Answer:
Deluxe Pool Service, Inc.
Trial Balance
April 30, 2016
Account Debit Credit
Cash . . . . . . . . . . . . . . . . . . . . $19,400
Accounts receivable . . . . . . . . 5,300
Equipment . . . . . . . . . . . . . . . 29,200
Accounts payable . . . . . . . . . . . . . . . . . . . . . $ 4,800
Note payable . . . . . . . . . . . . . . . . . . . . . . . . . 24,500
Common stock . . . . . . . . . . . . . . . . . . . . . . . . 16,500
Retained earnings . . . . . . . . . . . . . . . . . . . . . . .1,500
Service revenue . . . . . . . . . . . . . . . . . . . . . . 20,700
Salary expense . . . . . . . . . . . 9,000
Dividends . . . . . . . . . . . . . . . . 3,200
Utilities expense . . . . . . . . . . . 1,500
Delivery expense . . . . . . . . . . . 400
Total . . . . . . . . . . . . . . . . . . $68,000 $68,000
Explanation:
a) Data:
Deluxe Pool Service, Inc.
Trial Balance
April 30, 2016
Account Debit Credit
Total
Account Balance
Dividends . . . . . . . . . . . . . . . $3,200
Common stock . . . . . . . . . . $16,500
Utilities expense . . . . . . . . . . . 1,500
Accounts payable . . . . . . . . . . 4,800
Accounts receivable . . . . . . . . 5,300
Service revenue . . . . . . . . . . 20,700
Delivery expense . . . . . . . . . . . .400
Equipment . . . . . . . . . . . . . . 29,200
Retained earnings . . . . . . . . . 1,500
Note payable . . . . . . . . . . . . 24,500
Salary expense . . . . . . . . . . . .9,000
Cash . . . . . . . . . . . . . . . . . . .19,400
The following information was available for the year ended December 31, 2016: Net sales $ 857,750 Cost of goods sold 609,550 Average accounts receivable for the year 39,900 Accounts receivable at year-end 29,400 Average inventory for the year 174,000 Inventory at year-end 157,800
Required:
a. Calculate the inventory turnover for 2016. (Round your answer to 2 decimal places.)
b. Calculate the number of days' sales in inventory for 2016, using year-end inventories. (Use 365 days a year. Round your answer to 1 decimal place.)
c. Calculate the accounts receivable turnover for 2016. (Round your answer to 1 decimal place.)
d. Calculate the number of days' sales in accounts receivable for 2016, using year-end accounts receivable. (Use 365 days a year. Round your answer to 1 decimal place.)
Answer:Inventory turnover = 3.50 Times
Number of days sales in inventory= 94.5 Days
Accounts Receivable Turnover = 21.5 Times
Number of days sales in accounts receivable =12.5 days
Explanation:
a) Inventory turnover = Cost of goods sold / Average inventory
$609,550 / $174,000 = 3.50 Times
b)Number of days sales in inventory = inventory at year end / Cost of goods sold x 365
$157,800 / $609,550 x 365 = 94.49≈94.5 Days
.
c)Accounts Receivable Turnover = Net sales / Average accounts Receivable for the year
$857,750/$39,900 = 21.49≈ 21.5 Times
d)Number of days sales in accounts receivable = end of year Accounts Receivable / Net credit sales x 365
$29,400 / $857,750 x 365 = 12.51 ≈ 12.5 days
Assume that you manage a risky portfolio with an expected rate of return of 14% and a standard deviation of 38%. The T-bill rate is 5%. Your client chooses to invest 85% of a portfolio in your fund and 15% in a T-bill money market fund.
a. What is the expected return and standard deviation of your client's portfolio? (Round your answers to 2 decimal places.)
Expected return % per year
Standard deviation % per year
b. Suppose your risky portfolio includes the following investments in the given proportions:
Stock A 22%
Stock B 31%
Stock C 47%
What are the investment proportions of your clientâs overall portfolio, including the position in T-bills? (Round your answers to 2 decimal places.)
Security Investment
Proportions
T-Bills %
Stock A %
Stock B %
Stock C %
c. What is the reward-to-volatility ratio (S) of your risky portfolio and your client's overall portfolio? (Round your answers to 4 decimal places.)
Reward-to-Volatility Ratio
Risky portfolio
Clientâs overall portfolio
Answer and Explanation:
The computation is shown below:
a. The expected return and standard deviation is as follow
Expected Return is
= 85% × 14% + 15% × 5%
= 12.65% per year
Now
Standard Deviation is
= 85% × 38%
= 32.3% per year
b.
The investment proportions are as follows
T bills = 15%
Amount invested Stock A is
= 85% × 22%
= 18.70%
Amount invested Stock B is
= 85% × 31%
= 26.35%
Amount invested Stock C is
= 85% × 47%
= 39.95%
c.
As we know that
Reward-to-variability Ratio = (Return of Risky Portfolio - Return of T-Bills) ÷ Standard Deviation of Risky Portfolio
= (14% - 5%) ÷ 38%
= 0.2368
Client’s Reward-to-variability Ratio = (Client Portfolio return - Return of T-Bills) ÷ Client Portfolio Standard Deviation
= (12.65% - 5%) ÷ 32.3%
= 0.2368
Define perceptual selection and describe the types of filters that prevent clear perception and the reception of marketing stimuli
Answer: The answer is given below.
Explanation:
Perceptual selection simply implies that individuals attend to a little portion of stimuli where they're exposed. Perceptual filters, influences the decisions individuals make.
Perceptual vigilance is a filter that occurs due to the fact that consumers are likely to know the stimuli that will relate to their needs currently.
Perceptual defense simply means individuals only see whatever they feel like seeing and won't see what they aren't interested in seeing.
Adaptation has to do with noticing of a particular stimulus by consumers and the factors influencing this are. duration, intensity, exposure,, and relevance.
Valve is a software company that makes video games. Officially, all the employees report to the CEO. There are no other official managers. This means the CEO’s ________ is larger than generally recommended.
Answer: B, Span of control
Explanation:
A manager's span of control refers to how many people report under them. If an employee can report directly to a manager then they are in that manager's span of control.
Spans of control should not be so large that they can lead to inefficiency. Modern organizational experts recommend a span of control between 5 - 15 subordinates.
Every organization should have managers so that information and decisions can be handled faster and to achieve diversification of labor which improves efficiency. In the scenario mentioned, the company will probably not be efficient because for instance, all information will have to flow to the CEO for decision making before being approved making the decision making process slower which could be costly when time is of the essence.
Gerritt wants to buy a car that costs $30,750. The interest rate on his loan is 5.65 percent compounded monthly and the loan is for 7 years. What are his monthly payments
Answer:
$444.07
Explanation:
EMI = [P * I * (1+I)^N]/[(1+I)^N-1]
P =loan amount or Principal = 30750
I = Interest rate per month = .0565/12
N = the number of installments = 7*12 = 84
EMI = [30750*.0565/12* (1+(.0565/12))^84]/[(.0565/12))^84-1]
EMI = [30,750 * 0.0565 / 12 * 1.48374877204] / [1.48374877204 - 1]
EMI = 214.819001902 / 0.48374877204
EMI = $444.07
I sell shoes for $250 per pair. They cost me $25 to produce. My markup on cost is:______
A. $2
B. 9096
C. 900%
D. None of the above.
Answer:
Markup percentage= 900%
Explanation:
Giving the following information:
I sell shoes for $250 per pair. They cost me $25 to produce.
To calculate the markup percentage, we need to use the following formula:
Markup percentage= [(selling price - unitary cost)/unitary cost]*100
Markup percentage= [(250 - 25)/25]*100
Markup percentage= 900%
The shift from mass marketing to targeted marketing, and the corresponding use of a larger, richer mix of communication channels and promotion tools ________.
Answer:
Poses a problem for marketers
Explanation:
When there is a shift from mass marketing to a more targeted approach, there will be a need for different promotional tools to reach each target audience.
For example use of social media to get to youths, use of magazines and newspapers to get to the more mature customers.
If the promotional tools become many with different messages, customers tend to get confused about what the product can offer them.
They will tend to move to other companies that communicate clearly the benefits of their products.
Jim transfers money from his money market account to his savings account. This action:________.
a. reduced Ml and increases M2.
b. increases Ml and reduces M2.
c. has no effect on MI or M2.
d. increases Ml and M2.
Answer:
a.reduced MI and increases M2
Explanation:
Hope that help you!!
Sox Corporation purchased a 30% interest in Hack Corporation for $1,525,000 on January 1, 2021. On November 1, 2021, Hack declared and paid $1.1 million in dividends. On December 31, Hack reported a net loss of $4.0 million for the year. What amount of loss should Sox report on its income statement for 2021 relative to its investment in Hack
Answer:
$1,200,000
Explanation:
SOX Corporation purchased a 30% interest for $1,525,000
On November 1, 2021, Hack declared and paid $1,100,000 million in dividends
Hence, Carrying value = $1,525,000 - 30%($1,100,000)
Carrying value = $1,525,000 - $330,000
Carrying value = $1,195,000
Net loss given during the year reported by Hack is $4,000,000
Hence, Net Loss of SOX is $4,000,000 * 30%
Net Loss = $1,200,000
Therefore, the net loss to be recognized in the Income statement is $1,200,000
For each of the following items, indicate to which major group of the CPI the item belongs: a. Tuition payments to your university: (Click to select) b. A new desk for your dorm room or apartment: (Click to select) c. An airline ticket to Florida to be used during spring break: (Click to select) d. A 12-pack of beer to be used during spring break: (Click to select) e. Tickets to a local concert: (Click to select) f. A late night visit to the emergency room: (Click to select)
Answer:
Consumer Price Index is used as an indicator of inflation and is calculated by averaging price changes in a basket of household items including services provided to households overtime.
These items fall under groups and the major ones are;
MedicareRecreationTransportationHousing Food and BeveragesEducation and Communicationa. Tuition payments to your university: Education and Communication
b. A new desk for your dorm room or apartment: Housing
c. An airline ticket to Florida to be used during spring break: Transportation
d. A 12-pack of beer to be used during spring break: Food and Beverages
e. Tickets to a local concert: Recreation
f. A late night visit to the emergency room: Medicare
You are considering 2 investment alternatives. The first is a stock that pays quarterly dividends of $0.25 per share and is trading at $30 per share; you expect to sell the stock in 6 months for $34. The second is a stock that pays quarterly dividends of $0.50 per share and is trading at $27 per share; you expect to sell the stock in 1 year for $30. Which stock will provide the better annualized holding period return?
Answer:
Option 1
Explanation:
The computation is shown below:
For option 1
Dividend received in 6 month is
= $0.25 × 2
= $0.50
Now
Profit from the sale of stock is
= sale price - purchase price
= $24 - $20 i
= $4
So,
Net proceed received from stock is
= dividend + profit from the sale
= $0.50 + $4
= $4.50
Now
Holding period return for 6 months is
= (Net proceed received ÷ purchase price) ×100
= ($4.50 ÷ $20) × 100
= 22.5 %
So,
Annualized holding period return is
= 22.5% × 2
= 45%
For Option 2
Dividend received in 1 year is
= $0.50 × 4
= $2
Profit from sale of stock is
= $30 - $27
= $3
Net proceeds from stock is
= $2 + $3
= $5
So,
Annualized holding period return is
= ($5 ÷ $27) × 100
= 18.52%.
As we can see that option 1 contains higher return so it would be selected
Consider the relative liquidity of the following assets: Assets 1. A share in a publicly traded company 2. A $10 bill| 3. The funds in a savings account 4. Your car Select the assets in order of their liquidity, from most liquid to least liquid. Asset Most Liquid Second-Most Liquid Third-Most Liquid Least Liquid
Answer:
A $10 bill|
The funds in a savings account
A share in a publicly traded company
Your car
Explanation:
Liquidity measures how fast an asset can be converted to cash.
A $10 bill is already cash so it is the most liquid.
The funds in a savings account can be easily withdrawn from the account when needed. it is the second most liquid
The process of converting a share to cash is a little longer.
To sell a car, one has to find a ready buyer and negotiate the price. It is the least liquid
The one-year call on TLM stock with a strike price of $65 is priced at $2.20 while the one-year put with a strike price of $65 is priced at $11.18. The annual risk-free rate is 3.8 percent, compounded continuously. What is the current price of TLM stock?
Answer:
The answer is "53.60"
Explanation:
Given value:
Exercise price(E) = 65
risk-free rate= 3.8 %= 0.038
calling price (C)= 2.20
one-year put price (P)= 11.18
The value of dividend-yield =0
time = 1 year
stock price =?
calculated value:
[tex]e^{-0.038 \times 1} = 0.962713[/tex]
Formula:
[tex]\bold{S \times e^{-dt} +P = E \times e^{-rt} +c}\\[/tex]
[tex]\to S \times e^{-0.00\times 1}+11.18 =65 \times e^{-0.038 \times 1}+2.2\\\\\to S \times e^{0}+11.18 =65 \times0.962713+ 2.2\\\\\to S \times 1+11.18 =65 \times0.962713+ 2.2\\\\\to S +11.18 =65 \times0.962713+ 2.2\\\\\to S+11.18 = 62.576345+2.2\\\\\to S+11.18 = 64.776345\\\\\to S= 64.776345-11.18\\\\\to S= 53.596345 \ \ or \ \ 53.60[/tex]
At her death Siena owned real estate worth $200,000 that was titled with her sister in joint tenancy with the right of survivorship. Siena contributed $50,000 to the total cost of the property and her sister contributed the remaining $75,000. What amount, if any, is included in Siena's gross estate?
A. $80,000.
B. $125,000.
C. $50,000.
D. $100,000.
E. None of the choices are correct.
Answer:
$80,000
Explanation:
Sienna owned $200,000 worth of real estate at her death
This real estate was titled with her sister in joint tenancy with the right of ownership
Sienna contributed $50,000 to the total cost of the property
Her sister contributed the remaining $75,000
The first step is to determine the portion contributed by Sienna
= $50,000/$50,000+$75,000
= $50,000/$125,000
= 0.4×100
= 40%
Therefore, the amount that should be included in Sienna's gross estate can be calculated as follows
= 40/100 × $200,000
= 0.4 × $200,000
= $80,000
Hence the amount that should be included in Sienna's gross estate is $80,000
Flagstaff, Inc. uses standard costing for its one product, baseball bats. The standards call for 3 board-feet of wood at $1.40 per board-foot, and 45 minutes of work at $12 per hour per bat. Total manufacturing overhead costs were estimated at $9,450, of which the variable portion was $0.50 per bat and the fixed portion was $1.00 per bat with an estimate of 6,300 bats to be produced. Flagstaff identifies price variances at the earliest possible point in time.During March, the company had the following results:Direct labor used = 4,800 hours at a cost of $56,400Actual manufacturing overhead fixed costs = $6,000Actual manufacturing overhead variable costs = $3,100Bats produced = 6,000Instructions
Compute the following variances for March.
1. Labor quantity variance
2. Total labor variance
3. Overhead controllable variance
4. Overhead volume variance
Answer:
1. $3,600 (Favorable)
2.$2,400 (Favorable)
3. $200 (Favorable)
4. $299 (Unfavorable)
Explanation:
1. Labor quantity variance = (Actual hours * Standard rate) - ( Standard hours * Standard rate)
= (4,800* $12) - {(3/4 * 6,000) * $12)
= $57,600 - $54,000
= $3,600 (Favorable)
2. Total labor variance = (Actual hours * Actual rate) - (Standard hours * Standard rate)
= (4,800 * $11.75) - {(3/4 * 6,000) * $12}
= $56,400 - $54,000
= $2,400 (Favorable)
3. Overhead controllable variance = Actual overhead - Overhead budgeted
= ($3,100 + $6,000) - {($0.50 * 6,000) + $6,300}
=$9,100 - $9,300
= $200 (Favorable)
4. Overhead volume variance = (Normal hours - Standard hours) * Fixed overhead rate
= {(6,300 * 3/4) - 4,500} * ($1.00 + 3/4)
= 225 * $1.33
= $299.25 (Unfavorable)
In 2014 Randall suffered bodily injury while at work. In 2016, Randall won a workers' compensation claim and prevailed in an injury lawsuit, both in connection with the 2014 injury. Randall received the following in 2016 as settlement:
Punitive damages $150,000
Workers' compensation 50,000
Reimbursement for medical expenses 25,000
Compensation for emotional distress 15,000
What amount of the settlement should be excluded from Randall's 2017 gross income?
a. $165,000.
b. $90,000.
c. $60,000.
d. $75,000.
Answer:
d. $75,000.
Explanation:
Calculation for the amount of the settlement that should be excluded from Randall's 2017 gross income.
The amount of the settlement excluded from Randall's 2017 gross income will be the addition of the following:
Workers' compensation $50,000
Compensation for emotional distress $15,000
Medical expenses of $10,000
=$75,000
Therefore the amount of $75,000 will be the amount of the settlement that should be excluded from Randall's 2017 gross income.
Each month, an airline sells 1,500 business-class tickets from London to Paris at $200 a ticket, and 6,000 economy-class tickets at $80 a ticket. Use this information to construct the demand curves of business travelers and tourists respectively, if it is given that the demand curves for both groups are linear and that the marginal cost of a ticket is constant at $50.
Answer:
For business travellers Qb = 3,500 - 10pb
P = 350 - .1Q
And ,for tourists it is Qt = 22,000 - 200 pt
P = 110-Q ÷ 200
Explanation:
Let us assume the demand curve be [tex]Q_i = a_i - b_i p_i[/tex]
Also at the equilibrium point, MR = MC
So
[tex]\frac{a_i - 2Q_i}{b_i } = 50[/tex]
Now solving these equations
[tex]a_i = \frac{Q_i (2p_i - 50)}{p_i - 50} \\\\ b _i = \frac{Q_i }{p_i - 50}[/tex]
Now putting these values
So,
For business travellers Qb = 3,500 - 10pb
P = 350 - .1Q
And ,for tourists it is Qt = 22,000 - 200 pt
P = 110-Q ÷ 200
Hence, these are the answers that are shown above
Alistar Inc. recently issued $90 par value preferred stock that pays a 8.25% dividend rate per year. If the stock is currently selling for $85, what is the expected return of this preferred stock?
Answer: 8.735%
Explanation:
From the question, we are informed that Alistar Inc. recently issued $90 par value preferred stock that pays a 8.25% dividend rate per year and that the stock is currently selling for $85.
The expected return of this preferred stock will be calculated this:
The annual dividend will be:
= $90 × 8.25%
= $90 × 0.0825
= $7.425
The expected return on the preferred stock will be:
= Annual dividend ÷ Current price
=$7.425 ÷ $85
=0.08735
=8.735%
Prepare journal entries to record each of the following sales transactions of a merchandising company. The company uses a perpetual inventory system and the gross method
Apr. 1 Sold merchandise for $5,400, with credit terms n/30; invoice dated April 1. The cost of the merchandise is $3,240
Apr 4 The customer in the April 1 sale returned $620 of merchandise for full credit. The merchandise, which had cost $372, is returned to inventory.
Apr 8 Sold merchandise for $2,200, with credit terms of 1/10, n/30; invoice dated April 8. Cost of the merchandise is $1,540.
Apr. 11 Received payment for the amount due from the April 1 sale less the return on April 4.
Answer: please find the explanation column for answers
Explanation:
journal entry to record the sales transaction of a merchandising company:
Date Account Debit Credit
Apr 1 Account receivables $5,400
Sales $5,400
To record cost of goods sold
Apr 1 Cost of merchandise sold $3,240
Merchandise inventory $3,240
2. To record sales return of goods.
Date Account Debit Credit
Apr 4 Sales Return $620.00
Account Receivable $620.00
Cost of merchandised returned
Apr 4 Merchandise Inventory $372.00
Cost of Goods Sold $372.00
3.To Record Sales made from merchandise
Date Account Debit Credit
Apr 8 Account Receivable $2,200.00
Sales $2,200.00
To Record cost of merchandise Sold
Apr 8 Cost of Goods Sold $1,540.00
Merchandise Inventory $1,540.00
4.Journal to record payment received from sales of merchandise
Date Account Debit Credit
Apr 11 Cash $4,780.00
Account receivable $4,780.00
Calculation
Amount due from Apr 1 st sale less than return on April 4 =Account receivables - Sales Return= $5,400- $620=$4,780.00
You bought a stock one year ago for $48.28 per share and sold it today for $55.92 per share. It paid a $1.38 per share dividend today. What was your realized return?
Answer: 17.9%
Explanation:
From the question, a stock was bought one year ago for $48.28 per share and sold today for $55.92 per share and also paid a $1.38 per share dividend today.
The realized return will be calculated as:
Po = (P1 + D1) ÷ (1+Re)
48.28 = (55.92 + 1)/(1 + Re)
48.28 = 56.92/(1 + Re)
Cross multiply
48.28 + 48.28Re = 56.92
48.28Re = 56.92 - 48.28
48.28Re = 8.64
Re = 8.64/48.28
Re = 0.179 = 17.9%
On January 1, a company issues bonds dated January 1 with a par value of $380,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 6% and the bonds are sold for $396,210. The journal entry to record the issuance of the bond is
Answer:
See explanation
Explanation:
Selling Price of Bonds =396,210
Journal Entry
Date Account Title and Explanation Debit Credit
1 Jan Cash $396,210
Bond payable $380,000
Premium on bond payable $ 16,210
(To record issuance of bond)
Working
Premium On Bonds Payable = Selling Price of Bonds - Value of Bonds
= $396,210 - $380,000 = $ 16,210
Interest payment:
Semi-annual interest = 7%× 380,000× 1/2 =13,300
Date Account Title and Explanation Debit Credit
June 30 Bond interest expense $13,300
Cash $13,300
(To record semi annual interest paid on bond)
You own a portfolio that is invested 35 percent in Stock X, 20 percent in Stock Y, and 45 percent in Stock Z. The expected returns on these three stocks are 9 percent, 15 percent, and 12 percent, respectively. What is the expected return on the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
Expected return - Portfolio = 0.1155 or 11.55%
Explanation:
The expected return on the portfolio is the weighted average of the expected returns of the individual stocks that form up the portfolio. Thus, the formula for the expected return of the portfolio is,
Expected return - Portfolio = rA * wA + rB * wB + ... + rN * wN
Where,
rA, rB, ... represents the expected return on stock A, return on stock B and so onw represents the weight of each stock in the portfolioExpected return - Portfolio = 0.09 * 0.35 + 0.15 * 0.2 + 0.12 * 0.45
Expected return - Portfolio = 0.1155 or 11.55%
A advertising agency provides a complete range of services, including marketing research, media selection, copy development, artwork, and production.
a. True
b. False
Answer:
a. True
Explanation:
The advertising agency that provides a complete range of services with respect to research of market, selection of media, copy development, artwork, production, etc
This agency we called as a full service agency in which all the services are provided at one place
Therefore the given statement is true
hence, the correct option is A. True
Ms. Jackson borrowed $42,000 at 8.75% annual simple interest. If exactly 1 year later she was able to repay the loan without penalty, how much interest would she owe
Answer:
$3675
Explanation:
Interest = principal x interest rate x year
= $42,000 x 0.0875 x 1 = $3675
Capital Budgeting Criteria: Mutually exclusive Projects
A firm with a WACC of 10% is considering the following mutually exclusive projects:
Project A Project B
1 - $400 - $600
2 $55 $300
3 $55 $300
4 $55 $50
5 $225 $50
6 $225 $49
Which project would you recommend? Explain.
Answer:
Project A would be chosen because the NPV is higher. It means that project A would be more profitable than project B.
Explanation:
To determine which project would be recommended, we have to determine the NPV of each project.
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
For project A
Cash flow in year 1 = $-400
Cash flow each year from year 2 to 4 = $55
Cash flow each year from year 5 to 6 = $225
I = 10%
NPV = $27.42
For project B
Cash flow in year 1 = $-600
Cash flow each year from year 2 to 3 = $300
Cash flow each year from year 4 to 5 = $50
Cash flow in year 6 = $49
I = 10%
NPV = $20.73
Project A would be chosen because the NPV is higher
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Your investment bank has an investment of $100 million in the stock of the Swiss Roll Corporation and a short position in the stock of the Frankfurter Sausage Company. Here is the recent price history of the two stocks:
Answer:
hello your question is incomplete below is the complete question and the missing table
Your investment bank has an investment of $100 million in the stock of the Swiss Roll Corporation and a short position in the stock of the Frankfurter Sausage Company. Here is the recent price history of the two stocks: on the evidence of these six months how large would your short position in Frankfurter sausage needed to be to hedge you as far as possible against movements in the price of swiss Roll
answer : $42003667
Explanation:
$100 million in stocks
According to the data provided in the table attached below, to short the Frankfurt in order to hedge investment in Rolls is calculated below
we have to calculate the total return on both Roll corporation and Frankfurter sausage
for f-sausage
∑ (1 + monthly returns ) / 100
= ( 1 - 0.1 + 1 - 0.1 .... + 1 + 0.1 ) = -0.0297 = -2.97%
for Roll corporation
∑ (1 + monthly returns ) / 100
= ( 1 - 0.1 + 1 - 0.05 .... + 1 + 0.1 ) = -0.012475 = - 1.24%
next we will calculate the total loss inquired when investing in Roll corporation
Total loss = percentage loss * total investment
= 0.012475 * $100 million = - $ 1247500
we will have to offset the loss by shorting investments in F sausage
hence : $1247500 = investment in sausage * total return
1247500 = investment in sausage * 0.0297 ( The total return of F sausage is positive because it was a short position )
hence short investment in F sausage to offset loss incurred in ROLLS INVESTMENT
= 1247500 / 0.0297 = $42003667
A fully amortized loan has a 360 month payment schedule with principal and interest payments of $2588 each month. The amortization of this loan will pay off the loan in:
Answer:
30 years.
Explanation:
Exotech Computers manufactures computer components such as chips, circuit boards, motherboards, keyboards, LCD panels, and the like and sells them around the world. It wants to construct a new warehouse/distribution center in Asia to serve emerging Asian markets. It has identified sites in Shanghai, Hong Kong, and Singapore and has rated the important location factors for each site as follows:Location Factors Weight Scores (0 to 100) Shanghai Hong Kong SingaporePolitical Stability 0.25 50 80 90Economic Growth 0.18 90 80 75Port Facilities 0.15 60 95 90Container Support 0.10 50 80 90Land & Constr. Cost 0.08 90 50 30Transp/Distribution 0.08 50 80 70Duties & Tariffs 0.07 70 90 90Trade Regulations 0.05 70 95 95Airline Service 0.02 60 80 70Area Roads 0.02 60 70 80Recommend a site based on these location factors and ratings.
Answer:
Hong-Kong has the maximum weighted score. Hence, it will be selected for the best site for the construction of warehousing/distribution center.
Explanation:
SHANGHAI
Weight Shanghai Weighted Score(W*S)
Political Stability 0.25 50 12.5
Economic Growth 0.18 90 16.2
Port Facilities 0.15 60 9
Container support 0.1 50 5
Land & Construction 0.08 90 7.2
Trans/Distribution 0.08 50 4
Duties & Tariffs 0.07 70 4.9
Trade Regulations 0.05 70 3.5
Airline Service 0.02 60 1.2
Area Roads 0.02 60 1.2
TOTAL 64.7
HONG-KONG
Weight Hong-Kong Weighted Score(W*S)
Political Stability 0.25 80 20
Economic Growth 0.18 80 14.4
Port Facilities 0.15 95 14.25
Container support 0.1 80 8
Land & Construction 0.08 50 4
Trans/Distribution 0.08 80 6.4
Duties & Tariffs 0.07 90 6.3
Trade Regulations 0.05 95 4.75
Airline Service 0.02 80 1.6
Area Roads 0.02 70 1.4
TOTAL 81.1
SINGAPORE
Weight Singapore Weighted Score(W*S)
Political Stability 0.25 90 22.5
Economic Growth 0.18 75 13.5
Port Facilities 0.15 90 13.5
Container support 0.1 90 9
Land & Construction 0.08 30 2.4
Trans/Distribution 0.08 70 5.6
Duties & Tariffs 0.07 90 6.3
Trade Regulations 0.05 95 4.75
Airline Service 0.02 70 1.4
Area Roads 0.02 80 1.6
TOTAL 80.55
Franklin Corporation just paid taxes of $152,000 on taxable income of $512,000. The marginal tax rate is 35% for the company. What is the average tax rate for the Franklin Corporation?
Answer:
29.69%
Explanation:
Franklin corporation just paid taxes of $152,000
The taxable income is $512,000
Therefore, the average tax rate can be calculated as follows.
= Amount of taxes paid/amount of taxable income
= $152,000/$512,000
= 0.2969×100
= 29.69%
Hence the average tax rate for Franklin's corporation is 29.69%
"Preliminary or architectural design is the activity that begins the transition from the analysis, or business domain, to the _______ domain"
Answer:
Data
Explanation:
Architectural Domain is a business term that describes the whole enterprise architecture in order to enhance business efficiency. It is divided into four, in which the process of architectural design moves from one domain to another. These domains are:
1. Business Domain
2. Data Domain
3. Application Domain
4. Technology Domain
Therefore, Preliminary or architectural design is the activity that begins the transition from the analysis, or business domain, to the Data Domain.