A decision-maker faces the following decision under conditions of uncertainty. This decision-maker has $1 million in assets. Most of those assets, $750,000, are the individual’s equity in his house. The remaining $250,000 are absolutely secure. Unhappily, there is a risk that the individual’s house will burn down in a fire, which would be a total loss of the $750,000. The individual can insure his house against the loss from this fire. The premium for the insurance is $40,000, and it will insure the individual completely; that is, if the individual chooses to purchase this insurance policy, his assets will be $960,000, whether or not there is a fire. (There is no mortgage on the house, so $750,000 is the full amount paid by the insurance company.) The probability of a fire is 0.05.
Required:
a. What is the expected net earnings, the premium less the expected amount paid out to the client, to the insurance company from this policy?
b. If the individual in question were risk neutral, would he buy this insurance policy?
c. If the individual in question is an expected utility maximizer, with the utility function u(a) = where a is the individuala's total assets, would this individual buy the insurance?
Answer:
The correct Answer Is C,
Explanation:
I got It Right :)
A- The net earnings of the individual in question will be $710000 after the individual's claim for loss by fire is settled by the insurance company. B- Yes, he would buy the insurance if he were risk neutral.
C- Yes, the individual will buy the insurance policy if he were a expected utility maximizer as he would want to claim complete settlement of this amount to be claimed in case of fire loss.
The expected net earnings from the insurance after deducting the amount from the premium paid and total claim endorsed by the insurance company will be $710000 which can be shown as below
[tex]\rm Net\ earnings= claim\ received - premium\ of\ policy[/tex]
[tex]\rm Net\ earnings= 750000-40000[/tex]
We get,
[tex]\rm Net\ earnings= 710000[/tex]
If the individual were risk neutral he would like to take the insurance as the risk of fire in the example given above is 0.5 which is greater than zero and this ultimately implies that risk cannot be taken.In the case if the individual is expected utility maximizer he would take the insurance as it would not only give him the claims from losses due to fire but also help him secure his house against beta of fire.
Hence, the correct answers will be A- $710000; B- Yes.; C- Yes. and imply that taking insurance will be a wise decision by the individual.
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Please give a complete answer to all questions, citing the legal principle to support your answer.
I. John owns a clothing store. He sees Jack put several items of clothing into his bulky jacket and then walk past all cash registers on his way out the door without paying for the clothes. He has his security people restrain Jack and put him in a locked room while he calls the police. The police arrive in five minutes and place Jack under arrest for shoplifting. Jack sues John civilly for the tort of unlawful imprisonment. Will Jack win or lose this lawsuit?
2. Sarah, Lisa and Adriana are accountants and decide to form the limited liability partnership of SLA Accountants, LLP. They register the partnership with the state. Adriana then conducts an audit of the financial statements of DEF, Inc. and her audit team includes Anna, an audit manager who is under the supervision of Adriana during the course of the audit. Anna makes a major mistake in checking the assets of DEF with the result that the assets listed on the financial statements are overvalued and the liabilities are undervalued. DEF is a publicly traded stock and when the market finds out about this mistake, the value of the shares goes from $50/share to $5/share. The shareholders sue Sarah, Lisa and Adriana for negligence. Sarah and Lisa did not participate in this audit. Adriana states that her personal assets cannot be reached in this lawsuit. Is Adriana right or wrong?
3. Sam is a member of the U.S. Army’s Special Forces. He owns a Ford GT, the most expensive sports car made by Ford. He has received orders to deploy to the Middle East for a secret assignment that he realizes will be highly dangerous. He has a favorite nephew, Andrew, and he brings the car and the key fob over to Andrew’s house before he leaves. He tells Andrew that if he does not come back, the car is his. He does come back but when he comes over to see Andrew and asks for the car back, Andrew refuses, claiming this is a completed inter vivos gift and as such, he does not have to give it back. Is Andrew right or wrong?
1. In the criminal justice system, John can temporarily put Jack in custody pending the arrival of the police. Jack was not detained for a period longer than five minutes and not for a civil wrong.
Thus, in this lawsuit for the tort of unlawful imprisonment, Jack will lose because he committed a crime. He cannot apply a civil law to a criminal case.
2. Adriana is correct that her personal assets cannot be reached in this lawsuit brought by the shareholders of DEF, Inc. because SLA Accountants, LLP is a limited liability partnership and not just an ordinary partnership.
A limited liability partnership, like a limited liability company, offers members limited liability. However, the shareholders of DEF, Inc. may decide to sue Adriana personally.
3. Andrew is wrong because the car handed over by Sam was not a completed inter-vivos gift. The transfer was not absolute but conditional upon Sam not returning from the Middle East.
As a conditional transfer of gift, the vesting of the ownership interest created by the transfer depends on the fulfillment of a condition.
Thus, since the transfer condition did not materialize, Andrew should return the car to Sam in good faith.
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At a chip manufacturing plant, four technicians (A, B, C, and D) produce three products (Products 1, 2, and 3). This month, the chip manufacturer can sell 80 units of Product 1, 50 units of Product 2, and at most 50 units of Product 3. Technician A can make only Products 1 and 3. Technician B can make only Products 1 and 2. Technician C can make only Product 3. Technician D can make only Product 2. For each unit produced, the products contribute the following profit: Product 1, $6; Product 2, $7; and Product 3, $10. The time (in hours) each technician needs to manufacture a product is as follows(X means the technician can not produce the corresponding product). Each technician can work up to 120 hours per month. How can the chip manufacturer maximize its montly profit
The chip manufacturer can maximize the monthly profit by using the objective function: z = 6X₁ + 7X₂ + 10 X₃
An objective function is a function that has the goal of maximizing or minimizing the model's value based on the relationship between the variables in the function.
The term "decision variables" refers to a group of variables that are responsible for regulating the objective function.
The decision variable for the quantity of the product 1, 2, 3 manufactured can be expressed as:
X₁, X₂, X₃The objective function used in maximizing the profit is:
z = 6X₁ + 7X₂ + 10 X₃This is subjected to the constraint:
2X₁ + 3X₃ ≤ 120 (Tech A time and manufacturing limitation)2.5X₁ + 3X₂ ≤ 120 (Tech B time and manufacturing limitation)4X₂ ≤ 120 (Tech C time and manufacturing limitation)3.5X₂ ≤ 120 (Tech D time and manufacturing limitation)Learn more about objective function for maximizing profit here:
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Market equilibrium is the _____ between businesses and consumers.
Answer:
A.compromise
Explanation:
:) hope its help
1. Briefly summarize the actions a firm can take to enhance the ethical behavior of its purchasing
personnel?
The actions which a firm can take to enhance the ethical behavior of its purchasing personnel are:
Enforce strict compliance with rules and regulationsTake them on periodic trainings about ethicsGive out fines for employees who do not act ethicallyAccording to the given question, we are asked to show the actions which a firm can take to enhance the ethical behavior of its purchasing personnel
As a result of this, we can see that if a firm wants to improve the ethical behaviour, then they would have to make some rules and regulations with the guidelines on how best to use them so that the workers would always act in an ethical way such as being honest, faithful in their duties, etc
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which situation would normally involve long-term financing?
At the beginning of the year, The Mann Corporation, a private entity, decided to go public.
A charter of incorporation was constructed which authorized the sale of 10 million shares of $8 par value common stock, 100,000 shares of $800 par value, 8% preferred stock, and 200,000 shares of $40 no-par-value convertible preferred stock.
The following shares were sold as part of the firm's initial public offering:
* 1,000,000 shares of common stock at $80 per share.
* 100,000 shares of $800 par value, 8% preferred stock at $840 per share.
* 100,000 shares of $40 convertible, no-par preferred stock at $440 per share.
At year-end, the full dividend was declared and paid on both preferred stock offerings.
Required
Using a spreadsheet, record the financial effects of the shareholders' equity transactions for The Mann Corporation for the year.
Enter amounts in thousands (i.e., $10,000,000 = $10,000). Use a negative sign with answers to indicate a reduction in an account balance.
The Mann Corporation
Transaction (in thousands)
Common
Shares IPO
8% Preferred
IPO
No-par
Preferred IPO
8% Preferred
Dividend No-par
Preferred
Dividend Balance
Sheet
Totals
Assets
Cash $Answer $Answer $Answer $Answer $Answer $Answer
Shareholders' Equity
Common Stock Answer Answer Answer Answer Answer Answer
APIC - Common Answer Answer Answer Answer Answer Answer
$100 Preferred Stock Answer Answer Answer Answer Answer Answer
APIC-Preferred Answer Answer Answer Answer Answer Answer
$5 Conv. Preferred Answer Answer Answer Answer Answer Answer
Retained Earnings Answer Answer Answer Answer Answer Answer
Total Shareholders' Equity
The financial effects of the Mann Corporation's shareholders' equity transactions are recorded as follows:
The Mann Corporation
Transactions (in thousands)
Common 8% Preferred No-par Prefer- 8% No-par B/Sheet
Shares IPO Shares IPO red IPO Dividend Dividend Totals
Assets:
Cash $80,000 $84,000 $44,000 ($6,400) ($4,000) $197,600
Shareholders' Equity:
Common Stock $8,000 APIC- Common $72,000
8% Preferred Stock $80,000
APIC- Preferred $4,000
$40 Conv. Preferred $44,000
Retained Earnings ($10,400)
Total Shareholders' Equity $197,600
Data and Calculations:
Authorized Shares:
10 million shares, Common Stock at $8 par value
100,000 shares, 8% Preferred Stock at $800 par value
200,000 shares, Convertible Preferred Stock of $40 no-par value
Analysis of Sales of Shares:
Cash $80 million Common Stock $8 million Additional Paid-in Capital-Common Stock $72 million, 1,000,000 shares issued at $80
Cash $84 million 8% Preferred Stock $80 million Additional Paid-in Capital-8% Preferred Stock $4 million 100,000 shares issued at $840
Cash $44 million Convertible Preferred Stock $44 million
Calculation of Dividends:
8% Preferred Dividend = $6,400,000 ($80 million x 8%)
$40 Convertible Preferred Dividend = $4,000,000 (100,000 x $40)
Thus, the calculation of the dividend of the $40 non-par Convertible Preferred Stock is based on the $40 x 100,000 shares in issue because the $40 is its implied dividend rate just as the 8% is the implied dividend rate of the 8% Preferred Stock.
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If one’s income increases their aggregate demand Also increases as they both have direct relationship with each other.
You receive an email that you have won $100. For the company to transfer the money to your account, they need access to your bank routing number. What is the BEST way to handle this situation?
A. Reply with the information asked for.
B. Ask for further verification to prove that this is a legit company.
C. Request that they send you the money via an electronic gift card.
D. Click on the company’s logo so you can verify they have a real website.
Answer:
B
Explanation:
The BEST way to handle this situation is to ask for further verification to prove that this is a legit company.
What does verification means?This is when an individual ensures that the information he or she receives is genuine. The reason is to prevent fraud from the person sending an email.
Hence, the BEST way to handle this situation is to ask for further verification to prove that this is a legit company.
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Which of these statements about game design is FALSE?
Game design involves
incorporating user feedback to
improve the platform.
Games design is not a STEM
career because it is just about
making entertainment.
Game design is iterative.
Game design requires many team
members with lots of different
areas of expertise.
When it comes to game design, it is false to say that Games design is not a STEM career because it is just about making entertainment.
Game design:
Incorporates the feedback of users to make better games. Is quite iterative. Requires that many different people from different careers work in different teams.Game design is a STEM career because it requires people with expertise in science, technology, and engineering. It would be false to say that these careers are not present in game design.
In conclusion, option B is correct.
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yared plc assembles and sells bicycles in bahir dar city. the company expects to sale 400 bicycles for br. 600 each in 2015. the total variable and fixed costs for there sales are br. 160,000 and 50,000 respective.
Required
a. how many bicycle should be sold for yared plc to each their breakeven point?
b. how many bicycle must be sold to earn a target operating in come of br. 90,000?
c. what amount of sales must yared plc have to earn a target net income of br. 63,000 they have a tax rate of 30 percent?
a. The number of units to be sold for Yared Plc to break-even is 250 units.
b. The number of units to be sold to earn a target operating income of br. 90,000 is 700 units.
c. The sales amount for Yared Plc to earn a target net income of br. 63,000 is 700 units.
Data and Calculations:
Sales units of bicycles = 400 units
Selling price per unit = br. 600
Total variable costs = br. 160,000
Unit variable cost = br. 400 (br. 160,000/400)
Contribution margin per unit = br. 200 (br. 600 - br. 400)
Fixed costs = br. 50,000
Tax rate = 30%
Net income = income after tax
= 1 - 30%
= 70%
a. The number of units to be sold for Yared Plc to break-even is given by Fixed Costs/Contribution margin per unit
= br. 50,000/br. 200
= 250 units.
b. The number of units to be sold to earn a target operating income of br. 90,000 is given as (Fixed Costs + Target Profit)/Contribution margin per unit
= (br. 50,000 + br. 90,000)/br. 200
= br. 140,000/br. 200
= 700 units.
c. The sales amount for Yared Plc to earn a target net income of br. 63,000 is (br. 50,000 + br. 63,000/(1 - 30%)/br. 200
= (br. 50,000 + br. 90,000)/br. 200
= br. 140,000/br. 200
= 700 units.
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Which of the following accounts would Carlo credit when a customer who bought three dozen pastries and muffins from his bakery paid $55 in cash?
Based on the nature of the transaction described above, the account that would be credited is Revenue
Revenue is the amount that is received when a person or company sells a good or service.
By selling the pastries, Carlo jus earned some revenue. This revenue should therefore be posted to the revenue account. When revenue increases - as it just did - it is credited.
In conclusion, Carlo should credit the Revenue account.
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The Medical Device Makers Association does not include all manufacturers of medical and surgical instruments. The association refuses to deal with any parties who do not carry the products of its members. This is Group of answer choices a situation that neither restrains trade nor harms competition. subject to analysis under the rule of reason. not within the scope of the Sherman Act. a per se violation of antitrust law.
The word per se is often means the act is illegal in some countries. The above Scenario is known to be a per se violation of antitrust law.
The Per se rule is often used in the cases that involves price fixing, group boycott etc. This kind of case often needs a lot of inquiry before it is handled.
There are different kinds of per se violations of antitrust law. Some other business practices that can be said to be per se illegal under antitrust laws are:
When there is an horizontal market allocation agreementsWhen some particular horizontal group did boycotts by competitorsWhen there is tying arrangements etc.Antitrust laws is known to hinder the act of lowering the price in a specific geographic area so as to drive out competition.
Federal antitrust laws aim to keep the unity and peace of the free and open market competition both in the geographic areas and in types of products or services.
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Last year, Joan purchased a $1,000 face value corporate bond with an 11% annual coupon rate and a 25-year maturity. At the time of the purchase, it had an expected yield to maturity of 11.96%. If Joan sold
the bond today for $1,154.91, what rate of return would she have earned for the past year? Round your answer to two decimal places.
Joan's bond receivable has earned a 15.49% rate of return for the past year.
Data and Calculations:
Face value of the corporate bond = $1,000
Annual coupon rate = 11%
Maturity period = 25 years
Expected yield too maturity (YTM) = 11.96%
Current bond's price = $1,154.91
The rate of return earned since last year = 15.49% {($1,154.91 - $1,000)/$1,000}.
Thus, Joan's bond receivable has earned a 15.49% rate of return for the past year.
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I need help with writing a case analysis report. can someone please be of help?
Based on academic writing research, writing a case analysis report, you need to follow some specific steps, which begin with "Reading and Assessing the Case thoroughly."
Other steps you would need to take include the following:Focus your cases analysisDetect possible solutions or changes requiredChoose the best solutionComplete the case analysisHowever, note that the case analysis report will have the following body:
IntroductionBackgroundEvaluation of the caseProposed solutionRecommendation.Hence, in this case, it is concluded that writing a case analysis report requires you to follow specific steps.
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Bondholders tend to offset the effects of selfish strategies implemented by shareholders by: Multiple Choice increasing the interest rate on monies loaned to the firm. agreeing to reduce the interest rate on existing loans. restructuring their loans to provide additional time to the firm to make repayment. agreeing to reduce the outstanding principal balances on their loans. subordinating their bankruptcy position to the shareholders.
It should be noted that bondholders offset the effects of selfish strategies that are implemented by shareholders by A. increasing the interest rate on monies loaned to the firm.
A bondholder simply means an individual that's owning a bond that was issued by the government or a public company.
The effects of selfish strategies that are implemented by shareholders are offset by increasing the interest rate on monies loaned to the firm.
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provided service to srijana store and received cash Rs 5000.
Answer:
what we want to tell about ?or your question is not proper type it full and proper .
I can't understand what you want to ask ?
Concord Company buys land for $49300 on 12/31/17. As of 3/31/18, the land has appreciated in value to $50200. On 12/31/18, the land has an appraised value of $51500. By what amount should the Land account be increased in 2018
Based on the information given, it can be noted that revaluation of assets isn't applicable to land. Therefore, the amount will be $0.
Revaluation of assets simply mean the change in the market value of assets. It can either be increasing or decreasing.
From the information given, the amount that the land account be increased in 2018 is $0 because revaluation of assets isn't applicable to land.
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Q1: Torville Company's contribution margin income statement is presented below.
Sales for the current period consisted of 5,000 units. Determine the company's
break-even point in dollars.
Torville Company
Contribution Margin Income Statement
Sales
Variable costs
Contribution margin
Fixed costs
Sales : $125000
Variable cost : $90000
Contribution margin : $35000
Fixed cost : $28000
Net income: $7000
Net income
S125,000
20.000
35,000
28.000
$7.000
Based on the sales and the contribution margin, the breakeven point in dollars is $28,000
The breakeven point can be found as:
= Fixed cost / Contribution margin per unit
Breakeven point is therefore:
= 28,000 / (35,000 / 5,000 units)
= 4,000 units
This amount in dollars is:
= (4,000 x (Sales revenue - Variable cost / Number of sales))
= 4,000 x (125,000 - 90,000/ 5,000)
= $28,000
In conclusion, the breakeven point is $28,000
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Question 1 of 15.
#1. Objective A: Left Turn
True False
Mark for follow up
Based on the question above, the correct answer goes thus:
TrueObjectivityTo be objective implies that you State facts as it is devoid of your opinions. According to the available text, left turn is true
In conclusion, we can conclude that the correct answer is true
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Suppose Yummy Treats Bakery issues common stock in exchange for a building. Yummy Treats Bakery should record the building at Question content area bottom Part 1 A. the par value of the stock given. B. its book value. C. its market value. D. a value assigned by the board of directors
Based on the information given Yummy Treats Bakery should record the building at: C. its market value.
Market value is the value of an asset in the market or the amount at which an asset will be sold in the market.
Building is an asset and since common stock was issued out in exchange for a building , the best options is that Yummy treats bakery should record the building at the market value the asset or the building.
Inconclusion Yummy Treats Bakery should record the building at: C. its market value.
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When assets are pooled into financial instruments such as collateralized mortgage obligations (CMOs) to better facilitate selling them to the general public, the process is known as
It should be noted that When assets are pooled into financial instruments such as Collateralized Mortgage Obligations (CMOs) to better facilitate selling them to the general public the process is known as:
SecuritizationSecuritization helps in a process which involves the pooling of asset in order to make their selling to be faster and make the public to be aware of it.
Therefore, securitization is When assets are pooled into financial instruments such as Collateralized Mortgage Obligations.
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Lexie, a marketing manager, regularly interviews candidates for her team. Because Lexie is a
people person, and her department is built on teamwork, when she interviews candidates for a
job, she tries to get to know the candidates as people. She always begins by saying, "Tell me
about yourself," and based on what the candidate says, she lets the conversation unfold for 30
to 60 minutes per session.
Questions
i) How does Lexie’s current interview technique limit her effectiveness as an interviewer?
[3 marks]
ii) Lexie also wishes to contact people or organizations as referees for job candidates to fill
strategic positions in the organizations. Discuss two to three limitations of referee reports
placed on management or organizations for job candidates. How do organizations cope
with this burden?
[4 marks]
iii) The human resource department at Lexie’s organization is preparing to formulat
Lexie's interviews are not as effective because she does not care about the professional training of the people she will hire, which can have serious consequences on the operation of the company. On the other hand, the referral system would also hinder the operation of the company because the skills or abilities of the employees are not verified.
When we do a recruitment process, we must have several aspects in common to hire or dismiss a job applicant. Among the aspects that must be taken into account are:
Work experience.Vocational training.Other experiences.Following the foregoing, the person in charge of the selection process must objectively select the candidate who best fits a job based on her experience or professional training.
According to the above, Lexie is limiting her liability because she only looks at aspects of the applicants' personal lives without evaluating their ability to perform a job. Additionally, you should carry out some tests on the applicants to verify their work capabilities.
On the other hand, in the referral system, she has several limitations because she accepts the criteria of another individual or organization to hire a person without herself evaluating him to fit the job that she requires.
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On May 31, 2010 Amex Corporation acquired all of 10,000 shares of Luck’s outstanding common stock by paying Br 400,000 cash and issuing 20,000 shares of Br 15 par common stock having a market value of Br 40 per share to Luck’s stockholders. In addition, Br 300,000 is contingent up on the achievement of Br 1,000,000 profit margin in the next annual period. The fair value of contingent consideration was Br 100,000. • Separate balance sheets of Amex Corporation and Luck Company on May 31, 2010, together with current fair values of Luck’s identifiable net assets are given on the next slide:
Answer:
27. Answer the following question in the negative.
Est-ce qu'il y a quelqu'un à la réception de l'hôtel?
Explanation:
gold j]ludkcmmmmm it is ood know
If you wish to enter the field of soil and
forest conservation, what kind of
educational goal should you attain?
A. High school diploma
B. 2 year associate degree
C. 4 year college degree
D. Doctorate degree
4 year college degree is the minimum educational goal to attain if one wish to enter the field of soil and forest conservation.
The 4 year college degree is tantamount to the Bachelor degree achieved from University, college etc.
Usually, the position of forestry and related job requires the minimum of Bachelor degree from related course in the field of soil and forest conservation.
Hence, the 4 year college degree is the minimum educational goal to attain if one wish to enter the field of soil and forest conservation.
Therefore, the Option C is correct.
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Click this link to view O'NETS Wages and Employment section for Licensing Examiners and Inspectors. According
to O'NET What is the projected growth for this career belveen 2019 and 2029
little or no change
average
slower than average
faster than average
According to O'NETS Wages and Employment section for Licensing Examiners and Inspectors, the projected growth for this career between 2019 and 2029 is D. faster than average.
The career growth rate for Licensing Examiners and Inspectors is projected to be 10% year-on-year. This growth rate cannot be described as little or no change, average, or slower than average.
Thus, according to O'NETS Wages and Employment section for Licensing Examiners and Inspectors, the projected career growth between 2019 and 2029 is Option D.
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Which of the following statements about car insurance is true?
Answer:
Were Are The Statements
Explanation:
No Statements
The following is information concerning a product manufactured by Ames Brothers. Sales price per unit $ 79 Variable cost per unit 43 Total fixed manufacturing and operating costs (per month) 410,000 a. Determine the unit contribution margin. b. Determine the number of units that must be sold each month to break even. (Round your answer to the nearest whole number.) c. Determine the number of units that must be sold to earn an operating income of $234,000 per month. (Round your answer to the nearest whole number.
a. The determination of the unit contribution margin is $36 per unit ($79 - $43).
b. The determination of the units to be sold for the company to break-even in units is (Fixed costs/contribution margin per unit)
= 11,389 units ($410,000/$36).
c. The determination of units to sell to earn an operating income of $234,000 is (Fixed costs + Operating income)/Contribution margin per unit
= 17,889 units ($410,000 + $234,000)/$36.
Data and Calculations:
Sales price per unit = $79
Variable cost per unit = $43
Contribution margin per unit = $36 ($79 - $43)
Fixed manufacturing and operating costs per month = $410,000
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The hedge ratio of a call option is
A) A positive constant
B) Negative and larger than -1
C) Positive and larger than 1
D) Positive and smaller than 1
Answer:
A positive constant
Explanation:
the hedge ratio cimparez the amount of a position that is hedged to the entire position