suppose the returns on long term corporate bonds and T-bills are normally distributed. Based on the values below answer the following questions: what is the probability that in any given year, the return on long-term corporate bonds will be greater than 10 percent? long term corporate bonds average return= 6.30%
Answers
Answer:
32.35% ( the probability that in any given year, the return on long-term corporate bonds will be greater than 10 percent )
Explanation:
Given data for long-term corporate bonds
Standard deviation : 8.3%
mean = 6.2%
To calculate the probability that in any given year, the return on long-term corporate bonds will be greater than 10 percent ( USING THE NORM-DIST FUNCTION )
P( x > 10% ) = 1 - P(x<10%) = 1 - NORM-DIST (10,6.2,8.3,TRUE ) = 0.3235
= 32.35%
attached below is the missing part of your question
Related Questions
Which of the following is an advantage of pursuing an unrelated diversification strategy over a related diversification strategy?
a. There is greater coordination between business units.
b. Functional competencies would be useful in many different industries.
c. There are higher bureaucratic costs.
d. The company doesn't need coordination between business units.
Answers
Answer:
Correct Answer:
b. Functional competencies would be useful in many different industries.
Explanation:
This is because, the competencies of the organization could be useful leading to its application in many different industries. For example, a company into plastic manufacturing could diversify into electric bicycle manufacturing. Their competency in plastic manufacturing could come handy due to the parts of the bicycle being manufactured made up of plastics also.
Define perceptual selection and describe the types of filters that prevent clear perception and the reception of marketing stimuli
Answers
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.
Answers
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.
A advertising agency provides a complete range of services, including marketing research, media selection, copy development, artwork, and production.
a. True
b. False
Answers
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
Sunland Company reported the following information for the current year: Sales (64000 units) $1280000, direct materials and direct labor $640000, other variable costs $64000, and fixed costs $360000. What is Sunland’s contribution margin ratio?
Answers
Answer:
45%
Explanation:
Given the following :
Sales unit = 64000
Sales revenue = $1,280,000
Direct materials and directly labor = $640,000
Other variable cost = $64,000
Fixed cost = $360,000
Contribution margin ratio:
(Sales revenue - variable expenses) / sales revenue
Total variable expenses = (Direct materials and directly labor + other variable expenses)
Total variable expenses = (640000 + 64000) = $704,000
Contribution margin ratio :
$(1,280,000 - 704,000) / $1,280,000
$576,000 / $1,280,000
= 0.45
0.45 * 100 = 45%
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.
Answers
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
When using the simple EOQ model to determine optimal order quantity, which of the following is true?
A. Order quantity increases as order cost per order decreases
B. Order quantity decreases as order cost per order increases
C. Order quantity increases as holding cost per unit per year decreases
D. Order quantity decreases as holding cost per unit per year decreases
Answers
Answer:
C. Order quantity increases as holding cost per unit per year decreases
Explanation:
the formula for calculating economic order quantity (EOQ) is:
EOQ = √(2SD/H)
S = cost per orderD = annual demandH = holding cost per unitIf holding cost per unit (H) decreases, the EOQ will increase. Whenever you are dividing, if the denominator decreases, the result will be larger.
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)
Answers
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
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
Answers
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
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
Answers
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
Write a 500-750-word analysis of the significance of the three Matrices regarding their relevance for strategic planning. Describe the key information for each of the three matrices and how information from each will influence recommendations for strategic plans to improve the position of the company. Without prematurely determining and formalizing strategic goals and objectives, begin thinking about possible strategies to capitalize and add value to the organization based on the analysis of this information.
Answers
Answer:
Strategic planning is important for any company as it helps the company to strategically position itself in the industry. S W O T analysis is a tool that helps the company to do this. S W O T analysis is an attempt to reflect upon the strengths, weaknesses, opportunities and threats that the company face in its short period as well as long period functioning.
The airline industry offers an air source of transport to passengers and freight. A strength in this business can be a possibility to earn high income through its operations. It is not a kind of business that anyone can undertake as it requires huge investment. If investment is made and the required logistics is applied, then there is a chance for making huge profits. This is a strength. Also the unique patterns of services, the facilities that the airliner provides etc can be viewed as it's strengths. On the other hand weaknesses can be lack of infrastructure facilities, inefficient work force, high spoilage rate which is the rate of passengers missing their flights and subsequently returned money, highly competitive market etc.
Opportunities mean that aspects that help the company to ensure a continued growth. The world is becoming a global village. This scenario demands modes of transport that cater to the needs of the people who travel around the world. Businesses are operating on a trans national mode. Tourism sector is evolving into newer versions. All these situations can be viewed as opportunities for the airline company. On the other end, a threat at the moment is the the pandemic, which has hit the tourism sector badly, rising fuel price, government intervention etc can be considered as threats.
BCG matrix is developed by Boston Consulting Group. It based it's analysis on the development of four categories based on industry attractiveness indicating the growth rate of that industry and competitive position or relative market share. Higher the market share, higher will be the cash returns.There are four quadrants into which firm brands are classified, namely dogs, cash cows, stars and question marks.
Companies that hold low market shares compared to their competitors are categorized into the first classification. Companies that operate in a slowly growing market are also included in this category. If an airliner is classified into a poor dog category, strategic choices would be retrenchment or liquidation. Cash cows are the profitable brands. As the name suggests they should be milked to provide as much cash as possible. Cash cows need investment not to induce growth but to maintain their current market share. Strategic choices would be product development or diversification.
Stars operate in high growth industries. Also companies that have high market share are also included in this category. A company should invest on these primary units as they have the potential to become cash cows. But if the company can not catch up with the technical innovations, star would turn into poor dog. Strategic choices would be vertical integration, horizontal integration or market penetration. Question marks are the brands that need closer attention. They are loss making companies in fast growing markets holding low market share and consuming large amount of cash. Here strategic choices would be product development or divestiture.
The internal external matrix is based on an analysis of factors relevant to internal and external situations. Graphically represented analysis suggest grow and build or hold and maintain or harvest or exit strategies.
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
Answers
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)
Identify at least four factors that affect a bond’s yield. Briefly explain the effect that each factor has on the yield.
Answers
Answer:
Four factors that effect a bond yield are:
1. Interest rates
2. Inflation
3. The yield curve
4. economic growth
Explanation:
Four factors that affect a bond yield are:
1. Interest rates: higher interest rates by the bank often leads to rises in corporate bond yields.
2. Inflation: with high inflation level in the economy, in which prices of commodity increases, the credit risk also increases, this results in positive pressure on yields.
3. The yield curve: this gives or predicts the economic situation in terms of growth and output. Therefore, this leads to investors to put their capital in either short-term securities or long-term bonds which effects bonds in general.
4. economic growth: this leads to increased revenues and profits for companies, and in turn results in lower yields on bonds.
True or false: When considering the elimination of a segment, management should look at more than the segment's performance report.
Answers
Answer:Yes
Explanation:Yes
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?
Answers
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%
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:
Answers
Answer:
30 years.
Explanation:
The appropriate discount rate for the following cash flows is 9 percent compounded quarterly. Year Cash Flow 1 $700 2 700 3 0 4 1,100 What is the present value of the cash flows
Answers
Answer:
Total present value= $2,010.65
Explanation:
Giving the following information:
Cf1= 700
Cf2= 700
Cf3= 0
Cf4= 1,100
Discount rate= 9%
To calculate the present value, we need to use the following formula on each cash flow:
PV= FV/(1+i)^n
Cf1= 700/1.09= 642.20
Cf2= 700/1.09^2= 589.18
Cf3= 0
Cf4= 1,100/1.09^4= 779.27
Total present value= $2,010.65
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?
Answers
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
"Preliminary or architectural design is the activity that begins the transition from the analysis, or business domain, to the _______ domain"
Answers
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.
Consider the following cash flows of two projects for Fontana Rubber Parts Company. Assume the discount rate for Fontana Rubber Parts is 14%.
Year Dry Prepreg Solvent Prepreg.
0 -$30,000 -$90,000
1 10,000 28,000
2 10,000 28,000
3 10,000 28,000
4 10,000 28,000
5 10,000 28,000
a. Calculate NPV, IRR, MIRR, payback, and discounted payback for each project
b. Assuming the projects are independent, which one(s) would you recommend?
c. If the projects are mutually exclusive, which would you recommend?
Answers
Answer:
Year Dry Prepreg discounted cash flow
0 -$30,000 -$30,000
1 10,000 8,772
2 10,000 7,695
3 10,000 6,750
4 10,000 5,921
5 10,000 5,194
Year Solvent Prepreg. discounted cash flow
0 -$90,000 -$90,000
1 28,000 24,561
2 28,000 21,545
3 28,000 18,899
4 28,000 16,578
5 28,000 14,542
a. Calculate NPV, IRR, MIRR, payback, and discounted payback for each project
Dry Prepreg
NPV = $4,330
IRR = 19.86%
MIRR = 17.12%
payback = 3 years
discounted payback = 4.17 years
Solvent Prepreg
NPV = $6,130
IRR = 16.80%
MIRR = 15.51%
payback = 3.21 years
discounted payback = 4.58 years
b. Assuming the projects are independent, which one(s) would you recommend?
both projects, since their NPV is positivec. If the projects are mutually exclusive, which would you recommend?
Dry prepreg becuase its IRR, MIRR are higher, and its payback and discounted payback periods are shorter.
The shift from mass marketing to targeted marketing, and the corresponding use of a larger, richer mix of communication channels and promotion tools ________.
Answers
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.
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.
Answers
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%
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.
Answers
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
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
Answers
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
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.
Answers
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 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.)
Answers
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%
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?
Answers
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%
Chiller Company has credit sales of $5.60 million for year 2013. Chiller estimates that 1.32% of the credit sales will not be collected. Historically, 4% of outstanding accounts receivable is uncollectible. On December 31, 2013, the company's Allowance for Doubtful Accounts has an unadjusted credit balance of $3,561. Chiller prepared a schedule of its December 31, 2013, accounts receivable by age. Based on past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here:
Answers
Answer:
$59,045.80
Explanation:
The following information was missing:
Accounts Receivable total $1,565,170
Assuming the company uses the percent of accounts receivable method, what is the amount that Chiller will enter as the Bad Debt Expense in the December 31 adjusting journal entry?
total uncollectible debt = $1,565,170 x 4% = $62,606.80
since the account balance of the allowance for doubtful accounts is $3,561 (credit), the adjusting entry should be:
December 31, 2013, bad debt expense
Dr Bad debt expense (= $62,606.80 - $3,561) 59,045.80
Cr Allowance for doubtful accounts 59,045.80
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.
Answers
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
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.
Answers
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.