths occurring at younger ages and is an important health statistic used to prioritize public health issues.
Ford Motor Co. asks members of its target market to rate its cars and those of General Motors and Chrysler on a 7-point scale in terms of two dimensions (comfortable seats and engine power) so that it can establish a quadrant-grid map of these ratings. What type of analysis is Ford conducting?
A) Positioning
B) Combining
C) Qualifying
D) Dimensional
E) Insight management
Answer:
A) Positioning
Explanation:
Positioning is the process that outlines how a business intends to market it's products to consumers. An image is created by the marketing team based on market that is being targeted.
This image is created by using promotion, price, place, and product.
Ford is asking it's target market to rate it's cars so that it can establish a quadrant-grid map of these ratings, is a way to improve its positioning
Answer:
The correct answer is letter "A": Positioning.
Explanation:
The positioning analysis involves collecting data from the region where the company is targeting to start businesses. This study will give the firm an idea of what customers are looking for, thus, the organization will be better assessed on what type of products should be offered.
Barb is trying to take control of her time by using an online time tracking system that tracks her time spent on tasks and projects. She heard that if you do something for seven weeks it becomes a habit. The activity in our brain that decides whether a behavior should be repeated and stored is ______.
Answer:
Habit Loop
Explanation:
Habit Loop -
It is a type of loop , which runs in the brain of the human being , and functions to govern the habit , is referred to as habit loop .
The habit loop has three components , i.e. , reward , routine , and cue .
The proper knowledge of these components enables the person to have command of their habits and can easily remove the bad habits and inculcate the good ones .
Hence , from the given scenario of the question,
The correct term is habit loop .
In 2008, Upper Crust had cash flows from investing activities of −$270,000 and cash flows from financing activities of −$163,000. The balance in the firm's cash account was $86,000 at the beginning of 2008 and $118,000 at the end of the year. What was Upper Crust's cash flow from operations for 2008?
A- $118,000
B- $465,000
C- $32,000
D- $433,000
Answer:
Cash flows from operating activities = $465,000
so correct option is B- $465,000
Explanation:
given data
investing activities = - $270,000
cash flows = - $163,000
cash account at the beginning = $86,000
cash account at the end of year = $118,000
solution
we get here Cash flows from operating activities that is express as
Cash flows from operating activities = closing cash balance - (cash flows from financing activities + cash flows from investing activities + beginning cash balance) .....................1
put here value and we get
Cash flows from operating activities = $118,000 - (-$163,000 - $270,000 + $86,000)
Cash flows from operating activities = $465,000
Yancey Productions is a film studio that uses a job-order costing system. The company's direct materials consist of items such as costumes and props. Its direct labor includes each film's actors, directors, and extras. The company's overhead costs include items such as utilities, depreciation of equipment, senior management salaries, and wages of maintenance workers. Yancey applies its overhead cost to films based on direct labor-dollars At the beginning of the year, Yancey made the following estimates: Direct labor-dollars to support all productions Fixed overhead cost Variable overhead cost per direct labor dollar $8,640,000 $5,184,0ee $0,21 Required: 1. Compute the predetermined overhead rate 2. During the year, Yancey produced a film titied You Can Say That Again that incurred the following costs Direct materials Direct labor cost $1,350,00e $2,592,000
Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Yancey applies its overhead cost to films based on direct labor-dollars.
At the beginning of the year, Yancey made the following estimates:
Direct labor dollars= 8,640,000
Fixed overhead cost= 5,184
Variable overhead cost per direct labor dollar= $0,21
To calculate the predetermined overhead rate we need to use the following formula:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Estimated manufacturing overhead rate= 5,184/8,640,000 + 0.21= 0.0006 + 0.21= $0.2106 per direct labor dollar
Now, we can calculate the allocated overhead for You Can Say That Again:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 0.2106*2,592,000= $545,875.2
Baxley Brothers has a DSO of 26 days, and its annual sales are $6,205,000. What is its accounts receivable balance? Assume that it uses a 365-day year. Round your answer to the nearest cent.
Answer:
The receivable balance is $ 442,000
Explanation:
The DSO is the abbreviation for Days Sales Outstanding and is referred to in no of days.
Based on the data in the question, the average daily sales is $ 6,205,000/ 365 days.
$ 6,205,000 / 365 days = $ 17,000 per day
If the DSO is 26 days, we need to multiply the average daily sales by the number of days to get the receivable balance
$ 17,000 *DSO of 26 = $ 442,000
If Whole Foods Market leaders were to engage in a SWOT analysis, they might study which of the following factors as part of the organization's external environment? a. Demographic and population changes within society b. The organizational culture c. Leadership strength and strong succession plans d. The talent pipeline
Answer:
The answer is a. Demographic and population changes within society
Explanation:
Mountaineer excavation operates in a low-lying area that is subject to heavy rains and flooding. because of this, mountaineer purchases one year of flood insurance in advance on march 1, paying $36,000 ($3,000/month).
Required:
1. Recore the purchase of insurance in advance on March,1.
1. Record the adjusting entry on December, 31.
Answer:
1. Recore the purchase of insurance in advance on March,1.
Debit Prepaid Insurance $36,000
Credit Cash $36,000
2. Record the adjusting entry on December, 31.
Debit Insurance Expense $30,000
Credits Prepaid Insurance $30,000
Explanation:
Mountaineer excavation purchases one year of flood insurance in advance on March 1, paying $36,000 ($3,000/month). The company records the insurance as the prepaid Insurance:
Debit Prepaid Insurance $36,000
Credit Cash $36,000
On December, 31, the last day of the following 10 months, the company records an adjusting entry that Credits Prepaid Insurance for $30,000 ($3,000/month times the 10 months) and Debits Insurance Expense for $30,000
Debit Insurance Expense $30,000
Credits Prepaid Insurance $30,000
1. Record of the purchase of insurance in advance on March,1 as Debit Prepaid Insurance $36,000 & Credit Cash $36,000.
2. Record the adjusting entry on December, 31 as Debit Insurance Expense $30,000 & Credits Prepaid Insurance $30,000.
1. The journal entry above records the payment of $36,000 for one year of flood insurance coverage.
It debits the Insurance Expense account (or Prepaid Insurance account) to recognize the expense and credits the Cash account to reflect the payment made.
Thus, the journal entry would look like this
Debit Credit
Prepaid Insurance $36,000
Cash $36,000
2. Mountaineer Excavation would need to recognize the portion of the prepaid insurance that has been used up.
Since the insurance was purchased on March 1 and covers a period of one year, by December 31, 10 months’ worth of insurance has been used up. At a rate of $3,000 per month, this amounts to $30,000.
Thus, the journal entry would look like this
Debit Credit
Insurance Expense $30,000
Prepaid Insurance $30,000
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Given the following demand equation: Q = 100 minus− 5p Calculate the price that corresponds with a price elasticity value of negative 1.00−1.00. p = nothing (enter your response rounded to two decimal places).
Answer:
P = 10
Explanation:
Given that,
price elasticity of demand(Negative) = -1
Demand equation: Q = 100 - 5p
Differentiating Q w.r.t p,
[tex]\frac{dQ}{dp}=-5[/tex]
Price elasticity of demand = [tex]\frac{dQ}{dP}\times \frac{P}{Q}[/tex]
-1 = (-5) × [P ÷ (100 - 5p)]
-1(100 - 5P) = -5P
-100 + 5P = -5P
10P = 100
P = 10
Therefore, the price of $10 that corresponds with a price elasticity value of negative 1.00.
The price that corresponds with a price elasticity value of -1.00, given the demand equation Q = 100 - 5p, is 20.00. This is computed using the price elasticity of demand equation for a linear demand curve, Ed = p/Q, given Ed as -1.00.
Explanation:The given demand equation is Q = 100 - 5p. The price elasticity of demand is given as -1.00. The formula for the price elasticity of demand is Ed = (% change in quantity demanded) / (% change in price). But here, the equation is linear, so a simplified form of the formula for the price elasticity of demand equation for a linear demand curve is Ed = (p/Q)
Thus, inserting the given value of -1.00 for Ed and rearranging, we get p = Q. Given that the demand equation is Q = 100 - 5p, we can substitute Q with p into the given equation. This leads to p = 100 - 5p. By solving this equation for p, we find that p = 20.00
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Stanley Company uses a job cost system. Manufacturing overhead has been overallocated by $ 6 comma 600 for the year. Actual overhead incurred was $ 105 comma 000. Other balances are: Raw materials inventory at end of year $ 15 comma 000 Work in process inventory at end of year $ 32 comma 000 Finished goods inventory at end of year $ 42 comma 400 Unadjusted cost of goods sold for the year $ 290 comma 400 What will adjusted cost of goods sold be after closing manufacturing overhead?
Answer:
Adjusted Cost of Goods sold = $283,800
Explanation:
The question is to determine the adjusted cost of goods after closing manufacturing overhead.
First step is that the Manufacturing overhead of Stanley Company has been over-applied by $6,600.
The implication or meaning is that the overhead attributed to the job undertaken was more than the actual overhead that was incurred.
Over-applied manufacturing expense would usually overstate the cost of goods sold. Therefore
Adjusted Cost of Goods sold = Unadjusted cost of goods sold - Over-applied amount of overhead
= $290,400 - $6,600
= $283,800
The rate of return available on the next best investment alternative for the saver refers to the discount cost of funds. True False
Answer:
True because cost of funds to company are the required return of the investors so saying that the rate of return used for investment appraisal is discount rate(discount cost of funds) derived from the Dividend valuation Model, Gordon Growth Model, Capital Asset pricing model or credit spread. These are the ways to compute the required return of investors.
The quantity supplied of coffee beans decreases when: a. Average annual rainfall decreases due to a drought in Central and South America b. The price of coffee beans falls c. The price of tea rises. d. A labor union for coffee bean pickers forms and wages rise
Answer:
b. The price of coffee beans falls
Explanation:
Only a decrease in price of coffee beans would lead to a fall in the quantity supplied of coffee beans.
This is in line with the law of supply which says: The higher the price, the higher the quantity supplied and the lower the price, the lower the quantity supplied.
The other factors listed in the options would lead to a fall in supply and not quantity supplied.
I hope my answer helps you
Local Co. has sales of $ 10.2 million and cost of sales of $ 5.7 million. Its selling, general and administrative expenses are $ 550 comma 000 and its research and development is $ 1.2 million. It has annual depreciation charges of $ 1.1 million and a tax rate of 35 %. a. What is Local's gross margin? b. What is Local's operating margin? c. What is Local's net profit margin? a. What is Local's gross margin? Local's gross margin is nothing%. (Round to one decimal place.) b. What is Local's operating margin? Local's operating margin is nothing%. (Round to one decimal place.) c. What is Local's net profit margin? Local's net profit margin is nothing%. (Round to two decimal places.)
Answer:
a. What is Local's gross margin? (Round to one decimal place.)
0.4412 / 44.12%
b. What is Local's operating margin? (Round to one decimal place.)
0.1618 / 16.18%
c. What is Local's net profit margin? (Round to two decimal places.)
0.1049 / 10.49%
Explanation:
Local Co.
Income Statement for the year ended MM DD, YY
$, million
Sales 10.20
-Cost of sales 5.70
=Gross Income 4.50
-Selling, general and administrative expenses 0.55
-Research and development 1.20
-Annual depreciation charges 1.10
=Operating Income 1.65
-Tax rate of 35 %. 0.58
=Net Income 1.07
(a) Gross Margin = Gross Income / Sales = 4.50 / 10.20 = 0.4412 = 44.12%
(b) Operating Margin = Operating Profit / Sales = 1.65 / 10.20 =0.1618=16.18%
(c) Net Profit Margin = Net Income / Sales = 1.07 / 10.20 = 0.1049 = 10.49%
The year-end financial statements of Greenway Company contained the following elements and corresponding amounts: Assets = $23,000; Liabilities = ?; Common Stock = $5,300; Revenue = $11,600; Dividends = $900; Beginning Retained Earnings = $3,900; Ending Retained Earnings = $7,300.
The amount of liabilities reported on the end-of-period balance sheet was
A. $11,200.
B. $10,400.
C. $13,800.
D. $9,200.
Matt Bennett wishes to have $ 110 comma 000 in six years. If he can earn annual interest of 8%, how much must he invest today?
Answer:
he invest today is $229166.67
Explanation:
given data
future value = $110,000
time t = 6 year
rate r = 8 % = 0.08
to find out
present value
solution
we get here present value that is
future amount = principal × rate × time .................1
$110,000 = principal × 8% × 6
$110,000 = principal × 0.08 × 6
$110,000 = principal × 0.48
principal = [tex]\frac{110000}{0.48}[/tex]
principal = 229166.67
so he invest today is $229166.67
If Mary decides to invest 10 percent of her money in Firm A's common stock and 90 percent in Firm B's common stock, what is the expected rate of return and the standard deviation of the portfolio return? b. If Mary decides to invest 90 percent of her money in Firm A's common stock and 10 percent in Firm B's common stock, what is the expected rate of return and the standard deviation of the portfolio return? c. Recompute your responses to both questions a and b, where the correlation between the two firms' stock returns is negative 0.50. d. Summarize what your analysis tells you about portfolio risk when combining risky assets in a portfolio.
Answer:
Part a: The return of portfolio is 10.5% and standard deviation is 5.089%.
Part b: The return of portfolio is 14.5% and standard deviation is 11.12%.
Part c: The return of portfolio is 10.5% and standard deviation is 4.911% for case a while the return of portfolio is 14.5% and standard deviation is 10.51% for case b.
Part d: By changing the investment from firm A to firm B, the return is increased however the risk is also increased.
Explanation:
As the complete data is not available in the question, thus by referring the question found by google matching the context.
Following is the additional data
Firm A
Expected Return: 0.15
Standard Deviation: 0.12
Firm B
Expected Return: 0.10
Standard Deviation: 0.06
Correlation Coefficient=0.50
Part a:The investment value is WA=10%=0.1 and WB=90%=0.9 so
[tex]E_{portfolio}=[W_A \times E_A]+[W_B \times E_B]\\E_{portfolio}=[0.1 \times 0.15]+[0.9 \times 0.1]\\E_{portfolio}=0.105 =10.5 \%[/tex]
The standard deviation is given as
[tex]\sigma_{portfolio}=\sqrt{(W_A \times \sigma_A)^2+(W_B \times \sigma_B)^2+(2 \times W_A \times W_B \times CC \times \sigma_A \times \sigma_B)}\\\sigma_{portfolio}=\sqrt{(0.1 \times 0.12)^2+(0.9 \times 0.06)^2+(2 \times 0.1 \times 0.9 \times 0.5 \times 0.12 \times0.06)}\\\sigma_{portfolio}=0.06089 =6.089\%[/tex]
So the return of portfolio is 10.5% and standard deviation is 5.089%.
Part b:The investment value is WA=90%=0.9 and WB=10%=0.1 so
[tex]E_{portfolio}=[W_A \times E_A]+[W_B \times E_B]\\E_{portfolio}=[0.9 \times 0.15]+[0.1 \times 0.1]\\E_{portfolio}=0.145 =14.5 \%[/tex]
The standard deviation is given as
[tex]\sigma_{portfolio}=\sqrt{(W_A \times \sigma_A)^2+(W_B \times \sigma_B)^2+(2 \times W_A \times W_B \times CC \times \sigma_A \times \sigma_B)}\\\sigma_{portfolio}=\sqrt{(0.9 \times 0.12)^2+(0.1 \times 0.06)^2+(2 \times 0.1 \times 0.9 \times 0.5 \times 0.12 \times0.06)}\\\sigma_{portfolio}=0.1111 =11.12\%[/tex]
So the return of portfolio is 14.5% and standard deviation is 11.12%.
Part c:Now the correlation coefficient is -0.5 so
Calculation for part a now yields
The investment value is WA=10%=0.1 and WB=90%=0.9so
The value of return will remain same i.e. 10.5%
Whereas the standard deviation is given as
[tex]\sigma_{portfolio}=\sqrt{(W_A \times \sigma_A)^2+(W_B \times \sigma_B)^2+(2 \times W_A \times W_B \times CC \times \sigma_A \times \sigma_B)}\\\sigma_{portfolio}=\sqrt{(0.1 \times 0.12)^2+(0.9 \times 0.06)^2+(2 \times 0.1 \times 0.9 \times -0.5 \times 0.12 \times0.06)}\\\sigma_{portfolio}=0.04911=4.911\%[/tex]
So the return of portfolio is 10.5% and standard deviation is 4.911%.
Calculation for part a now yields
The investment value is WA=90%=0.9 and WB=10%=0.1 so
The value of return will remain same i.e. 14.5%
The standard deviation is given as
[tex]\sigma_{portfolio}=\sqrt{(W_A \times \sigma_A)^2+(W_B \times \sigma_B)^2+(2 \times W_A \times W_B \times CC \times \sigma_A \times \sigma_B)}\\\sigma_{portfolio}=\sqrt{(0.9 \times 0.12)^2+(0.1 \times 0.06)^2+(2 \times 0.1 \times 0.9 \times -0.5 \times 0.12 \times0.06)}\\\sigma_{portfolio}=0.1051 =10.51\%[/tex]
So the return of portfolio is 14.5% and standard deviation is 10.51%.
Part d:It is evident from the example that by changing the investment from firm A to firm B, the return is increased however the risk is also increased.
For the first investment scenario(A:10% B:90%), (part:a), The return is 10.5% with a risk of 5.089%For the second investment scenario(A:90% B:10%), (part:b), The return is 14.5% with a risk of 11.12%Here is clearly visible that higher rate of return also increases the risk. In this case for an increase of 4% in the return, there is a rise of 6.031%
The effect of negative correlation coefficient is however minimal as indicated in part c.
For the first investment scenario, the risk is reduced from 5.089% to 4.911%For the second investment scenario, the risk is reduced from 11.12% to 10.51%This is not a significant effect.
Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of $562,500 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $48,400. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On March 4 of Year 5, the equipment was sold for $82,400. Required: 1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by the following methods: a. Straight-line method
Answer:
Annual depreciation expense =(Cost-Residual value)/Useful live
Cost=$562500
Residual value=$48400
Useful live=5years
As as a result annual depreciation=$102820
The figures for accumulated depreciation for relevant years can be found in the attached excel file.
Explanation:
The book value of the asset after useful years was $48400,its residual value.
The gain on disposal van be computed thus:
Proceeds-Residual value
$82400-$48400=$34000
Step - (1) - Information Given -
Equipment cost = $562500.
Estimated useful life = 5 years.
Estimated residual value = $48400.
.
Step - (2) - Calculation of Annual depreciation expense, Accumulated depreciation and the Book value of the Equipment at the end of each year -
Straight-line depreciation = (Cost of Equipment - Residual value) / Estimated useful life
= ($562500 - $48400) / 5 years
= $102820
A law was recently passed in the city of Birmingdon that specifies a long list of restrictions on disposing of different kinds of waste material. The law is long, meticulous, and complicated, and many citizens do not understand all the points of the law or the purpose it is meant to fulfill. Citizens are commonly caught breaking the ordinance. Which law or principle of law which is most relevant to this situation?
a. Procedural Due Process
b. Substantive Due Process
c. First Amendment
d. Equal Protection Laws
Answer:
Substantive Due Process
Explanation:
Substantive Due Process - it is referred to as the authority of courts to defend the rights from the interference of government. it is also applicable even when these rights are not written anywhere in the constitution of the United States.
it is different from the procedural due process whose main focus is to convict the defendant for any rules breaking while Substantive Due Process is work for protecting fundamental right from Government interference.
Assume that your parents wanted to have $100,000 saved for college by your 18th birthday and they started saving on your first birthday. They saved the same amount on your birthday and earned 8.0% per year on their investments.
A. How much would they have to save each year to reach their goal?
B. If they think you will take five years instead of four to graduate to graduate and decide to have $140,000 saved just in case, how much more would they have to save each year to reach their new goal?
Answer:
My parents will need to make 18 deposits of 24,724.16 dollars
My parent will then have to deposit 28,185.55 per year
which is $3,461.39 more than the other scenario
Explanation:
We need to solve for the future value of an annuity-due (because the payment are made at the beginning of each period
[tex]FV \div \frac{(1+r)^{time} -1 }{rate}(1+r) = C\\[/tex]
FV 1,000,000
time 18
rate 0.08
[tex]1,000,000 \div \frac{(1+0.08)^{18}-1 }{0.08}(1+0.08) = C\\[/tex]
C $ 24,724.163
If we need do save and additional 140,000 dollars:
[tex]FV \div \frac{(1+r)^{time} -1 }{rate}(1+r) = C\\[/tex]
FV 1,140,000
time 18
rate 0.08
[tex]1,140,000 \div \frac{(1+0.08)^{18}-1 }{0.08}(1+0.08) = C\\[/tex]
C $ 28,185.546
The difference will be:
28,185.55 - 24,724.16 = 3.461,39
Juniper Design Ltd. of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of $450,000 on sales of $1,200,000. The company’s average operating assets for the year were $1,400,000 and its minimum required rate of return was 13%.
Required:
Compute the company’s residual income for the year.
Answer:
$268,000
Explanation:
Given that,
Last year net operating income = $450,000
Sales = $1,200,000
Average operating assets = $1,400,000
Minimum required rate of return = 13%
Minimum required return:
= 13% × Average operating assets
= 0.13 × $1,400,000
= $182,000
Therefore,
Residual income:
= Net operating income - Minimum required return
= $450,000 - $182,000
= $268,000
Final answer:
Juniper Design Ltd.'s residual income for the year can be calculated by subtracting the product of its average operating assets and its minimum required rate of return from the net operating income, which results in a residual income of $268,000.
Explanation:
To calculate the residual income of Juniper Design Ltd., we need to first find the company's net operating income, subtract the product of the minimum required rate of return and the average operating assets. Given that the net operating income is $450,000, the average operating assets are $1,400,000, and the minimum required rate of return is 13%, the calculation is as follows:
Minimum required return on assets = Average operating assets × Minimum required rate of return
= $1,400,000 × 13%
= $182,000
Residual income = Net operating income - Minimum required return on assets
= $450,000 - $182,000
= $268,000
Therefore, the residual income for Juniper Design Ltd. is $268,000 for the year.
Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams from the previous question. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $40 to $50, and the stock has paid a dividend of $2 per share. (LO 3-4)
a. What is the remaining margin in the account?
b. If the maintenance margin requirement is 30%, will Old Economy receive a margin call?
c. What is the rate of return on the investment?
Part (a): Remaining Margin in the Account
Old Economy Traders were required to put up 50% of the total value of the shares that were short sold as the initial margin requirement is 50%.
At the $40 starting price, 1,000 Internet Dreams shares are worth $40,000. As a result, they had to put down a $20,000 initial margin.
The stock price has risen to $50 per share, and the value of 1,000 shares is now $50,000.
[tex]\[ \text{Remaining Margin} = \text{Initial Investment} - \text{Current Value} \\\\= $20,000 - $50,000 = -$30,000 \][/tex]
Part (b): Margin Call
The maintenance margin requirement is 30%. This means that the account's equity must be at least 30% of the total value of shares.
Calculate the account's equity at the current value of the shares:
[tex]\[ \text{Equity} = \text{Current Value} - \text{Remaining Margin} \\\\= $50,000 - (-$30,000) \\\\= $80,000 \][/tex]
Now, calculate the minimum required equity based on the maintenance margin requirement:
[tex]\[ \text{Minimum Required Equity} = \text{Maintenance Margin} \times \text{Total Value} \\\\= 0.30 \times $50,000 \\\\= $15,000 \][/tex]
Part (c): Rate of Return on the Investment
The rate of return on the investment is calculated as the total gain (including dividends) divided by the initial investment.
Total Gain = Change in Stock Value + Dividends
Total Gain = ($50 - $40) × 1,000 + $2 × 1,000 = $12,000
Rate of Return = (Total Gain / Initial Investment) × 100
Rate of Return = ($12,000 / $20,000) × 100 ≈ 60%
Thus, the rate of return on the investment is approximately 60%.
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a. The remaining margin in the account is -$30,000. b. Old Economy will receive a margin call. c. The rate of return on the investment is approximately 30%.
Explanation:a. To calculate the remaining margin in the account, we need to determine the amount of the initial margin and subtract the current value of the short position from it. The initial margin is 50%, so the initial margin amount would be 50% of the short position value, which is 50% of 1000 shares multiplied by the initial price of $40. Hence, the initial margin is $20,000. Given that the current price is $50, the value of the short position is $50 multiplied by 1000 shares, which is $50,000. Subtracting the short position value from the initial margin, we get the remaining margin in the account, which is $20,000 - $50,000 = -$30,000.
b. To check if Old Economy will receive a margin call, we need to calculate the maintenance margin amount. The maintenance margin requirement is 30%, so the maintenance margin amount would be 30% of the short position value, which is 30% of $50,000. Hence, the maintenance margin is $15,000. Comparing the remaining margin (-$30,000) with the maintenance margin ($15,000), we can see that the remaining margin is less than the maintenance margin. Therefore, Old Economy will receive a margin call.
c. The rate of return on the investment can be calculated using the formula: Rate of return = (Ending Value - Starting Value + Dividends) / Starting Value. Given that the starting value is $40, the ending value is $50, and the dividends per share is $2, the rate of return can be calculated as follows: ($50 - $40 + $2) / $40 ≈ 0.30 or 30%.
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