Answer: businesses have more incentives to keep prices low.
Explanation: just took the test
Answer:businesses have more incentives to keep prices low.
Explanation:
You are required to pay quarterly estimates of the tax liability for your company. If your first quarter payment for taxes was $6,500, how much was the total tax bill for the year if they were equal quarterly payments?
a) $6,500
b) $13,000
c) $19,500
d) $26,000
Answer:
D
Explanation:
Simple. It looks hard but it is simple.
Just take 6.5k, and multiply it by 4 (quarterly), and you get 26K.
Any questions?
The total tax liability for the year is $26,000. Thus, the correct answer is option d.
What is a tax liability?Tax liability is the payment owed by an individual, business, or other entity to a federal, state, or local tax authority.
The tax liability for the year is calculated as-
The first quarter payment is $6,500
The total quarter in a year is 4.
Assuming equal quarterly payments, the tax bill for the year :
$6,500× 4 = $26,000
Therefore, the total tax bill for the year if they were equal quarterly payments is $26,000.
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f the present value of the annuity is $45,000, what should be the size of each payment from the annuity
Answer:
"$571.92" is the correct solution.
Explanation:
The given problem is incomplete. Please find attachment of the complete question.
The given values are:
Payments will be made for
= [tex]8\frac{1}{4} \ years[/tex]
At the rate of:
= [tex]5.75 \ percent[/tex]
= [tex]0.0575 \ per \ year[/tex]
The present value of annuity is:
= [tex]45000[/tex]
Let the size of each payment will be "d".
Now,
⇒ [tex]45000=\frac{1-(1+\frac{0.0575}{12})^{-99}}{\frac{0.0575}{12}}\times d[/tex]
⇒ [tex]d = 571.92[/tex] ($)
Task C has two immediate predecessors, Tasks A and B. Task C also has two immediate followers, Tasks D and E. Task A has an early finish time of 3 days, and Task B has an early finish time of 5 days. Task D has a late start time of 10 days and Task E has a late start time of 8 days. Task C is 2 days long. What is the early finish time of Task C
Answer:
7 days
Explanation:
Calculation for the early finish time of Task C
First step is to find the Early Start of task C
Using this formula
Early Start of task C = MAX (Early Finish of task A, Early Finish of task B)
Let plug in the formula
Early Start of task C= MAX(3,5)
Early Start of task C = 5
Now let calculate the Early Finish time of Task C
Using this formula
Earliest Finish = Earliest Start + Activity Duration
Let plug in the formula
Earliest Finish of task C = 5 + 2
Earliest Finish of task C = 7 days
Therefore the early finish time of Task C will be 7 days
The early finish time of task C is the sum of the early start time and the activity duration of the task. Hence, the early finish time of task C is 7 days.
Given the Parameters :
Activity time of task C = 2 days Early finish, Task A = 3 days Early finish, Task B = 5 daysThe early finish time of task C :
Early start time possible + Activity time of task C
Maximum value of the finish time of the preceeding task :
Early start time of task C = maximum(3, 5)
Early start time of task C = 5 days
Early finish time of C = 5 days + Activity time
Early finish time of task C = 5 days + 2 days = 7 days
Therefore, the early finish time of task C is 7 days
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The Sheridan Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in the Sunbelt. In order to do so, Sheridan has decided to locate a new factory in the Panama City area. Sheridan will either buy or lease a site depending upon which is more advantageous. The site location committee has narrowed down the available sites to the following three very similar buildings that will meet their needs.
Building A: Purchase for a cash price of $612,100, useful life 26 years.
Building B: Lease for 26 years with annual lease payments of $71,490 being made at the beginning of the year.
Building C: Purchase for $655,200 cash. This building is larger than needed; however, the excess space can be sublet for 26 years at a net annual rental of $6,850. Rental payments will be received at the end of each year. The Sheridan Inc. has no aversion to being a landlord.
In which building would you recommend that The Sheridan Inc. locate, assuming a 11% cost of funds?
Answer:
Present value of Building A = $612,000
Present value of Building B = $71,490 + $71,490*Present value of Annuity for n=25,i=11% = $71,490 + $602,070.53 = $673,560.53
Present value of Building C = $655,200 - $6,850*Present value of Annuity for n=26,i=11% = $655,200 - $58,143.20 = $597,056.80
Net Present Value
Building A $612,000
Building B $673,560.53
Building C $597,056.80
Conclusion: The Sherdian Inc. should locate itself in Building C as it has least Net Present Value
can you receive interest on bonds
Answer:
Treasury bonds pay a fixed interest rate on a semi-annual basis. This interest is exempt from state and local taxes. But it's subject to federal income tax, according to TreasuryDirect. ... They earn interest until maturity and the owner is also paid a par amount, or the principal, when the Treasury bond matures.May 28, 2020
Bill works at Peterbuilt on the assembly line producing truck frames. Bill is exceptionally knowledgeable about the equipment needed to do his job and often makes recommendations to management on the specifications for and alternative suppliers of needed equipment. Given Bill’s position on the assembly line as an operator, he probably functions in the buying center at Peterbuilt as a(n):
Answer:
A User
An Initiator
An Influencer
Explanation:
Bill’s position on the assembly line as an operator, he probably functions as a user, influencer, initiator by putting machines parts together, ensure maintenance, helps in decision making and also influence the sales of machines parts, negotiate sales and other duties.
Firms face competing pressures in the marketplace-how to achieve lower costs through proven approaches to production, while looking at how to maximize their effectiveness in local markets. A firm's choice of strategy must reflect these pressures, and the firm knows that the dynamics of competition may require changes in strategy. Pressures for local responsiveness mean that a firm may not be able to realize the full benefits from economies of scale, learning effects, and location economies. Customization of products brings benefits, but it also limits the firm's ability to realize significant scale economies and location economies. Companies generally choose from four main strategic postures: a global standardization strategy, a localization strategy, a transnational strategy, or an international strategy. The appropriateness of each strategy varies given the competitive realities and the firm's core competences.
Read the case below and answer the questions that follow.
Your firm has been a leader in several lines of fast-moving consumer goods. The firm has been following a localization strategy. Your products have been distributed in a number of foreign markets and regions, and they are distinct enough in local markets to respond to national tastes and preferences. Competition, however, has become more intense, with many competitors using lower cost structures to undercut your prices and still satisfy your customers.
The firm must decide what kind of strategy it needs to follow to meet the demands of the local markets as well as the increased competitive pressures on cost.
a. leverage skills and products associated with a firm's core competencies from one country to another.
b. monitor and adapt to changing customer tastes in a large number of foreign markets.
c. compete effectively in more than one international market.
Answer:
a. leverage skills and products associated with a firm's core competencies from one country to another.
Explanation:
Company A can still meet the demands of the local markets and the competitive pressures it is facing by utilizing its core competences and deploring its products internationally. A hybrid of localization and international strategies would be more appropriate. This hybrid approach will enable the company "to realize the full benefits from economies of scale and learning effects, without losing on location economies," as desired in the case study.
At the end of the current year, Leer Company reported total liabilities of $315,000 and total equity of $115,000. The company's debt ratio on the last year-end was:
Answer:
73.26%
Explanation:
First, we need to determine the total assets.
Total assets = Total liabilities + equity
= $315,000 + $115,000
= $430,000
Debt ratio = Total liabilities / Total assets
= 315,000 / 430,000
= 73.26%
Therefore, the company's debt ratio on the last year end is 73.26%
On June 12, Music, Incorporated sells $4,000 of goods on account to a credit customer with credit terms of 1/10, n/30. If the customer pays on June 20, select the correct entry to record the receipt of the customer's payment:
Answer:
June 20
Cash $3,960 (debit)
Discount allowed $40 (debit)
Trade Receivable $4,000 (credit)
Explanation:
The sale journal is as follows :
June 12
Trade Receivable $4,000 (debit)
Sales Revenue $4,000 (credit)
The payment journal will be :
June 20
Cash $3,960 (debit)
Discount allowed $40 (debit)
Trade Receivable $4,000 (credit)
Note
That the customer was granted a discount period of 10 days and they managed to repay the amount owing in that period by June 20, so they are eligible for a cash discount of 1 %.
The following selected accounts from the Bramble Corp.’s general ledger are presented below for the year ended December 31, 2022:
Advertising expense $54,000 Interest revenue $32,000
Common stock 249,000 Inventory 66,000
Cost of goods sold 1,084,000 Rent revenue 24,000
Depreciation expense 124,000 Retained earnings 534,000
Dividends 149,000 Salaries and wages expense 674,000
Freight-out 24,000 Sales discounts 8,600
Income tax expense 69,000 Sales returns and allowances 43,000
Insurance expense 15,000 Sales revenue 2,399,000
Interest expense 69,000
Required:
Prepare a multiple-step income statement BRAMBLE CORP.
Answer:
Bramble Corp.
Multiple-step Income Statement
$
Sales revenue 2,399,000
Sales returns and allowances (43,000)
Net Sales Revenue 2,356,000
Less Cost of goods sold (1,084,000)
Gross Profit 1,272,000
Less Operating Expenses :
Selling and Distribution Expenses
Advertising expense 54,000
Freight-out 24,000
Sales discounts 8,600 (86,600)
Administrative Expenses
Depreciation expense 124,000
Salaries and wages expense 674,000
Insurance expense 15,000 (813,000)
Net Operating Income 372,400
Less Non- Operating Expenses :
Interest revenue (32,000)
Rent revenue (24,000)
Income tax expense 69,000
Interest expense 69,000 (82,000)
Net Income/(Loss) 290,400
Explanation:
The multiple-step income statement has been prepared above.
Beasley Industries' sales are expected to increase from $5 million in 2019 to $6 million in 2020, or by 20%. Its assets totaled $3 million at the end of 2019. Beasley is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2019, current liabilities are $740,000, consisting of $160,000 of accounts payable, $450,000 of notes payable, and $130,000 of accrued liabilities. Its profit margin is forecasted to be 4%, and its dividend payout ratio is 50%. Using the AFN equation, forecast the additional funds Beasley will need for the coming year. Do not round intermediate calculations. Round your answer to the nearest dollar.
$
The AFN equation assumes that ratios remain constant. However, firms are not always operating at full capacity so adjustments need to be made to the existing asset forecast. Excess capacity adjustments are changes made to the existing asset forecast because the firm is not operating at full capacity. For example, a firm may not be at full capacity with respect to its fixed assets. First, the firm's management must find out the firm's full capacity sales as follows:
Next, management would calculate the firm's target fixed assets ratio as follows:
Finally, management would use the target fixed assets ratio with the projected sales to calculate the firm's required level of fixed assets as follows:
Required level of fixed assets = (Target fixed assets/Sales) × Projected sales
Quantitative Problem 2: Mitchell Manufacturing Company has $1,600,000,000 in sales and $310,000,000 in fixed assets. Currently, the company's fixed assets are operating at 70% of capacity.
A. What level of sales could Mitchell have obtained if it had been operating at full capacity? Do not round intermediate calculations. Round your answer to the nearest dollar.
$
B. What is Mitchell's Target fixed assets/Sales ratio? Do not round intermediate calculations. Round your answer to two decimal places.
%
C. If Mitchell's sales increase by 60%, how large of an increase in fixed assets will the company need to meet its Target fixed assets/Sales ratio? Do not round intermediate calculations. Round your answer to the nearest dollar.
$
Answer:
Using the AFN equation, forecast the additional funds Beasley will need for the coming year.
EFN = (A/S) x (Δ Sales) - (L/S) x (Δ Sales) - (PM x FS x (1-d))
A/S = $3 / $5 = 0.6
ΔSales = $1,000,000
L/S = $290 / $5,000 = 0.058 (notes payable are not included)
PM = 4%
FS = $6,000,000
1 - d = 0.5
EFN = (0.6 x $1,000,000) - (0.058 x $1,000,000) - (0.04 x $6,000,000 x 0.5) = $600,000 - $58,000 - $120,000 = $422,000
A. What level of sales could Mitchell have obtained if it had been operating at full capacity?
$1,600,000,000 / 0.7 = $2,285,714,286
B. What is Mitchell's Target fixed assets/Sales ratio?
$310,000,000 / $2,285,714,286 = 0.14
C. If Mitchell's sales increase by 60%, how large of an increase in fixed assets will the company need to meet its Target fixed assets/Sales ratio?
required level of fixed assets = 0.14 x ($1,600,000,000 x 1.6) = $358,400,000
increase in fixed assets = $358,400,000 - $310,000,000 = $48,400,000
Twelve samples, each containing five parts, were taken from a process that produces steel rods at Emmanual Kodzi's factory. The length of each rod in the samples was determined. The results were tabulated and sample means and ranges were computed. The results were:
Sample Sample Mean (in.) Range (in.) Sample Sample Mean (in.) Range (in.)
1 11.204 0.033 7 11.201 0.041
2 11.204 0.041 8 11.203 0.034
3 11.189 0.034 9 11.197 0.027
4 11.208 0.051 10 11.201 0.029
5 11.195 0.031 11 11.201 0.039
6 11.197 0.036 12 11.206 0.047
For the given data, the x = nothing inches (round your response to four decimal places).
Based on the sampling done, the control limits for 3-sigma x chart are:
Upper Control Limit (UCLx) = nothing inches (round your response to four decimal places).
Lower Control Limit (LCLx) = nothing inches (round your response to four decimal places).
Based on the x-chart, is one or more samples beyond the control limits? ▼ Yes No .
For the given data, the R = nothing inches (round your response to four decimal places).
The control limits for the 3-sigma R-chart are:
Upper Control Limit (UCLR) = nothing inches (round your response to four decimal places).
Lower Control Limit (LCLR) = nothing inches (round your response to four decimal places).
Based on the R-chart, is one or more samples beyond the control limits? ▼ Yes No .
Full question attached
Answer and Explanation:
Answer and explanation attached
What is a balance sheet?
Answer:
"In financial accounting, a balance sheet is a summary of the financial balances of an individual or organization, whether it be a sole proprietorship, a business partnership, a corporation, private limited company or other organization such as government or not-for-profit entity."
Explanation:
Sources: Wikipedia
For each of the following transactions for New Idea Corporation, give the accounting equation effects of the adjustments required at the end of the month on July 31: (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a minus sign)
a. Received a $550 utility bill for electricity usage in July to be paid in August.
b. Owed wages to 10 employees who worked three days at $75 each per day at the end of July. The company will pay employees at the end of the first week of August.
c. On July 1, loaned money to an employee who agreed to repay the loan in one year along with $900 for one full year of interest. No interest has been recorded yet.
Answer and Explanation:
The accounting equation effects of the adjustments required at the end of the month on July 31 is shown below:-
Transactions Assets = Liabilities + Stockholder's equity
a Utilities payable $550 Utilities expenses -$550
b Wages payable $2,250 Wages expense -$2,250
(3 × $75 × 10)
c Interest receivable $450 Interest revenue $450
($900 ÷ 2)
Explanation:-
a. The adjustment of the utilities would be recognized in the equation of accounting by rising the liability that is utilities payable and falling the equity that is utility expense.
b. The adjustment of the wages would be recognized in the equation of accounting by rising the liability that is wages payable and falling the equity that is wages expense.
c. The adjustment of the interest would be recognized in the equation of accounting by rising the assets that is interest receivable and falling the equity that is interest revenue.
Prior to safely smoking meat for food preservation, what must an operation have?
An operation must have a variance from regulatory authorities prior to smoking meat safely for food preservation.
A variance is simply an official permit that allows entities to do something that is ordinarily forbidden by regulation. Food safety methods that often require a variance include the smoking of food as a method of preservation but not as a flavor enhancer; and more often than not, follows a strict HACCP (hazard analysis critical control point).
Therefore, if an operation (business or organization) intends to smoke food as a preservative method during food processing, they need to seek and gain variance from the local regulatory authority.
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Mason Corporation had $650,000 in invested assets, sales of $700,000, operating income amounting to $99,000, and a desired minimum return on investment of 15%. The investment turnover for Mason Corporation is
Answer:
1.08 times
Explanation:
Mason corporation has $650,000 in invested assets
Sales is $700,000
Operating income is $99,000
Minimum investment on return is 15 percent
Therefore the investment turnover for mason corporation can be calculated as follows
= net sales/debt
= 700,000/650,000
= 1.08 times
You purchase 15 shares of Initech stock at $25 per share. Later, you sell your shares when the price is $30 per share.
What is your dollar return? (Answer should be just a number. Do not include a dollar symbol.)
Answer:
dollar return would be 75 if i'm not mistaken
Explanation:
5 dollar profit per share. 5 times 15 is 75. profit would be 75
One of the Justices on the Supreme Court, stated that in this decision, the Supreme Court gave up power to gain power. What do you think this means?
Answer:
the judicial power shall be vested in one suprene court and in such lower courts as may be established by law.
How is an excise tax different from a sales tax?
A). An excise tax is not deductible.
B). An excise tax applies to specific products.
C). An excise tax applies only to imported goods.
D). An excise tax is an indirect tax.
The answer is B.
An excise tax applies to specific products.
Hopes this helps :)
The difference between excise tax and sales tax is that an excise tax applies to specific products.
So, option B). is correct.
Excise tax and sales taxSales tax is applied to practically everything you buy, whereas excise tax is only applied to certain goods and services. Excise duty is charged on the manufacture of goods, whereas sales tax is levied on the selling of commodities.
One distinction between sales and excise taxes is that sales taxes are computed as a percentage of the purchase price, whereas excise taxes are assessed per unit. The difference between excise tax and sales tax is that an excise tax applies to specific products.
So, option B). is correct.
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On June 30, 20X1, a tornado damaged Jensen Corporation’s warehouse and factory, completely destroying the work-in-process inventory. Neither the raw materials nor finished goods inventories were damaged. A physical inventory taken after the tornado revealed the following valuations:
Raw materials $87,000
Work-in-process 0
Finished goods 151,000
$238,000
The inventory of January 1, 20X1, consisted of the following:
Raw materials $41,000
Work-in-process 128,000
Finished goods 173,000
$342,000
A review of the books and records disclosed that the gross profit margin historically approximated 28% of sales. The sales total for the first six months of 20X1 was $405,000. Raw material purchases totaled $150,000. Direct labor costs for this period were $112,000, and manufacturing overhead has historically been applied at 50% of direct labor.
Required:
Compute the value of the work-in-process inventory lost at June 30, 20X1.
Answer:
$130,400
Explanation:
Raw material transferred to WIP = Beginning balance + Purchase - Closing balance = $41,000 + $150,000 - $87,000 = $104,000
Cost of Goods manufactured = Closing balance + Cost of goods sold - Beginning balance
Cost of Goods manufactured = $151,000 + $405,000*70% - $173,000 = $151,000 + $291,600 - $173,000
Cost of Goods manufactured = $269,000
Ending Work in Process = Beginning balance + Direct material + Direct labor - Manufacturing overheads - Cost of goods manufactured
Ending Work in Process = $128,000 + $104,000 + $112,000 + $112,000*50% - $269,600
Ending Work in Process = $128,000 + $104,000 + $112,000 + $56,000 - $269,600
Ending balance of Work in Process = $130,400
The Pet Store experienced the following events for the Year 1 accounting period:________.
1. Acquired $60,000 cash from the issue of common stock.
2. Purchased $65,000 of inventory on account.
3. Received goods purchased in Event 2 FOB shipping point; freight cost of $900 paid in cash.
4. Sold inventory on account that cost $38,000 for $71,000.
5. Freight cost on the goods sold in Event 4 was $620. The goods were shipped FOB destination. Cash was paid for the freight cost.
6. Customer in Event 4 returned $4,200 worth of goods that had a cost of $2,150.
7. Collected $58,300 cash from accounts receivable.
8. Paid $59,200 cash on accounts payable.
9. Paid $2,600 for advertising expense.
1. Paid $3,100 cash for insurance expense.
Required:
a. Which of these events affect period (selling and administrative) costs? Which result in product costs? If neither, label the transaction
b. Record the above events in a horizontal statement model. In the Cash Flow column, use OA to designate operating activity, IA for NA. investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event. The beginning balances have been recorded as an example.
Complete this question by entering your answers in the tabs below.
Required A Required B
Which of these events affect period (selling and administrative) costs? Which result in product costs? If neither, label the transaction NA.
Transaction Cost
1
2
3
4
5
6
7
8
9
10
Answer:
I used an excel spreadsheet since there is not enough room here
Explanation:
True Nutri Inc. sells performance enhancing foods and beverages for athletes and health-conscious people. In a recent product development meeting, Mike suggested that True Nutri Inc. should acquire a new technology developed by One Health Corp. for infusing vitamin and mineral blends into food. He believed it would be easier to acquire the technology directly from One Health Corp. Justin felt that the method of infusing blends into food should be developed within True Nutri Inc. itself. He knows it may take longer but feels that the competitive advantage it would provide was worth the wait. Lara suggested that True Nutri Inc. should use its resources and work jointly with One Health Corp. to develop an entirely new product.
Based on the scenario, which method of acquiring technology does Justin favor?
a. internal development
b. licensing
c. contracted development
d. franchising
e. research partnership
Answer: a. internal development
Explanation:
Internal development is a method of growth and development that is done by using the resources of the company instead of relying on takeovers or acquisitions.
Justin wants True Nutri Inc to develop the tech itself without acquiring it from One Health Corp so he has an Internal Development mindset. Benefits of Internal Development include the development of a competitive advantage and increased efficiency which Justin hopes can benefit the company.
Fechter Corporation had the following stockholders’ equity accounts on January 1, 2020: Common Stock ($5 par) $500,000, Paid-in Capital in Excess of Par—Common Stock $200,000, and Retained Earnings $100,000. In 2020, the company had the following treasury stock transactions.
Mar. 1 Purchased 5,000 shares at $8 per share.
June 1 Sold 1,000 shares at $12 per share.
Sept. 1 Sold 2,000 shares at $10 per share.
Dec. 1 Sold 1,000 shares at $7 per share.
Fechter Corporation uses the cost method of accounting for treasury stock. In 2020, the company reported net income of $30,000.
Required:
Journalize the treasury 2020, for net income.
Answer:
Entries and their narrations are posted below
Explanation:
We will record assets and expenses on the debit as they increase during the year and will record liabilities and capital on the credit side as they increase during the year or vice versa.
March 1 (Purchased 5,000 shares at $8 per share)
Dr treasury stock $40,000
(5000 x $8)
Cr Cash $40,000
June 1 (Sold 1,000 shares at $12 per share)
Dr Cash $12,000
(1000 x $12)
Cr Treasury stock $8,000
(1000 x $8)
Cr paid-in capital from treasury stock $4,000
Sept. 1 (Sold 2,000 shares at $10 per share)
Dr Cash $20,000
(2000 x $10)
Cr Treasury stock $16,000
(2000 x $8)
Cr paid-in capital from treasury stock $4,000
Dec. 1 Sold 1,000 shares at $7 per share.
Dr Cash $7,000
(1000 x $7)
Dr paid-in capital from treasury stock $1,000
Cr Treasury stock $8,000
(1000 x $8)
The following events occur for The Underwood Corporation during 2021 and 2022, its first two years of operations.
June 12, 2021 Provide services to customers on account for $33,200.
September 17, 2021 Receive $18,500 from customers on account.
December 31, 2021 Estimate that 45% of accounts receivable at the end of the year will not be received.
March 4, 2022 Provide services to customers on account for $48,200.
May 20, 2022 Receive $10,000 from customers for services provided in 2021.
July 2, 2022 Write off the remaining amounts owed from services provided in 2021.
October 19, 2022 Receive $38,500 from customers for services provided in 2022.
December 31, 2022 Estimate that 45% of accounts receivable at the end of the year will not be received.
Required:
Calculate net accounts receivable at the end of 2021 and 2022.
2021 2021
Total accounts receivable
Less: Allowance for uncollectible acounts
Net accounts receivable
Answer:
Net account receivable
2021 $8,085
2022 $5,335
Explanation:
Calculation for the net account receivable
2021 2022
Total account receivable 14,700 9,700
(33,200-18,500=14,700)
(48,200-38,500=9,700)
Less: Allowance for doubtful accounts (6,615) (4,365)
(45%*14,700=6,615)
(45%*9,700=4,365)
Net account receivable 8,085 5,335
(14,700-6,615=8,085)
(9,700-4,365=5,335)
Therefore Net account receivable will be :
2021 $8,085
2022 $5,335
Combination Fraction of Portfolio in Diversified Stocks Average Annual Return Standard Deviation of Portfolio Return (Risk)
(Percent) (Percent) (Percent)
A 0 2.00 0
B 25 4.50 5
C 50 7.00 10
D 75 9.50 15
E 100 12.00 20
If Rosa reduces her portfolio's exposure to risk by opting for a smaller share of stocks, he must also accept a average annual return. Suppose Rosa currently allocates 25% of her portfolio to a diversified group of stocks and 75% of her portfolio to risk-free bonds; that is, she chooses combination B. She wants to increase the average annual return on her portfolio from 4.5% to 9.5%. In order to do so, she must do which of the following?
a. Sell some of her bonds and use the proceeds to purchase stocks
b. Sell some of her stocks and use the proceeds to purchase bonds
c. Place the entirety of her portfolio in bonds
d. Accept a lower average annual rate of return
Answer:
a. Sell some of her bonds and use the proceeds to purchase stocks.
Explanation:
Debt or bonds is less risky so it generates lower returns. Stock or equity comprises high risk so it offers high returns to its investors. If Rosa wants to increase her returns from 4.5% to 9.5% then he should sell some of its bonds and invest the proceeds into stocks. The lower returns on the bonds will be replaced by high returns on the stocks.
The defect rate for data entry of insurance claims at Sadegh Kazemi Insurance Co. has historically been about 1.50% This exercise contains only parts a, b, c, d, and e.
a. If you wish to use a sample size of 100, the 3-sigma control limits are: UCLD (enter your response as a number between 0 and 1, rounded to three decimal places).
b. what if the sample size used were 50, with 3 standard deviation?
c. what if the sample size used were 100, with 2 standard deviation?
d. what if the sample size used were 50, with 2 standard deviation?
e. what happens to standard deviation Ap when the sample size is larger?
f. explain why the lower control limits cannot be less then 0.
Answer and Explanation:
Answer and explanation attached
QUESTION 1
The prices for all furniture sold at American Furniture Warehouse end in $9.99, such as $599.99, $899.99, etc. American Furniture Warehouse uses
O a. odd-even pricing.
b.price lining
c. bundle pricing.
d. product-line pricing.
Oe. dynamic pricing.
Assume that in January 2017, the average house price in a particular area was $300,400. In January 2001, the average price was $207,300. What was the annual increase in selling price
Answer:
r = 0.023455 or 2.3455% rounded off to 2.35%
Explanation:
We are given the future value and the present value of house. To calculate the annual percentage increase in the price of the house over the period of 16 years from January 2001 to January 2017, we can use wither use the formula for Future Value or Present value.
Here we are solving it using the future value formula which is,
FV = PV * (1 + r)^t
Where,
FV is Future ValuePV is Present valuer is the annual rate of increaset is time period in yearsPlugging in the values for FV, PV and t, we can calculate the value of r r annual percentage increase in the price.
300400 = 207300 * (1 + r)^16
300400 / 207300 = (1 + r)^16
1.449107574 = (1 + r)^16
Eliminating the power 16 by taking a power of 1/16 on both sides.
(1.449107574)^1/16 = (1 + r)^16/16
1.023455087 = 1 + r
1.023455087 - 1 = r
r = 0.023455 or 2.3455% rounded off to 2.35%
Drag each label to the correct location on the table. Match the companies to their business categories.
Answer:
Trading- A wholesaler a department store
service-an auditing firm, a commercial bank, logistics company
Explanation:
Trading businesses wholesalers, department stores, service businesses- auditing firms, commercial banks, and logistics companies.
What are trading businesses?Trading companies are businesses working with different kinds of products which are sold for consumer, business, or government purposes. Trading companies buy a specialized range of products, maintain a stock or a shop, and deliver products to customers.
Different kinds of practical conditions make for many kinds of business. Usually, two kinds of businesses are defined in trading. Importers or wholesalers maintain a stock and deliver products to shops or large end customers. They work in a large geographical area, while their customers, the shops, work in smaller areas and often in just a small neighbourhood. Today "trading company" mainly refers to global B2B traders, highly specialized in one goods category and with a strong logistic organization.
Changes in practical conditions such as faster distribution, computing and modern marketing have led to changes in their business models.
Learn more about trading, here:
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Higgs Bassoon Corporation is a custom manufacturer of bassoons and other wind instruments. Its current value of operations, which is also its value of debt plus equity, is estimated to be $200 million. Higgs has $110 million face value, zero coupon debt that is due in 3 years. The risk-free rate is 5%, and the standard deviation of returns for similar companies is 60%. The owners of Higgs Bassoon view their equity investment as an option and would like to know the value of their investment.
Required:
Using the Black-Scholes Option Pricing Model, how much is the equity worth?
Answer:
123.63 million
Explanation:
From the given information:
The total value for the firm is $200 million
The face value of debt is $110 million
Maturity of debt = 3 years
Risk free rate = 5 %
Standard deviation of return = 60%
Using Black-Scholes Option Pricing Model, the equity worth is computed in an Excel file and the screenshot is show in the image attached below.