Answer:
d
Explanation:
Systemic risk is measured by beta. The higher beta is, the higher the systemic risk and the higher the compensation demanded for by investors
The portfolio's beta can be determined by adding together the weighted beta of each stock in the portfolio
weighted beta of a stock = percentage of the stock in the portfolio x beta of the stock
weighted beta of Dr Pepper Snapple Group stock = (200 / 350) x -0.11 = -0.062857.
weighted beta of Home Depot shares = (100/350) x 1.21 = 0.345714
weighted beta of Tesla Motors shares= (50/350) x 1.4 = 0.2
0.2 + 0.345714 -0.062857. = 0.4828
what is the major difference between money markets and capital markets: One is more domestic while the other is more international
Answer:
The major difference between money markets and capital markets is:
the time horizon of the debt instruments.
Explanation:
A money market is a global financial market for the exchange of short-term debts (or debt instruments that mature in less than or equal to one year). A capital market is also a global financial market for the exchange of long-term debt instruments (or securities that mature in more than one year). Additionally, the capital market, unlike the money market, enables the exchange of equity securities (common stocks and preferred stocks). Principally, the major difference is the time horizon provided by the two markets.
On July 5, a stock index futures contract was at 394.85. The index was at 392.54, the risk free rate was 2.83 percent, the dividend yield was 2.08 percent, and the contract expired on September 20. Determine whether an arbitrage opportunity was available and explain what transactions were executed.
Solution :
Given :
The stock index contracts at = $ 394.85
Index = $ 392.54
Risk fee rate = 2.83 %
Dividend = 2.08 %
Now take long position on the index at $ 392.54 per share
After 75 days, they have to pay $ 392.54 + 392.54 x 2.83 x 75/365
= $ 394.823
Take s short position on the stock index futures contract on $ 394.85 per share.
Dividends received = $ 392.54 x 2.08%
= $ 8.164
Therefore, there is an arbitrage opportunity.
a sale is made at a lumber company for goods costing a total of $13,359 (which includes 9.5% sales tax). in the books of the lumber company revenue should be credited for what amount
Answer:
$12,200
Explanation:
Sales including sales tax = $13,359
Sales tax rate = 9.5%
Let the sales be = $X
Sales tax payable = Sales * Sales tax rate
Sales tax payable = X * 9.5%
Sales tax payable = 0.095X
Sales + Sales tax = Sales including sales tax
X + 0.095X = 13,359
1.095X = 13,359
X = 13,359/1.095
X = $12,200
So, Sales = $12,200. Thus, in the books of the lumber company, Revenue should be credited for $12,200
Swiss Furniture Company manufactures bookshelves and uses an activity-based costing system to allocate all manufacturing conversion costs. The following information is provided for the month of May:
Activity Estimated Indirect Activity Costs Allocation Base Estimated Quantity of Allocation Base
Materials handling $6,300 Number of parts 9,100 parts
Assembling $14,000 Number of parts 9,100 parts
Packaging $2,680 Number of bookshelves 910 bookshelves
Required:
Each bookshelf consists of 10 parts. The direct materials cost per bookshelf is $32.What is the total manufacturing cost per bookshelf?
Answer:
Total unitary manufacturing cost= $57.25
Explanation:
First, we need to calculate the activities rates:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Materials handling= 6,300/9,100= $0.69 per part
Assembling= 14,000/9,100= $1.54 per part
Packaging= 2,680/910= $2.95 per bookshelve
Each bookshelf consists of 10 parts. The direct materials cost per bookshelf is $32.
Now, we can allocate conversion costs to each unit:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Materials handling= 0.69*10= $6.9
Assembling= 1.54*10= $15.4
Packaging= 2.95*1 = $2.95
Total allocated costs per unit= $25.25
Finally, the total unitary manufacturing cost:
Total unitary manufacturing cost= 32 + 25.25
Total unitary manufacturing cost= $57.25
g Jill has a balance of $866,000 in her retirement savings account. She expects to retire in 8 years. She will not save any additional money until she retires, but what she has in savings now will earn 9% for the next 8 years. Bob has a balance of $482,000 in his retirement savings and he also wants to retire 8 years from now. He plans to save money every year for the next 8 years so that he will have exactly as much money as Jill does 8 years from now. If he earns the same rate on his savings as Jill, how much will he have to save each year for 8 years to catch up with Jill
Answer:
$69,378.96
Explanation:
The first step is to determine the future value of Jill's balance
FV = P (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
$866,000(1.09)^8 = $1,725,559.25
the second step is to determine the future value of the balance in Bob's account
$482,000(1.09)^8 = $960,415.19
The difference between Jill and Bob's future value amount is 765,144.06. this has to be the future value of bob's yearly savings
yearly savings = 765,144.06. / annuity factor
Annuity factor = {[(1+r)^n] - 1} / r
(1.09^8 - 1) / 0.09 = 11.028474
765,144.06. / 11.028474 = $69,378.96
Investment X offers to pay you $4,020 per year for 12 years, whereas Investment Y offers to pay you $2,041 per year for 7 years. How much higher is the present value investment X if the discount rate is 11 percent? Round to nearest whole number.
Answer:
$16,481.68
Explanation:
Note that the present value of each yearly cash inflow can be determined using the formula provided below:
PV of cash inflow=cash inflow/(1+discount rate)^n
n is the year in which the cash inflow is expected, it is 1 for year 1 cash inflow, 2 for year 2 and so on.
PV of Investment X=$4,020/(1+11%)^1+$4,020/(1+11%)^2+$4,020/(1+11%)^3+$4,020/(1+11%)^4+$4,020/(1+11%)^5+$4,020/(1+11%)^6+$4,020/(1+11%)^7+$4,020/(1+11%)^8+$4,020/(1+11%)^9+$4,020/(1+11%)^10+$4,020/(1+11%)^11+$4,020/(1+11%)^12
PV of investment X=$26,099.27
PV of investment Y=$2,041/(1+11%)^1+$2,041/(1+11%)^2+$2,041/(1+11%)^3+$2,041/(1+11%)^4+$2,041/(1+11%)^5+$2,041/(1+11%)^6+$2,041/(1+11%)^7
PV of investment Y=$9,617.59
the difference in PV=$26,099.27-$9,617.59
the difference in PV=$16,481.68
Recall that since stocks have really long lives, in the video we first imagined owning a stock for only one period. In this simple, yet powerful scenario, today's stock price is the PV of next year's dividend and next year's stock price.) The stock of Alydar Oil, an all-equity firm, is currently trading at $30 per share, after just having paid a $2.60 per share dividend. The market expects a dividend of $3.30 per share to be paid one year from today. If the equity cost of capital (same as discount rate for equity) is 13% for this firm, the expected ex-dividend price (the stock price after the dividend is paid next year) in one year (t = 1) should be closest to:_______.a) $32.77b) $30.60c) $33.90d) $31.30
Answer:
Option b ($30.6) is the correct option.
Explanation:
Given:
Current price,
= $30
Required rate,
= 13%
Expected dividend,
= 3.30
Now,
The expected ex-dividend will be:
= [tex]Current \ price\times (1+ Required \ rate) - Expected \ dividend[/tex]
On putting the values, we get
= [tex]30\times (1+13 \ percent)-3.30[/tex]
= [tex]30\times 1.13-3.30[/tex]
= [tex]33.9-3.30[/tex]
= [tex]30.6[/tex] ($)
answer the following about break even analysis. New city day care center operates from Monday to friday. it has fixed expenses of $5,000 per week and charges each child who attends the program $15 per day. It costs the center $5 per day for supplies and snacks fro each child. How many children must come ot the center each day for it to break even
Answer:
500 children
Explanation:
Break even point is the level at which a firm makes neither a profit nor a loss. In other words the point where Profit = $ 0.
Break even (units) = Fixed Costs ÷ Contribution per unit
Therefore,
Break even (children) = $5,000 ÷ ($15 - $5)
= 500
500 children must come to the center each day for it to break even.
Synergy Inc. has reported the following operating information for one of its divisions: Sales revenue $150,000 Operating income $30,000 Operating assets $375,000 Calculate the division's margin, turnover, and ROI.
Answer:
Division's margin = 20%
Turnover = 40%
Return On Investment = 8%
Explanation:
Given:
Sales revenue = $150,000
Operating income = $30,000
Operating assets = $375,000
Find:
Division's margin
Turnover
Return On Investment
Computation:
Division's margin = [Operating income / Sales revenue]100
Division's margin = [30,000 / 150,000]100
Division's margin = 20%
Turnover = [Sales revenue / Operating assets]100
Turnover = [150,000 / 375,000]100
Turnover = 40%
Return On Investment = Division's margin x Turnover
Return On Investment = 20% x 40%
Return On Investment = 8%
The First National Bank has total deposits of $675,000 and excess reserves of $22,300. If the required reserve ratio is 9 percent, the First National Bank has total reserves of:
Answer: $83050
Explanation:
Based on the information given in the question, the total reserves of First National Bank will be given as follows:
Total deposit = $675000
The Required reserve ratio will be:
= 675000 × 9%
= 675000 × 9/100
= $60750
Since the bank has excess reserves of $22,300, then the total reserve will be:
= $60750 + $22300
= $83050
20. Calculating Loan Payments You want to buy a new sports coupe for $78,500, and the finance office at the dealership has quoted you a loan with an APR of 4.9 percent for 60 months to buy the car. What will your monthly payments be
Answer:
$1,477.80
Explanation:
Calculation to determine What will your monthly payments be
First step is to calculate the Present value of annuity of 1 using this formula
Present value of annuity of 1 = (1-(1+i)^-n)/i
Where,
i= 4.9%/12 =0.00408333333
n=60
Let plug in the formula
Present value of annuity of 1=(1-(1+0.00408333333)^-60)/0.00408333333
Present value of annuity of 1=53.11957022
Now let calculate the Monthly payment using this formula
Monthly payment = Loan amount / Present value of annuity of 1
Let plug in the formula
Monthly payment= $ 78,500.00 / 53.11957022
Monthly payment= $1,477.80
Therefore your monthly payments will be $1,477.80
Monthly payments for the car loan = $1,476.72
To calculate your monthly loan payments, one can use the formula for calculating the monthly payment on an amortizing loan. The formula is:
[tex]P = (Pv * r) / (1 - (1 + r)^{-n})[/tex]
Where:
P = Monthly payment
PV = Present value (loan amount)
r = Monthly interest rate (annual interest rate divided by 12)
n = Total number of payments
Given:
Loan amount (PV) = $78,500
Annual interest rate = 4.9%
Loan term (n) = 60 months
First, calculate the monthly interest rate (r):
r = 4.9% / 100 / 12 = 0.00408
Next, substitute the values into the formula and solve for P:
[tex]P = (78,500 * 0.00408) / (1 - (1 + 0.00408)^{-60})[/tex]
[tex]P = 320.08/(1-(1.00408)^{-60}[/tex]
P = 320.08/1-0.78325
P = 320.08/0.21675
P = $1,476.72
Thus, your monthly payments for the car loan would be approximately $1,476.72.
Learn more about the monthly payments here:
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MacGyver Company bought equipment on January 3, 20X1, for $34,100. At the time of purchase, the equipment was estimated to have a useful life of 6 years and a salvage value of $620. Using the straight-line method, the amount of one year's depreciation is
Answer:
$5,580
Explanation:
Straight line method charges a fixed amount of depreciation for each and every year the asset is in use in the business.
Depreciation expense = (Cost - Salvage Amount) ÷ Estimated useful life
therefore,
Depreciation expense = ($34,100 - $620) ÷ 6
= $5,580
Using the straight-line method, the amount of one year's depreciation is $5,580.
Country Alpha has 15 thousand acres of land and 45 thousand laborers, whereas Country Beta has 100 thousand acres of land and 200 thousand laborers. These countries produce a labor-intensive good A, and a land-intensive good B.
Based on the information given, we can conclude that:
If trade opens up between Country Alpha and Country Beta, according to the Heckscher-Ohlin model, Country Beta will export _____ and import _____.
a. both the goods; neither good
b. good B; good A
c. good A; good B
d. neither good; both of the goods
Answer: b. good B; good A
Explanation:
According to the Heckscher-Ohlin model, a country should export the good that is has a relative abundance in and import the good it has relative scarcity in.
Find out labor to land ratio of both countries:
Country Alpha = 45 / 15 = 3
Country Beta = 200 / 100 = 2
Country Alpha has 3 labor units per acre
Country Beta has 2 labor units per acre
Country Alpha therefore has more labor abundance and should export the labor intensive good which is good A which means Country B will import A.
Country Beta should export more land intensive good which is good B.
Given the following information, calculate the effective gross income: property: 4 office units, contract rents per unit: $2,750 per month; vacancy and collection losses: 18%; operating expenses: $41,000; capital expenditures: 11%.
Answer:
the effective gross income is $117,480
Explanation:
The computation of the effective gross income is shown below:
= Gross income - vacancy income
= ($2,750 × 4 units × $12) - ($2,750 × 12 × 4 × 11%)
= $132,000 - $14,520
= $117,480
hence, the effective gross income is $117,480
The same is to be considered and relevant
A business buyer purchases toner, paper, and staples from a seller of office supplies. What form does the seller need to use to inform the buyer about the payment owed for this purchase?
A. A receipt
OB. An invoice
C. A purchase order
OD. A packing slip
I'm pretty sure it is b because invoice is a record that keeps track of orders and cost
The financial statements report the cumulative impact of all transactions recorded as of the financial statement date. Input the cumulative amount of a) Net Income (Loss), b) Total Assets, c) Total Liabilities, and d) Total Equity that would be reported on the financial statements immediately after each transaction is recorded.
Answer:
True
Explanation:
Financial statements reports the impact of all business transactions that occur. These transaction are recorded when they incur and then any necessary adjustment is made in order to reflect the true expense or liability. the adjusting entries are passed to correctly record the transaction.
An economy has an aggregate demand shortfall of $1200 billion and a GDP gap of $900 billion. The mpc is 2/3. The appropriate fiscal policy to eliminate the gap, using G alone, would be to
Answer:
Change in government expenditure needed = 300
Explanation:
Multiplier 'k' = Change in Income / Change in Govt. expenditure = dY / d GE = 1 / ( 1-MPC )
Desired change in Y, ie GDP = 900 billion , MPC = 2 / 3.
k = 1 / ( 1 - 2/3 ) = 1 / ( 1/3 ) = 3
3 = 900 / d GE
d GE = 900 / 3 = 300
Change in government expenditure = 300
The following information relates to the Stockton Company:Paid note payable$ 150Bought equipment260Depreciation expense500Net income6,000Paid dividends500Issued bonds payable1,100Issued common stock900Sold land2,400What is the net cash provided by financing activities
Answer:
$1,350
Explanation:
Financing Activities are those activities that involve raising capital or debt as well as repayment to holders of such instruments.
Cash flow from financing activities :
Paid note payable ($150)
Paid dividends ($500)
Issued bonds payable $1,100
Issued common stock $900
Net cash provided by financing activities $1,350
therefore,
the net cash provided by financing activities is $1,350
If you wish to accumulate $125,000 in 7 years, how much must you deposit today in an account that pays a quoted annual interest rate of 11% with quarterly compounding of interest
Answer:
You need to deposit $58,481.53 today.
Explanation:
a) Data and Calculations:
Future value expected = $125,000
Period of investment = 7 years
Interest rate = 11% compounded quarterly
The amount of deposit needed today to earn $125,000 in 7 years at annual interest rate of 11% is calculated as follows:
N (# of periods) 28
I/Y (Interest per year) 11
PMT (Periodic Payment) 0
FV (Future Value) 125000
Results
PV = $58,481.53
Total Interest $66,518.47
Suppose there are two breakfast restaurants in your college town, Waffle Kingdom and Flip's Flapjacks, and they decide to operate collusively as a cartel. If both restaurants abide by the cartel's agreement, each will earn $80000 in profit. If both restaurants cheat on the cartel's agreement, both will earn $15000 in profit. If one restaurant cheats and the other abides by the agreement, the cheater will earn a profit of $120000, while the restaurant that abides will have a loss of $7500. The most profitable combined outcome for the two restaurants would be:____________
a. for both restaurants to abide by the cartel’s agreement.
b. for both restaurants to cheat on the cartel’s agreement.
c. for Waffle Kingdom to cheat on the agreement and Flip’s Flapjacks to abide by the agreement.
d. There is not a profitable outcome for both restaurants.
Answer:
a. for both restaurants to abide by the cartel’s agreement.
Explanation:
As per the given situation, the most profitable outcome i.e. combined for the two restaurants is that the both restaurant should be abide via cartel agreement as in the both cases the earnings is $80,000 so this represent the most profitable condition for these two restaurants
Hence, the option a is correct
And, the rest of the options are wrong
"Consider the following data: Cost of goods sold $70 Direct labor $20 Direct materials used $15 Cost of goods manufactured $80 Work in process ending $10 Finished goods ending $15 Actual overhead $32 OH allocated at 150% of DL$. Show all computations. a) Prepare a schedule of COGM & Sold using OH allocated. b) Prepare the journal entry to close OH."
Answer:
Schedule of cost of goods manufactured & Sold
Particulars Amount
Direct materials used $15
Direct labor $20
Factory overhead Applied $30
(150% of DL Cost)
Total manufacturing costs $65
Add: Beginning WIP $25
Total cost of work in process $90
Less: Ending WIP $10
Cost of goods manufactured $80
Particulars Amount
Cost of goods manufactured $80
Add: Beginning finished goods inventory $5
Cost of goods available for sale $85
Less: Ending finished goods inventory $15
Cost of goods sold $70
How will you use the cloud to stay organized
Answer:
Explanation:
Develop a Folder Naming System. Decluttering your cloud space will mean developing a file system and then putting everything in its proper place. ...
The dollar amount by which total rent exceeds base rent under a percentage lease for retail is referred to as:
Answer:
vacancy
Explanation:
Vacancy. The dollar amount by which total rent exceeds base rent under a percentage lease for retail is referred to as. Overage rent.
You have $25,832.81 in a brokerage account, and you plan to deposit an additional $4,000 at the end of every future year until your account totals $210,000. You expect to earn 10% annually on the account. How many years will it take to reach your goal? Round your answer to two decimal places at the end of the calculations.
Answer: 14 years
Explanation:
The question states that an individual has $25,832.81 in a brokerage account, and plan to deposit an additional $4,000 at the end of every future year until the money in the account totals $210,000 and it's expected to earn 10% annually on the account.
To know the number of years that it'll take to reach the goal, we'll solve this in Excel as:
= =NPER (10%,-4000,-25832.81, 210000).
= 14 years
Therefore, it'll take 14 years to reach the goal.
Suppose a stock had an initial price of $88 per share, paid a dividend of $2.10 per share during the year, and had an ending share price of $96. Compute the percentage total return.
Answer:
Percentage total return = 0.1147 or 11.47%
Explanation:
Below is the calculation for a percentage of total return:
The initial price of share = $88
Dividend amount = $2.10
Ending price of share = $96
Use the below formula to find the percentage return:
Percentage total return = [(Ending price - initial price) + Dividend amout] ÷ Initial price
Percentage total return = [(96 - 88) + 2.10] / 88
Percentage total return = 0.1147 or 11.47%
Owner Shan Lois considering franchising her Noodles for a restaurant concept. She believes people will pay $ 10.50 for a large bowl of noodles. Variable costs are $ 6.30 per bowl.Lo estimates monthly fixed costs for a franchise at $10,500.Requirements1. Use the contribution margin ratio approach to find afranchise's breakeven sales in dollars.2. Lo believes most locations could generate $63,000 in monthly sales. Is franchising a good idea for Lo if franchisees want a minimum monthly operating income of 13,500?
Answer:
Selling price = $10.50
Variable cost = $6.30
Fixed cost = $10,500
Contribution margin = Selling price - Variable cost = $10.50 - $6.30 = $4.20
Contribution margin ratio = Contribution margin/Selling price = $4.20/$10.50 = 0.4 = 40%
1. Break even sales = Fixed cost / Contribution margin ratio
Break even sales = $10,500 / 40%
Break even sales = $10,500 / 0.40
Break even sales = $26,250
2. Break even sales = (Fixed cost + Operating income) / Contribution margin ratio
Break even sales = ($10,500 + $13,500) / 40%
Break even sales = $24,000 / 0.40
Break even sales = $60,000
Lo believes most locations could generate $63,000 in monthly sales.
Observation: The monthly sales is greater than the breakeven, so the monthly sales is the best choice.
Combining Supply and Demand
Scenario: The following shows a demand and supply schedule listing CDs demanded and supplied in the
millions) per week at each price. Graph each the following demand/supply schedules on one demand graph
and then answer the questions below:.
$6
Shortage/
Surplus
(Qs - Qd)
$5
$4
Price Per Quantity Quantity
Compact Demanded Supplied
Disc (Qd) (Qs)
$6
o
9
$5
2
6
$4
3
5
$3
4
4
$2
6
3
$1
9
0
$3
$2
$1
1
2 3 4 5 6 7 8
9 10 11 12 13 14
Answer:
the answer is $3
Explanation:
Refer to the following selected financial information from McCormik, LLC. Compute the company's inventory turnover for Year 2.
Year 2 Year 1
Cash $37,500 36,850
Short-term investments 90,000 90,000
Accounts receivable, net 85,500 86,250
Merchandise inventory 121,000 117,000
Prepaid expenses 12,100 13,500
Plant assets 388,000 392,000
Accounts payable 113,400 111,750
Net sales 711,000 706,000
Cost of goods sold 390,000 385,500
a) 4.72.
b) 4.33.
c) 3.28.
d) 5.78.
e) 3.86.
Answer:
c) 3.28.
Explanation:
Computation for the company's inventory turnover for Year 2.
Using this formula
Inventory Turnover = Cost of Goods Sold / Average Inventory
Let plug in the formula
Inventory Turnover=$390,000/[($121,000+ $117,000)/2]
Inventory Turnover=$390,000/$238,000/2
Inventory Turnover=$390,000/119,000
Inventory Turnover=3.277
Inventory Turnover= 3.28 (Appropriately)
Therefore the company's inventory turnover for Year 2 is 3.28
Book Values versus Market Values In preparing a balance sheet, why do you think standard accounting practice focuses on historical cost rather than market value
Answer:
Historical costs is objectively and precisely measured, whereas market values can be difficult to estimate, and different analysts would come up with different
values.
Explanation:
In preparing a balance sheet it is customary for a company to value the assets and other items based on historical costs rather than market values.
For example if an asset is purchased at $20,000, this value will reflect in the balance sheet in subsequent years. Or future calculation will be based on this.
Let's say yearly depreciation is $1,000 then after on year the value will be $19,000, after two years $18,000 and so on.
This is more object than market value which varies at any one time.
Market value for an item will vary depending on location and the market.
You are evaluating a potential investment in equipment. The equipment's basic price is $176,000, and shipping costs will be $3,500. It will cost another $17,600 to modify it for special use by your firm, and an additional $8,800 to install it. The equipment falls in the MACRS 3-year class that allows depreciation of 33% the first year, 45% the second year, 15% the third year, and 7% the fourth year. You expect to sell the equipment for 30,900 at the end of three years. The equipment is expected to generate revenues of $151,000 per year with annual operating costs of $77,000. The firm's marginal tax rate is 35.0%. What is the after-tax operating cash flow for year 1
Answer:
$71,881.45
Explanation:
The after-tax operating cash flow for year 1 is simply the net income plus depreciation for year 1 since depreciation needs to be added back to net income as it is not a cash outflow in the actual sense.
net income=(revenue-annual operating costs-depreciation)*(1-tax rate)
revenue=$151,000
annual operating costs=$77,000
depreciation expense for year 1=($176,000+$3,500+$17,600+$8,800)*33%
depreciation expense for year 1=$67,947.00
tax rate=35.0%
net income=($151,000-$77,000-$67,947)*(1-35%)
net income=$3,934.45
after-tax operating cash flow for year 1=$3,934.45+$67,947.00
after-tax operating cash flow for year 1= $71,881.45