Answer:
1) effective interest rate (for the 9 months period)= (1 + 10%/12)⁹ - 1 = 1.07754 -1 = 0.07754 = 7.75%
2) accrued interest = ($15,545/9) x 2 = $3,454.44 = $3,454
December 31, 2016, accrued interest on non-interest bearing note
Dr Discount on notes receivable 3,454
Cr Interest revenue 3,454
3) July 31, 2017, collection of non-interest bearing note receivable
Dr Cash 216,000
Dr Discount on notes receivable 12,091
Cr Notes receivable 216,000
Cr Interest revenue 12,091
4) November 1, 2016, non-interest bearing note receivable issued [I will assume that the note receivable was made for a sales operation (if it was made for a loan, you can just change sales revenue for cash)]
Dr Notes receivable 216,000
Cr Sales revenue / cash 200,455
Cr Discount on notes receivable 15,545
Explanation:
we have to first calculate the present value of the note using the 10% discount rate:
PV = $216,000 / (1 + 10%/12)⁹ = $216,000 / (1 + 0.8333%)⁹ = $200,454.88 = $200,455
Devin is a landscaper who needs to prepare different types of grass seed for his customers' yards. Bluegrass seed costs $2.00 per pound while drought-resistant seed costs $3.00 per pound. If for a particular day the two types of grass seed totaled $68.00 and together weighed 25 pounds, how many pounds of bluegrass seed did Devin prepare?
Answer:
7 pounds
Explanation:
To solve this we need to use simultaneous algebraic equations.
Assume
x = 1 pound of bluegrass seed
y = 1 pound of drought resistant seed
Our first equation considers the number of pounds
x + y = 25
y = 25 - x
For the combined bluegrass seeds and thought resistant seeds bought
For the second equation we consider the price
2x + 3y = 68
Substitute value of y in equation 2
2x + 3(25 - x) = 68
2x + 75 - 3x = 68
x= 7
So the amount of bluegrass seed is 7
We can also get the amount of drought resistant seed from equation
7 + y = 25
y = 18
Karen wants to create a visual aid to compare 1st, 2nd, 3rd and 4th quarter sales. Which
visual aid would she use?
Pie chart
Bar graph
Picture
Line graph
Answer:
Pie Chart
Explanation:
A pie chart is a statistical graphic chart in a shape of a pie. Usually, it is divided into part, or slices if you may, to show and explain numerical proportion.
In pie charts, the length of the arc of each slice or part, is usually proportional to the quantity it represents.
Pie charts are generally used to show percentage or proportional data. Normally, if percentage is used, the percentage value is marked or written near the part or slice it represents.
Answer:
c
Explanation:
Compute the following probabilities:
a. If Y is distributed N (-8,9), Pr (Y≤-12) = —— . (Round your response to four decimal places.)
b. If Y is distributed N (-4,9), Pr (Y>-1) = ——. (Round your response to four decimal places.)
c. If Y is distributed N (40,25), Pr (34≤Y≤44) = ——. (Round your response to four decimal places.)
Answer: a. 0.3300 b. 0.3707 c. 0.1584
Explanation:
If X is distributed N([tex]\mu,\sigma^2[/tex]) [Normal distribution], then Z-score = [tex]\dfrac{X-\mu}{\sigma}[/tex] .
a. If Y is distributed N (-8,9),
Pr (Y≤-12) [tex]=P(\dfrac{Y-\mu}{\sigma}\leq \dfrac{-12-(-8)}{\sqrt{9}})[/tex]
[tex]=P(Z\leq -1.33)=1-P(Z<1.33)\\\\=1- 0.9082\ \ \ [\text{By z-table}]\\\\= 0.0917[/tex]
b. If Y is distributed N (-4,9),
Pr (Y>-1) =[tex]=P(\dfrac{Y-\mu}{\sigma}>\dfrac{-1-(-4)}{3})[/tex]
[tex]=P(Z>1)=1-P(Z<1)\\\\=1-0.8413\ \ \ [\text{By z-table}]\\\\=0.1587[/tex]
c. If Y is distributed N (40,25),
Pr (34≤Y≤44) = [tex]P(\dfrac{34-40}{5}<\dfrac{Y-\mu}{\sigma}<\dfrac{44-40}{5})[/tex]
[tex]P(-1.2<Z<0.8)=P(Z<0.8)-P(Z<-1.2)\\\\=P(Z<0.8)-(1-P(Z<1.2))\\\\=0.7881-(1-0.8849)\ \ \ [\text{By z-table}]\\\\=0.6730[/tex]
A 10-year bond paying 8% annual coupons pays $1000 at maturity. If the required rate of return on the bond is 7%, then today the bond will sell (rounded to the nearest cent) for
Answer:
Bond Price = $1070.235815 rounded off to $1070.24
Explanation:
To calculate the price of the bond today, we will use the formula for the price of the bond. We assume that the interest rate provided is stated in annual terms. As the bond is an annual bond, the coupon payment, number of periods and annual YTM will be,
Coupon Payment (C) = 1000 * 0.08 = 80
Total periods (n)= 10
r or YTM = 7%
The formula to calculate the price of the bonds today is attached.
Bond Price = 80 * [( 1 - (1+0.07)^-10) / 0.07] + 1000 / (1+0.07)^10
Bond Price = $1070.235815 rounded off to $1070.24
To manufacture protective cases and keep its operations running smoothly, Connie’s Case Creations makes purchases from a number of suppliers. Using the drop down menu, match the description of each purchase with the corresponding business-product classification.
Purchase of large-scale machinery to mold each case.
Purchase of cleaning fluids for maintaining manufacturing equipment.
Purchase of accounting services for tax preparation.
Purchase of bulk plastics to be molded into cases.
Purchase of multifunction laser printers for office use.
Purchase of leather straps to be fastened to finished cases.
Purchase of plastic glues to attach decorations to finished cases.
Answer:
Purchase of large-scale machinery to mold each case.- Major EquipmentMajor equipment are large scale type assets.
Purchase of cleaning fluids for maintaining manufacturing equipment - SupplySupply goods are bought to enable the company maintain their equipment.
Purchase of accounting services for tax preparation - Business ServiceThey are services purchased to maintain the business.
Purchase of bulk plastics to be molded into cases - Raw MaterialsThese are the commodity goods that will be used to make finished products.
Purchase of multifunction laser printers for office use - Accessory EquipmentAccessory equipment are light in nature but are still needed to help in the operations of the business.
Purchase of leather straps to be fastened to finished cases - Component PartPurchase of plastic glues to attach decorations to finished cases - Process MaterialThese are products that will be used in the production process.
Suppose a State of California bond will pay $1,000 eight years from now. If the going interest rate on these 8-year bonds is 5.5%, how much is the bond worth today
Answer:
The bond is worth $651.59 today
Explanation:
FV = $1000
N = 8
I/Y = 5.5%
Present Value = ?
PV = FV*(1+r)^(-n)
PV = $1000 * (1 + 0.055)^-8
PV = $1000 * (1.055)^-8
PV = $1000 * 0.651599
PV = $651.59
Which of the following statements is true with regard to the reimbursement of employee business expenses?
a. Excess reimbursements of ordinary and necessary expenses are never subject to withholding.
b. Provided that reimbursements are received by an employee under a plan which requires the employee to substantiate the expenses to his employer, the amounts are excluded from the definition of wages subject to withholding, without regard to whether the employee actually substantiates the expenditures.
c. Reimbursements of ordinary and necessary expenses are subject to federal income tax withholding.
d. Reimbursements received by an employee under a plan which contains a requirement to return excess amounts, and the employee does so on a timely basis, are excluded from the definition of wages subject to withholding.
e. All of these choices are true.
Answer: All ofthe choices are true
Explanation:
It should be noted that the reimbursements of ordinary and necessary expenses are subject to federal income tax withholding. Also, excess reimbursements of ordinary and necessary expenses are never subject to withholding.
Lastly, the reimbursements that is received by an employee under a plan which contains a requirement to return excess amounts, and the employee does so on a timely basis, are excluded from the definition of wages subject to withholding.
Therefore, all the options are correct.
TRV is expecting to purchase a new manufacturing line. It is expected to cost 119,000 and will require an additional 12,000 to set-up. It will generate $25,000 annually for the next 5 years. What is the modified internal rate of return if the cost of capital is 12% and the expected rate on reinvestments is equal to 8%?
Answer:
2.28%
Explanation:
initial outlay = $119,000 + $12,000 = $131,000
cash flows 1 - 5 = $25,000
Re = 12%
rate of reinvestments = 8%
using a financial calculator, the MIRR = 2.28%
if you want to calculate MIRR manually, you must solve the following:
MIRR = ⁿ√(future value of cash flows at reinvested rate / present value of negative values discounted at financing rate) - 1
n = 5future value of cash flows at reinvested rate = $25,000 x 5.8666 (FV annuity factor) = $146,665present value of negative cash flows = $131,000MIRR = ⁵√($146,665 / $131,000) - 1 = 1.0228 - 1 = 0.0228 = 2.28%
Hejl Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is $213 per month plus $104 per job plus $23 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in March to be 22 jobs and 82 meals, but the actual activity was 27 jobs and 76 meals. The actual cost for catering supplies in March was $4,713. The spending variance for catering supplies in March would be closest to:
Answer:
$56 (Favorable)
Explanation:
Standard cost = Actual Quantity * Standard rate
Standard cost = Catering supplies cost + Actual number of jobs * Rate per job) + Actual number of meals * Rate per meal
Standard cost = {213 + (27 jobs * $104 per job) + (76 meals * $23 per job)
Standard cost = ($213 + $2,808) + $1,748
Standard cost = $3,021 + $1,748
Standard cost = $4,769
Spending variance = Actual cost - Standard cost
Spending variance = $4,713 - $4,769
Spending variance = $56 (Favorable)
Faisal has $ 15 comma 000 in his savings account and can save an additional $ 4 comma 500 per year. If interest rates are 12%, how long will it take his savings to grow to $ 50 comma 000 ?
Answer:
It will take 4 years 6 months.
Explanation:
Required here is the period, n for an investment to grow to $50,000 and this is calculated as follows :
Pv = - $15,000
Pmt = - $4,500
P/yr = 1
r = 12 %
Fv = $50,000
n = ?
Using a Financial Calculator, the period, n for an investment to grow to $50,000 is 4.50 or 4 years 6 months.
For a company with a product mix of 40% of product A and 30% each of products B and C, which of the following mixed-model sequences best reflects the lean philosophy?
A. BBAACCABBC.
B. AAABBCCCBB.
C. BBBBAAACCC.
D. ACBACABCAB.
E. BACBACBACB.
Answer:
E. BACBACBACB
Explanation:
The lean philosophy was originated from manufacturing practices but has grown to cover all aspects of an organization. The philosophy discourages waste by encouraging efficiency which is directed at continuous improvement for the goal of creating value for the customer. In the example above, applying lean philosophy, we would pick the last option since this reduces waste of inventory by making sure that the product with the highest demand comes first; therefore we sequence as per demand rate under lean philosophy to reduce waste and increase efficiency.
A manufacturer of microwaves has discovered that male shoppers have little value for microwaves and attribute almost no extra value to an auto- defrost feature. Female shoppers generally value microwaves more than men do and attribute greater value to the auto-defrost feature. There is little additional cost to incorporating an auto-defrost feature. Since men and women cannot be charged different prices for the same product, the manufacturer is considering introducing two different models. The manufacturer has determined that men value a simple microwave at $56 and one with auto-defrost at $74, while women value a simple microwave at $74 and one with auto-defrost at $130.
Suppose the manufacturer is considering three pricing strategies:
1. Market a single microwave, with auto-defrost, at $69, to both men and women.
2. Market a single microwave, with auto-defrost, at $121, to only women.
3. Market a simple microwave to men, at $52. Market a microwave, with auto-defrost, to women at $103. For simplicity, assume there is only 1 man and 1 woman and that if the price of a microwave is equal to an individual's willingness to pay, the individual will purchase the microwave.
Answer:
If the number of male and female buyers is the same, then the best pricing strategy is to offer 2 different microwaves (option 3). One simple and cheap microwave for men and one with auto-defrost for women.
Explanation:
If most buyers were women (significantly higher), then option 2 would be better, since $121 per microwave is a much higher price and even though total sales numbers may not be maximized, profits will probably be maximized.
If most buyers are men, then option 1 would be probably better, depending on the proportion of male vs female buyers.
Balls and Bats, Inc. purchased equipment on January 1, 2005, at a cost of $100,000. The estimated useful life is 4 years with a salvage value of $10,000. Complete the following tasks for this assignment: Prepare two different depreciation schedules for the equipment - one using the double-declining balance method, and the other using the straight-line method. (Round to the nearest dollar). Determine which method would result in the greatest net income for the year ending December 31, 2005
Answer and Explanation:
The computation of two different depreciation schedules is shown below:-
a. Using the Double-declining balance method
Year Equipment Cost Depreciation rate Amount
2005 $90,000 50% $45,000
2006 $45,000 50% $22,500
2007 $22,500 50% $11,250
2008 No depreciation as it is lower that straight line method that is $22,500 also we took the double rate of 25% so we consider 50%
b. Using the straight line method
Straight Line Depreciation Method:
$100,000 - $10,000
= $90,000
Year Equipment Cost Depreciation rate Amount
2005 $90,000 25% $22,500
2006 $90,000 25% $22,500
2007 $90,000 25% $22,500
2008 $90,000 25% $22,500
Depreciation rate is
= 1 ÷ 4 years
= 25
2. The double declining method reduced the net income while the straight line method increased the net icnome
grwoth is the key to better consumption possibilities and one key to better consumption possibilities is
Answer:
Trade
Explanation:
The consumption possibility can be gotten from three different factors, it could be gotten from opportunity for trade, production set and also from consumption behavior.
Involving in trade would reduce the prices of goods for consumers, especially in a country that is involved in importation. It creates gains for consumers. Therefore it can be said that trade is a key to better consumption possibilities.
Which of the following strategies yields positive profits when the stock price is low but not when the stock price is high?
a. Straddle
b. Bullish spread
c. Protective put
d. bearish spread
Answer: d. bearish spread
Explanation:
With a bearish spread, the investor believes the market to be heading for a price decline in the stock of interest. They will therefore purchase a put option on it. However, they also want to reduce the cost of the transaction so what they will do is to simultaneously buy 2 put options for the same asset for the same date of expiration but with different exercise prices.
If the price of the stock then falls, they will make a profit on both aand reduce costs.
Suppose you invested $58 in the Ishares Dividend Stock Fund (DVY) a month ago. It paid a dividend of $0.65 today and then you sold it for $68. What was your return on the investment?
Answer:
18.36%
Explanation:
Calculation for the return on the investment?
Using this formula
Return on investment = Net profit/Cost of Investment
The first step is to find the net profit using this formula
Net profit =( Sales amount +Dividend)-Dividend Stock Fund Investment
Let plug in the formula
Net profit = ($68 + $0.65) - $58 =
Net profit= $68.65-$58
Net profit= $10.65
Now let calculate the return on investment
Using this formula
Return on investment = Net profit/Cost of Investment
Let plug in the formula
Return on investment=$10.65/58
Return on investment= 18.36%
Therefore the return on the investment will be 18.36%
Which of the following organizations does notfollow the AICPA's Not-for-Profit Guide?
A) Political parties.
B) Voluntary health and welfare organizations.
C) City libraries.
D) Private foundations.
Answer: City Libraries
Explanation;
The American Institute of CPAs Not-for-Profit Guide is meant to help Not-for-Profit organizations prepare their financial statements in such a way that they can incorporate the unique aspects of their organization.
Not-for-Profit organizations are private in nature so this guide is mostly for private organizations. City Libraries on the other hand are Government owned and as such will use Government type accounting methods not the AICPA's Not-for-Profit Guide.
Given the different perspectives of diverse groups regarding international trade, on what should national trade policy be based
Answer:
The vast majority of economic perspectives on international trade agree in that international agree is mutually benefitial for all countries. The reason is that international trade allows each country to specialize in the production of those goods and services for which they have a comparative advantage.
However, it is also true that from a social and political perspective, there are many more disagreements. For example, it is true that while international trade benefits most of the population as a whole, some sectors of the population are sometimes negatively affected by its effects.
For this reason, the approach to international trade should be: engage in trade with as many countries as possible, making sure that those groups who become disadvantaged by its effects are supported by a social safety net, and by training programs that can help them find other jobs.
The management of Kabanuck Corporation is considering dropping product V41B. Data from the company's accounting system appear below: Sales $933,000 Variable expenses $410,500 Fixed manufacturing expenses $522,500 Fixed selling and administrative expenses $347,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $212,500 of the fixed manufacturing expenses and $123,500 of the fixed selling and administrative expenses are avoidable if product V41B is discontinued. What would be the effect on the company's overall net operating income if product V41B were dropped
Answer:
$186,500 decrease
Explanation:
The computation of the effect in case when the product V41B is dropped is shown below:
We need to compare the cost between the current profits and the fixed cost incurred which is
Current profits = Sales - Variable costs - Fixed manufacturing expenses - Fixed selling and administrative expenses
= $933,000 - $410,500 - $522,500 - $347,000
= ($347,000)
Now fixed costs incurred is
= ($522,500 - $212,500) + ($347,000 - $123,500)
= $310,000 + $223,500
= $533,500
Since the fixed cost is more than the current profits, so the net operating income would be decreased by
= $533,500 - $347,000
= $186,500
Assume that the substitution effect is large relative to the income effect. If a tax reform is designed to increase saving, what does it do to the interest rate and spending on capital goods?
a.
It increases the interest rate and decreases spending on capital goods.
b.
It increases the interest rate and increases spending on capital goods.
c.
It decreases the interest rate and increases spending on capital goods.
d.
It decreases the interest rate and decreases spending on capital goods.
Answer:
a.
It increases the interest rate and decreases spending on capital goods.
Explanation:
Tax reform is a process through which most government controls the spending on capital goods and encourage local goods purchases. This is accomplished through increase on the taxes on those goods in such a way that, it becomes highly discouraging to spend such amount on it thereby encouraging savings.
What do you notice about the payback period as the discount rate rises? Explain this relationship
Cash flow A B
Cost $8,000 $90,000
Cash flow year 1 $2,857 $9,000
Cash flow year 2 $2,857 $18,000
Cash flow year 3 $2,857 $27,000
Cash flow year 4 $2,857 $36,000
Cash flow year 5 $2,857 $13,500
Cash flow year 6 $2,857 $0
1. With a discount rate of 4%, the cash outflow for project A is:________.
2. Discount rate of 12%, the cash outflow for project B is:________.
3. Discount rate of 20%, the cash outflow for project B is:________.
4. As the discount rate increased, the discount payback perioud_______. The reason is that the future dollars are worth______in present value as the discount rate increases requiring______future dollars to recover the present value of the outlay.
Answer:
Payback Period as the discount rate rises1. With a discount rate of 4%, the cash outflow for project A is:__$8,000______.
2. Discount rate of 12%, the cash outflow for project B is:__$90,000______.
3. Discount rate of 20%, the cash outflow for project B is:__$90,000______.
4. As the discount rate increased, the discounted payback perioud__increased_____. The reason is that the future dollars are worth__less____in present value as the discount rate increases requiring__more____future dollars to recover the present value of the outlay.
Explanation:
a) Data and Calculations:
Cash flow A B Discount Discount
Factor at 12% PV Factor 20% PV
Cost $8,000 $90,000
Cash flow year 1 $2,857 $9,000 0.893 $8,037 0.833 $7,497
Cash flow year 2 $2,857 $18,000 0.797 14,346 0.694 12,492
Cash flow year 3 $2,857 $27,000 0.712 19,224 0.579 15,552
Cash flow year 4 $2,857 $36,000 0.636 22,896 0.482 17,352
Cash flow year 5 $2,857 $13,500 0.567 7,655 0.402 5,427
Cash flow year 6 $2,857 $0
PV at 4% 12% $72,158 20% $58,320
Annuity for Project A
= $14,976 ($2,857 x 5.242) at year 6
= $12,719 ($2,857 x 4.452) at year 5
= $10,371 ($2,857 x 3.630|) at year 4
= $7,928 ($2857 x 2.775) at year 3
Assume that Cane expects to produce and sell 106,000 Betas during the current year. One of Cane’s sales representatives has found a new customer who is willing to buy 4,000 additional Betas for a price of $74 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order?
Answer:
The first part of the question is missing, so I looked for a similar question to fill in the blanks:
Relevant production costs per unit:
Direct material $30 Direct labor $20 Variable manufacturing overhead $7 Variable selling expenses $12 Total relevant costs per unit $69incremental revenue if special order is accepted = 4,000 x $74 = $296,000
incremental costs if special order is accepted = 4,000 x $69 = $276,000
financial advantage of accepting special order = $296,000 - $276,000 = $20,000
If the special order is accepted, operating profits will increase by $20,000
An investor receives a 15% total return by purchasing a stock for $40 and selling it after one year with a 10% capital gain. How much was received in dividend income during the year
Answer:
Dividend per share = $2
Explanation:
The total yield or return on a stock consists of two components namely dividend yield and capital gains yield.
Total yield or return = Dividend yield + Capital gains yield
If the total return is 15% while the capital gains yield was 10%, the dividend yield on the stock will be,
0.15 = Dividend yield + 0.1
0.15 - 0.1 = Dividend Yield
Dividend Yield = 0.05 or 5%
Thus, dividend income per share will be,
0.05 = Dividend per share / 40
0.05 * 40 = Dividend per share
Dividend per share = $2
Suppose we have the following scenario:
Multiplier: 1.7
Tax Rate: 20%
Increase in spending: $300
Billion Total Deficit in the previous year: $1 Trillion
Based on the information provided what is the deficit that arises from the increase in spending from the government?
a. $510 billion.
b. $300 billion.
c. $198 billion.
d. $188 billion.
Answer:
b. $300 billion.
Explanation:
Data provided in the question
Multiplier = 1.7
Tax rate = 20%
Increase in spending = $300
Total deficit = $1 trillion
Based on the above information, the deficit that arises from the increase in spending should be $300 billion as it is financed by the government that results in budget deficit
Hence, the correct option is B. $300 billion
Which of the following is not one of the key characteristics required in order for money to be an acceptable medium of exchange?
a) profitability;
b) durability;
c) divisibility;
d) portability;
e) scarcity
Answer:
a) profitability;
Explanation:
The key characteristics required for accepting the money as a medium of exchange includes durability, divisibility, portability, scarcity only
It does not involved the profitability as it is concerned with the profits only and thus not relevant for the acceptable medium of exchange
Therefore in the given case, the option a is correct
Uber’s guidance that if a driver’s "rating over the most recent 100 trips is below a 4.6, your profile may be at risk of deactivation" represents which step in the control process?
Answer:
The step it represent is quality control in the control process. Uber management need to ensure that, the maximum quality of service is offered to its customers by their drivers hence the reason why such guidance rule is put in place.
Explanation:
The improvement in the value of the objective function per unit increase in a right-hand side is the Group of answer choices g
The available options are:
a. sensitivity value.
b. dual price.
c. constraint coefficient.
d. slack value.
Answer:
Dual price
Explanation:
Dual price is term in business, which describes the measurement, amount or quantity per unit increase in the right-hand side of a constraint for a max problem. Dual price gives the extender of price a consumer should be ready to pay for additional units of a resource.
Hence, the improvement in the value of the objective function per unit increase in a right-hand side is the DUAL PRICE
Sally's Fries sells five large fries for every four small ones. A small fry sells for $2.00 with a variable cost of $0.25 . A large fry sells for with a variable cost of What is the weighted average contribution margin?
Answer:
Weighted average contribution margin= (weighted average selling price - weighted average unitary variable cost)
Explanation:
Sales proportion:
Large fries= 5/9= 0.56
Small fries= 4/9= 0.44
A small fry sells for $2.00 with a variable cost of $0.25.
We need to complete the information to calculate the weighted average contribution margin:
For example= A large fry sells for $2.9 with a variable cost of $0.4
To calculate the weighted-average contribution margin, we need to use the following formula:
Weighted average contribution margin= (weighted average selling price - weighted average unitary variable cost)
Weighted average contribution margin= (0.56*2.9 + 0.44*2) - (0.56*0.4 + 0.44*0.25)
Weighted average contribution margin= 2.504 - 0.334
Weighted average contribution margin= $2.17
Most products in the marketplace are in the ________ stage of the product life cycle.
a) growth
b) development
c) decline
d) maturity
e) introduction
Answer:
D. Maturity stage
Explanation:
Most products in the marketplace are in the maturity stage of the product life cycle.
There are four stages in the product life cycle:
1. Introduction stage: This is the stage where awareness is created about a new product in the market. Consumers are made to the aware of a new product by advertisement and marketing.
2. Growth: After awareness has been created for the product, there is an increase in firms expansion and demand.
3. Maturity: This is a stage where firms realise more profits due to
reduction in cost of production and marketing.
4. Decline: When the firm start making more peofits, other firms will join the industry leading to competition. This may lead to the product declining if it can't compete in the industry.
"The Standard and Poor's 100 Index has closed at 575.12, up 2 points from the prior day's close. The holder of 5 "deep in the money" OEX Call contracts would have an approximate gain of:"
Answer:
$1,000
Explanation:
Multiplier = 100,
Points = 2
Number of contracts = 5
Then solving for the approximate gain;
We have the Index option contracts that have a multiplier of 100.
Therefore, a change of 2 points equals 100 x 2 = $200.00 per contract.
In that wise, this person is told to have 5 contracts, which then translates to the change in value, which is 5 x $200 = $1,000
Hence, the right answer is $1,000.