Answer:
nominal interest rate = 8.8%
periodic interest rate = 2.2%
the effective interest rate = 9.09%
Explanation:
nominal interest rate is the rate given to the investor = 8.8%
periodic interest rate = nominal interest rate / total number of compounding periods per year = 8.8% / 4 = 2.2%
the effective interest rate = (1 + periodic interest rate)ⁿ - 1 = (1 + 8.8%/4)⁴ - 1 = (1 + 8.8%/4)⁴ - 1 = (1 + 2.2%)⁴ - 1 = 1.0909 - 1 = 0.0909 = 9.09%
You want to invest $50,000 in a portfolio with a beta of no more than 1.4 and an expected return of 12.4%. Bay Corp. has a beta of 1.2 and an expected return of 11.2%, and City Inc. has a beta of 1.8 and an expected return of 14.8%. The risk-free rate is 4%. You can invest in Bay Corp. and City Inc. How much will you invest in each?
Answer:
Assume the weight to be invested in Bay Corp is x. That means (1 - x) will be the weight for City Inc. The expression for the expected return will be;
(x * 11.2%) + ( (1 - x) * 14.8%) = 12.4%
0.112x + 0.148 - 0.148x = 0.124
-0.036x = -0.024
x = 0.67
Portfolio beta is;
= 0.67 * 1.2 + ( 1 - 0.67) * 1.8
= 1.398 so beta condition is satisfied.
Amount in Bay Corp.;
= 0.67 * 50,000
= $33,500
Amount in City Inc.;
= 50,000 - 33,500
= $16,500
The amounts that will be invested in Bay Corp. and City Inc. will be $33500 and $16500.
Let the weight invested in Bay Corp be x.Therefore the weight invested in City Inc. will be 1 - x.
Therefore, the equation to solve the question will be:
( x × 11.2%) + [(1 - x) × 14.8%)] = 12.4%
Open the brackets
0.112x + 0.148 - 0.148x = 0.124
Collect like terms
-0.036x = -0.024
x = -0.024 / 0.036
x = 0.67
The portfolio beta will be:
= 0.67 * 1.2 + ( 1 - 0.67) × 1.8
= 1.398 .
Therefore, the amount invested in Bay Corp will be:
= 0.67 × $50,000
= $33,500
Therefore, the amount in City Inc. will be:
= $50,000 - $33,500
= $16,500
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Colleges often rely heavily on raising money for an "annual fund" to support operations. Alumni are typically solicited for donations to the annual fund. Studies suggest that the graduate’s annual income is a good predictor of the amount of money he or she would be willing to donate, and there is a reasonably strong, positive, linear relationship between these variables. In the studies described:
Answer: size of alum's donation to the annual fund is the response variable
Explanation:
Considering the annual income is a good predictor of the amount of money he or she would be willing to donate, and there is a reasonably strong, then the study indicated that the size of alum's donation to the annual fund is the response variable
If the European subsidiary of a U.S. firm has net exposed assets of 750,000 Euros, and the euro drops in value from $1.30/euro to $1.20/ Euro the U.S. firm has a translation:__________
a. gain of $75,000
b. loss of $75,000
c. gain of $65,000
d. loss of 546,923
who developed the revealed preference theory?
In economics
Answer:
In 1938 Samuelson presented revealed preference theory as an alternative to utility theory, while in 1950, Samuelson took the demonstrated equivalence of the two theories as a vindication for his position, rather than as a refutation.
Answer:
Samuelson developed the revealed preference theory.
In a single period system, the target ________ is the balancing point between shortage costs and excess costs.
Answer: service level
Explanation:
A single period inventory model typically occurs to the organizations that order one-time items. In this case, such organizations can only get the right quantity when they order once in order to prevent loss.
In a single period system, the target service level is the balancing point between shortage costs and excess costs.
Tinker's cost of goods sold in the year of sale (2019) was $750,000 and 2018 cost of goods sold was $770,000. The inventory at the end of 2019 was $188,000 and at the end of 2018 the inventory was $208,000. Tinker's average number of days to sell its inventory during 2019 is closest to: (Use 365 days a year.)
Answer:
96.3 days
Explanation:
Inventory turnover is calculated as;
= ( Average inventory / cost of goods sold ) × 365
Where,
Average inventory = (Beginning inventory + Ending inventory) / 2
Average inventory = ($208,000 + $188,000) / 2
Average inventory = $198,000
Therefore,
Inventory turnover = ($198,000 / $750,000) × 365
Inventory turnover = 96.3 days
The average number of days for Tinker to sell it's inventory during 2019 is closest to 96.3 days
A snack manufacturer discovers that they must increase the salt content of chips by 14 milligrams before about 50 percent of their consumers notice the change. A clever intern points out that this is an example of:
Answer:
difference threshold
Explanation:
Difference threshold is use by businesses or effectively reduce cost without affecting their profit margin .
It is the minimum amount of change that is required to make consumers of a product to notice the change 50% of the time.
In the given scenario the snack manufacturer discovers that they must increase the salt content of chips by 14 milligrams before about 50 percent of their consumers notice the change.
As a vice president of a financial services company, you serve many clients, and they sometimes ask your company to contribute to their favorite charities. You recently received a letter from Elliana Larios asking for a substantial contribution to the National Court Appointed Special Advocate (CASA) Association. On visits to your office, she has told you about its programs to recruit, train, and support volunteers in their work with abused children. She herself is active in your town as a CASA volunteer, helping neglected children find safe, permanent homes. She told you that children with CASA volunteers are more likely to be adopted and are less likely to reenter the child welfare system.
You have a soft spot in your heart for children and especially for those who are mistreated. You sincerely want to support CASA and its good work. But times are tough, and you can't be as generous as you have been in the past. Ms. Larios wrote a special letter to you asking you to become a Key contributor, with a pledge of $2,000
Your Task Write a refusal letter that maintains good relations with your client. Address it to Ms. Elliana Larios, 8569 East 39th Street, Phoenix, AZ 85730.
As a vice president of a financial services company, you serve many clients, and they sometimes ask your company to contribute to their favorite charities. You recently received a letter from Elliana Larios asking for a substantial contribution to the National Court Appointed Special Advocate (CASA) Association. On visits to your office, she has told you about its programs to recruit, train, and support volunteers in their work with abused children. She herself is active in your town as a CASA volunteer, helping neglected children find safe, permanent homes. She told you that children with CASA volunteers are more likely to be adopted and are less likely to reenter the child welfare system.
You have a soft spot in your heart for children and especially for those who are mistreated. You sincerely want to support CASA and its good work. But times are tough, and you can't be as generous as you have been in the past. Ms. Larios wrote a special letter to you asking you to become a Key contributor, with a pledge of $2,000
Your Task Write a refusal letter that maintains good relations with your client. Address it to Ms. Elliana Larios, 8569 East 39th Street, Phoenix, AZ 85730.
pencer Co. has a $300 petty cash fund. At the end of the first month the accumulated receipts represent 553 for delivery expenses, $167 for merchandise inventory, and $22 for miscellaneous expenses. The fund has a balance of $58. The journal entry to record the reimbursement of the account includes a:_________.a) Debit to Petty Cash for $300. b) Debit to Cash Over and Short for $58 c) Credit to Cash for $242 d) Credit to Inventory for $167e) Credit to Cash Over and Short for $58.
Answer:
c) Credit to Cash for $242
Explanation:
Petty cash, beginning = $300
Delivery expense = $53
Merchandise inventory = $167
Miscellaneous expense = $22
Petty cash, Ending = $58
The journal to record the reimbursement of the accounts will be:
Event Account Title and Explanation Debit Credit
1 Delivery expense $53
Merchandise inventory $167
Miscellaneous expense $22
Cash $242
A portfolio has 70 shares of Stock A that sell for $30 per share and 125 shares of Stock B that sell for $17 per share. (a) What is the portfolio weight of Stock A?(b) What is the portfolio weight of Stock B?
Answer:
Portfolio weight of Stock A=49.70%
Portfolio weight of Stock A=50.29%
Explanation:
Calculation for the portfolio weight of Stock A and Stock B
First step is to calculate the total amount invested in both portfolio weight of Stock A and Stock B
Stock A and Stock B Total amount invested=
(A 70 shares*$30 per share)+ (B 125 shares*$17 per share)
Stock A and Stock B Total amount invested=$2,100+$2,125
Stock A and Stock B Total amount invested=$4,225
Now let calculate the PORTFOLIO WEIGHT OF STOCK A
Using this formula
Portfolio weight of Stock A=Stock A/Stock A and Stock B Total amount invested
Let plug in the formula
Portfolio weight of Stock A=(70 shares*$30 per share)/$4,225
Portfolio weight of Stock A=$2,100/$4,225
Portfolio weight of Stock A=0.4970*100
Portfolio weight of Stock A=49.70%
Therefore the Portfolio weight of Stock A
will be 49.70%
Calculation for PORTFOLIO WEIGHT OF STOCK B
Using this formula
Portfolio weight of Stock B=Stock B/Stock A and Stock B Total amount invested
Let plug in the formula
Portfolio weight of Stock B=(125 shares*$17 per share)/$4,225
Portfolio weight of Stock B=$2,125/$4,225
Portfolio weight of Stock B=0.5029*100
Portfolio weight of Stock B=50.29%
Therefore the Portfolio weight of Stock will be 50.29%
Trevor Ang holds a $400,000 portfolio consisting of the following stocks:
Stock Investment Beta
A $100,000 1.40
B $70,000 1.60
C $30,000 1.10
D $200,000 1.00
Total $400,000
What is the portfolio's beta?
Answer:
Portfolio beta = 1.2125
Explanation:
The portfolio beta is a function of the weighted average of the individual stocks' betas that form up the portfolio. To calculate the beta of a portfolio, we use the following formula,
Portfolio Beta = wA * Beta of A + wB * Beta of B + ... + wN * Beta of N
Where,
w is the weight of each stock
Portfolio Beta = 100000/400000 * 1.4 + 70000/400000 * 1.6 +
30000/400000 * 1.1 + 200000/400000 * 1
Portfolio beta = 1.2125
ABC company had 8,000 in accounts receivable on Dec. 31, 2019. However, the company estimated that 2,000 of them would become bad debt. The company recorded the 2,000 as bad debt. What is the impact on the financial statement?
Answer:
Net income is reduced by 2,000 and the net value of receivables on balance sheet reduced by 2,000
Explanation:
Since it is given that there is $8,000 in account receivable out of which $2,000 would be estimated and recorded as a bad debt
So here the bad debt expense is recorded that means the expenses are increased that ultimately reduced the net income also at the same time the amount of receivable would also decreased by $2,000
Therefore the same is to be considered
A simple random sample of 700 individuals provides 200 Yes responses. a. What is the point estimate of the proportion of the population that would provide Yes responses (to 2 decimals)? b. What is your estimate of the standard error of the proportion (to 4 decimals)? c. Compute the 95% confidence interval for the population proportion (to 4 decimals).
Answer and Explanation:
A. The point estimate of individuals that would provide yes responses is the sample proportion. The sample proportion is calculated by dividing number of yes responses by sample size:
p = x/n = 200/700= 0.2857
B. The standard error of the population is the square root of the product of the point estimate and it's complement divided by the sample size given by
√p(1-p)/n
=√0.2857(1-0.2857)/700= 0.0170
C. For confidence level 95%, z score is calculated 1-0.95= 0.05/2= 0.025
Z score checked under the table = 1.96
Boundaries=
P-1.96 *standard error and p+1.96 *standard error
= 0.2857-1.96*0.0170= -0.25238
=0.2857+1.96*0.0170= 0.31902
Note : BODMAS demands we multiply first in the above calculation before subtraction or addition.
Magee Company's stock has a beta of 1.20, the risk-free rate is 4.50%, and the market risk premium is 5.00%. What is Magee's required return
Answer:
10.50%
Explanation:
Calculation for Magee's required return
Using this formula
Required return=Risk-free rate+Beta(Market risk premium)
Let plug in the formula
Required return= 4.50% + 1.20(5.00%) .
Required return=4.50%+6%
Required return= 10.50%
Therefore Magee's required return will beb10.50%
Renoir Associates has declared a $49,000 cash dividend to shareholders. The company has 4,000 shares of $16par, 6% preferred stock and 11,000 shares of $16par common stock. The preferred stock is noncumulative. How much will be distributed to the preferred and common stockholders on the date of payment?
Answer:
Preferred stock dividend is paid our before common dividends are paid out. Preferred dividends are;
= 4,000 * 16 * 6%
= $3,840
Common Stock Dividends
= 49,000 - 3,840
= $45,160
Which of the following best explains how the rise of machinery created an unfriendly relationship between industrialists and their employees?
A. The industrialist earned his income from the work of others.
B. There was a lack of unions.
C. The employees were underpaid.
Answer:
C
Explanation:
In as much as these are the only options given, then there has to be an answer there. Even though I fancy there being another answer.
But I'd say, the closest to the reason from the aforelisted is that the employees were underpaid. Since the advent of machineries, truth is that there wasn't going to be need for employees. This is because machines tend to have a much better output, better efficiency and won't need to be paid monthly in wages.
Since there isn't need for employees again, the industrialist tend to underpay the employees because they don't see their useful in the first instance
The rise of the use of machine is on the increase. The best explanation as to how the rise of machinery created an unfriendly relationship between industrialists and their employees is the employees were underpaid.
The industrialists did treat their workers bad. They make sure to keep wages as low as ever. Their attitude towards their employee was like if employee did not like the pay, the long hours and other working conditions he could quit and go to other places.
They were super-rich, living in great homes, living life lavishly abut their employees were paid little sum as if they do not have any choice.
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Hindelang Inc. is considering a project that has the following cash flow and WACC data. What is the project's MIRR?
WACC: 12.25%
Cash flows -
Year 0: - $850
Year 1: $300
Year 2: $320
Year 3: $340
Year 4: $360
Answer:
MIRR = 17%
Explanation:
The computation of the MIRR of a project is shown below:
Year Cash flows ( in $)
0 -850
1 300
2 320
3 340
4 360
WACC 12.25%
MIRR 17%
We simply applied the MIRR over the excel
We simply applied the attached formula so that the correct percentage could come
And, the same is to be considered
Keynes revolutionized economic theory by changing the explanation for what causes economic growth from aggregate _______ to aggregate _______.
a. demand; supply
b. supply; demand
c. cost; inflation
d. GDP; income
Answer:
b. supply; demand
Explanation:
Before Keynes, classical economists thought that aggregate supply was more important than aggregate demand in determining the overall economic level of a country. This was mainly because of the belief in say's law: the law stated that every offer creates its own deamand.
Keynes changed economics because he stated that demand and supply do not always reach equilibrium, and that demand is often insufficient, and it is the government job to stimulate demand through expansionary monetary and fiscal policy, like lowering interest rates and cutting taxes.
If the current price of a stock is P=40, its β=1.25, and the expected rate of return of the market portfolio is r¯M=0.13, what does CAPM predict for the price of the stock in a year? Use rf=0.05 as the risk-free rate.
Answer:
im sorry
Explanation:
Find the equivalent taxable yield of the municipal bond for tax brackets of zero, 10%, 20%, and 30%, if it offers a yield of 4.50%
Answer and Explanation:
The computation of the equivalent taxable yield is shown below:
For zero = 4.50%
For 10% = 4.50 ÷ 0.90 = 5%
For 20% = 4.50 ÷ 0.80 = 5.625%
For 30% = 4.50 ÷ 0.70 = 6.43%
For 10%, for 20% and for 30% it would reduced the tax brackets by the same
like
for 10%
= 1 - 0.10
= 0.90
The Same applied for other ones
Therefore the above should be the answer
If you decide to take a break and go for a hike in order to focus less consciously on the creative process, which stage is the creative process are you experiencing?
Answer: Incubation
Explanation: In the incubation stage the person moves away from the problem and gives space to the mind to search for a solution. An example is going for a walk to relax your mind a bit and ideas flow better.
A stock has a beta of 1.2. Suppose the expected market risk premium (EMRP) is 6% and the risk-free rate is 1%. What is this stock's expected return according to the CAPM
Answer:
7%
CAPM = 1% + [6% - 1%](1.2) = 1% + 6% = 7%
A US Multi National Corporation has a contract for a relatively predictable long-term inflow of Japanese yen. The firm decides to hedge the yen exposure by finding a supplier in Japan and paying for these imports in yen. This hedging strategy is known as ________.
Answer: a natural hedge
Explanation:
Natural hedge is simply a strategy that is used by a company in order to reduce risk and this is done through the investment in the assets that their performance is not positively correlated.
Such companies typically makes revenue in the currency of another country. Since the firm decides to hedge the yen exposure by finding a supplier in Japan and paying for these imports in yen, this hedging strategy is known as natural hedge.
Charging off the cost of a wastebasket with an estimated useful life of 10 years as an expense of the period when purchased is an example of the application of the
Answer:
E. materiality concept
Explanation:
The materiality concept refers to a concept in which it impacts the decisions of the user if there is any small impact. In other words, any small impact could change the user decisions with respect to the financial statement i.e. relevant and useful
Therefore according to the given situation, the Option E is correct
And all the other options are incorrect
When operating in a constrained environment, which products should be produced? a. products with the highest contribution margin per unit b. products with the highest contribution margin per unit of the constrained process c. products with the highest selling price d. products with the lowest allocated joint cost
Answer: B. products with the highest contribution margin per unit of the constrained process.
Explanation:
When operating in a constrained environment, the products that should be produced are the products with the highest contribution margin per unit of the constrained process.
This is essential for the company to maximize its total contribution margin. This in turn will help the company in realizing revenue and also maximizing profit.
Select the correct answer.
Restaurant supply companies handle deliveries of foods and goods to restaurants.
ОА.
True
OB.
False
Answer:
True
Explanation:
I took the test and this is the right answer. :-)
(2-3 statements answer only) I'll give brainliesr.
•What market/s do we consider when it comes to raw materials?
Answer:
factor market
Explanation
Lemme know if I'm wrong :/
When evaluating an investment, the MNC should consider the ____________ cash flows generated by the project.
a. total
b. variable
c. incremental
d. fixed
Answer: c. Incremental
Explanation:
Simply put incremental cashflow is the additional cashflow that accrues to a company when it takes on a new project. The Multinational company should therefore consider this when they are accepting a project.
If the new project has a positive incremental cashflow, it will add to the cashflows of the company and so should be initiated as opposed to those with negative incremental cashflows.
Zebco Inc is evaluating a project that has a cost of $1,000 and will produce end-of-year net cash inflows of $500 per year for 3 years. The required rate of return for this project's is 10 percent. The difference between the project's IRR and its MIRR is closest to:_________.
a. 5.09%
b. 5.75%
c. 4.31%
Answer:
a. 5.09%
Explanation:
initial outlay = -$1,000
cash flow 1 = $500
cash flow 2 = $500
cash flow 3 = $500
the simplest way to determine the IRR and MIRR is to use an excel spreadsheet and the IRR and MIRR functions:
IRR = 23.38%
in order to us the MIRR formula, we must use the 10% rate as both financing and reinvestment rates.
MIRR = 18.29%
difference between them = 23.38% - 18.29% = 5.09%
Donnegan Company reported operating expenses of $325,000 for 2020. The following data were extracted from the company’s financial records: 12/31/19 12/31/20 Prepaid Expenses $ 60,000 $69,000 Accrued Expenses 210,000 255,000 Accounts Payable 300,000 350,000 On a statement of cash flows for 2020, using the direct method, cash payments for operating expenses should be:___________.
Answer:
cash payments for operating expenses should be $329,000
Explanation:
Cash Payments for operating expenses is included in the Cash Flow from Operating Activity Section of the Statement of Cash Flows when the Direct Method of preparing this statement is selected.
This is calculated as follows :
Cash Payments for operating expenses
Operating expenses $325,000
Adjustment of changes in Working Capital
Increase in Prepaid Expenses ($69,000 - $ 60,000) $9,000
Increase in Accrued Expenses ($255,000 - $210,000) $45,000
Increase in Accounts Payable ($350,000 - $300,000) ($50,000)
Cash payments for operating expenses $329,000