Answer:
r = 0.24 or 24%
Explanation:
The expected rate of return or the required rate of return is the minimum return that investors anticipate on a stock based on the systematic risk of that stock as measured by its beta. The CAPM equation can be used to calculate the expected rate of return on a stock. The formula is,
r = rRF + Beta * rpM
Where,
rRF is the risk free raterpM is the risk premium on marketr = 0.042 + 1.8 * 0.11
r = 0.24 or 24%
6. If negative float appears on a partial path (until certain activity), the most likely explanation is: a. One or more activities on that path is running late. b. The project is not meeting its expected completion date. c. The project is meeting its expected completion date but a certain activity/ event on that path is not meeting its expected completion date. d. It must be a software glitch.
Answer:
Negative Float on a Partial Path:
c. The project is meeting its expected completion date but a certain activity/ event on that path is not meeting its expected completion date.
Explanation:
Float is the quantification of delays in a project. Negative float means that there is a delay exceeding the intended or allowed float by an ascertainable time. This means that float is about the time when an activity takes longer than originally planned. Some projects have inbuilt standard float which had been computed based on past experience of similar projects, with some allowances made for different expected scenarios.
Where is a gain or loss from discontinued operations reported in the financial statements?
a. In the report on internal control
b. Immediately following income from continuing operations on the income statement
c. Immediately following retained earnings on the balance sheet
d. Immediately following income tax expense on the income statement
Answer:
b. Immediately following income from continuing operations on the income statement
Explanation:
Gains are losses from discontinued operations must be reported in the company's income statement. Discontinued operations are not reported in the balance sheet.
The net of tax gain or loss from discontinued operations should be reported immediately after the operating income (loss).
Sparks Corporation has a cash balance of $5,480 on April 1. The company must maintain a minimum cash balance of $5,000. During April, expected cash receipts are $56,200. Cash disbursements during the month are expected to total $60,600. Ignoring interest payments, during April the company will need to borrow:___________
a) $5,000
b) $4,400
c) $1,080
d) $3,920
Answer:
d) $3,920
Explanation:
The computation of the borrowed amount is shown below:
= Beginning cash balance + expected cash receipts - expected cash disbursements - minimum monthly cash balance
= $5,480 + $56,200 - $60,600 - $5,000
= $3,920
We easily add to the starting cash balance the estimated cash receipts and deducted the expected cash disbursements and the minimum monthly cash balance, in order to get the correct value
Suppose that the marginal cost of mining gold is constant at $300 per ounce and the demand schedule is as follows:
PRICE (per oz.) QUANTITY (per oz.)
$1000 1000
$900 2000
$800 3000
$700 4000
$600 5000
$500 6000
$400 7000
$300 8000
A) If the number of supplies is large, what would be the price and quantity?
B) If there is only one supplier, what would be the price and quantity?
C) If there are only two suppliers and they form a cartel, what would be the price and quantity?
D) Suppose that one of the two cartel memebers in part (c) decides to increase its production by 1,000 ounces while the other member keeps its production constant. What will happen to the revenues of both firms?
Answer:
a) The price would be $300 and quantity would be 8000 oz
b) The price would be $700 and quantity would be 4000 oz
c) The price would be $700 and quantity would be 2000 oz each
d) The revenues of both firm would : increase ( for the firm that increase production ) and decrease ( for the firm that doesn't increase production)
Explanation:
marginal cost = $300
calculate the value of TR ( total revenue for each price and quantity given )
TR = price * quantity
also calculate the MR ( marginal revenue for each )
MR = [tex]\frac{change in TR }{change in quantity}[/tex]
For the first value : TR = $1000000 , MR = nil
For the second value : TR = $1800000 , MR = $800
For the third value : TR = $2400000. MR = $600
For the fourth value : TR = $2800000 , MR = $400
For the fifth value: TR = $3000000 , MR = $200
For the sixth value : TR = $3000000, MR = $0
For the seventh value : TR = $2800000, MR = -$200
For the eighth value : TR = $2400000, MR = -$400
a)The price would be $300 and quantity would be 8000 oz because from the table above that is the point with highest quantity supplied
b) The price would be $700 and quantity would be 4000 oz because the single supplier would put the price and quantity to be supplied at the point where marginal cost is closest to the marginal revenue
d) The revenues of both firm would : increase ( for the firm that increase production ) and decrease ( for the firm that doesn't increase production) this is because increase in production is directly proportional to increase in revenue .
Which of the following best explains why the service sector is a natural avenue for e-commerce?
a. The service sector is less geographically reliant and more globally oriented
b. Much of the value in services is based on the collection, storage, and exchange of information
c. The service sector has historically been more technologicaly-reliant
d. It is not; services are difficult to translate to e-commerce because they rely on face-to-face communications and barter
Answer:
b. Much of the value in services is based on the collection, storage, and exchange of information
Explanation:
Service provides an excellent avenue for e-commerce.
E-commerce is the practice of selling and buying using online tools like the internet. Payments for goods and services exchanged is also done online.
Service sector are not manufacturers of goods but rather they provide value in the form of customer service, management, knowledge, advise, and data.
The information service sector deals with provides an ideal avenue for e-commerce activities of selling and buying online.
When a decrease in credit card availability increases the cash people hold, the money-demand curve shifts to the right. As a result, there is an increase in the interest rates. What should the Federal Reserve do to restore the interest rate level back to the original interest rate?
Answer:
The FED must decrease the price of money (or interest rates), and to do that it will buy US securities. By purchasing securities, the FED will decrease the money supply, lower the interest rates and halt inflation. This is called a contractionary monetary policy.
It can also increase the banking system's required reserve ratio, but besides lowering the interest rates, it will also decrease the supply of credit cards even further, so one action could offset the other. That is why this policy might be inefficient in this specific case.
In the Schedule of Cost of Goods Manufactured, Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory − Ending work in process inventory.
A. True
B. False
Answer:
A. True
Explanation:
The formula to compute the cost of goods manufactured is shown below:
Cost of goods manufactured = Opening work in process + Manufacturing cost - ending work in process
here the manufacturing cost refers to the direct material cost, direct labor cost and the manufacturing overhead cost i.e. indirect cost that is required to manufacturing a product
hence, the given statement is true
As a central bank has greater independence from the government, the economy's inflation rate tends to
Answer:
The economy's inflation rate tends to stable and low
Explanation:
As a central bank has greater independence from the government, the economy inflation rate tends to be stable and low Because when central banks are independent from the government, they tend to make better monetary policy decisions as they do not work for votes, so they take suitable measure without thinking about politics. Thus, they have better credibility in the country.
The independence granted to the central bank tend to let the bank utilizes its full fiscal knowledge at its disposal with the help of past record, knowledge of accountant, economist, financial analyst and other expert working under the independent and head bank. This leads to stability in the economy, and inflation expectation are low.
In the context of a bond portfolio, price risk and reinvestment rate risk exactly cancel out at a time horizon equal to _____
Answer: duration of the portfolio
Explanation:
An investment time horizon which is also referred to as the investment horizon is total time that an investor is expected to hold a particular security.
In the context of a bond portfolio, price risk and reinvestment rate risk exactly cancel out at a time horizon equal to duration of the portfolio.
Which of the following is not one of the six key decisions in project management?
a. Identify projects to implement
b. Selecting the project manager & the project team
c. Planning and designing the project
d. Deciding on the project manager's tittle
Answer:
Option D. Deciding on the project manager's tittle
Explanation:
The reason is that the composition of the project, resources required to execute a project, planning and designing of the project and deciding which strategy to implement are the key factors that decides the success of the project. Hence Option A, B and C each are one of the six key decisions in the project management.
Option D is incorrect because deciding the project manager's title doesn't any important role as it doesn't have any significant impact on the productivity of the project manager. Hence Option D is not one of the six key decisions in the project management.
What is the value today of $1,100 per year, at a discount rate of 8 percent, if the first payment is received 4 years from now and the last payment is received 23 years from today
Answer:
The value today = $8,573.36
Explanation:
The value today of the investment would the present value of annuity of 1,100 receivable discounted at the at the rate of 8%.
The PV of the payment would be done as follows:
The number of payments would be 20 installments. Please be mindful not to say 19. Remember the first the payment occurs in year 4 which is inclusive.
PV = A × 1- ( (1+r)^(-n))/r
A- annual payment
r- rate of return
n- number of years
DATA
A- 1,100
r- 8%
n- 20
PV = 1,100 × 1- (1.08)^(-20)/0.08 = 10,799.96
PV (in year 0) = PV in year 3× (1+r)^(-3)
PV (in year 0) =10,799.96 × 1.08^(-3) = 8,573.36
PV (in year 0) = $ 8,573.36
The value today = $8,573.36
Universal Travel Inc. borrowed $501,000 on November 1, 2021, and signed a 12-month note bearing interest at 7%. Interest is payable in full at maturity on October 31, 2022. In connection with this note, Universal Travel Inc. should report interest payable at December 31, 2021, in the amount of: (Round your final answers to the nearest whole dollar.)
Answer:
Interest = $5,834.67
Explanation:
In November 1, the note bears 12 month = 7%
From November 1 to December 31 = 2 month
Hence for 2 month Interest = 2 * 7/12(%) = 1.1667%
Thus, interest = $500,100 * 1.1667%
Interest = 5834.6667
Interest = $5,834.67 approximately.
Which of the following charts would be best to draw out the movement of people or material?
a) Activity chart
b) Operations chart
c) Flow diagram
d) Process chart
Answer:
c) Flow diagram.
Explanation:
Flow diagram also known as a flowchart can be defined as a visual representation or an activity diagram which is typically used to illustrate or demonstrate the simple sequence of actions or movements within a complex process and workflow. A Flow diagram would be best to draw out the movement of people or material.
Generally, a flowchart or flow diagram makes use of symbols such as rectangle, oval, diamond, arrow to represent the steps, flow or sequence of a complex system.
A study was conducted on the relationship between speeds of cars and gas mileage. The correlation coefficient was 0.45. Later, the researchers found the speedometers read 5 mph too high. Researchers recomputed the coefficient. The new value will be:__________. a) 0.40 b) 0.50 c) 0.45
Answer:
c) 0.45
Explanation:
The correlation coefficient measures the relationship between two how two variables change, in this case speed and gas mileage. Since the speedometers were wrong by 5 mph in a constant manner, the correlation between how changes in speed affect gas mileage will not be altered. For example, if you were measuring how an increase of 10 mph decreased gas mileage, you are looking at the change in speed and it is the same if you start with 60 mph and then increase speed to 70 mph, or if you start at 55 mph and then increase to 65 mph, the change in speed will be 10 mph for both.
Part P40 is a part used in the production of air conditioners at Jackson Corporation. The following costs and data relate to the production of Part P40: Number of parts produced annually Fixed costs Variable costs Total cost to produce Jackson Corporation can purchase the part from an outside supplier for per unit. If they purchase from the outside supplier, 50% of the fixed costs would be avoided. If Jackson Corporation makes the part, how much will its operating income be?
Question
Part P40 is a part used in the production of air conditioners at Jackson Corporation. The following costs and data relate to the production of Part P40:
Number of parts produced annually 26,000
Fixed cost $43,000
Variable cost 70,000
Total cost to produce 113,000
Jackson Corporation can purchase the part from an outside supplier for $4.62 per unit. If they purchase from the outside supplier, 50% of the fixed costs would be avoided. If Jackson Corporation makes the part, how much will its operating income be?
Answer:
Change in operating income= $28,620
Explanation:
$
Total variable cost of making 70,000
Total cost of external purchase ($4.62×26,000) 120,120
Extra variable cost from external purchase 50,120
less Savings in fixed overheads(50%×43,000) ( 21,500)
Change in operating income 28,620
Note that the the balance of the fixed cost (50% of $43,000= 21500) were not included because they not relevant for the decision. They would be incurred either way.
Change in operating income= $28,620
as a marketing manager you reach out to the director of marketing to let her knoiw about problems you are having with communications with the sales team and explain how these issues are preventing you from achieveing your sales goals
Answer:
One of the problems I am having with the sales team is lack of communication.
There is a lot of sales and marketing activities going on the company, yet we don't have a system in place to ensure that I receive accurate feedback from all the relevant sections. For instance, there is no way to accurately know what feedback regarding our products and services that the sales team are collecting.I am not getting real-time results as they are happening. Sometimes it takes 6 weeks to get information about something that happened. By that time, if it's a negative occurrence, we are way out of course before we can make corrections. If it's a great occurrence, we lose out on the moment and the timing to capitalise on it for more results.This lack of data/poorly collected information is also affecting my working relationship with my superiors as I am unable to provide my superiors with market intelligence.Solutions
In order to mitigate these problems, I suggest we hold an emergency training for every member of the sales and marketing team on communications and how it can significantly improve our bottom line as well as everyone's take home.
For instance, if there is a new entrant into the market, the sales team usually are the first to know. If this is not communicated immediately, we lose out on the right timing to react with precision and speed.
I would also suggest that we provide the sales team with a simple app on their mobile phones which enables them to give feedback in realtime and at the end of each days work. We would need to work with the IT team on this.
Thank you.
. In competitive markets, price is equal to marginal cost in the long run. Explain why this statement is not true for monopolistic competition.
Answer:
A Monopolistic Market may consist of many firms providing the same goods and services but these goods and services will be differentiated from one another in such a way that the goods will be perceived differently.
This has the effect of giving firms in such a market a downward sloping demand curve. The firm will maximise output at the point where Marginal Revenue equals marginal cost. This point will be lower than the demand curve so the firm will charge a price that is higher than the marginal cost at that point.
Refer to graph attached and notice how the price P is above the Long run marginal cost curve.
Clemente Inc. incurs the following costs to produce 10,000 units of a subcomponent: Direct materials $8,400 Direct labor 11,200 Variable overhead 12,600 Fixed overhead 16,200 An outside supplier has offered to sell Clemente 10,000 units of the subcomponent for $2.85 a unit. If Clemente could avoid $3,000 of fixed overhead by accepting the offer, net income would increase (decrease) by
Answer:
$6700
Explanation:
Direct materials $8,400 + Direct labor 11,200 + Variable overhead 12,600 + Fixed overhead 16,200
= 48400 total
2.85 x 10000= 28500
Fixed overhead 16,200 - $3,000
= 13200
28500 + 13200 = 41700
Change in net income = 48400 - 41700
= 6700
The net income of the company would increase by $6700
The accompanying data represent the monthly rate of return of a certain company's common stock for the past few years. Complete parts (a) and (b) below.
0.26 0.26 0.04 0.06 0.06 −0.04 −0.04 0.22
0.47 0.06 - 0.16 0.19 0.05 0.18 0.09 0.02
−0.05 −0.02 0.08 0.02 −0.02 0.13 −0.08 −0.02
0.06 −0.01 0.07 −0.05 0.01 −0.10 0.02 0.03
0.01 0.11 −0.11 0.09 0.10 0.25 −0.02 0.03
Determine and interpret the quartiles.
Interpret the quartiles.
A. 25% of the monthly returns are less than or equal to the first quartile. 50% of the monthly returns are less than or equal to the second quartile. 75% of the monthly returns are less than or equal to the third quartile.
B. 25% of the monthly returns are more than or equal to the first quartile. 50% of the monthly returns are more than or equal lo the second quartile. 75% of the monthly returns are more than or equal lo the third quartile.
C. 75% of the monthly returns are less than or equal to the first quartile. 50% of the less than or equal lo the third quartile.
Answer:
A. 25% of the monthly returns are less than or equal to the first quartile. 50% of the monthly returns are less than or equal to the second quartile. 75% of the monthly returns are less than or equal to third quartile.
Explanation:
The data shows that the data is less than 25% in the first quartile. The other half of the data falls in the second quartile which is about almost 50% of the data. The 75% of the monthly returns are less than or equal to the third quartile.
A two-year project has sales of $582,960, cash costs of $411,015, and depreciation expense of $68,109. The tax rate is 24 percent and the discount rate is 12 percent. What amount should be used as the annual depreciation tax shield when computing the project's operating cash flow? Ignore bonus depreciation. C) $47,213.34 D) $26,210.01 E) $46,676.30 B) $16,346.16 A) $23,606.67
Answer:
B) $16,346.16
Explanation:
annual operating tax shield = depreciation expense x tax rate = $68,109 x 24% = $16,346.16
when you are calculating the net cash flows, the formula you will follow is:
net cash flow = [(revenues - cash costs - depreciation expense) x (1 - tax rate)] + depreciation expense
net cash flow = [($582,960 - $411,015 - $68,109) x (1 - 24%)] + $68,109 = $147,024.36
The Pan American Bottling Co. is considering the purchase of a new machine that would increase the speed of bottling and save money. The net cost of this machine is $55,000. The annual cash flows have the following projections. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year Cash Flow 1 $ 28,000 2 26,000 3 26,000 4 31,000 5 12,000 a. If the cost of capital is 15 percent, what is the net present value of selecting a new machine
Answer:
NPV = $29,794.60
Explanation:
Year Cash Flow
0 -$55,000
1 $28,000
2 $26,000
3 $26,000
4 $31,000
5 $12,000
NPV = -$55,000 + ($28,000 x 0.8696) + ($26,000 x 0.7561) + ($26,000 x 0.6575) + ($31,000 x 0.5718) + ($12,000 x 0.4972) = -$55,000 + $24,348.80 + $19,658.60 + $17,095 + $17,725.80 + $5,966.40 = -$55,000 + $84,794.60 = $29,794.60
on january 1 year 1 abc merchandising company was started the company experienced the following events during the first year of operations started the business by the issue common stock for 1000 cash purchased 410 inventory on account how much revenue will abc merchandisng company report
Answer: $390
Explanation:
Revenue for a merchandising business is realized when the business sells some of its goods to customers. This can either be in cash or on account which would mean that the customer did not pay cash but now owes them.
The business sold merchandise costing $350 for $390 on account so this is the amount that they will recognize as revenue.
Valley Spa purchased $7,800 in plumbing components from Tubman Co. Valley Spa Studios signed a 60-day, 10% promissory note for $7,800. If the note is dishonored, what is the amount due on the note
Answer:
$7,930
Explanation:
Calculation for the amount due on the note
First step
(10%×$7,800×60-day/360 days)
=$130
Now let calculate the amount due on the note
Amount due on the note=$7,800+$130
Amount due on the note=$7,930
Therefore the Amount due on the note If the note is dishonored will be $7,930
A company's interest expense is $20,000. Its income before interest expense and income taxes is $140,000. Its net income is $58,800. The company's times interest earned ratio equals:_________ a) 0.42 b) 700 c) 2.38 d) 0.143 e) 0.34
Answer:
7
Explanation:
The company's times interest ratio is calculated as;
= Its income before interest expense and any income taxes ÷ Interest expense
= $140,000 ÷ $20,000
= 7
Derst Inc. sells a particular textbook for $39. Variable expenses are $28 per book. At the current volume of 49,000 books sold per year the company is just breaking even. Given these data, the annual fixed expenses associated with the textbook total:
Answer:Annual fixed expenses = $ 539,000
Explanation:
Given;
break even point on books sold= $49,000
sales price per unit = $39
variable cost= $28
Using the formulae,
Break-Even point (units) = Fixed Costs ÷ (Sales price per unit – Variable costs per unit) or in sales
49,000 =Fixed cost / ( 39-28)
Fixed cost = 49,000 x 11
= $ 539,000
Annual fixed expenses = $ 539,000
Consider the following information:Portfolio Expected Return Standard DeviationRisk-free 6.0% 0%Market 10.2 21A 8.2 10a. Calculate the sharpe ratios for the market portfolio and portfolio A. (Round your answers to 2 decimal places.)Sharpe RatioMarket portfolio Portfolio A b.If the simple CAPM is valid, state whether the above situation is possible?YesNo
Answer:
Explanation:
Given the following :
Portfolio - - - - - - Expected return - - - Std
Risk-free - - - - - - - - 6.0% - - - - - - - - - - 0%
Market - - - - - - - - - 10.2 - - - - - - - - - - - - 21
A - - - - - - - - - - - - - 8.2 - - - - - - - - - - - - 10
Calculate the sharpe ratios for the market portfolio and portfolio A.
Sharpe Ratio = (Expected portfolio return - Risk-free rate of return) / standard deviation of portfolio return
Sharpe ratio of market portfolio:
(10.2 - 6) / 21
4.2 / 21 = 0.20
Sharpe ratio of portfolio A:
(8.2 - 6) / 10
2.2 / 10 = 0.22
B) NO
If simple CAPM is valid, the above situation is Not possible, BECAUSE, according to the simple Capital Asset Pricing Model, the market portfolio is the most efficient, however with a Sharpe ratio of 0.20, which is lower than the sharpe ratio obtained for portfolio A, 0.22 then, portfolio A is more efficient.
At her current level of consumption, Jess gets half as much marginal utility from an additional bagel as from an additional muffin. If the price of muffin is $2 each, then Jess is maximizing her utility if the price of a bagel is:
Answer:
$1
Explanation:
Utility is the satisfaction a person derives from consumption of a product.
Consumers seek to maximise utility when they have choices between products.
They choose products that gives them most satisfaction.
In this scenario gets 0.5 unit satisfaction from consuming a bagel to 1 unit of satisfaction from consuming muffins.
She will maximise utility in bagels when she pays a price that will give her satisfaction of consuming one muffin.
Therefore
0.5 utility on bagel = x
1 utility on muffin = $2
Cross multiply
x = ( 2 * 0.5) ÷ 1
x = $1
So Jess gets same satisfaction from 2 bagels as she gets from $2 of muffin
Mondo Snow Removal's cost formula for its vehicle operating cost is $1,980 per month plus $696 per snow-day. For the month of January, the company planned for activity of 13 snow-days, but the actual level of activity was 17 snow-days. The actual vehicle operating cost for the month was $13,430. The activity variance for vehicle operating cost in January would be closest to:
Answer:
The activity variance for vehicle operating cost for the month of January is $2,784 U
Explanation:
Activity Variance = Actual Activity - Standard Activity * Standard Rate
Activity Variance = Actual snow days - Standard snow days * Standard Rate
Activity Variance = (17 - 13) * $696
Activity Variance = 4 * $696
Activity Variance = $2,784 Unfavorable
To make bond purchases, the Fed gets the money __________. Select the correct answer below: exclusively from proceeds it has received from selling bonds in the past
Answer: by creating it
Explanation:
Here are the options:
a. from proceeds it has received from selling bonds in the past.
b. from dues paid to it by member banks.
c. by creating it.
d. from the government.
During recession, the government used the expansionary policies in order to improve and stimulate the economy. Buying bonds by the government is a way of increasing money supply in the economy.
To achieve this, the government simply has to create it which can simply be done by printing the currency.
The shareholders' equity of Green Corporation includes $320,000 of $1 par common stock and $510,000 par of 7% cumulative preferred stock. The board of directors of Green declared cash dividends of $61,000 in 2021 after paying $31,000 cash dividends in each of 2020 and 2019. What is the amount of dividends common shareholders will receive in 2021
Answer:
$25,300
Explanation:
The computation of the common shareholders received the dividend for the year 2021 is shown below:
Since in the year 2021, the dividend i.e. declared is $61,000
Now the preference shareholders dividend is
= $510,000 × 0.07
= $35,700
So for common shareholders, the dividend would be
= $61,000 - $35,700
= $25,300