Answer:
The Fed is more independent because of its substantial revenue from securities and discount loans. Independence allows it to control its own budget.
Explanation:
This has always been one unique privilege the Fed (or The Federal Reserve System) has. The Federal Reserve System is the central bank of the United States, and so it regulates and controls the financial activities of the country.
Unlike other agencies that often require/depend on the nation's official budget before they can fully function, the Fed has the ability not only to control its own budget but to create money for nationwide circulation to other agencies.
Jamison Company uses the total cost method of applying the cost-plus approach to product pricing. Jamison produces and sells Product X at a total cost of $1,100 per unit, of which $750 is product cost and $350 is selling and administrative expenses. In addition, the total cost of $1,100 is made up of $630 variable cost and $470 fixed cost. The desired profit is $143 per unit.
Required:
Determine the mark up percentage on total cost.
Answer:
The mark up percentage on total cost is 13%.
Explanation:
Mark up percentage on total cost refers to the profit as a percentage of the total cost.
Therefore, the mark up percentage on total cost can be calculated using the following formula:
Mark up percentage on total cost = (Desired profit / Total cost) * 100 ......... (1)
Where;
Desired profit = $143
Total cost = $1,100
Substituting the values into equation (1), we have:
Mark up percentage on total cost = ($143 / $1,100) * 100 = 0.13 * 100 = 13%
Therefore, the mark up percentage on total cost is 13%.
The expected return of a portfolio is computed as ___________ and the standard deviation of a portfolio is ___________.
Answer:
The expected return of a portfolio is computed as PROBABILITY DISTRIBUTION OF THE PORTFOLIO'S POSSIBLE RETURNS and the standard deviation of a portfolio is BASED ON THE STANDARD DEVIATION OF EACH WEIGHTED ASSET'S RETURN.
Explanation:
The expected return of a portfolio is basically the sum of the expected returns of each individual asset, e.g. a portfolio is made up of two assets with equal weights.
Asset A's expected returns = 15%, with a probability of 0.4, 10%, with a probability of 0.2, and 1% with a probability of 0.4. This assets expected return = (15% x 0.4) + (10% x 0.2) + (1% x 0.4) = 8.4%
Asset B's expected return = 10%, with a probability of 0.3, 8%, with a probability of 0.4, and 6% with a probability of 0.3. This assets expected return = (10% x 0.3) + (8% x 0.4) + (6% x 0.3) = 8%
Portfolio's expected return = (8.4% x 1/2) + (8% x 1/2) = 8.2%
standard deviation = √variance
variance = [(weight stock A)² · (σ of stock A)²] + [(weight stock B)² · (σ of stock B)²] + (2 · weight of stock A · weight of stock B · covariance between stocks A and B)
A company purchased factory equipment on April 1, 2014, for $96,000. It is estimated that the equipment will have a $12,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2014, is A) $9,600.B) $8,400. C) $6,300.D) $7,200.
Answer:
Depreciation for 9 month = $6,300
Explanation:
Given:
Cost of equipment = $96,000
Salvage value = $12,000
Use full life = 10 year
Total time in 1st year = 9 month
Find:
Depreciation for 9 month
Computation:
Depreciation = [(96,000-12,000)/10)]
Depreciation = 8,400
Depreciation for 9 month = 8,400 (9/12)
Depreciation for 9 month = $6,300
Which cost flow assumption generally results in the highest reported amount for ending inventory when inventory costs are rising
Answer:
FIFO method (first in, first out)
Explanation:
When inventory costs are increasing, the FIFO method (first in, first out) results in the lowest cost of goods sold, which in turn result in the highest ending inventory value. On the other hand, the LIFO method (last in, first out) results in the highest cost of goods sold and the lowest ending inventory value. Goods purchased last will have a higher cost since the price of the merchandise increased during the year.
Nestlé of Switzerland is revisiting its cost of equity analysis. As a result of extraordinary actions by the Swiss Central Bank, the Swiss bond index yield (10-year maturity) has dropped to a record low of %. The Swiss equity markets have been averaging % returns, while the Financial Times global equity market returns, indexed back to Swiss francs, stands at %. Nestlé's corporate treasury staff has estimated the company's domestic beta at , but its global beta (against the larger global equity market portfolio) at .
a. What is Nestlé's cost of equity based on the domestic portfolio for a Swiss investor?
b. What is Nestlé's cost of equity based on a global portfolio for a Swiss investor?
Answer:
The numbers are missing, so I looked for similar questions to fill in the blanks:
Rf (Switzerland) = 0.54%
Rm (Switzerland) = 8.5%
Beta (Switzerland) = 0.919
Rm (global) = 9.06%
Beta (global) = 0.532
a. What is Nestlé's cost of equity based on the domestic portfolio for a Swiss investor?
Re (Switzerland) = Rf + [Beta x (Rm - Rf) = 0.54% + [0.919 x (8.5% - 0.54%)] = 0.54% + 7.32% = 7.86%
b. What is Nestlé's cost of equity based on a global portfolio for a Swiss investor?
Re (global) = Rf + [Beta x (Rm - Rf) = 0.54% + [0.532 x (9.06% - 0.54%)] = 0.54% + 4.53% = 5.07%
Mendelson Laboratories purchased engineering equipment at a cost of $420,000. Shipping costs totaled $15,000. Installation cost was $8,000. An additional electrical line had to be run to the equipment at a cost of $3,000. Labor and testing costs totaled $6,000. Materials used up in testing cost $3,000. The capitalized cost is:
Answer:
The capitalized cost is $455,000
Explanation:
According to the Standard (IAS 16) costs of an item of Property, Plant and equipment include the Purchase Costs and any other costs directly attributable to placing the asset in the location and condition for use as intended by management.
Calculation of Costs of Equipment :
Purchase Costs $420,000
Shipping costs $15,000
Installation cost $8,000
Electrical line $3,000
Labor and testing costs $6,000
Material in testing $3,000
Total cost $455,000
Corporation borrows cash by signing a $90,000, 8%, eight-month note on December 1 with its local bank. The total cash paid for interest (only) at the maturity of the note by Lexter will be:______
a. $600
b. $3,600
c. $4,800
d. $7,200
Answer:
c. $4,800
Explanation:
Loan Note is the promissory document to repay a specific amount of loan after a specific time period along with interest applicable to the loan value using a specified rate.
Interest amount can be calculated as follow
Interest = Loan Note's face value x Interest rate x Numbers of months upto maturity / NUmbers of months in a year
Placing values in the formula
Interest = $90,000 x 8% x 8/12
Interst = $4,800
The total cash paid for interest (only) at the maturity of the note by Lexter will be: c.$4,800.
Using this formula
Total cash paid =Cash× Interest rate× Number of months
Where:
Cash=$90,000
Interest rate=8% or 0.08
Number of months=8/12
Let plug in the formula
Total cash paid=$60,000×0.08×8/12
Total cash paid=$4.800
Inconclusion the total cash paid for interest (only) at the maturity of the note by Lexter will be: c.$4,800.
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g A corporation had 70,000 shares of $7 par value common stock outstanding. The board of directors declared and issued a 50% stock dividend. The market value of the stock was $27 per share. What is the journal entry to record this stock dividend
Answer:
Journal Entry
Dr. Retained earnings ___________________ $945,000
Cr. Common Stock _____________________ $245,000
Cr. Paid in capital excess of par common stock $700,000
Explanation:
Stock dividend is the distribution of earnings for the period among the equity stockholders in the form of common stocks.
The Numbers of stocks issued can be calculated as follow
Numbers of stocks = Common stock outstanding x Stock dividend rate
Placing values in the formula
Numbers of stocks = 70,000 x 50% = 35,000
Now calculate the stock dividend value
Stock divdned = Numbers of stocks issued under stock dividend x Market value of stock = 35,000 x $27 = $945,000
The value upto the par is recorded in the common stock account and excess will be recorded in paid in capital excess of par common stock account.
Common Stock = 35,000 x $7 = $245,000
Paid in capital excess of par common stock = 35,000 x ( $27 - $7 ) = $700,000
A company issued 5-year, 6% bonds with a par value of $97,000. The company received $94,947 for the bonds. Using the straight-line method, the amount of interest expense for the first semiannual interest period is:______.
Answer:Interest expense=$2,704.70
Explanation:
Cash Interest paid for the first semiannual interest period = Principal x Rate x Time (Period)
$97,000 × 0.06 × 1/2 year =$2,910
Straight line method to calculate the premium amortized=Bond Issue Price – Face Value)/ Bond term
= ($97,000 − $94,947) / 5 /2 = $2,053/10 =$205.30
Interest expense=Cash Interest paid - premium amortized
$2,910 − $205.30 = $2,704.70
A Japanese carmaker plans to expand its production in the United States. The company borrowed $170 million for this expansion at an interest rate of 8% per year. The loan will be repaid in equal payments at the end of each year over a 15-year period. What is the amount of the annual payment?
Answer:
$35,951,249
Explanation:
Future value = PV*(1+r)^n
Future value = 170,000,000 * (1+0.08)^15
Future value = 170,000,000 * (1.08)^15
Future value = 170,000,000 * 3.172
Future value = $539,268,749
The total amount to be paid in 15 years is $539,268,749
Annual payment = Future value/n
Annual payment = $539,268,749/15
Annual payment = $35,951,249
A firm has a machine it can sell for $50,000. The book value of the machine is $20,000 at the moment. If the firm sells the machine today, what is the tax implication from the sale? Assume that the tax rate is 40%. Round to the nearest penny. If tax liabilities, type a negative sign in front. Do not include a dollar sign in your answer.
Answer:
-12,000.00
Explanation:
Tax implication from the sale = ($50000 - $20000)*40%
Tax implication from the sale = $30,000 * 40%
Tax implication from the sale = 12,000
Now, as there is capital gain, so that means the company will have to pay taxes of 12,000. So, this is a liability of 12,000 which means the answer is = -12,000.00
Lawson Manufacturing Company has the following account balances at year end:
Office supplies $ 4,000
Raw materials 27,000
Work-in-process 59,000
Finished goods 109,000
Prepaid insurance 6,000
What amount should Lawson report as inventories in its balance sheet?
A) $109,000.
B) $113,000.
C) $195,000.
D) $199,000.
Answer:
C) $195,000.
Explanation:
Calculation for the amount that Lawson should report as inventories in its balance sheet
Raw materials 27,000
Add Work-in-process 59,000
Add Finished goods 109,000
Inventories $195,000
Therefore the amount that Lawson should report as inventories in its balance sheet will be 195,000
Swifty Corporation sells one product and uses a perpetual inventory system. The beginning inventory consisted of 76 units that cost $22 per unit. During the current month, the company purchased 478 units at $19 each. Sales during the month totaled 360 units for $42 each. What is the number of units in the ending inventory
Answer:
Ending inventory in units= 194
Explanation:
Giving the following information:
The beginning inventory consisted of 76 units.
During the current month, the company purchased 478 units.
Sales during the month totaled 360 units.
To calculate the number of units in ending inventory, we need to use the following formula:
Ending inventory in units= total inventory - sales in units
Ending inventory in units= 554 - 360
Ending inventory in units= 194
Consolidation Entry TL removes the gain on sale from an intra-entity land sale because the land remains under the control of the consolidated entity.a. True b. False
Answer:
True
Explanation:
In consolidation the intra-entity transaction takes place and the gain on these transactions are eliminated as the sale and purchases are taken place in the same entity as a group. At the time of consolidation of group account the gain arising from these types of transactions are eliminated because the asset is held by the same entity as a group but in the individual account of each company of the group the gain on these transactions are recorded and reported in the accounts.
This professional analyzes statistics and uses them to calculate risks and premiums
Answer:
Explanation:
An actuary compiles and analyzes statistics and uses them to calculate insurance risks and premiums. Mehmud and associates created the tool, called “Wakely Risk Insight,” to aid the consulting firm’s clients.
g Distinguish between the total U.S. debt and the debt held by the public. Why is the debt as a percentage of GDP more relevant than the total debt
Answer:
The total US debt is all the money that the US federal government owes. While the debt held by the public is only the portion of the US debt held by private entities (e.g. private investors or foreign governments).
In the past (around 20 years ago), government debt owned by federal agencies was much higher, over 40%, with social security being the largest debt holder. This is called intragovernmental debt. That means that around 60% of the debt was held by the public. But in recent years this has changed. Currently. intragovernmental national debt has fallen to 23%. This means that the debt hold by the public is more or less 77%.
Even as intragovernmental debt has decreased, the total size of the national debt is not as important as the percentage of the national debt compared to the GDP. Currently, national debt represents 98.3% of the GDP which is the highest level since WWII. This is really something to worry about because the government spends a huge portion of its budget paying interests on existing national debt and the higher it is, the less money available for other expenses. As the national debt increases in relation to the GDP, it is more difficult for the country to pay it back. The said thing is that politicians do not pay for it, taxpayers pay it.
Based on the constant demand assumption in the economic order quantity (EOQ) model, the average cycle inventory is:____________
A) the order quantity divided by the number of inventory cycles per year.
B) the annual demand divided by the number of inventory cycles per year.
C) half of the order quantity.
D) half of the annual usage.
Answer:
C) half of the order quantity
Explanation:
The constant demand assumption in the economic order quantity (EOQ) model permits that there should be a minimum number of goods any company should purchase in order to help minimize different types of costs accrued through this system.
Based on the constant demand assumption in the economic order quantity (EOQ) model, the average cycle inventory is half of the order quantity.
holdup bank has an issue of prefered stock witha standard deviation of $7 that just sold for $87 per share. What is the banks cost of prefered
Answer: 8.05%
Explanation:
From the question, we are informed that Holdup bank has an issue of prefered stock witha stated dividend of $7 that just sold for $87 per share.
The banks cost of prefered will be:
= Dividend / Stock value
= 7/87
= 0.0805
= 8.05%
Barry’s expectation that employees will complete his requests immediately is typical of —— leaders.
Answer: Commanding leaders
Explanation: The commanding leader is a type of leadership where the leader is someone who is very controlling. These leaders are tough and direct people, they are those who take charge of situations regardless of what others may think.
In the commanding leadership style, the leader is someone very focused and does whatever it takes to get the desired results. They are often intimidating and expect their employees to always do what they ask.
One example of consumers not knowing what they want is that, before purchase, consumers want products with many features, but after purchase consumers are more satisfied with products with fewer features. This is called:________
a. Feature frustration
b. Feature regret
c. Feature Fatigue
d. Feature apprehension
Answer:
c. Feature Fatigue
Explanation:
Feature fatigue is defined as the phenomenon where consumers are satisfied with buying products that are simple and easy to use as opposed to feature-rich products.
The various reasons consumers avoid feature-rich products are:
- Less quality due to rushed production to input many features
- Reduced usability of features. When features of a good are not used they tend to confuse user and sometimes reduce efficiency of use.
- Lack of understanding of complex features
- More stability of products with less features
Juanita is a citizen of Brazil but is working in Canada for a subsidiary of her company. Juanita is a(n) _____ manager.
a. ethnocentric
b. expatriate
c. geocentric
d. host-country
e. domestic
Answer:
b. expatriate
Explanation:
In this specific scenario, Juanita is an expatriate manager. Expatriate managers are just employees that are not native-born citizens from the country in which they are currently working in. Since Juanita is working in Canada but is not a Citizen of Canada then she is considered an expatriate. The main reason for hiring such an individual is that they most likely possess skills that only a few people may have due to many years of experience.
The newspaper reported last week that Bennington Enterprises earned $34.04 million this year. The report also stated that the firm’s return on equity is 13 percent. Bennington retains 85 percent of its earnings.What is the firm's earnings growth rate? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))What will next year's earnings be? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars.)
Answer:
a.
15.29%
b.
$39,659,760
Explanation:
Note that the formula for return on equity provided below can be used to determine the earnings growth rate:
return on equity=earnings growth rate*retention rate
return on equity=13%
the earnings growth rate is the unknown
retention rate=85%
13%=the earnings growth rate*85%
the earnings growth rate=13%/85%=15.29%
The earnings next year=this year's earnings*(1+15.29% )
The earnings next year=$34,400,000*(1+15.29%)=$39,659,760
Top Flight Stock currently sells for $53. A one-year call option with strike price of $58 sells for $10, and the risk-free interest rate is 5.5%. What is the price of a one-year put with strike price of $58
Answer:
$11.97
Explanation:
Calculation for the price of a one-year put
Using this formula
Price=Call option-Stock+Strike price(1+Risk-free interest rate)
Let plug in the formula
Price = $10 - $53 + $58/(1+.055)
Price = $10 - $53 + $58/(1.055)
Price= $11.97
Therefore the price of a one-year put with strike price of $58 will be $11.97
The put price for one year for a stock would be $14.21. The calculations are done on the basis of call option prices and risk free rate of return given in the query.
Put price generally refers to the asking price to sell the stock at a future price either up or down with respect to current situations of the stock market.
The formula for calculating the Put price for one year will be calculated is as given below.[tex]\rm {Put\; price}= \dfrac{Call\; option- current\; stock\ price + current\; strike\; price}{(1+ risk\; free\; interest\; rate)}\\[/tex]
Putting the values available in the formula above we get
[tex]\rm {Put\ price} = \dfrac{10-53+58}{1+0,055}[/tex]
Value obtained will be[tex]\rm Put\ price = 14.21[/tex]
Hence, the put price for a stock whose strike price is $58 will be $14.21 for a period of 1 year.
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As the marginal propensity to consume (MPC) increases, the spending multiplier:______.a. remains the same. b. increases. c. decreases. If the marginal propensity to consume is 0.60, then, assuming there are no taxes or imports, what is the multiplier?
Answer:
b. increases ; 2.5
Explanation:
MPC stands for Marginal Propensity to Consume. In economics, the MPC may be defined as the metric that quantifies the induced consumption. It is the concept that determines that the increase in the spending of personal consumer occurs with increase in the disposable income.
It is estimated that as the MPC increases, the spending multiplier also increases. MCP is the ratio of consumption function to the disposal income change. When the MCp is 0.6, then the multiplier becomes 2.5 if there is no imports and taxes involved.
Speedy gas
High Price Low price
Swifty Gas High Price $100, $100 $25,$150
Low price $150, $25 $50,$50
(Table: Two Rival Gas Stations) Use Table: Two Rival Gas Stations. The table shows a payoff matrix for two gas stations in a small town. Each firm can set either a high price or a low price, and customers view these two firms as nearly perfect substitutes. Profits in each cell of the payoff matrix are given as (Swifty's profit, Speedy's profit). Which statement describes a dominant strategy?
a. Swifty will always set a low price,no matter Speedy's choice.
b. Swifty will always set a high price,no matter Speedy's choice.
c. Swifty will set a low price when Speedy sets a high price,but Swifty will set a high price when Speedy sets a low price.
d. Swifty will set a high price when Speedy sets a high price,but Swifty will set a low price when Speedy sets a low price.
Answer:
a. Swifty will always set a low price,no matter Speedy's choice.
Explanation:
Swifty's dominant strategy should result in maximizing its profits regardless of what Speedy does. This is achieved by setting a low price, since that strategy could yield $150 + $50 = $200
If Swifty sets a high price it could earn = $100 + $25 = $125
Since $200 is higher than $125, then that would be Swifty's dominant strategy.
The operating cycle of a company: Multiple Choice Is the time it takes to acquire a loan, pay the interest, and retire the loan by paying the creditor in full. Must be less than one year. Is the time it takes to purchase inventory, sell inventory, and collect cash from the sale. Is usually greater than one year.
Answer:
c. Is the time it takes to purchase inventory, sell inventory, and collect cash from the sale.
Explanation:
The operating cycle of a company in this context is the average period of time that is required for the company to make an initial outlay of cash to produce product and services, sell and receive cash from consumers in exchange of goods or services.
Receipts from cash sales of $3,200 were recorded incorrectly in the cash receipts journal as $2,300. This item would be included on the bank reconciliation as a(n):_______
a. addition to the balance per bank statement
b. deduction from the balance per company's records
c. deduction from the balance per bank statement
d. addition to the balance per company's records
Answer:
d. addition to the balance per company's records
Explanation:
Since in the question it is mentioned that the receipts generated from cash sales is $3,200 is not reported correctly in the journal of cash receipts as it is wrongly reported i.e. $2,300
So this type of error would be involved in the balance according to the records of the company
hence, the correct option is d
The same is to be considered
What might be reasons that small-company stocks earn higher returns than large-company stocks on average?
Answer:
small company stocks are less safe and liquid and is more exposed to inflation
Explanation:
From the period of 1926 to 2010, the small company stock had the highest average return of securities as compared to the company stocks of large company. Some of the reasons for the highest return on average of a small company stock than the small company stock are :
1. The small company stocks are less safe.
2. The small company stocks are less liquid.
3.They are more exposed to the inflation.
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1.6.2 Test (CST): Goals and Career Planning
Question 3 of 25
If Lucinda's top priority is being able to express her creative side, her most
likely long-term goal is to become a(n)
O
A. lawyer
B. interior designer
C. teacher
0
D. police officer
When meeting someone from a different culture it is more useful to focus on ________, or central tendencies and patterns within a culture which recognize that there are variations of beliefs, behavior and values within that culture.
a. prototype
b. stereotype
c. halo bias
d. fundamental attribution error
Answer:
Option A: Prototype
Explanation:
culture is basically the way of life of people in a place. It is a system of beliefs, values, and ways of life that are shared or common with(by) a group of people.migration in the world today has made people with different cultures to be intertwined. Understanding your cultures is good but to foster growth, peace and love wherever we are among other cultures and traditions, one must learn to understand other people cultures around is as it will help in building faith, love and peace. Cultural differences appear in a number of important areas, including nonverbal signals, gender. Religion and attitudes toward work and success.
Focus on the original, early model,/sample(prototype), central tendencies and patterns within a culture will help us to recognize that there are a lot of difference in the beliefs, behavior and values within that culture.