The level annual benefit premium for the given multi-state 3-year term insurance is approximately $11,800, calculated using the equivalence principle and weighted sums of expected present values of premiums and benefits. So, the correct option is (C).
To calculate the level annual benefit premium, we can use the equivalence principle, which states that the expected present value of premiums equals the expected present value of benefits. We can set up an equation to solve for the premium as follows:
PV(Premiums) = PV(Benefits)
where PV denotes present value. We can break down the expected present value of premiums and benefits for each state:
State 0 (Active):
PV(Premiums|State 0) = 100,000 * (1 - 0.1) = 90,000 (since premiums are paid only if the insured is active)
PV(Benefits|State 0) = 0.8 * 0 + 0.1 * 100,000 + 0.1 * 100,000 = 20,000 (since the insured has a 10% chance of becoming disabled and a 10% chance of dying)
State 1 (Disabled):
PV(Premiums|State 1) = 0 (since no premiums are paid when the insured is disabled)
PV(Benefits|State 1) = 100,000 * (0.7 * 0 + 0.2 * 1) = 20,000 (since the insured has a 70% chance of remaining disabled and a 20% chance of dying)
State 2 (Dead):
PV(Premiums|State 2) = 0 (since the insured cannot pay premiums when dead)
PV(Benefits|State 2) = 100,000 * 1 = 100,000 (since the benefit is payable at the end of the year of death)
Now, we can calculate the expected present value of premiums and benefits by taking a weighted sum of the values for each state, using the transition probabilities:
PV(Premiums) = 0.8 * PV(Premiums|State 0) + 0.1 * PV(Premiums|State 1) + 0 * PV(Premiums|State 2) = 0.8 * 90,000 + 0.1 * 0 + 0 * 0 = 72,000
PV(Benefits) = 0.8 * PV(Benefits|State 0) + 0.1 * PV(Benefits|State 1) + 1 * PV(Benefits|State 2) = 0.8 * 20,000 + 0.1 * 20,000 + 1 * 100,000 = 118,000
Finally, we can solve for the level annual benefit premium by equating the two values:
72,000 = 118,000 / (1 + d)^3
where d is the discount rate. Solving for the premium, we get:
Premium = 118,000 / (1 + d)^3 / 3 = 11,792.07
Rounding to the nearest dollar, the correct answer is (C) 11,800.
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classify each of the items as revenue, expense, other changes to stockholders' equity (other than revenue or expense), or none of these:
Issuance of stock- other changes to stockholders' equity
Prepaid insurance- others- Assets
Rent expenses-Expense
In fashionable usage, revenue is the full amount of income by using the sale of products or offerings associated with the company's operations. sales income is earnings obtained from promoting items or offerings over a time body. Tax revenue is income that a central authority gets from taxpayers. Fundraising revenue is profits acquired through a charity from donors and so on. to in addition its social functions.
In greater formal usage, revenue is a calculation or estimation of periodic profits primarily based on a particular well-known accounting practice or the guidelines mounted by means of a central authority or authorities company. two common accounting methods, cash foundation accounting and accrual foundation accounting do not use the equal technique for measuring revenue. corporations that provide shares on the market to the public are usually required with the aid of regulation to record sales primarily based on normally conventional accounting concepts or on global economic Reporting standards.
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Complete Question:
Classify the following item as Revenue, Expense, Other Changes to Owner's Equity, or None of these:
(i) Accounts payable
(ii) Advertising expense
(iii) Investment owner
suppose the price of leather used to produce shoes increases. the higher price of leather the supply of shoes, and the supply curve of shoes . group of answer choices decreases; shifts rightward decreases; shifts leftward does not change; does not shift increases; shifts leftward increases; shifts rightward
This would cause an increase in the production cost of shoes, which could affect the supply of shoes. The correct answer is: Decreases; shifts leftward.
Suppose the price of leather used to produce shoes increases. The increase in the price of leather would lead to a decrease in the profit margins for shoe producers. In response, they may reduce their production of shoes, resulting in a decrease in the quantity supplied of shoes at every price level. This decrease in supply would cause the supply curve of shoes to shift leftward, indicating that shoe producers are willing to supply fewer shoes at every price level than before. The new equilibrium price and quantity of shoes would depend on the magnitude of the increase in the price of leather and the elasticity of demand for shoes. If the demand for shoes is relatively elastic, the increase in price may cause a larger decrease in quantity demanded and a larger decrease in the equilibrium price of shoes.
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One of the objectives of facility location analysis is to select a site with the lowest total cost. Which of the following are hidden costs that should be included in the analysis? Multiple Choice Becoming less responsive to the customer Supplier costs Construction costs Taxes X Product life cycle costs
The cοrrect answer is becoming less responsive to the customer. The hidden cost that should be included in the facility location analysis is becoming less responsive to the custοmer.
What is the most important objective of facility planning?The intention of facility planning is to not solely understand opportunities for efficiency, but tο assume them as well. Alleviating inefficiencies inside the administrative center has rippling effects throughout the whοle business.
Governmental barriers to enter and detect in many international locatiοns are growing through restrictive protectionist legislation. Quality of life in a host community is nο longer a most important element in making the facility area decision.
Facility place (or location-allocation) analysis determines the mοst advantageous places for a given quantity of services from a set of feasible locations based totally on sοme criteria whilst simultaneously assigning the client demand to the shοps or distribution centers.
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Complete question:
the direct order of organizing information in a message is likely to produce the most effective result in question 9 options: a. a letter to the parents of a student regarding his absenteeism. b. an email to a vendor giving the reasons for no longer buying from him. c. a memo to an employee informing her of the termination of her service. d. an email praising the best-performing employees of the quarter. e. a letter to a customer apologizing for the non-availability of a product.
In the following question, among the given options, The direct order of organizing information is likely to produce the most effective result in options (a), (b), (c), and (e).
Here is a brief about the following
(a) A letter to the parents of a student regarding his absenteeism should be organized in a direct manner, starting with a clear statement of the reason for the letter and providing specific details about the student's absenteeism.
(b) An email to a vendor giving the reasons for no longer buying from him should also be organized in a direct manner, starting with a clear statement of the decision to stop buying from the vendor and providing specific reasons for the decision.
(c) A memo to an employee informing her of the termination of her service should be organized in a direct manner, starting with a clear statement of the decision and providing specific details about the reasons for the termination.
(e) A letter to a customer apologizing for the non-availability of a product should also be organized in a direct manner, starting with a clear statement of the apology and providing specific details about why the product is not available and what is being done to address the situation.
Option (d), an email praising the best-performing employees of the quarter, may benefit from a more indirect approach, such as starting with a general statement of appreciation before moving on to specific details about the employees' performance. However, the effectiveness of this approach may depend on the specific context and audience.
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in general, which of these contract terms is not required to meet the requirement of definiteness? the parties involved the subject matter of the contract the time of payment acceptance assessment question in general, certain terms must be included in contracts to satisfy the requirement of definiteness. what are the exceptions to this rule? choose 2 answer choices. courts can rewrite contracts even if the intent is vague. if the contract is in writing, not all terms are required to be included. sales contracts under the ucc courts can complete a contract to supply some missing items.
If any of those contract conditions must generally be acceptance in order to satisfy the definiteness requirement?
The secret to acceptance is?Acceptance entails accepting the "unvarnished truths" about who we are and our circumstances, including the excellent and not so great, with passing judgment on ourselves. Acceptance is the starting point for growth and change, not a reason for us to remain trapped with things the way they are [9].
What does acceptance have to offer?Accepting enables us to speak up for our own needs but also acknowledging that other people may feel differently than we do, for example, and while also comprehending their possible reasons for doing so. As contrast to the "my way or the highway" viewpoint, this method pave the way for respect and cooperation between all parties.
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An IAR has set up the initial meeting with a prospective advisory client. An important part of that meeting is gathering client data. Of the following items, which is generally considered to be the most important for preparing suitable recommendations?
A) Age of the prospect
B) Assets available for investment
C) Risk tolerance
D) Life stage
The most important for preparing suitable recommendations when gathering client data is generally Risk tolerance . This is because risk tolerance determines the level of investment risk a client is willing and able to take on. So, The correct option is (c).
Risk tolerance is generally considered the most important item for preparing suitable recommendations. This is because risk tolerance ultimately guides the advisor in creating a suitable investment portfolio.
For example, a young client may have a low risk tolerance due to a conservative personality, while an older client may have a high risk tolerance due to a large pension or inheritance. Therefore, understanding a client's risk tolerance is critical in designing an investment portfolio that aligns with their financial goals and objectives. The correct answer is (c).
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David Ricardo's theory of comparative advantage and free trade was an attack on which of the following economic doctrines of the age? a. colonialism b. laissez-faire c. communism d. feudalism
the following economic theories of the time was attacked by David Ricardo's thesis of comparative advantage and free trade on colonialism.
What is the foundation of David Ricardo's idea of comparative advantage?According to Ricardo's widely regarded comparative advantage theory, states can obtain an international trade advantage by focusing on manufacturing items with the lowest opportunity costs when compared to other nations. Ricardo's premise is that removing protection would cause resources to shift from high-cost to low-cost items, resulting in increased production. His comparative advantage theory, which advocates for a free trade paradigm, is part of the wider argument for laissez faire. In On the Principles of Political Economy and Taxation (1817), David Ricardo predicted that landowners would get an increasing share of national revenue while capitalists would receive less and less, resulting in economic stagnation.
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TRUE OR FALSE: As opposed to venture capitalists, angel investors prefer to target their investments in new firms requiring large sums of money.
As opposed to venture capitalists, angel investors prefer to target their investments in new firms requiring large sums of money. The statement is True.
What is capitalist?A common conception of capitalism is as an economic system where individual actors own and control property according to their interests and where supply and demand freely determine market prices in a way that can best serve society.
The desire to turn a profit is capitalism's fundamental characteristic. Socialism is based on government planning and restrictions on private control of resources, whereas capitalism is based on individual initiative and prefers market mechanisms over government involvement.
When left to their own devices, economies frequently mix components from both systems. Without a question, capitalism plays a significant role in the modern era's creativity, riches, and success.
Businesses are encouraged to maximize efficiency by competition and capital accumulation.
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When I purchase a corporate _______, I am lending the corporation funds for a purchase a corporation's _______, I become an owner in the corporation. stock: debt security stock: bond bond: debt security bond: stock
When I purchase a corporate bond, I am lending the corporation funds for a purchase a corporation's stock, I become an owner in the corporation.
A stock, usually referred to as equity, is a type of investment that denotes ownership in a portion of the issuing company. Shares, also known as units of stock, entitle its owners to a share of the company's assets and income in proportion to the number of shares they possess. Most individual investors' portfolios are built on stocks, which are mostly bought and sold on stock exchanges. Government standards designed to shield investors from dishonest tactics must be followed during stock trades. Corporations are a unique sort of organisation even if stockholders do not own them since they are regarded by the law as legal persons. Companies report their taxes. can be sued, can borrow money, and can possess property. A company is a "person" in the sense that it has rights and obligations.
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Which of the following is the term used for the amount and number of raw materials, parts, and finished products that a company has in its possession?A. disturbed materials B.inventory C. physical resources D. Supplies E. material resources
The following option that is being defined as the amount and number of raw materials, parts, and finished products that a company has in its possession is B. inventory.
In the term of business and economic, Inventory also can be called as stock. Inventory generally can be defined as the goods and materials that a business holds for the ultimate goal of resale, production or utilization. In the other side, the Inventory management generally can be defined as a discipline primarily about specifying the shape and placement of stocked goods. Inventory can be classified into several types, such as raw materials, work-in-progress (or also known as WIP), finished goods, and maintenance, repair, and overhaul ( or also known as MRO) inventory.
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Alternative price indexes Because there isn't one single measure of inflation, the government and researchers use a variety of methods to get the most balanced picture of how prices fluctuate in the economy. Two of the most commonly used price indexes are the consumer price index (CPI) and the GDP deflator. The GDP deflator for this year is calculated by dividing the using by the using and multiplying by 100. value of all goods and services produced in the economy this year cost of a given market basket of goods and services value of all goods and services produced in the economy in the base year United States. Check all that apply. Shows up in the... GDP Deflator CPI Scenario An increase in the price of a Treewood Equipment feller buncher, which is a commercial forestry machine made in the U.S. but not bought by U.S. consumers A decrease in the price of a German-made television that is popular among U.S. consumers
Arrives in the...
GDP Deflator: An increase in the cost of a commercial forestry machine built in the United States but not purchased by American customers, such as a Treewood Equipment feller buncher.
CPI: A drop in the cost of a well-liked by American consumers television made in Germany.
What does GDP deflator actually mean?The GDP deflator, often known as the implicit price deflator, is used to calculate inflation. The annual price levels of newly produced final goods and services in a country are estimated using this method.
What do CPI and GDP deflators measure?The GDP price index and implicit price deflator analyse price increases in products and services purchased by consumers, firms, the government, and foreigners but not importers, whereas the CPI tracks price changes in out-of-pocket expenditures made by urban consumers.
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refer to exhibit 4.1. what is the firm's tie? do not round your intermediate calculations. question 12 options: 3.99 3.19 3.76 3.35 3.82
Grounded on current income, the times interest earned( TIE) rate assesses a company's capacity to service its debt. Earnings before interest and levies( EBIT) divided by the total interest due on bonds and other debt is the computation for a company's TIE number.
The outgrowth is a figure that illustrates how numerous times a business could pay its interest charges out of pretax gains. The interest content rate is another name for TIE. Consider that XYZ Company, for case, has$ 10 million in outstanding 4 debt and$ 10 million in ordinary stock. To buy outfit, the business needs to raise further plutocrat. 6 periodic interest is the cost of capital for issuing farther debt.
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A company makes a $1000 payment to Supplies Mart, to pay the outstanding balance on account. This transaction would be journalized with a debit to the _____________ account and a credit to the _________ account.
A company makes a $1000 payment to Supplies Mart, to pay the outstanding balance on the account. This transaction would be journalized with a debit to the Payable account and a credit to the Cash account.
The debit to Accounts Payable recognizes the outstanding balance owed to Supplies Mart. This account is a liability account and it is used to track the amount of money that the company owes to its vendors.
By debiting this account, the outstanding balance is reduced by the amount of the payment.
The credit to Cash recognizes the payment of $1000 to Supplies Mart. This account is an asset account and it is used to track the amount of money that the company has available to pay its bills. By crediting this account, the money available to the company is reduced by the amount of the payment.
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How would the following changes in price affect total revenue? That is, would total revenue increase, decrease, or remain unchanged?
Price falls and demand is inelastic: Decrease
Price rises and demand is elastic: Decrease
Price rises and supply is elastic: Increase
Price rises and supply is inelastic: Increase
Price rises and demand is inelastic: Increase
Price falls and demand is elastic: Increase
Price falls and demand is of unit elasticity: Remain unchanged
Increasing price will decrease revenue changes in price affect total revenue . That is, would total revenue increase, decrease, or remain unchanged.
What are sales versus profit?
Profit is the net money left over after deducting costs from earnings, whereas revenue is the income created by business operations. Sales, income from fees, and income from property are just a few examples of the different ways in which revenue can be earned.
The total income a firm receives from the sale of products or services that are connected to its core business operations is referred to as revenue.
How do price adjustments impact overall revenue?
Thus, a price rise will result in higher overall revenue whereas a price cut will result in lower overall revenue. Last but not least, demand is said to be unit elastic when the percentage change in quantity required is equal to the percentage change in price.
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which of the following is an example of a noncash item on an income statement? multiple choice question. retained earnings depreciation dividends costs
Option b: Depreciation. Depreciation is a suitable example of a noncash item on a income statement.
In accountancy, the depreciation is a term that refers to two aspects of the same concept.
The first is the actual decrease in the fair value of an asset as it is used (matching principle).
Depreciation is thus the depreciation of an asset, the way the cost of a tangible asset (such as equipment) is redistributed or "depreciated" over its useful life.
Businesses depreciate the long-term assets for both accounting and the tax purposes. Asset impairment affects the balance sheet of a company or entity, and the method of accounting depreciation of assets affects the final result and therefore the income statement that is reported.
Acquisition costs are generally allocated as depreciation over the period the asset is expected to be used.
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Which of the following government actions is the most common for a natural monopoly in the United States?
a. prevents its formation
b. break it up using antitrust laws
c. use price regulation
d. public ownership
e. elimination of the market
The answer is option c. use price regulation, is one of the actions that is most common for a natural monopoly in the United States.
What does the term "monopoly" signify in economics?Definition: A market system in which a single seller dominates the market and offers an exclusive product. In a monopoly market, there is no competition for the seller because there is no other close equivalent for the goods he is selling.
What are examples of monopoly?A company that sells its product exclusively and without any close substitutes is said to have a monopoly. An unchecked monopoly has the ability to set prices and has market power. Examples include Microsoft and Windows, DeBeers and diamonds, and the natural gas provider in your community.
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Analyze the following cases and apply what you have learned in this week's module:Present value and future value of an annuity. Fran Abrams wants to determine how much money she will have in 5 years if she chooses annuity A, that is, the ordinary annuity. She will deposit $1,000 per year, at the end of each of the next 5 years, into a savings account that pays 7% annual interest.Present value and future value of mixed income. Frey Company, a shoe manufacturer, has the opportunity to receive the following mixed inflow of cash flows over the next 5 years:Year 1 $3,000Year 2 $5,000Year 3 $4,000Year 4 $3,000Year 5 $2,000If the company is to earn at least 9% on its investments, what is the most it should pay for that opportunity?
The most Frey Company should pay for that opportunity is $13,320.29 if they want to earn at least 9% on their investments.
The present value and future value of an annuity can be calculated using the following formulas:
Future value of an annuity: FV = P * [(1 + r)^n - 1] / r
Present value of an annuity: PV = P * [1 - (1 + r)^-n] / r
Where P is the payment amount, r is the interest rate, and n is the number of periods.
For Fran Abrams' annuity A, we can use the future value formula to determine how much she will have in 5 years:
FV = $1,000 * [(1 + 0.07)^5 - 1] / 0.07
FV = $5,750.69
Therefore, Fran will have $5,750.69 in 5 years if she chooses annuity A.
For Frey Company's mixed income opportunity, we can use the present value formula to determine the most they should pay for that opportunity:
PV = $3,000 * [1 - (1 + 0.09)^-1] / 0.09 + $5,000 * [1 - (1 + 0.09)^-2] / 0.09 + $4,000 * [1 - (1 + 0.09)^-3] / 0.09 + $3,000 * [1 - (1 + 0.09)^-4] / 0.09 + $2,000 * [1 - (1 + 0.09)^-5] / 0.09
PV = $2,752.29 + $4,198.35 + $3,030.93 + $2,099.18 + $1,239.54
PV = $13,320.29
Therefore, the most Frey Company should pay for that opportunity is $13,320.29 if they want to earn at least 9% on their investments.
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Which, if any, of the following statements concerning disclosures related to investment property is/are correct?
I. When the fair value method is used, the entity must disclose whether or not a qualified independent party provided valuations.
II. When the cost method is used, the entity must still disclose fair value of investment property.
Only statement I. "When the fair value method is used, the entity must disclose whether or not a qualified independent party provided valuations." about concerning disclosures related to investment property is/are correct.
Yes, when the fair value method is used, the entity must disclose whether or not a qualified independent party provided valuations. This disclosure is important because it allows investors to determine if the fair value estimates are reliable.
An independent party's opinion can give investors confidence that the estimates are accurate and that the entity is not overvaluing its assets or liabilities.
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suppose that sam and teresa are the only suppliers of boots in some hypothetical market. their annual supply schedules are given by the following table: price sam's quantity supplied teresa's quantity supplied (dollars per pair) (pairs) (pairs) 10 0 12 20 8 24 30 16 32 40 20 40 50 24 44 on the following graph, plot sam's supply of boots using the green points (triangle symbol). next, plot teresa's supply of boots using the purple points (diamond symbol). finally, plot the market supply of boots using the orange points (square symbol). note: line segments will automatically connect the points. remember to plot from left to right.
To plot Sam's supply of boots, we use the green triangle symbol. At a price of $10, Sam supplies 0 pairs of boots. At a price of $20, Sam supplies 8 pairs of boots.
At a price of $30, Sam supplies 16 pairs of boots. At a price of $40, Sam supplies 20 pairs of boots. At a price of $50, Sam supplies 24 pairs of boots. These points are then connected by line segments to form a supply curve.
To plot Teresa's supply of boots, we use the purple diamond symbol. At a price of $12, Teresa supplies 20 pairs of boots. At a price of $24, Teresa supplies 24 pairs of boots.
At a price of $32, Teresa supplies 32 pairs of boots. At a price of $40, Teresa supplies 40 pairs of boots. At a price of $44, Teresa supplies 44 pairs of boots. These points are then connected by line segments to form a supply curve.
To plot the market supply of boots, we add the quantity supplied by Sam and Teresa at each price level. For example, at a price of $10, the market supply is 0 + 12 = 12 pairs of boots. At a price of $20, the market supply is 8 + 24 = 32 pairs of boots.
These points are then connected by line segments to form the market supply curve using the orange square symbol. The market supply curve represents the total quantity of boots supplied by both Sam and Teresa at different price levels.
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true/false. gaggle, inc., and chirp chirp, inc., have their dispute resolved in arbitration. the arbitrator makes an erroneous finding of fact. this is a ground for a court to review the merits of the award.
The statement '' gaggle, incl. and chirping chirping, incl. settle their disputes by arbitration. the arbitrator makes a false statement. this is the reason why the court evaluates the reasonableness of the punishment '' is false because arbitration is a procedure where, with the consent of the parties .
By choosing arbitration, the parties are choosing a private dispute resolution process instead of going to court. Out-of-court dispute resolution procedures include arbitration, mediation, negotiated rulemaking, neutral finding, and mini-trials. In addition to mandatory arbitration, the purpose of ADR is to provide a forum for parties to work toward a voluntary settlement, rather than having the case decided by a judge or other authority.
Both parties waive the right to appeal, which means that the other party may feel paralyzed. If the matter is complex but the amount of money involved is modest, the fee for an arbitrator may make arbitration uneconomical.
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Suppose that you have a risky asset that provides you with an expected return of 12% per year with 20% volatility (standard deviation). Consider a risk-free asset that provides you with a 3% risk-free return.
If you are allowed to borrow money at a risk-free rate, how can you get a portfolio with an 18% expected return, and what is the risk of this portfolio?
The risk of the portfolio is 17.5%.
To get a portfolio with an 18% anticipated return, we need to combine the risky asset with the threat-free asset in such a way that the overall portfolio has an anticipated return of 18%.
Let x be the proportion of the portfolio invested in the parlous asset, and( 1- x) be the proportion invested in the threat-free asset. also the anticipated return of the portfolio is
E( Rp) = x * E( Rrisky) ( 1- x) * E( Rrisk-free)
where E( Rrisky) is the anticipated return of the parlous asset, which is 12% in this case, and E( Rrisk-free) is the anticipated return of the threat-free asset, which is 3.%
Setting E( Rp) = 18%, we get
18% = x * 12( 1- x) * 3
working for x, we get x = 0.875.
So, we need to invest 87.5% of the portfolio in the parlous asset and the remaining 12.5% in the threat-free asset to get an anticipated return of 18%.
The risk( or standard deviation) of the portfolio is given by
σp = x * σrisky
where σrisky is the standard deviation of the parlous asset, which is 20 in this case.
Substituting the values, we get
σp = 0.875 * 20% = 17.5%
thus, the risk of the portfolio is 17.5%.
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TRUE/FALSE. When a competitive analysis shows that a similar business concept already exists, the owner can still enter the market with a similar concept that just provides better service.
When competitive research reveals that a similar business concept already exists, the owner can still enter the market with a similar concept that only offers superior service, it's true.
Competitive analysis: What is it?Researching key rivals as part of a competitive analysis is a tactic used to learn more about their offerings, revenue streams, and marketing strategies. Conducting a competitive market study can help you implement more effective business strategies, fend off rivals, and gain market share, to name a few advantages.
You can find possible possibilities to outperform your competition and learn the ins and outs of how your rival operates by doing a competitive analysis.
Additionally, it makes it possible for you to keep abreast of market developments and make sure your goods continually meet and surpass industry standards. In order to distinguish your goods and services from those of your rivals, competitive market research looks for and contrasts key market metrics.
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marvin harris explains taboos by arguing for a real economic benefit to the society. which of the following is not a criticism of this approach?
The answer is It does not account for why the taboo is maintained when economic situations change is not a criticism of this approach.
What kinds of things are taboos?Some people believe that discussing sex, politics, and religion in polite company is inappropriate. A taboo behavior is one that a society or culture deems unacceptable. In some communities or cultures, having sex before or after being married is considered taboo.
What taboos are most prevalent?Common taboos include prohibitions or ritual regulations of killing and hunting, sex and sexual relationships, reproduction, the dead and their graves, as well as food and dining (mainly cannibalism and dietary standards like vegetarianism, kashrut, and halal) or religious practices (treif and haram).
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What is the treatment for freehold property in final account
In construction accounting, the treatment for freehold property in the final account refers to how the value of a freehold property is accounted for in the project's final financial statements.
What is the rationale for the above response?In construction accounting, the treatment for freehold property in the final account refers to how the value of a freehold property is accounted for in the project's final financial statements. Freehold property refers to land or buildings that are owned outright by the project owner, rather than leased or rented.
The treatment for freehold property in the final account typically involves including the value of the property as a fixed asset on the project's balance sheet. This value is then depreciated over time, using an appropriate depreciation method, in order to reflect the decline in value of the property over its useful life.
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Each of the four independent situations below describes a lease requiring annual lease payments of $10,000. For each situation, determine the appropriate lease classification by the lessee and indicate why. Table Summary: Summary Situation 1 2 3 4 Lease term (years) 4 4 4 4 Asset's useful life (years) 6 5 6 6Asset's fair value $44,000 $45,000 $41,000 $38,500 Purchase option that is reasonably certain to be exercised? No Yes No No Annual lease payments Beg. of yr. End of yr. Beg. of yr. End of yr. Lessor's implicit rate (known by lessee) 5% 6% 5% 6% Lessee's incremental borrowing rate 5% 5% 5% 5%
Situation 1: Operating lease
Situation 2: Finance lease
Situation 3: Operating lease
Situation 4: Operating lease
Situation 1:
Lease classification: Operating lease
Explanation: The lease term is less than 75% of the asset's useful life, there is no purchase option reasonably certain to be exercised, and the present value of the lease payments is less than 90% of the asset's fair value. Therefore, the lease is classified as an operating lease.
Situation 2:
Lease classification: Finance lease
Explanation: The lease term is equal to 75% of the asset's useful life, and there is a purchase option that is reasonably certain to be exercised. Therefore, the lease is classified as a finance lease.
Situation 3:
Lease classification: Operating lease
Explanation: The lease term is less than 75% of the asset's useful life, there is no purchase option reasonably certain to be exercised, and the present value of the lease payments is less than 90% of the asset's fair value. Therefore, the lease is classified as an operating lease.
Situation 4:
Lease classification: Operating lease
Explanation: The lease term is less than 75% of the asset's useful life, there is no purchase option reasonably certain to be exercised, and the present value of the lease payments is less than 90% of the asset's fair value. Therefore, the lease is classified as an operating lease.
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5. the price of trade suppose that slovenia and liechtenstein both produce olive oil and wheat. slovenia's opportunity cost of producing a bushel of wheat is 5 crates of olive oil while liechtenstein's opportunity cost of producing a bushel of wheat is 11 crates of olive oil. by comparing the opportunity cost of producing wheat in the two countries, you can tell that has a comparative advantage in the production of wheat and has a comparative advantage in the production of olive oil. suppose that slovenia and liechtenstein consider trading wheat and olive oil with each other. slovenia can gain from specialization and trade as long as it receives more than of olive oil for each bushel of wheat it exports to liechtenstein. similarly, liechtenstein can gain from trade as long as it receives more than of wheat for each crate of olive oil it exports to slovenia. based on your answer to the last question, which of the following prices of trade (that is, price of wheat in terms of olive oil) would allow both liechtenstein and slovenia to gain from trade? check all that apply. 1 crate of olive oil per bushel of wheat 3 crates of olive oil per bushel of wheat 7 crates of olive oil per bushel of wheat 15 crates of olive oil per bushel of whea
Slovenia and Lichtenstein would gain from trade if trade prices were favourable, such as the price of wheat relative to the price of olive oil.
What is meant by Prices of Trade?The amount that makers of goods charge retailers for their products, as in contrast to what shoppers normally pay in-store: I got my coat at a trade price straight from the factory.
A broad definition of trade costs includes costs associated with enforcement, exchange rates, legal and regulatory requirements, local distribution, transportation (including freight and time costs), communication, and other information costs.
Therefore, In each transaction, list the different amounts you paid for the stock, as well as the total number of shares you purchased. Subtract the number of shares involved in each transaction from the transaction's price.
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Aperol Industries started their business on January 1st. On the first day of operations, they purchased three machines. These machines all had varying costs, useful lives, and residual values. They are forecasting their fixed asset book values and depreciation expense. They have provided the dashboard below. The first line chart demonstrates the book value of each asset as of the end of each year, while the second line chart demonstrates the total depreciation expense expected to be recorded in the income statement each year. Aperol Industries employs straight-line depreciation on all of their assets.
Depreciation expense of Machine A =$ 80,000, Depreciation expense of Machine B = $50,000, Depreciation expense of Machine C = $30,00, Total depreciation for first year = $160,000, Total depreciation for Second year = $160,000, Total depreciation for Third year = $80,000, Total depreciation for fourth year = $50,000.
What is the solution of the question?The values provided in the question are as follows :
Machine A = $170,000
Machine B = $250,000
Machine C = $ 90,000
According to the first line chart,
The useful life of these three machine are as follows:
Machine A = 4 years
Machine B = 2 years.
Machine C = 3 years.
Residual value :
Machine A = 450,000
Machine B = $10,000
Machine C = $ 0
Calculation of depreciation expenses as follows:
The formula to calculate annual deprecation is as follows:
Annual depreciation ( Macine A)=( Cost of machine − Residual value ) / Expexcted useful life.=$170,000−$10,0002=$80,000
Annual depreciation (Machine B ) =( Cost of machine − Residual value ) / Expected useful life.=$250,000−$50,0004=$50,000
Annual depreciation (Machine C)=(Cost of machine − Residual value )/ Expected useful life.=$90,000−$03=$30,000
Dr Depreciation Expense - $50,000
Cr Accumulated Depreciation - $50,000
(To record depreciation expense of Machine B )
Thus, the depreciation of all the years is written above.
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an auditor is testing a client's pension benefit obligation. which of the following types of evidence would be most appropriate for determining that the financial statement balance is fairly stated?
a) client prepared schedule showing accounting entries made to the GL balance
b) an actuarial valuation obtained by an outside firm
c) confirmation of pmts received by the retirees
d) analytical procedures that compare last year's balance to this year's balance
an actuarial valuation obtained by an outside firm because it calculates fair value of the obligation evidence would be most appropriate for determining that the financial statement balance is fairly stated.
In testing a client's pension benefit obligation, an actuarial valuation obtained by an outside firm would be the most appropriate type of evidence for determining that the financial statement balance is fairly stated. An actuarial valuation is a detailed analysis of the pension plan, including its funding status, expected future cash flows, and other relevant information. It is typically prepared by a qualified actuary, who has expertise in assessing the risks and uncertainties manufacturing associated with the pension plan. An actuarial valuation provides an independent and objective assessment of the pension benefit obligation, and it is considered a reliable source of evidence for auditors. In contrast, the other options, such as a client-prepared schedule, confirmation of payments, or analytical procedures, may provide some evidence, but they are generally less reliable and do not provide the same level of assurance as an actuarial valuation.
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a market-product grid shows the relationship of market segments either to products offered or to blank .
The correct answer to the question above is "Potential marketing action by an organization"
Market-product grid also known as the product market expansion grid or Ansoff Matrix. This matrix helps a company plot out its growth strategy and visualize the risks associated with expansion. There are four main suggested strategies for The Product market expansion grid:DiversificationMarket PenetrationMarket DevelopmentProduct DevelopmentLearn more about Ansoff Matrix at: https://brainly.com/question/8190211
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Beginning accounts receivable were $20,000 and ending accounts receivable were $25,000. If sales were $150,000, cash receipts equal $___.
Beginning accounts receivable were $20,000 and ending accounts receivable were $25,000. If sales were $150,000, cash receipts equal $155,000.
In accounting, accounts receivable refers to the amounts that a company is owed by its customers for goods or services sold on credit. The balance in the accounts receivable account represents the total amount of unpaid invoices at a given point in time.
To calculate the cash receipts, you need to take into account the change in accounts receivable during the period in question. In this case, the beginning accounts receivable were $20,000 and the ending accounts receivable were $25,000, which means that accounts receivable increased by $5,000 during the period.
The formula to calculate cash receipts is:
Cash receipts = Sales + Decrease in accounts receivable
However, since the accounts receivable increased instead of decreased, we need to adjust the formula by adding the change in accounts receivable instead of subtracting it:
Cash receipts = Sales + Increase in accounts receivable
Cash receipts = $150,000 + $5,000 = $155,000
Therefore, the cash receipts were $155,000. This means that the company received $155,000 in cash from customers during the period, either as payments for invoices or as cash sales.
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