Answer:
a. How much will Ruby’s IRA be worth when she needs to start withdrawing money from it when she retires?
the future value of Ruby's IRA = $10,000 x 21.725 (FV factor, 8%, 40 periods) = $217,250
b. How much money will she have to accumulate in her company’s 401(k) plan over the next 40 years in order to reach her retirement income goal?
she needs to accumulate $875,000 - $217,250 = $657,750 during the next 40 years
the annual contribution = FV / FV annuity factor = $657,750 / 259.057 (FV annuity factor, 8%, 40 periods) = $2,539.02 per year
Two investment advisers are comparing performance. One averaged a 21% rate of return and the other a 18% rate of return. However, the beta of the first investor was 1.4, whereas that of the second investor was 1. a. Can you tell which investor was a better selector of individual stocks (aside from the issue of general movements in the market)? First investor Second investor Cannot determine b. If the T-bill rate was 7% and the market return during the period was 13%, which investor would be considered the superior stock selector? Second investor First investor Cannot determine c. What if the T-bill rate was 4% and the market return was 17%? First investor Second investor Cannot determine
Required information [The following information applies to the questions displayed below.] Hudson Co. reports the contribution margin income statement for 2017. HUDSON CO. Contribution Margin Income Statement For Year Ended December 31, 2017 Sales (11,500 units at $225 each) $ 2,587,500 Variable costs (11,500 units at $180 each) 2,070,000 Contribution margin $ 517,500 Fixed costs 360,000 Pretax income $ 157,500 1. Compute Hudson Co.'s break-even point in units and. 2. Compute Hudson Co.'s break-even point in sales dollars.
Answer:
1) Break-even point in units =8000 units
2) Break-even point (sales) = $1,800,000
Explanation:
Break-even point is the level of activity at which a firm must operate such that its total revenue will equal its total costs. At this point, the company makes no profit or loss because the total contribution exactly equals the total fixed costs.
Break even point in units is calculated using this formula:
Break even point in units = Total general fixed cost/ (selling price - Variable cost)
Break-even point in units = 360,000/(225- 180) = 8000 units
Break-even point in units =8000 units
2) Break-even point (sales) is computed as follows:
Break-even point (sales) = Total general fixed cost/C/S ratio.
C/s ratio = (Selling price - variable cost)/Selling price × 100
= (225 - 180)/225 × 100 = 20%
Break-even point (sales) = 360,000/20% = $1,800,000
Break-even point (sales) = $1,800,000
1) Break-even point in units =8000 units
2) Break-even point (sales) = $1,800,000
Compare and contrast the views of management and accountants regarding the changes required by the Sarbanes-Oxley Act on internal controls and how these changes have affected corporations, accounting firms, and investors?
Answer and Explanation:
The SoX sarbanes oxley act of 2002 was enacted to address company fraud that was exemplary of Eron and worldcom and bring back the confidence held in the financial market
It was meant to increase the effectiveness of internal control in companies in keeping accounting records or financial reports reliable and fraud-proof. The SOX act increased the independence of company auditors making their reports more reliable as they didn't have to compromise because they were dependent on top managers. In addition top managers were held responsible for any fraud in accounting statements and so were to certify the reliability of reports released to the public
Allowance for Doubtful Accounts has a credit balance of $2,100 at the end of the year (before adjustment), and an analysis of customers' accounts indicates uncollectible receivables of $19,700. Which of the following entries records the proper adjustment for bad debt expense?
a. debit Bad Debt Expense, $21,800; credit Allowance for Doubtful Accounts, $21,800
b. debit Allowance dfor Doubtful Accounts, $17,600; credit Bad Debt Expense, $17,600
c. debit Allowance for Doubtful Accounts, $21,800; credit Debt Expense, $21,800
d. debit Bad Debt Expense, $17,600; crdit Allowance for Doubful Accounts, $17,600
Other receivables includes all of the followoing EXCEPT:
a. taes receivable
b. interest receivable
c. receivables from employees
d. notes receivabe
Answer:
1. Analysis of accounts receivables Allowance Required $19,700
Less: Credit balance available in Allowance account $2,100
Additional allowance required $17,600
The journal entry will be as follows
DEBIT CREDIT
Bad debt expenses $17,600
Allowance for doubtful accounts $17,600
Hence, the correct option is D.
2. Other receivables include all except "Notes Receivables"
Hence, the correct option is D
Moss County Bank agrees to lend the Sunland Company $605000 on January 1. Sunland Company signs a $605000, 6%, 9-month note. What is the adjusting entry required if Sunland Company prepares financial statements on June 30
Answer:
DR Interest Expense $18,150
CR Interest Payable $18,150
Explanation:
June 30 would mean that 6 months have elapsed since the note was issued. The interest rate is an annual one so will have to be adjusted for 6 months.
The interest expense so far will be;
= 605,000 * 6% * [tex]\frac{6}{12}[/tex]
= $18,150
This figure is to be debited to the Interest Expense account to show that it is an expense and credited to the Interest Payable account.
Health and Wealth Company is financed entirely by common stock that is priced to offer a 12 percent expected return. If the company repurchases 20 percent of the common stock and substitutes an equal value of debt yielding 8 percent, what is the expected return on the common stock after refinancing
Answer: 13%
Explanation:
By substituting 20% of debt for debt yielding 8%, the company now has 20% financing from debt and 80% from equity.
The expected return on common stock after refinancing can be calculated by;
Return after refinancing = Return before refinancing + [tex]\frac{Debt}{Equity}[/tex](return before refinancing - Debt yield)
= 12% + [tex]\frac{0.2}{0.8} (0.12 - 0.08)[/tex]
= 13%
Goodard Inc. planned to use $156 of material per unit but actually used $147 of material per unit, and planned to make 1,140 units but actually made 900 units. The sales−volume variance for materials is ________.
Answer:
2700, favorable
Explanation:
To calculate the sales-volume variance for materials, we use the equation as follows;
Sales-volume variance for materials = (Actual Price - Standard Price)*Aqual Quantity
sales-volume variance for materials = (147-150)*900
sales-volume variance for materials = 2700 Favorable
Torino Company has 1,200 shares of $10 par value, 5.5% cumulative and nonparticipating preferred stock and 12,000 shares of $10 par value common stock outstanding. The company paid total cash dividends of $500 in its first year of operation. The cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is:
Answer:
$820
Explanation:
Dividend on Preferred Shares = 1,200 * 10 *5.5% = 660
Dividend in arrears for first year ($660 - $500) = $160
Dividend for second year = $660
Dividend to be paid to preferred shareholder = $820
before common shareholders
The Cash account in the ledger of Clear Windows shows a balance of $12,596 at September 30. The bank statement, however, shows a balance of $16,253 at the same date. The only reconciling items consist of a bank service charge of $16, a large number of outstanding checks totaling $6,740, and a deposit in transit. Refer to the information above. What is the adjusted cash balance in the September 30 bank reconciliation
Answer:
Adjusted Cash Balance $ 12,596
Explanation:
September 30 Cash account balance$12,596
September 30 Bank statement, balance $16,253
September 30 Difference in balances $3657
Clear Windows
Bank Reconciliation Statement
September 30 Bank statement, balance $16,253
less Outstanding checks $6,740,
Less Bank service charge $16,
Add Deposit in Transit $ 3099
September 30 Cash account balance $ 12,596
Adjusted Cash Balance is the same as the cash book balance.
We start from the bank balance , dot the necessary adjustments and get the same cash book balance.
Shenshen Zhongxing Telecom (ZTE) is a Chinese company that is the only telecommunications company in China that produces and markets an inexpensive camera phone to sell to middle-class Chinese living in urban areas. Because ZTE targets a single segment within a limited geographical area, it can be said to have a(n):
Answer:
Niche competitive advantage
Explanation:
In this scenario, Shenshen Zhongxing Telecom (ZTE) is a Chinese company which is the only telecommunications company in China that produces and markets an inexpensive camera phone to sell to middle-class Chinese living in urban areas. Because ZTE targets a single segment within a limited geographical area, it can be said to have a niche competitive advantage.
Generally, companies using a niche competitive advantage are only seeking or interested in targeting and reaching a single but unique segment within a limited geographical area or market. ZTE specialize in producing a unique inexpensive camera phone which would avail them a competitive advantage over other companies in the industry.
Hence, the niche competitive advantage allow companies to specialize in a unique product, innovations, narrow competition from rival businesses, reaching target audience effectively and ability to take price decisions.
Sally goes to Honest Harry's used car lot to purchase a car. After test driving the car, she sits down to negotiate the contract. She asks about a warranty and Harry says that all cars that he sells come with a 30 day unconditional warranty on all parts and labor. She signs the contract and the next day the engine blows a rod. When she calls Harry she's told that there is no warranty according to the contract. She reads her contract and it says "as is"
Answer:
Sally can do very little in this case due to the parol evidence rule. In common law, the parol evidence rule limits what type of evidence one party can use in a court in order to support their arguments. In this case, Sally cannot present the evidence of an oral contract because it was previous to the signing of the written contract. This rule doesn't allow certain older evidence to be presented in order to support a change of an existing contract.
I.e. an individual cannot try to change the terms of a contact once they have been signed just because in older contracts certain parts were different.
Assume your required internal rate of return on similar investments is 11 percent. What is the net present value of this investment opportunity? What is the going-in internal rate of return on this investment? Should you make the investment?
Answer:
Hello some parts of your question is missing attached below are the missing parts
You are considering the purchase of a small income-producing property for $150000 that is expected to produce the following net cash flows
End of year cash flow
1 $50000
2 $50000
3 $50000
4 $50000
Answer : a) $5122.28 (b) 12.59% (c) You should make the investment
Explanation:
Internal rate of return = 11 %
initial cash flows = $150000
period = 4 years
Find the NPV (net present value )( using present value tables)
= preset value of cash flows - initial cash flows
= ∑ present cash flows for 4 years - $150000
= $155122.28 - $150000 = $5122.28
The going-in internal rate of return on investment
N (number of years ) = 4
pv ( present value ) = $150000
PMT = -$50000
Fv ( future value ) = 0
IRR = 12.59% ( making use of the cash flow list in our financial calculator )
A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.10 per stone for quantities of 600 stones or more, $8.50 per stone for orders of 400 to 599 stones, and $9.00 per stone for lesser quantities. The jewelry firm operates 110 days per year. Usage rate is 28 stones per day, and ordering costs are $48.
a. If carrying costs are $2 per year for each stone, find the order quantity that will minimize total
annual cost.
b. If annual carrying costs are 30 percent of unit cost, what is the optimal order size?
c. If lead time is six working days, at what point should the company reorder?
Answer:
a.385 stones
b.349 stones
c.168 stones
Explanation:
Order quantity that minimizes total annual cost is known as the Economic Order Quantity.
Economic Order Quantity = √(2 × Annual Demand × Ordering Cost per Order) / Holding Cost per unit
= √(2×28×110×$48) / $2
= 384.5 or 385 stones
Economic Order Quantity = √(2 × Annual Demand × Ordering Cost per Order) / Holding Cost per unit
= √(2×28×110×$48) / ($8.10 × 30%)
= 348.8 or 349 stones
Re-oder point is the point at which the order should be placed to obtain additional inventories
Reorder Point = Lead Time × Usage
= 6 days × 28 stones
= 168 stones
Marco was an economics major in college until he discovered he could major in strength and conditioning. Then he switched majors. Clearly, learning about this field is important to him. Mike and Bob are addressing
n the video, Marco says he was an economics major in college until he discovered he could major in strength and conditioning. Then he switched majors. Clearly, learning about this field is important to him. Mike and Bob are addressing ............... when they send Marco to seminars instead of, for example, increasing his salary in exchange for his continued high performance at MBSC. They could maintain Marco’s high level of motivation by:........................
A. Sending him on an all-expense-paid Caribbean cruise for two weeks
B. Reimbursing his tuition as he seeks a master’s degree in fitness management
C. Reassuring him that he has a job with MBSC as long as he performs well
D. Setting up an employee discount program at a nearby coffee shop, laundromat, and tasalon
Answer:
Valence
C. Reassuring him that he has a job with MBSC as long as he performs well
Explanation:
By sending Marco to seminars, Mike and Bob are addressing VALENCE; a psychological value an individual put on another person, in relation to the attractiveness of individual whose a psychological value has been placed. In this case, a psychological value placed on Macro by his managers is the valuable rewards they would get from his professional development, rather than increasing his salary in exchange for high performance.
Therefore, they could maintain Marco’s high level of motivation by reassuring him that he has a job with MBSC as long as he performs well.
Benjamin Graham, the father of value investing, once said, "In the short run, the market is a voting machine, but in the long run, the market is a weighing machine." In this quote, Benjamin Graham was referring to the key difference between the "price" and the "value" of a security. In November 2006, Citigroup's stock (NYSE: C) was trading at $49.59. Following the credit crisis of 2007-2008 and by the end of October 2009, Citigroup's stock price had plummeted to $4.27. Several banks went under, and others saw their stock prices lose more than 60% of their value. Based on your understanding of stock prices and intrinsic values, which of the following statements is true?
a. A stock's intrinsic value is based only on the perceived risk of a stock.
b. A stock's intrinsic value is based on true investor returns.
Which of the following describe the reason(s) why maximization of intrinsic stock value benefits society.
a. Most investors prefer companies that can rise prices beyond reasonable levels.
b. Successful companies can avoid raising external funds in the financial markets.
c. successful companies higher more employees.
d. stock price maximization requires efficient, low-cost businesses.
Answer:
1- a. A stock's intrinsic value is based on true investor return.
2- a. Most investors prefer companies that can rise prices beyond reasonable levels.
b. Successful companies can avoid raising external funds in the financial markets.
Explanation:
Intrinsic value of a company's stock is the real value of stock which is based on systematic factors affecting the company. The factors affecting the intrinsic value of company are usually internal factors. The performance of company management, employee satisfaction and its operational efficiencies are the factor which drive intrinsic value of a company.
se the following information for Jett Co. to answer the following question: 2015 2014 Sales 1,200 1,000 COGS 850 700 Operating Expenses 200 200 Income Taxes 30 35 Jett Co.'s gross profit, operating profit and net profit margins for 2015 are: A. 50.0%, 32.5%, 22.5% respectively. B. 29.2%, 12.5%, 10.0%, respectively. C. 27.0%, 11.0%, 10.5%, respectively. D. 21.5%, 17.5%, 12.0%, respectively.
Answer:
B. 29.2%, 12.5%, 10.0%
Explanation:
Gross Profit = Sales - Cost of goods sold / Sales
Gross Profit = $1,200 - $850 / $1,200
Gross Profit = $350 / $1,200
Gross Profit = 0.2917
Gross Profit = 29.17%
Operating profit = Sales - Cost of goods sold - Operating Expenses / Sales
Operating profit = $1,200 - $850 - $200 / $1,200
Operating profit = $150 / $1,200
Operating profit = 0.125
Operating profit = 12.5%
Net profit margin = Sales - Cost of goods sold - Income Taxes / Sales
Net profit margin= $1,200 - $850 - $200 - $30 / $1,200
Net profit margin $120 / $1,200
Net profit margin= 0.1
Net profit margin= 10%
The five major decisions addressed by logistics managers are A. transportation, warehousing, location, reverse logistics, and third-party logistics. B. location, transportation, warehousing, reverse logistics, and tactical. C. strategic, third-party logistics, warehousing, transportation, and location. D. None of the above answers is entirely correct.
Answer:
C. strategic, third-party logistics, warehousing, transportation, and location.
Explanation:
A logistics manager is an individual who is saddled with the responsibility of the entire or overall supply chain management of goods produced by an organization. They are usually responsible for the distribution and supply of goods through out the manufacturing and finished process of delivering to final consumers.
The five major decisions addressed by logistics managers are
1. Strategic.
2. Third-party logistics.
3. Warehousing.
4. Transportation.
5. Location.
Crocetti Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 121 Budgeted unit sales (all on credit): January 7,000 February 7,500 March 11,900 April 14,900 Credit sales are collected: 40% in the month of the sale 60% in the following month The budgeted accounts receivable balance at the end of February is closest to:
Answer:
The budgeted accounts receivable balance at the end of February is closest to: $4,500.
Explanation:
Prepare a Accounts Receivable Budget for January and February
January February
Balance b/d $0 $4,200
Credit Sales $7,000 $7,500
Cash Received (40%) ($2,800) ($3,000)
Cash Received (60%) $0 ($4,200)
Balance c/d $4,200 $4,500
Conclusion:
Therefore, the budgeted accounts receivable balance at the end of February is closest to: $4,500
Lola is responsible for redesigning work in her organization, and she frequently must persuade people to accept change, often not an easy task. She asks you for some tips. What advice do you give her
Explanation:
Organizational changes can occur for several reasons, it can be operational changes, inclusion of new technology, new procedures, new policies, etc.
So many employees may be resistant to change due to insecurities and lack of information.
Therefore, according to the scenario above, for Lola to convince people to accept changes in the work redesign, ideally, she should provide the necessary information so that employees are aware of the changes and feel included and necessary for it to happen. She can use various means of communicating the message, such as e-mail, panel, face-to-face meeting, etc., to be sure that she will create an environment of security and reliability of information, in addition to increasing persuasion by reinforcing an important message.
A product sells for $240 per unit, and its variable costs are 70% of sales. The fixed costs are $318,000. What is the break-even point in sales dollars?
Answer:
The Break-Even Point in Sales Dollars will be $1,060,000
Explanation:
Contribution Margin Ratio = 100% - Variable Cost Ratio
= 100% - 70%
= 30%
Therefore, the Break-Even Point in Sales Dollars = Total Fixed Costs / Contribution Margin Ratio
= $318,000 / 0.30
= $1,060,000
The Break-Even Point in Sales Dollars will be $1,060,000
Process A has fixed costs of $1000 and variable costs of $5 per unit. Process B has fixed costs of $500 and variable costs of $7.50 per unit. What is the crossover point between process A and process B? 50 units 250 units $9,500 $5,000 200 units
Answer:
200 units
Explanation:
The computation of the crossover point between process A and process B is shown below:
Let us assume the cross over point be x
We made a question i.e given below:
Total Cost of A = Total Cost of B
$1,000 + 5x = $500 +7.50x
$1,000 - $500 = 7.50x - 5x
$500 = 2.5x
So, the x is 200 units
Hence, the cross over point is 200 units by applying the above formula so that the correct units could arrive
200 units are the correct option
When we computation of the crossover point between process A and process B is shown below:
ComputationLet us assume the cross over point be x
Total Cost of A = Total Cost of B
Then $1,000 + 5x = $500 +7.50x
Then $1,000 - $500 = 7.50x - 5x
Now $500 = 2.5x
So, the x is 200 units
Hence, the cross over point is 200 units by applying the above formula so that the correct units could arrive.
Find out more information about computation here:
https://brainly.com/question/24643173
Marley Investments, Inc. purchased 45% of the common stock of Beige Corporation on January 1, 2019, Beige Corporation reports a net income of $700,000 for the 2019 year.
Which of the following is the correct journal entry?
A. Equity Investments-Beige Corporation 315,000
Revenue from Investments 315,000
B. Revenue from Investments 315,000
Cash 315,000
C. Revenue from Investments 315,000
Cash 315,000
D. Revenue from Investments 315,000
Equity Investments-Beige Corporation 315,000
Answer:
A.
Debit Equity Investments-Beige Corporation 315,000
Credit Revenue from Investments 315,000
Explanation:
In the given scenario Marley Investment is purchasing 45% of common stock of Beige Corporation
Revenue for the year is $700,000
So the cost of purchase will be 0.45 * 700,000 = $315,000
Since Marley Investment is making an investment in Beige shares, it will debit it's Equity Investment for this amount ($315,000)
Equity investment are costs incurred when a business purchases securities.
After purchase of the shares the revenue can now be recognised by crediting the Revenue from Investment account.
Marley Investment is now a stakeholder in Beige Corporation
Power and influence (Connect, Perform)
Complete the following sentences with the correct term.
1. When a manager uses relationships and formal authority to cause other people in the organization to change their behavior, the manager _______.
2. The homeroom teacher has ______ because she can choose to give the best-behaving students passes to the school library, which students find a more pleasant place to study than the classroom.
3. Management at Work As the training and development manager at the Anderson Windows and Doors Company, part of your job involves helping managers learn to become better leaders. You are thinking about starting a class titled "Power and Influence for Managers," and you’ve been gathering some examples to use during the training session. Select which type of power the manager is using in the following example.
Example--- Type of Power Used Jeffrey has 20 years of management experience, and he can answer any question. Because Jeffrey is one of the most knowledgeable managers in the company, people naturally follow his advice when making complicated decisions. In reviewing research on power, you discover that there are three other common sources of power in organizations.
Which of the following are included in that list? Check all that apply.
A. Network of relationships
B. Personal effort
C. Locus of control
D. Information
4. Select the type of influence principle that best describes each of the following examples.
Example- Type of Influence Principle. A real estate agent gets new clients by being known as a "good guy" whose clients trust and respect him. A parent smiles at a child whenever the child is being quiet. In turn, the child is quiet more often. When discussing influence tactics with your managers, you should tell them that:
A. The best managers use a variety of influence tactics
B. The best managers avoid the use of influence tactics
C. The best managers use hard tactics, such as asking for what they want and using rational persuasion
D. The best managers use soft tactics, such as making people like them and developing allies
Answer:
1. Is exercising influence.
2. Reward power.
3a. Referent power.
3b. A, B and D.
4a. Make people like you.
4b. Reward the behaviors you want.
5. A. The best managers use a variety of influence tactics.
Explanation:
1. When a manager uses relationships and formal authority to cause other people in the organization to change their behavior, the manager is exercising influence.
2. The homeroom teacher has reward power because she can choose to give the best-behaving students passes to the school library, which students find a more pleasant place to study than the classroom.
3a. Jeffrey has 20 years of management experience, and he can answer any question. Because Jeffrey is one of the most knowledgeable managers in the company, people naturally follow his advice when making complicated decisions. The type of power used by Jeffrey is referent power.
3b. The three (3) common sources of power are;
I. Network of relationships.
II. Personal effort.
III. Information.
4a. A real estate agent gets new clients by being known as a "good guy" whose clients trust and respect him. The type of influence principle here is, make people like you because he is termed a "good guy" meaning he his trustworthy, respectful and nice. Hence, people would like his personality and by extension be his clients.
4b. A parent smiles at a child whenever the child is being quiet. In turn, the child is quiet more often. The type of influence principle used here is, reward the behaviors you want because the parent is happy that the child isn't crying or disturbing. Therefore, to reinforce the child's quietness; the parent smiles at the child.
5. When discussing influence tactics with your managers, you should tell them that: the best managers use a variety of influence tactics. In order to be able to lead your subordinates effectively, efficiently and successfully as a manager, you will have to know how and when to use a variety of influence tactics such as rational persuasion, consultation, ingratiation, legitimating, pressure, personal appeals, coalitions, exchange and inspirational appeals depending on the context or situation.
Hence, the more tactics you have as a manager, the higher your chances of achieving your influence goals.
Greenbrier Industrial Products' bonds have a 7.60 percent coupon and pay interest annually. The face value is $1,000 and the current market price is $1,062.50 per bond. The bonds mature in 16 years. What is the yield to maturity
Answer:
6.9%
Explanation:
To find the answer, you have to use the formula to calculate the yield to maturity:
Yield to maturity= (C+(F-P/n))/(F+P/2), where:
C= Coupon payment= $1,000*7.60%= $76
F= Face value= $1,000
P= Price= $1,062.50
n= Years to maturity= 16
Yield to maturity=(76+(1,000-1,062.50/16))/(1,000+1,062.50/2)
Yield to maturity=72,09/1,031.25
Yield to maturity=0.069 → 6.9%
Accoriding to this, the yield to maturity is 6.9%.
The exercise price on one of Chrisardan Companies call options is $20, its exercise value is $27, and its time value is $8. What are the options market value and the price of the stock
im gunna say say invest 15 dollars. i am not sure if thats what it wanted?
The rate of return on the common stock of Lancaster Woolens is expected to be 18 percent in a boom economy, 8 percent in a normal economy, and only 2 percent in a recessionary economy. The probabilities of these economic states are 12 percent for a boom and 10 percent for a recession. What is the variance of the returns on this common stock
Answer:
Variance of the return on this common stock is 0.15%
Explanation:
Note: See the attached excel file for the calculation of the variance of the returns on this common stock.
Note that the probability of a normal economy can be obtained as follows:
Probability of normal economy = 100% - Probability of a boom - Probability of a recession = 100% - 12% - 10% = 78%
These probabilities are used in the attached excel file.
ightweight personal locator beacons are now available to hikers, making it easier for the Forest Service's rescue teams to locate those lost or in trouble in the wilderness. True or False: Forest Service costs will likely rise due to moral hazard.
Answer: True
Explanation:
Moral Hazard refers to the tendency of entities to take on more risk than they usually would have if they have a way to mitigate that risk. As a result of hikers now having trackers, they will be found easily in cases of distress. This will encourage hikers to go deeper into the forest or engage in activity they would not have before because they know that the Forest Service will be able to help them. The new trackers will also encourage more people to start forest hiking as they will view it as safer.
When all these happen, the Forest service will have to increase it's size as well as conduct more operations which will cost money thereby increasing their cost.
how much would you have to earn each month to cover your living expense
Answer:
about $4,100 a month
Explanation:
The risk-free rate of return is 3.2 percent and the market risk premium is 6.1 percent. What is the expected rate of return on a stock with a beta of 1.19? (round answer to whole number with two decimal points: i.e., use 1.23 percent instead of 0.0123)
Answer:
10.46%
Explanation:
The risk-free rate of return is 3.2%
The market risk premium is 6.1%
The stock beta is 1.19
Therefore, the expected rate of return on the stock can be calculated as follows
Rate of return= Risk-free rate+beta(market Risk premium)
= 3.2% + 1.19×6.1%
= 3.2% + 7.259
= 10.46%
Hence the expected rate of return on the stock is 10.46%
Andy views beer and pizza as complements to one another. If the price of pizza decreases, economists would expect Andy's demand for ____________.
Answer:
Andy's demand for beer will increase.
Explanation:
Andy’s demand for beer will increase because it is given that pizza and beer are complements. Therefore, there is an inverse relationship between the price of one complement goods and the number of other complement goods. Here, we can see that price of one good ( say pizza) decreases so the demand for other goods (say beer) will increase because there is an inverse relationship between these commodities.