Answer:
decision support system.
Explanation:
A decision support system can be defined as a technological program used by organizations to assist in decision making.
This system works by analyzing essential data for decision making, such as sales reports, revenues, operations and projections, and after the analysis, it gathers the most important information, which will help a manager to find relevant standards and make an important decision of more quickly and effectively.
This system guarantees the analysis of a high volume of information and synthesizes it in a flexible and easy way, allowing the analysis of data from graphs, for example, which facilitates decision making. Because it is an intelligent computer system, it can be developed to deliver better performance and assist in organizational decision making.
Roger purchased a stock for $16 a share. The stock paid a $1 annual dividend and increased in price by $2 a year for the following three years. What is the arithmetic average annual capital gain
Answer:
The answer is 11.2%
Explanation:
Cost of acquisition: $16 per share
Annual dividend: $1
The stock increases by $2 every year for 3 years. Therefore, we have:
First year is $16 per share
Second year is $18 per share
Third year is $20 per share.
The arithmetic average annual capital gain will be
($2/$16 + $2/$18 + $2/$20)/3
(0.125 + 0.111 + 0.1) / 3
0.336/3
0.112
Expressed as a percentage:
= 11.2%
In its first month of operations, Cheyenne Corp. made three purchases of merchandise in the following sequence: (1) 185 units at $5, (2) 570 units at $6, and (3) 130 units at $7.
Assuming there are 260 units on hand, compute the cost of the ending inventory under the (a) FIFO method and (b) LIFO method. Cheyenne uses a periodic inventory system.
FIFO
(a) Cost of the ending inventory $_________.
LIFO
(b) Cost of the ending inventory $_________.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Purchases:
(1) 185 units at $5
(2) 570 units at $6
(3) 130 units at $7
Ending inventory in units= 260
To calculate the ending inventory under the FIFO (first-in, first-out) method, we need to use the cost if the last units incorporated into inventory:
Ending inventory cost= 130*7 + 130*6= $1,690
To calculate the ending inventory under the LIFO (last-in, first-out) method, we need to use the cost if the firsts units incorporated into inventory:
Ending inventory cost= 185*5 + 75*6= $1,375
A cement manufacturer has supplied the following data: Tons of cement produced and sold 320,000 Sales revenue $ 1,024,000 Variable manufacturing expense $ 241,000 Fixed manufacturing expense $ 340,000 Variable selling and administrative expense $ 199,320 Fixed selling and administrative expense $ 101,000 Net operating income $ 142,680 The company's contribution margin ratio is closest to:
Answer:
contribution margin ratio= 0.57
Explanation:
Giving the following information:
Sales revenue $ 1,024,000
Total variable cost:
Variable manufacturing expense $ 241,000
Variable selling and administrative expense $ 199,320
Total= $440,320
To calculate the contribution margin ratio, we need to use the following formula:
contribution margin ratio= (sales - total variable cost) / sales
contribution margin ratio= (1,024,000 - 440,320) / 1,024,000
contribution margin ratio= 0.57
_______________ of well-to-do individuals often put their own money into small new companies at an early stage of development, in exchange for owning some portion of the firm. Group of answer choices
Answer: C. A Network
Explanation:
One of the ways of raising capital is through the use of Angel Investors. These are usually well off individuals with excess cash for investment who look for companies to invest in at an early stage because they are trying to gain a positive return when the companies become successful.
To make their funds more substantial and their services easier to reach, Angel investors form networks to enable them achieve their mission of putting their own money into small new companies at an early stage of development, in exchange for owning some portion of the firm.
Jan's Bakery is considering a merger with Tina's Cookies. Jan's total operating costs of producing services are $300,000 for a sales volume of $2 million. Tina's total operating costs of producing services are $75,000 for a sales volume of $600,000. If the two firms merge, calculate the total average cost for the merged firm assuming no synergies.
Answer:
Jan's Bakery and Tina Cookies
Total Average Cost for the merged firm
= ($300,000 + $75,000)/2
= $187,500
Explanation:
The total average cost for Jan's Bakery and Tina's Cookies is the average of their total operating costs. This is obtained by adding $300,000 to $75,000 and then dividing by 2.
Though, in practical terms, the presence of some synergies will cut some of the operating costs off, especially such costs as rent, advertising, and some other administrative costs. Some selling costs will also be eliminated when the merger goes through.
Which one of these is not a smart way to negotiate? Make counteroffers by phone or in person, so you can use your powers of persuasion Go in knowing the maximum you’re willing to pay Learn about the seller’s needs and try to accommodate them Add a personal letter to your offer
Answer:
Add a personal letter to your offer.
Explanation:
Negotiation is when an agreement or a compromise is reached by parties involved in a deal in order to avoid issues or argument. People negotiate for different reasons such as beating down a price , resolve a problem or dispute among parties, create a new thing in which parties involved are not able to do , or agree on how to share limited resource like money, assets etc.
Negotiation is a skill(soft)which can be learnt by people hence become a strong negotiator. These soft skills include communication, persuasion and ability to strategize . With regards to the above, the odd among the given option is add a personal letter to your offer.
The one of among the options that is not a smart way to negotiate is addition of a personal letter to your offer.
For better understanding, let's explain what negotiation means
Negotiation is simply defined as a continuous working together of two or more parties in order to reach an agreement that is mutually satisfactory especially to both buyer and seller or an others. There are three phases to negotiation which are planning and preparation, Settlement and Documentation.Negotiating Tactics includes bidding war, brinksmanship, one party away, bogey--tactic, bluffing, defense in depth, flinching, Highball/Lowball and others. Personal letter is not inclusive.From the above, we can therefore say that the answer that The one of among the options that is not a smart way to negotiate is addition of a personal letter to your offer is correct
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Fixed Overhead Spending and Volume Variances, Columnar and Formula Approaches
Branch Company provided the following information:
Standard fixed overhead rate
(SFOR) per direct labor hour $5.00
Actual fixed overhead $305,000
BFOH $300,000
Actual production in units 16,000
Standard hours allowed for
actual units produced (SH) 64,000
Required
Enter amounts as positive numbers and select Favorable (F) or Unfavorable(U).
Using the columnar approach, calculate the fixed overhead spending and volume variances.
1 2 3
Spending Volume
Answer:
Fixed Overheads Spending Variance = $5,000 Unfavorable(U).
Fixed Overheads Spending Variance = $20,000 Favorable (F).
Explanation:
Fixed Overheads Spending Variance = Actual Fixed Overheads - Budgeted Fixed Overheads
= $305,000 - $300,000
= $5,000 Unfavorable(U).
Fixed Overheads Spending Variance = Fixed Overheads at Actual Production - Budgeted Fixed Overheads
= ($5.00 × 64,000) - $300,000
= $320,000 - $300,000
= $20,000 Favorable (F)
On the cash flow statement, a realized loss on investments should be added back under Cash from Operating Activities because the realized loss decreases net assets but does not use up any cash.
a. True
b. False
Answer:
The answer is A. TRUE
Explanation:
Realized loss like depreciation or amortization are added back to the net income under the cash flow from operating activities section.
Realized gain/loss is the total amount of realized gains and losses resulting from the sale of investment or securities.
This is usually done under the indirect method of cash flow. This does not occur under the direct method of cash flow
Harold Manufacturing produces denim clothing. This year, it produced 5,260 denim jackets at a manufacturing cost of $42 each. These jackets were damaged in the warehouse during storage Management investigated the matter and identified three alternatives for these jackets.
1. Jackets can be sold to a second-hand clothing shop for $8.00 each
2. Jackets can be disassembled at a cost of $31,800 and sold to a recycler for $12.00 each.
3. Jackets can be reworked and turned into good jackets. However, with the damage, management estimates it will be able to assemble the good parts of the 5,260 jackets into only 3,050 jackets. The remaining pieces of fabric will be discarded. The cost of reworking the jackets will be $102,200, but the ackets can then be sold for their regular price of $45.00 each.
Required:
Calculate the incremental income.
Answer:
Incremental net income = $42,080
Explanation:
Note the the income would be that which result from the alternative action with the highest net income Note that the manufacturing cost of $12 per unit is not relevant for the purpose of this decision and hence would not form part of the analysis
$
Option one: Outright sale
Sales from disposal = 5,260× 8 42,080
Option 2: disassembling
Revenue $12 × 5,260 = 63120
Cost of disassembling ( 31,800)
Net income 31,320
Option 3: Reworking
Sales revenue ($45.00× 3,050) 137250
Cost of reworking (102,200)
Net income 35,050
The outright option gives the highest net income hence should be considered.
Incremental net income = $42,080
Alternative 2
Explanation:
You have just purchased a new warehouse. To finance the purchase, you’ve arranged for a 30-year mortgage for 80 percent of the $3,200,000 purchase price. The monthly payment on this loan will be $17,300.
a. What is the APR on this loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)
b. What is the EAR on this loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)
Answer:
a) 7.2%
b) 7.46%
Explanation:
the loan's principal = $3,200,000 x 80% = $2,560,000
first monthly payment = $17,300 x 360 payments = $6,228,000
total interests charged = $6,228,000 - $2,560,000 = $3,668,000
using a financial calculator:
n = 360
payment = -17,300
present value = 2,560,000
monthly APR = 0.6% x 12 months = 7.2%
effective annual rate = (1 + i/n)ⁿ - 1 = (1 + 0.072/30)³⁰ - 1 = 7.46%
The holder of a promotional permit may:
Provide alcohol to a minor
Serve an intoxicated person
Offer in-store wine and beer samples
Sell alcohol to members in a private club
Answer:
Offer in-store wine and beer samples.
Explanation:
Promotional permit was established to allow a person promote sale of alcoholic beverages on behalf of the manufacturer. Such alcoholic beverage must however be sold on the premises of the licenced holder.
A promotional permit holder, according to the Texas Alcoholic Beverage Commission,which was established in 1935, may involve in the sales of alcoholic beverages in a state or premises of the license holder. It is to be noted that the license holder must qualify enough before being granted the permit and must also pay some fees before carrying on such activities.
As a holder of a promotional permit, you are allowed to offer in-store wine and beer samples.
A person with a promotional permit:
Is allowed to promote the sale of a certain brand of alcohol Must be in a contract with the brand they are promotingIn order to promote the brand of alcohol, the person may use sales strategies such as offering in-store wine and beer samples to people to get them to try out the brand that they are promoting.
In conclusion, a holder of a promotional permit can offer in-store wine and beer samples.
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During June, Vixen Company sells $850,000 in merchandise that has a one year warranty. Experience shows that warranty expenses average about 3% of the selling price. Customers returned $14,000 of merchandise for warranty replacement during the month. The entry to settle the customer warranties is:
Answer: Debit Warranty Expense $25,500; credit Estimated Warranty Liability $25,500.
Explanation:
From the question, we are informed that during June, Vixen Company sells $850,000 in merchandise that has a one year warranty and that experience shows that warranty expenses average about 3% of the selling price and that customers returned $14,000 of merchandise for warranty replacement during the month.
The entry to settle the customer warranties is to debit Warranty Expense $25,500 and then credit Estimated Warranty Liability $25,500.
The warranty expense is calculated as:
= 3% × $850,000
= 0.03 × $850,000
= $25,500
An organization's tangible and intangible resources can be a source of competitive advantage, and these resources play an important role in determining an organization's capabilities and competencies.
A. True
B. False
Answer:
A. True
Explanation:
Tangible resources includes cash, inventory, machinery, land or buildings. they are assets that can be seen
Intangible resources are resources that cannot be seen
for example, a company has developed a resource that increases the amount of output a company produces at a lower cost. this resource would increase the capabilities of the company.
Farris Billiard Supply sells all types of billiard equipment, and is considering manufacturing their own brand of pool cues. Mysti Farris, the production manager, is currently investigating the production of a standard house pool cue that should be very popu- lar. Upon analyzing the costs, Mysti determines that the materials and labor cost for each cue is $25, and the fixed cost that must be covered is $2,400 per week. With a selling price of $40 each, how many pool cues must be sold to break even
Answer:
Break-even point in units= 160 units
Explanation:
Giving the following information:
Unitary variable cost= $25
Selling price per unit= $40
Fixed costs= $2,400
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 2,400 / (40 - 25)
Break-even point in units= 160 units
Calculate the average and marginal tax rates in the following table. (Hint: Enter your answers as decimals and do not round when computing tax rates. For example, 8.25% should be entered as "8.25" and not "0.825")
Total Taxable Income Total Tax Due Average Tax Rate Marginal Tax Rate
(Dollars) (Dollars) (Percentage) (Percentage)
0 0 0 0
2,000 130
10,000 650
20,000 1,300
100,000 6,500
The tax rates shown in this table are:________.
True or False: If the marginal tax rate is equal to the average tax rate, then the average tax rate must remain the same.
A. True
B. False
Sean, Yvette, and Bob are the only voters in a small society and are considering whether to publicly finance a project.
Indicate in the following table what each individuals vote would be and whether the public project will be funded
Name Marginal Cost Marginal Benefit Vote
Sean $100 $108
Yvette $100 $12
Bob $100 $125
Total $300 $245
If this same project were taking place in the private sector, a firm ________ fund the project.
In private markets, decisions to provide goods or services to the market are generally made if marginal benefits ________ marginal costs. in comparison, the decisions to provide goods and services by governments are made through _______. as a result, governments may approve projects whose costs _________ their benefits.
Answer:
1. a. Average Tax rate = 130/2,000 = 6.5%
Marginal Tax Rate = (130 - 0)/ (2,000 - 0) = 6.5%
b. Average Tax rate = 650/10,000 = 6.5%
Marginal Tax Rate = [tex]\frac{650-130}{10,000-2,000}[/tex] = 6.5%
c. Average Tax rate = 1,300/20,000 = 6.5%
Marginal Tax Rate = [tex]\frac{1,300-650}{20,000-10,000}[/tex] = 6.5%
d. Average Tax rate = 6,500/100,000 = 6.5%
Marginal Tax Rate = [tex]\frac{6,500-1,300}{100,000-20,000}[/tex] = 6.5%
2. The tax rates shown in this table are: Proportional
Proportional Taxes take the same percentage of income across all income groups.
3. A. True
4. Sean and Bob would both vote yes as the Marginal Benefit of the project exceeds their marginal cost but project will not be funded in the end as the Total Marginal Cost exceeds Total Marginal benefit. Sean and Bob may want to pay but Yvette will not.
5. If this same project were taking place in the private sector, a firm would not fund the project.
6. In private markets, decisions to provide goods or services to the market are generally made if marginal benefits exceed marginal costs
7. As a result, governments may approve projects whose costs exceed their benefits.
If you are a strict risk minimizer, you would choose Stock ____ if it is to be held in isolation and Stock ____ if it is to be held as part of a well-diversified portfolio.
Answer:
c) B; A
Explanation:
For isolation the stock B is chosen as it contains the less standard deviation but for diversified portfolio stock A is chosen as the less risk is added also standard deviation is not relevant i.e unsystematic diversified risk also it involves less beta as compared with other two stocks
Hence, the correct option is C and the rest options are wrong
A _______ structure provides an organization with the most flexibility, but easier to operate. functional product matrix geographic product team
Answer:
product team.
Explanation:
A product team structure can be defined as a team whose main objectives are to develop problems and solutions for a product line.
This team is responsible for implementing strategic and marketing actions to ensure functionality, the inclusion of benefits and acceptance of the product in the market, therefore it must be formed by trained professionals with a strategic vision aligned with the organizational values and objectives.
This type of team structure allows greater flexibility in the work, due to the fact that it is carried out by a multifunctional team where there is the possibility of sharing innovative ideas for the success in the development of a product.
On September 1, the company acquired five acres of land with a building that will be used as a warehouse. Tristar paid $120,000 in cash for the property. According to appraisals, the land had a fair value of $85,400 and the building had a fair value of $54,600. On September 1, Tristar signed a $42,000 noninterest-bearing note to purchase equipment. The $42,000 payment is due on September 1, 2022. Assume that 9% is a reasonable interest rate. On September 15, a truck was donated to the corporation. Similar trucks were selling for $2,700. On September 18, the company paid its lawyer $4,000 for organizing the corporation. On October 10, Tristar purchased maintenance equipment for cash. The purchase price was $17,000 and $600 in freight charges also were paid. On December 2, Tristar acquired various items of office equipment. The company was short of cash and could not pay the $5,700 normal cash price. The supplier agreed to accept 200 shares of the company's no-par common stock in exchange for the equipment. The fair value of the stock is not readily determinable. On December 10, the company acquired a tract of land at a cost of $22,000. It paid $3,000 down and signed a 11% note with both principal and interest due in one year. Eleven percent is an appropriate rate of interest for this note.
Required:
Prepare journal entries to record each of the above transactions.
Answer and Explanation:
The Journal entries is shown below:-
1. Land Dr, $73,200 (($85,400 ÷ (85,400 + 54,600)) × $120,000)
Building Dr, $46,800 ($54,600 ÷ (85,400 + 54,600)) × $120,000
To Cash $120,000
(Being cash paid is recorded)
2. Equipment Dr, $38,532.06 ($42,000 × 0.91743)
Discount on Note Payable Dr, $3,4687.94 ($3,780 × 0.91743)
To Note Payable $42,000
(Being equipment is recorded)
3. Truck Dr, $2,700
To Sales revenue $2,700
(Being truck is recorded)
4. Organisation cost Exp enses Dr, $4,000
To Cash $4,000
(Being cash paid is recorded)
5. Maintenance Equipment Dr, $17,600
To Cash $17,600
(Being cash paid is recorded)
6. Office Equipment Dr, $5,700
To Common Stock $5,700
(Being office equipment is recorded)
7. Land Dr, $22,000
To Cash $3,000
To Note Payable $19,000
(Being cash paid is recorded)
On January 1, 2016, the Excel Delivery Company purchased a delivery van for $33,000. At the end of its five-year service life, it is estimated that the van will be worth $3,000. During the five-year period, the company expects to drive the van 100,000 miles.
Required:
Calculate annual depreciation for the five-year life of the van using each of the following methods. (Do not round intermediate calculations.)
1. Straight line
2. Sum of the years digits
3. Double declining balance
4, Units of production using miles driven as a measure of output and the following actual mileage:
Year Miles
2016 22,000
2017 24,000
2018 15,000
2019 20,000
2020 21,000
Answer:
1. Straight line
years 2016 to 2020 = $6,000
2. Sum of the years digits
2016 = $10,000
2017 = $8,000
2018 = $6,000
2019 = $4,000
2020 = $2,000
3. Double declining balance
2016 = $13,200
2017 = $7,920
2018 = $4,752
2019 = $2,852
2020 = $1,276
4, Units of production using miles driven
2016 = $6,600
2017 = $7,200
2018 = $4,500
2019 = $6,000
2020 = $5,700
Explanation:
purchase cost $33,000
useful life 5 years, salvage value $3,000
expected use 100,000 miles
1. Straight line
($33,000 - $3,000) / 5 = $6,000
2. Sum of the years digits
year 1 = 5/15 x $30,000 = $10,000
year 2 = 4/15 x $30,000 = $8,000
year 3 = 3/15 x $30,000 = $6,000
year 4 = 2/15 x $30,000 = $4,000
year 5 = 1/15 x $30,000 = $2,000
3. Double declining balance
year 1 = 2 x 1/5 x $33,000 = $13,200
year 2 = 2 x 1/5 x $19,800 = $7,920
year 3 = 2 x 1/5 x $11,880 = $4,752
year 4 = 2 x 1/5 x $7,128 = $2,851.20 ≈ $2,852
year 5 = $4,276 - $3,000 = $1,276
4, Units of production using miles driven
depreciation expense per mile = ($33,000 - $3,000) / 100,000 = $0.30
Year Miles
2016 22,000 x $0.30 = $6,600
2017 24,000 x $0.30 = $7,200
2018 15,000 x $0.30 = $4,500
2019 20,000 x $0.30 = $6,000
2020 (21,000 - 2,000) x $0.30 = $5,700
two firms, A and B, each currently emit 100 tons of chemicals into the air. THe government has decided to reuce the pollution and from now on will require
Answer:
Option A = 20 fewer tons of pollution into the air, and Firm B will emit 100 fewer tons of pollution into the air.
Explanation:
The information or data required to decode or solve the above Question is given below;
(1). "It costs Firm A $200 for each ton of pollution that it eliminates before it is emitted into the air, and it costs Firm B $100 for each ton of pollution that it eliminates before it is emitted into the air."
DEDUCTION: We can see that Firm A in (1) above uses more money that is $200 than firm B which is $100 to eliminate each ton of pollution.
(2). "Both firms, A and B, each currently emit 100 tons of chemicals into the air."
DEDUCTION: Both firms emit the same amount of pollution.
(3)." The government gives each firm 40 pollution permits, which it can either use or sell to the other firm"
So, from (1) we can deduce that A is more likely to buy the 40 pollution permit of B to make firm A to be 40 + 40 = 80 pollution permit.
Thus, A will emit 20 fewer tons of pollution while B will emit 100 tons.
"Value proposition in simple terms is the consideration of the value the product delivers against the ______________ necessary to obtain and use it. "
Answer:
Price
Explanation:
The value proposition refers to the promise made to the customers about what they wil get when they buy the product. This value proposition is determined by analizing the benefits the customers get and the costs they have to be able to get the product. So, according to that, the answer is that "Value proposition in simple terms is the consideration of the value the product delivers against the price necessary to obtain and use it" because the price would be the cost the customer has to pay to purchase the product.
What form of FDI is NOT an option in the service industry, due to the fact that many services have to be produced where they are sold
Answer: C. exporting
Explanation:
As many services have to be produced where they are sold, Exporting is not very ideal in the Service industry even if it might work here and there.
Exporting is a form of FDI that means sending the good in question to another country and this is not ideal when services are needed.
For instance, you need your hair cut in Maine but Maine uses exported Barbers from Mexico City, the logistics of such a business are to understate it, untenable. The barber should be in Maine.
9. The risk-free rate and the expected market rate of return are 5.6% and 12.5%, respectively. According to the capital asset pricing model (CAPM), the expected rate of return on a security with a beta of 1.25 is equal to
Answer:
21.2%
Explanation:
CAPM = risk free rate +( beta x expected market return)
5.6% + (1.25 x 12.5%) = 21.2%
Enrollment at Bayside College keeps going up, despite tuition and fee hikes to help cover the cost of new wind turbines installed on campus. These turbines generate enough power to serve the campus buildings and to sell to local business establishments. After reading about corporate social responsibility. you conclude:_________.
a. new technology such as wind turbines is a huge capital investment for a college. The effort demonstrates the high cost of environmental programs
b. although it is a trendy social cause, this effort is not showing good long-term social responsibility toward the students who will end up with sizeable future debt
c. this is a demonstration of corporate philanthropy
d. students are willing to pay the extra tuition in the short term because they believe that the means (the use of innovative technology) will justify the end (a better environment.
Answer:
a. new technology such as wind turbines is a huge capital investment for a college. The effort demonstrates the high cost of environmental programs
Explanation:
Corporate social responsibility is defined as integration of social and environmental concerns in the business activities of an organisation.
The business entity is accountable to its stakeholders and the public.
In the given scenario the wind turbines generate enough power to serve the campus buildings and to sell to local business establishments.
However enrollment keeps going up because cost of the new turbines need to be covered.
This demonstrates new technology such as wind turbines is a huge capital investment for a college. The effort demonstrates the high cost of environmental programs
Take It All Away has a cost of equity of 10.81 percent, a pretax cost of debt of 5.45 percent, and a tax rate of 35 percent. The company's capital structure consists of 77 percent debt on a book value basis, but debt is 37 percent of the company's value on a market value basis. What is the company's WACC
Answer:
8.12%
Explanation:
The computation of the weighted average cost of capital is shown below:
= Cost of equity × weight of equity + pretax cost of debt × (1 - tax rate) × weight of debt
= 10.81% × 0.63 + 5.45% × (1 - 0.35) × 0.37
= 6.81% + 1.31%
= 8.12%
We simply applied the above formula by considerin the capital structure with its weight so that the correct percentage could come
Calculate the required rate of return for Avy Inc., assuming that the company has a beta of 1.10, while investors expect treasury bills to be yielding 3.0%, with a market risk premium is 5.0%.
Answer:
8.5%
Explanation:
Avy incorporation has a beta of 1.10
The risk free rate is 3.0%
The market risk premium is 5.0%
Therefore, the required rate of return can be calculated as follows
Required rate of return= Risk-free rate+beta(market Risk premium)
= 3.0% + 1.10(5.0%)
= 3.0%+5.5
= 8.5%
Hence the required rate of return is 8.5%
A put on XYZ stock with a strike price of $40 is priced at $2.00 per share, while a call with a strike price of $40 is priced at $3.50. What is the maximum per-share loss to the writer of the uncovered put and the maximum per-share gain to the writer of the uncovered call
Answer:
Loss = $38
Gain = $3.5
Explanation:
The calculation of maximum per-share loss and maximum per-share gain is shown below:-
Maximum loss = Exercise price - Premium received
= $40 - $2
= $38
So, the maximum per share loss is $38
Maximum gain = Premium received
= $3.5
So, the maximum per share gain is $3.5
We simply applied the above formulas to determine each part
Estimated cash flows appear below for an investment project. The project is required rate of return (IRR) is 11.40%. What is the discounted payback period for the project in years
Answer: 3.83 years
Explanation:
The Discounted Payback period is used to determine how long it would take a project to payback the investment made in it given required return adjusted cashflows.
Year 1.
= 17,000 / ( 1 + 11.4%)
= $15,260
Year 2
= 20,000/ 1.114²
= $16,116
Year 3
= 27,000/1.114³
= $19,530
Year 4
= 30,000/1.114⁴
= $19,480
Investment Balance up to year 3
= -67,000 + 15,260 + 16,116 + 19,530
= -$16,904
The amount left is smaller than the discounted Cashflow for Year 4 so the Investment will be paid back in year 4.
= 16,904/19,480
= 0.83
0.83 of year 4 will be taken to pay off Investment.
In total;
= 3 complete years + 0.83 in 4th year
= 3.83 years.
Some companies resort to questionable means to enforce computer use policies. They use surveillance software to monitor employees' IT use. Every activity on the employee's computer is simultaneously tracked and recorded. Everything that the employee sees on their monitor can also be seen on the monitor of the person tracking them. The same software is used to monitor children's online activities and monitor spouses suspected on infidelity. Should employees be treated as undisciplined children of cheating spouses
Answer:
Its appropriate because the company monitors its employee's use of IT system during office time not their personal devices.
Explanation:
If the company is monitoring closely its own IT systems then it is appropriate as the company is keen in increasing the employee productivity during office time. This is also appropriate if the employee is told about the close monitoring because he will not access his personal things which includes payments of utilities and other item using online banking. So this is appropriate as it is not meant to harm the employee and is part of improving employee performance.
The Grange is a firm in a monopolistically competitive market that sells farm implements. The firm collected the data below to determine the profit-maximizing price and quantity at which to sell. Using the data, what is the profit-maximizing price and quantity at which the Grange company should sell its product?
Quantity Price Total Revenue Marginal Revenue Total Cost Marginal Cost
2 $21 $42 $21 $0 $30
4 $18 $72 $15 $64 $2
6 $16 $96 $2 $72 $4
8 $14 $112 $8 $88 $8
10 $12 $120 $4 $108 $10
2 $10 $120 $0 $32 $12
4 $8 $112 $4 $160 $14
Answer:
The profit-maximizing price is $14, and the profit-maximizing quantity is 8.
Explanation:
This is because for a monopolistically competitive firm, the profit-maximizing quantity occurs where marginal revenue equals marginal cost. What the firm does is looking for the point in the demand curve that is exactly above the marginal cost-marignal revenue intersection, and charges the corresponding price and quantity.
We can see that for the quantity of 8, and the price of $14, both marginal revenue and marginal cost are $8, meaning that these are the quantity and price that are profit-maximizing.