All other things being equal, what is the best type of investment income?
A. Tax-deferred income fee-offset.
B. Tax-exempt income fee-only fee-based commission-only.
C. Tax-sheltered income.
D. Taxable income.
When seeking professional financial advice, _____financial planner is the most likely to offer unbiased advice.
Answers
Answer and Explanation:
The best type of investment income that is earned is tax-exempt that depend upon the commission only also the income that is spent should be bigger for the recipient
And at the time of seeking advice, the fee only should be likely to offer an unbiased advice because no other extra financial gains should be advised for an investment made except this professional fee
While the other options are ignored as they contain some interest regarding a commission for advising to their clients
The correct option is B.
The information is considered as follows:
The best type of investment income should be earned is tax-exempt that based upon the commission only.Moreover, the income that is spent should be more or the recipient And at the time of taking the advice, the fee only should be likely to offer for an unbiased advice since no other additional financial gains should be advised for an investment made except this professional feeLearn more: https://brainly.com/question/24908711?referrer=searchResults
Related Questions
Bond X is a premium bond making semiannual payments. The bond has a coupon rate of 7.5 percent, a YTM of 6 percent, and 13 years to maturity. Bond Y is a discount bond making semiannual payments. This bond has a coupon rate of 6 percent, a YTM of 7.5 percent, and also 13 years to maturity. Assume the interest rates remain unchanged and a $1,000 par value.
Required:
a. What are the prices of these bonds today?
b. What do you expect the prices of these bonds to be in one year?
c. What do you expect the prices of these bonds to be in three years?
d. What do you expect the prices of these bonds to be in eight years?
Answers
Answer:
a. What are the prices of these bonds today?
price of bond X:
0.03 = {37.5 + [(1,000 - MV)/26]} / [(1,000 + MV)/2]
0.03 x [(1,000 + MV)/2] = 37.5 + [(1,000 - MV)/26]
0.03 x (500 + 0.5MV) = 37.5 + 38.46 - 0.03846MV
15 + 0.015MV = 75.96 - 0.03846MV
0.05346MV = 60.96
MV = 60.96 / 0.05346 = $1,140.29
price of bond Y:
0.0375 = {30 + [(1,000 - MV)/26]} / [(1,000 + MV)/2]
0.0375 x [(1,000 + MV)/2] = 30 + [(1,000 - MV)/26]
0.0375 x (500 + 0.5MV) = 30 + 38.46 - 0.03846MV
18.75 + 0.01875MV = 68.46 - 0.03846MV
0.05721MV = 49.71
MV = 49.71 / 0.05721 = $868.90
b. What do you expect the prices of these bonds to be in one year?
price of bond X:
0.03 = {37.5 + [(1,000 - MV)/24]} / [(1,000 + MV)/2]
0.03 x [(1,000 + MV)/2] = 37.5 + [(1,000 - MV)/24]
0.03 x (500 + 0.5MV) = 37.5 + 41.67 - 0.04167MV
15 + 0.015MV = 79.17 - 0.04167MV
0.05667MV = 64.17/0.05667 = $1,132.29
price of bond Y:
0.0375 = {30 + [(1,000 - MV)/24]} / [(1,000 + MV)/2]
0.0375 x [(1,000 + MV)/2] = 30 + [(1,000 - MV)/24]
0.0375 x (500 + 0.5MV) = 30 + 41.67 - 0.04167MV
18.75 + 0.01875MV = 71.67 - 0.04167MV
0.06042MV = 52.92
MV = 52.92 / 0.06042 = $875.87
c. What do you expect the prices of these bonds to be in three years?
price of bond X:
0.03 = {37.5 + [(1,000 - MV)/20]} / [(1,000 + MV)/2]
0.03 x [(1,000 + MV)/2] = 37.5 + [(1,000 - MV)/20]
0.03 x (500 + 0.5MV) = 37.5 + 50 - 0.05MV
15 + 0.015MV = 87.5 - 0.05MV
0.065MV = 72.5
MV = 72.5 / 0.065 = $1,115.38
price of bond Y:
0.0375 = {30 + [(1,000 - MV)/20]} / [(1,000 + MV)/2]
0.0375 x [(1,000 + MV)/2] = 30 + [(1,000 - MV)/20]
0.0375 x (500 + 0.5MV) = 30 + 50 - 0.05MV
18.75 + 0.01875MV = 80 - 0.05MV
0.06875MV = 61.25
MV = 61.251 / 0.06875 = $890.91
d. What do you expect the prices of these bonds to be in eight years?
price of bond X:
0.03 = {37.5 + [(1,000 - MV)/10]} / [(1,000 + MV)/2]
0.03 x [(1,000 + MV)/2] = 37.5 + [(1,000 - MV)/10]
0.03 x (500 + 0.5MV) = 37.5 + 100 - 0.1MV
15 + 0.015MV = 137.5 - 0.1MV
0.115MV = 122.5
MV = 122.5 / 0.115 = $1,065.22
price of bond Y:
0.0375 = {30 + [(1,000 - MV)/10]} / [(1,000 + MV)/2]
0.0375 x [(1,000 + MV)/2] = 30 + [(1,000 - MV)/10]
0.0375 x (500 + 0.5MV) = 30 + 100 - 0.1MV
18.75 + 0.01875MV = 130 - 0.1MV
0.11875V = 111.25
MV = 111.25 / 0.11875 = $936.84
A group of investors are discussing the formation of a new property and liability insurer. The proposed com-pany would market a new homeowners policy that combines traditional homeowner coverages with unem-ployment benefits if the policyholder becomes involun-tarily unemployed. Each investor would contribute at least $100,000 and would receive a proportionate interest in the company. In addition, the company would raise additional capital by selling ownership rights to other investors. Management wants to avoid the expense of hiring and training agents to sell the new policy and wants to sell the insurance directly to the public by selective advertising in personal finance magazines.
A. Identify the type of insurance company that best fits the above description.
B. Identify the marketing system that management is considering adopting.
Answers
Answer:
A. Stock insurance company
B. Direct response system marketing strategy
Explanation:
A. A stock insurance company has the stock holders or owners as investors and not policyholders. Profit is made when the stock increases in value over time. In this given question raising additional capital only happens In a stock insurance company.
B. Because the management do not want hiring of agents and personalized selling, they can do this through direct response system marketing strategy. This policy is sold directly to customers through various system such as telemarketing or through the media
Williams Company computed its cost per equivalent unit for direct materials to be $1.90 and its cost per equivalent unit for conversion to be $3.85. A total of 245,000 units of product were completed and transferred out as finished goods during the month. The ending Work in Process inventory consists of 26,000 equivalent units of direct materials and 26,000 equivalent units of conversion costs. The amount that should be reported in ending Work in Process Inventory is:
Answers
Answer:The amount that should be reported in ending Work in Process Inventory is:
=$149,500
Explanation:
Work-in-process inventory is materials that are unfinished or partially completed in a production process.
Work in Process inventory = Direct materials cost+ conversion cost
= (equivalent units of direct materials x direct material cost per unit) + (equivalent units of direct materials x conversation cost per unit )
=26,000 x $1.90 + 26,000 x $3.85
$49,400 + $100.100
=$149,500
The amount that should be reported in ending Work in Process Inventory is:
=$149,500
Answer:1408750
Explanation:
Direct Materials 245,000 x 1.90 = 465500
Conversión 245,000x3.85= 943250
Total transferred to finished goods = 465500+943250=1408750
Maxwell purchased $30,000 worth of 52-week T-Bills for $29,650. What will be the rate of return on his investment? (Round you two decimal places.)
Answers
Answer:
The rate of return per year = 1.18%
Explanation:
We know that 52 weeks = 1 year
Investment amount = $29650
Now first find the return on investment by subtracting the purchase price from the actual value of T bills.
Return on the investment = Actual value of T bill – Purchase price
Return on the investment = $30000 - $29650 = $350
The rate of return per year = (350/29650) * 100
The rate of return per year = 1.18%
The profit earned on an investment is divided by the cost of that investment to determine the return on investment (ROI). When represented as a percentage, an investment with a profit of $100 and a cost of $100 would have an ROI of 1 or 100%.
1.18% will be the rate of return on Maxwell's investment.
GIVEN1 year = 52-weeks
Investment amount = $29650
NOTESubtract the purchase price from the real value of T bills to get the return on investment.
[tex]\text{Return on the investment = Actual value of T bill – Purchase price }[/tex]
[tex]\text{Return on the investment} = 30,000 - $29,650 = 350[/tex]
[tex]\text{The rate of return per year} = \frac{350}{29,650}[/tex] × [tex]100[/tex]
[tex]\text{The rate of return per year} = 1.18[/tex]%
Therefore, 1.18% is the computed value of the rate of return on investment.
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Which of the following is not generally correct about recording a sale of a debt security before maturity date?
a. Accrued interest will be received by the seller even though it is not an interest payment date.
b. An entry must be made to amortize a discount to the date of sale.
c. The entry to amortize a premium to the date of sale includes a credit to the Premium on Debt Investments.
d. A gain or loss on the sale is reported as an other revenue or expense.
Answers
Answer: The entry to amortize a premium to the date of sale includes a credit to the Premium on Debt Investments.
Explanation:
Debt security is simply issued by either the government or a corporation and it's an investment in debt instrument.
The statement that is not generally correct about recording a sale of a debt security before maturity date is that the entry to amortize a premium to the date of sale includes a credit to the premium on debt Investments. This isn't true as the entry to amortize a premium to the date of sale does not include a credit to the premium on debt Investments
Debt securities or bonds are financial instruments. The most common types of debt instruments are municipal bonds and corporate bonds. The debt securities can be the amount taken in the form of a loan that is to be paid mandatorily after the maturity of the time period.
The entry that is incorrect for recording a sale of a debt security before the maturity date is:
Option c. The entry to amortize a premium to the date of sale includes credit to the Premium on Debt Investments.
Reason:
The entry will be incorrect for the sale of debt security because the amortization premium at the date of sale does not include any credit amount to the premium over the debt instruments.
All the other options will record a sale of debt before its maturity period.
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For each of the pairs below, determine whether they are positively correlated, negatively correlated, or uncorrelated.
A. Time spent studying and test scores: Positively correlated.
B. Vaccination and illness: Negatively correlated.
C. Soft drink preference and music preference:Uncorrelated.
D. Income and education: Positively correlated.
Answers
Answer and Explanation:
In case when there is an existence of the mutual relationship lies between the two variables so it can be said it is a correlation. In case when one variable rises, and the other is also rises so it is positive and in the case when one variable rises, and the other is fall so it is negative
Now the classification is as follows
a. Spent more time that results in more marks so positive correlation
b. In case when the vaccination rises, the illness decreased so negative correlation
c. No relation lies between the soft drink and the music paid so no correlation
d. Increase in education results more income so positive correlation
Gala Company is a manufacturer of laptop computers. Various costs and expenses associated with its operations are as follows.The company intends to classify these costs and expenses into the following categories: (a) direct materials, (b) direct labor, (c) manufacturing overhead, and (d) period costs.For each item, indicate the cost category to which it belongs.ItemCategory1. Property taxes on the factory building. Period Costs Direct Materials Direct Labor Manufacturing Overhead Direct Materials and Manufacturing Overhead2. Production superintendents’ salaries. Period Costs Direct Materials and Manufacturing Overhead Direct Materials Manufacturing Overhead Direct Labor3. Memory boards and chips used in assembling computers. Manufacturing Overhead Direct Materials and Manufacturing Overhead Direct Labor Direct Materials Period Costs4. Depreciation on the factory equipment. Direct Materials Direct Materials and Manufacturing Overhead Direct Labor Manufacturing Overhead Period Costs5. Salaries for assembly-line quality control inspectors. Direct Materials and Manufacturing OverheadDirect MaterialsPeriod CostsDirect Labor or Manufacturing Overhead6. Sales commissions paid to sell laptop computers. Period CostsManufacturing OverheadDirect Materials and Manufacturing OverheadDirect LaborDirect Materials7. Electrical components used in assembling computers. Manufacturing OverheadDirect MaterialsPeriod CostsDirect Materials and Manufacturing OverheadDirect Labor8. Wages of workers assembling laptop computers. Period CostsDirect Materials and Manufacturing OverheadDirect LaborDirect MaterialsManufacturing Overhead9. Soldering materials used on factory assembly lines. Direct Materials and Manufacturing OverheadDirect LaborManufacturing OverheadPeriod CostsDirect Materials10. Salaries for the night security guards for the factory building. Manufacturing OverheadPeriod CostsDirect Materials and Manufacturing OverheadDirect MaterialsDirect Labor
Answers
Answer:
The various costs associated with the Gala Company could be classified into the following:
a. Direct Material Cost
Memory boards and chips used in assembling computers.
b. Direct Labour Cost
Production superintendents’ salaries.
Salaries for assembly-line quality control inspectors.
Wages of workers assembling laptop computers.
c. Manufacturing Overhead
Sales commissions paid to sell laptop computers.
Electrical components used in assembling computers.
Soldering materials used on factory assembly lines.
d. Period Cost
Property taxes on the factory building.
Depreciation on the factory equipment.
Salaries for the night security guards for the factory building.
Explanation:
Answer:
Explanation:\
The general ledger of Zips Storage at January 1, 2021, includes the following account balances:Accounts Debits CreditsCash $ 25,700 Accounts Receivable 16,500 Prepaid Insurance 14,200 Land 159,000 Accounts Payable $ 7,800 Deferred Revenue 6,900 Common Stock 154,000 Retained Earnings 46,700 Totals $ 215,400 $215,400 The following is a summary of the transactions for the year:1. January 9 Provide storage services for cash, $145,100, and on account, $57,700.2. February 12 Collect on accounts receivable, $52,600.3. April 25 Receive cash in advance from customers, $14,000.4. May 6 Purchase supplies on account, $11,400.5. July 15 Pay property taxes, $9,600.6. September 10 Pay on accounts payable, $12,500.7. October 31 Pay salaries, $134,600.8. November 20 Issue shares of common stock in exchange for $38,000 cash.9. December 30 Pay $3,900 cash dividends to stockholders.1. Prepare a post-closing trial balance. (Hint: The balance of Retained Earnings will be the amount shown in the balance sheet.)2. Prepare an unadjusted trial balance3. Prepare an adjusted trial balance4-a. Prepare the income statement for the year ended December 31, 2021.4-b. Prepare the classified balance sheet for the year ended December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.)5. Record closing entries. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)6. Post the transactions, adjusting entries and closing entries to the T-accounts. Be sure to include beginning balances.
Answers
Answer:
The solution and the calculation for this question is shown on the first, second , third , fourth and fifth image
Explanation:
Here are simplified financial statements for Watervan Corporation. INCOME STATEMENT (Figures in $millions)Net sales $881Cost of goods sold 741Depreciation 31Earnings before interest and taxes (EBIT) $109Interest before tax $97Taxes 34Net income $63 BALANCE SHEET (Figures in $millions) End of Year Start of YearAssetsCurrent assets $369 $312Long-term assets 258 222Total assets $627 $534Liabilities and shareholders; equityCurrent liabilities $194 $157Long-term debt 108 121Shareholders' equity 325 256Total liabilities and shareholders' equity $627 $534The company's cost of capital is 8.5%a. Calculate Watervan's economic value added (EVA). Do not round intermediate calculations. Enter answer in millions rounded 2 decimal places.Economic value added $_____ millionb. What is the company's return on capital? Use start of year rather than average capital. Do not round intermediate calculations. Enter answer as a percent rounded to 2 decimal places.Return on capital _____%c. What is its return on equity? Use start of year rather than average equity. Enter answer as a percent rounded to 2 decimal places.Return on equity _____%
Answers
Answer:
1. Economic value added = $34.04 million
2. Company's return on capital = 18.79%
3. Return on equity = 24.61%
Explanation:
1. Economic value added (EVA) = NOPAT - capital charge
Where;
NOPAT = EBIT × ( 1 - tax rate )
Tax rate = Taxes / Income before taxes
= 34 / 97 * 100
= 35%
NOPAT = 109 × ( 1 - 35% )
= 70.85
But,
Capital charge = Capital employed × Cost of capital = (Equity + Interest bearing Liabilities) × Cost of capital
= (325 + 108) × 8.5%
= 433 × 8.5%
= 36.81
Therefore,
Economic value added(EVA)
= 70.85 - 36.81
= $34.04 million
2. Company's return on capital(using start of year equity)
= NOPAT / (Total assets - Current liabilities)
= 70.85 / (534 - 157)
= 70.85 / 377
= 0.1879
= 18.79%
Return on capital is 18.79%
3. Return on equity(using start of year equity) = Net income / Shareholder's equity
= 63 / 256
= 1.125
= 24.61%
Return on equity is 24.61%
A measurement of the excess value produced on an investment is called the Economic Value Added (EVA). The "true" cash flow return on capital received from an investment is what is meant by the term return on capital (ROC).
1. Economic value added is $34.04 million.
2. Company's return on capital is 18.79%.
3. Return on equity is 24.61%.
The calculations are provided below:
Economic value added (EVA) = capital charge - NOPAT
Where;
NOPAT equals EBIT - (tax rate - 1)
Tax rate equals taxes / pre-tax income
= 34 / 97 * 100
= 35%
NOPAT = 109 × (1 - 35%)
= 70.85
But,
Capital employed x Capital charge Cost of capital is equal to equity plus interest-bearing liabilities.
= (325 + 108) × 8.5%
= 433 × 8.5%
= 36.81
Therefore,
EVA or economic value added
= 70.85 - 36.81
equals $34.04 billion
2. The firm's return on capital (using equity at the year's beginning)
(Total Assets - Current Liabilities) = NOPAT
= 70.85 / (534 - 157)
= 70.85 / 377
= 0.1879
= 18.79%
18.79% is the return on capital.
3. Net income divided by shareholder equity, or return on equity (using start-of-year equity).
= 63 / 256
= 1.125
= 24.61%
24.61% is the return on equity.
A measure of a company's financial performance known as economic value added (EVA) is based on the residual wealth that is determined by subtracting its cost of capital from its operating profit, adjusted for taxes on a cash basis.
EVA is also known as economic profit since it aims to identify a company's genuine economic profit. Stern Value Management, initially established as Stern Stewart & Co., is a management consulting business that developed this metric.
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Suppose the following table reflects the total satisfaction (utility) derived from eating slices of pizza. Calculate the marginal utility of each slice of pizza and answer two questions about marginal utility.a. What is the marginal utility of each slice of pizza? Instructions: Complete each of the seven yellow cells below. Enter your responses as a whole number. Indicate negative responses with a (-) negative sign.Quantity Consumed Total Utility Marginal UtilityNo slices 0 -First slice 25 Second slice 50 Third slice 75 Fourth slice 90 Fifth slice 103 Sixth slice 100 Seventh slice 90 b. Marginal utility first diminishes with slice numberc. Marginal utility first turns negative with slice number
Answers
Answer:
a)
quantity consumed total utility marginal utility
0 0 0
1 25 25
2 50 25
3 75 25
4 90 15
5 103 13
6 100 -3
7 90 -10
b) slice number 4
c) slice number 6
Explanation:
The law of marginal utility states that as the total number of units consumed increases, the utility yielded by consuming one more unit decreases.
A company's trial balance included the following account balances: Accounts payable $19,287 Accounts receivable 81,416 Cash 73,404 Income tax payable 3,592 Inventories 25,896 Note payable, due in two years 1,789 Equipment 54,928 Stockholders' equity 203,608 Supplies 5,592 Wages payable 12,960 What is the amount of Total Assets on the Balance Sheet
Answers
Answer:
Total Assets on the Balance Sheet is $241,236.
Explanation:
Total Assets would include the total from the Non Current Assets Section and the total from the Current Assets Section of the Balance sheet.
Here is an extract of the Assets Section of the Balance Sheet :
Assets
Non-Current Assets
Equipment $54,928
Total Non-Current Assets $54,928
Current Assets
Inventories $25,896
Supplies $5,592
Accounts receivable $81,416
Cash $73,404
Total Current Assets $186,308
Total Assets $241,236
The financial crisis of 2008 demonstrated the flaw in a bottom-up detailed approach to calculating risk. There are
too many individual judgments that can be biased. Banks and bank regulators instead use a rule of thumb that
bank capital should be 8-10 percent of the balance sheet. That is, managers rely on
A) a heuristic
B) rational decision making
C) intuitive decision making
Answers
Answer:
B
Explanation:
Answer: it’s A
Explanation:
________is important if people from different departments are going to work together to produce better outcomes than they could individually.
Answers
Answer:
collaboration
Explanation:
Collaboration is a term that describes a form of synergy which involves two or more individuals or groups operating together for the purpose of reaching a common goal of achieving mutual objectives.
Hence, COLLABORATION is important if people from different departments are going to work together to produce better outcomes than they could individually.
Which statement best explains how elasticity and incentives work together?
A )An elastic good, such as a game, is more likely to respond to incentives.
B) An inelastic good, such as a game, is more likely to respond to incentives.
C) An elastic good, such as a game, is less likely to respond to incentives.
D) An inelastic good, such as a game, is less likely to respond to incentives.
Answers
Answer: A
Explanation: A. An elastic good, such as a game, is more likely to respond to incentives.
Flexibility and incentives coexist A game is an example of an elastic good that is more likely to respond to incentives. As a result, choice (A) is the right one.
What is Elasticity ?Elasticity is a term used in economics to describe how susceptible one economic component is to shifts in another.
For instance, the relationship between changes in supply or demand and price changes or between changes in demand and income changes.
Demand is said to be inelastic if it remains largely constant regardless of price changes and has a coefficient of elasticity below 1.0.Clothing or electronics are examples of elastic goods, whereas inelastic goods include things like food and prescription medications.
Cross elasticity quantifies the shift in demand for one commodity as a result of price changes for another, related good. when the elasticity value is larger than 1.0
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Identify the two basic categories of items on an income statement.
Answers
Answer:
RevenueExpensesExplanation:
The Income statement is used to check the financial performance of a company within a period by calculating the net income or losses made.
It does so by subtracting the expenses incurred from the revenue realized. These two categories are therefore the most basic items in the income statement and will always appear in them.
Examples of Revenue sources include; Sales and Service Revenues.
Examples of Expenses include; Advertising, Salaries and Depreciation.
Which of the following is not an example of the bricks-and-clicks e-tailing business model? A. Walmart.com B. JCPcnney.com C. Drugstore.com D. Staples.com
Answers
Answer:
C
Explanation:
bricks-and-clicks e-tailing business model are businesses that have physical stores and also have an online store.
E-tailing business models only exist online
What are the two branches of quantitative management?
Answers
Answer:
management science and operations management.
Explanation:
Quantitative Management is a form of management that is often employed in solving issues relating to numbers or figures. It involves the utilization of mathematical components, statistical formulas, and computerization modeling to create definite solutions and aids the management team to make a better decision.
It is basically divided into two, and they are:
1. Management Science: this deals with the mathematical aspect of the management team decision.
2. Operations Management: this deals with products and services delivery of the firm
What are the five primary factors of production?
Answers
Which of the following is a difference between the marketing concept and the selling concept?
a. The marketing concept focuses on customer conquest, whereas the selling concept focuses on targeting the right customers.
b. The marketing concept focuses on short-term sales, whereas the selling concept strives to build long-term customer relationships.
c. The marketing concept is product-centered, whereas the selling concept is production-centered.
d. The marketing concept focuses on customer needs, whereas the selling concept focuses on existing products.
e. The marketing concept takes an inside-out perspective, whereas the selling concept takes an outside-in perspective.
Answers
Answer: d. The marketing concept focuses on customer needs, whereas the selling concept focuses on existing products.
Explanation:
A difference between the marketing concept and the selling concept is that the marketing concept focuses on customer needs, whereas the selling concept focuses on existing products.
A selling concept believes there must be adequate promotion and large scale selling for consumers to purchase a firm's products while according to Marketing concept,the need of the consumers has to be known and identified by the firms.
Which of the following is perhaps the main advantage associated with the use of advertising?
A) It takes little time to develop an advertising campaign.
B) The total dollar layout in advertising is usually low.
C) It is an extremely cost efficient way to reach a large number of people.
D) It can quickly convey a large amount of technical information.
E) It can be quite memorable.
Answers
Answer:
C) It is an extremely cost efficient way to reach a large number of people.
Explanation:
Advertising refers to a marketing strategy in which the company able to promote its goods and services in a various ways like in television, social media, print media, etc so that it could create awareness among the people
According to the given options, the option C is correct as it derives the actual meaning and motive of advertising that it is cost efficient plus it also reaches to a large number of people.
hence, the correct option is c.
What would the net value of a long straddle position be if the stock price at expiration is $35?
Answers
Answer:
$1.15
Explanation:
Calculation for the net value of a long straddle position
Using this formula
Net value of a long Straddle=(Stock price at expiration-Strike price)-Put option selling-Call option selling
Let plug in the formula
Net value of a long Straddle = ($35-$29)-$2.90-$1.95
Net value of a long Straddle=$6-$2.90-$1.95
Net value of a long Straddle=$1.15
Therefore the net value of a long straddle position will be the amount of $1.15
5) An international company is producing $50 widgets at a cost of $50,000 and is selling
them for $60,000. If it produces a 51st unit, its total sales will be $62,000 and its total cost will
be $51,500. Should the company produce the 51st unit?
6) Hibw will the following events affect the production possibility frontier of an economy?
Event A: A large fraction of the work force becomes unemployed.
Event B: The productivity of all work force doubles.
Event C: The government requires dairy farmers to destroy part of their herds.
Answers
Answer:
00
Explanation:
00
You can determine a company's cash situation by analyzing the cash flow statement. The cash flow statement also helps determine whether the company (1) is generating enough cash from its operations to make new investments and pay dividends or (2) will need to generate cash by issuing new debt or selling its assets.
Which of the following is true for the statement of cash flows?
a. It reflects cash generated and used during the reporting period.
b. It reflects revenues when earned.
Three categories of activities (operating, investing, and financing) generate or use the cash flow in a company. In the following table, identify which type of activity is described by each statement.
Globo-Chem Co. reported net sales of $200 million last year and generated a net income of $44 million. Last year's accounts receivable increased by $20 million. What is the maximum amount of cash that Globo-Chem Co. received from sales last year?
a. $135 million
b. $64 million
c. $90 million
d. $180 million
Answers
Answer:
Which of the following is true for the statement of cash flows?
a. It reflects cash generated and used during the reporting period.Revenues are recognized when the earning process is completed, and they are not necessarily associated to the collection of cash, e.g. accounts receivable.
Three categories of activities (operating, investing, and financing) generate or use the cash flow in a company. In the following table, identify which type of activity is described by each statement.
What statements? I looked for a similar question:
Ruth Enterprises distributes a holiday bonus to all its employees ⇒ OPERATING ACTIVITYYum Co. uses cash to repurchase 10% of its common stock. ⇒ FINANCING ACTIVITYA company buys some common stock in its supplier's firm with its extra cash. ⇒ INVESTING ACTIVITYA company records a decrease in its total raw materials inventory from the previous year. ⇒ OPERATING ACTIVITYGlobo-Chem Co. reported net sales of $200 million last year and generated a net income of $44 million. Last year's accounts receivable increased by $20 million. What is the maximum amount of cash that Globo-Chem Co. received from sales last year?
d. $180 millionSuppose you have a choice between investing in a savings account that pays an 8.6% APR, compounded monthly (Bank Monthly) and one that pays an 8.5% APR, compounded daily (Bank Daily). Using only effective annual rates, which bank would you prefer?
Answers
Answer:
8.6% APR, compounded monthly
Explanation:
Effective annual rate = ( 1 + periodic interest rate)^m - 1
8.6% APR = (1.007167)^12 - 1 = 0.089472 = 8.95%
m = number of compounding = 12
periodic interest rate = 8.6% / 12 = 0.717%
8.5% APR = (1.000233)^365 - 1 = 0.088706 = 8.87%
m = number of compounding = 365
periodic interest rate = 8.5% / 365 = 0.02329%
I would prefer the 8.6% APR, compounded monthly because the effective annual rates are higher
Indicate whether each of the following is identified with (1) an asset, (2) a liability, or (3) owner’s equity:_______.
a. accounts payable
b. cash
c. fees earned
d. land
e. supplies
f. wages expense
Answers
Answer:
a. accounts payable -liability
b. cash -asset
c. fees earned -owner’s equity
d. land -asset
e. supplies -asset
f. wages expense- owner’s equity
Explanation:
Accounts payable is an obligation payable to the supplier,hence,it is a liability.
Cash is an asset of the business which is used in purchasing other assets such as inventory or trading securities.
Fees earned would increase retained earnings which is an integral part of the owner's equity
Land is a long-lived asset whose benefits would be derived in more than one year.
Supplies are assets of the business which are used in the business.
Wages expense reduces retained earning in owner's equity
Which core competency of the Lean Enterprise focuses on building quality in?
Answers
Answer:
Technical Agility
Explanation:
Lean Enterprise is a process of continuous improvements in operations which generates value for the end product. The company have to continuously improve its product so that the customers remains satisfied and newer markets can be easily accessed depending upon the added features in the product.
For this reason, technical agility says that the newer technologies must be adapted or must be integrated with its existing technology because it brings quality to the company end products and makes processes and operations better than before.
Quantitative Problem: Jenna is a single taxpayer with no dependents so she qualifies for one personal exemption. During 2013, she earned wages of $126,000. She doesn't itemized deductions, so she will take the standard deduction and her personal exemption to calculate 2013 taxable income. In addition, during the year she sold common stock that she had owned for five years for a net profit of $7,500. How much does Jenna owe to the IRS for taxes
Answers
Answer:
$26,898.25
Explanation:
Jenna'a taxable ordinary income = $126,000 - $6,100 (standard deduction) - $3,900 (personal exemption) = $116,000
ordinary income taxes = $17,891.25 + [($116,000 - $87,850) x 28%] = $25,773.25
capital gains taxes = $7,500 x 15% = $1,125
total tax liability = $25,773.25 + $1,125 = $26,898.25
Underhill Incorporated manufactures and sells two products: Product Y1 and Product Y0. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appears below: Direct Direct Expected Labor Labor Production Per Unit Hours Product Y1 300 6.0 1,800 Product Y0 500 9.0 4,500 Total direct labor-hours 6,300The direct labor rate is $27.50 per DLH. The direct materials cost per unit is $106.10 for Product Y1 and $168.40 for Product Y0. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Activity Overhead ---- EXPECTED ACTIVITY -----Activity Cost Pool Measures Cost Product Y1 Product Y0 TotalLabor-related DLHs $151,263 1,800 4,500 6,300Production orders Orders $43,253 300 400 700Order size MHs $863,478 4,900 5,000 9,900Total $1,057,9941. What is the overhead applied to each unit of Product Y1 under activity-based costing?2. If the company allocates all of its overhead based on direct labor-hours using its traditional costing method, what is the overhead cost that would be applied to each unit of Product Y1?
Answers
Complete Question
The complete question is shown on the first uploaded image
Answer:
The solution and calculations is shown on the second, third uploaded image
Explanation:
Inferring Values Using the Income Statement and Balance Sheet Equations Review the chapter explanations of the income statement and the balance sheet equations. Apply these equations in each of the following independent cases to compute the two missing amounts for each case. Assume that it is the end of the first full year of operations for the company. TIP: First identify the numerical relations among the columns using the balance sheet and income statement equations. Then compute the missing amounts. Independent Total Total Net Total Total Stockholders' Cases Revenues Expenses Income (loss) Assets Liabilities Equity A A $100,000 82,000 $150,000 70,000 $ B 80,000 12,000 112,000 60,000 C 80,000 86,000 104,000 26,000 D 50,000 13,000 22,000 77,000 E 81,000 (6,000) 73,000 28,000
Answers
Answer:
The solution and the calculation is shown on the first uploaded image
Explanation:
Analyse two ways in which employee innovation andcreativity can be developed.
Answers
Answer:
° Ask for ideas from employees
° Provide guidance to employees
Explanation:
° Ask for ideas from employees. For an organization that wants to develop innovation and creativity of its employees, such must come up with an avenue for employees to express their ideas and then create a process internally for submission. The management may allocate time frame for such idea generation and submission; while also supporting it with incentive so that people can think beyond the norm.
° Provide guidance to employee. Generally, virtually everyone can develop an idea, however, the skills needed to making it come to reality is not common to most people. In terms of providing guidance, an innovation and creativity champion could be appointed, who will give support, encouragement, advise and directions to other employees who have developed certain ideas. The aim here is not just to develop an idea, but getting support with the right skills to getting the ideas materialized.