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

Answers

Answer 1

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.


Related Questions

dentify what concept each of the following circumstances is an example of: a. Students end up doing "all-nighters" just to finish a term paper. (Click to select) b. The so-called "Lake Wobegon effect" where everyone in a group claims to be above average. (Click to select) c. People who are usually very neat tend to litter in areas that are covered with graffiti. (Click to select) d. Behavioral economists suggest that brand loyalty can be a source of monopoly power for producers. (Click to select)

Answers

Answer:

a. Students end up doing "all-nighters" just to finish a term paper.- Planning Fallacy

The Planning fallacy is a tendency by humans to overestimate how much time they have to complete a project due to them having an optimism bias when projecting how much time will be needed. The students thought they had time to study up until they didn't.

b. The so-called "Lake Wobegon effect" where everyone in a group claims to be above average. - The Overconfidence Effect

The overconfidence effect leads people to believe that their abilities exceed what they actually are and can be called the  Lake Wobegon effect which was derived from the name of a fictional town where every child was supposedly above average.

c. People who are usually very neat tend to litter in areas that are covered with graffiti.- Framing effect

The Framing effect refers to a cognitive tendency by people to make decisions based on the how it is presented to them. The places covered with graffiti appeared dirty to them so them chose to litter there.

d. Behavioral economists suggest that brand loyalty can be a source of monopoly power for producers. - Status quo bias

This supports the old saying, "if it isn't broke, don't fix it". This bias is an emotional one that leads people to stay in a condition that they are used to because it is what they know and anything else might be considered a loss to them. Therefore companies can use these to always sell to a group of people if those people have brand loyalty.

Relevant financial information for Gordon, Inc. andJordan, Inc. for the current year is provided below. ($ in millions) Net sales Net income Total assets, beginning Total assets, ending Gordon, Inc. $3,280 118 1,420 Jordan, Inc. $6,540 132 1,600 2,230 2,020 Based on these data, which of the following is a correct conclusion?
A) Return on Assets is 7.4% for Gordon and 6.5% for Jordan. Thus, Gordon is more profitable than Jordan
B) Return on Assets is 7.4% for Gordon and 6.5% for Jordan. Thus, Gordon is less profitable than Jordan
C) Return on Assets is 7.8% for Gordon and 6.2% for Jordan. Thus, Gordon is more profitable than Jordan
D) Return on Assets is 7.8% for Gordon and 6.2% for Jordan. Thus, Gordon is less profitable than Jordan

Answers

Answer:

C) Return on Assets is 7.8% for Gordon and 6.2% for Jordan. Thus, Gordon is more profitable than Jordan

Explanation:

please find attached a clear image of the table used in answering this question

Return on assets = net income / average total assets

average total assets = (beginning assets  + ending asset) / 2

for gordon

average total assets = (1420 + 1600) / 2 = 1510

ROA = 118 / 1510 = 0.078146 = 7.8%

For Jordan,

average total assets = (2,230 + 2,020) / 2 = 2125

ROA = 132 /  2125 = 0.062118 = 6.2118%

The ROA figure shows how well a company converts assets into net income. The higher the ROA number, the better as it means the firm earns  more money on less investment

The petty cash fund has a current balance of $ 350​, which is the established fund balance. Based on activity in the​ fund, it is determined that the balance needs to be changed to $ 550. Which journal entry is needed to make this​ change?
A. No journal entry is needed because this change only involves cash.
B. Debit the Petty Cash account and credit the Cash account for $200.
C. Debit the Cash account and credit the Petty Cash account for $200.
D. Debit the Petty Cash account and credit the Cash account for $550.

Answers

Answer:

i think the answer is B. Debit the Petty Cash account and credit the Cash account for $200.

Explanation:

Use the information in the chart to calculate the real exchange rate between the U.S. dollar and the Indian rupee. Round to the nearest whole number. 2014 2015 2016 rupees/dollar 57 62 72 U.S. price index 99.5 100.1 101.1 Indian price index 108 117 128 What was the real exchange rate in 2014

Answers

Answer: 52.51 rupees/dollar

Explanation:

The real exchange rate attempts to account inflation in the countries being compared by using prices in the exchange rate.

The formula for calculating it is;

Real exchange rate = Nominal exchange rate *(Price index of domestic country/Price index of foreign country)

Real exchange rate in 2014 = 57*(99.5/108)

= 52.51 rupees/dollar

If the rate of inflation is 4.8 %4.8%​, what nominal interest rate is necessary for you to earn a 2.2 %2.2% real interest rate on your​ investment? ​(Note: Be careful not to round any intermediate steps less than six decimal​ places.

Answers

Answer:

Nominal rate of return= 7.11%

Explanation:

Inflation is the increase in the price level.It erodes the value of money.rise in the price of money  

Nominal interest is that quoted for investment or loan transactions. It has not been been adjusted for inflation.  

Real interest rate is the amount of interest in terms of the the quantity of good and services that can be purchased. It is the nominal interest rate adjusted for inflation.  

The relationship between inflation, real interest and nominal interest rate is given using the Fishers Effect;  

N = ( (1+R) × (1+F)) - 1  

N- nominal rate, R-real rate, F- inflation  

real rate - 2.2%, inflation - 4.8%

Nominal rate of return =(1.022)× (1.048) - 1 = 0.071056

Nominal rate of return = 0.071056 × 100 = 7.1056 %

Nominal rate of return= 7.11%

Between 2015 and 2016 the country of experienced a growth rate of 0.3 If nominal GDP had increased by 2.0 and the population growth was recorded as 0.4 then calculate the annual inflation rate in West Fredonia Give your answer to one decimal

Answers

Answer: 1.3%

Explanation:

Inflation refers to general increase in prices in a given economy in a given period. Given the variables available, the best formula to use would be the Economic growth formula;

Economic Growth = %Δ Nominal GDP – %ΔPrices – %ΔPopulation

0.3 = 2.0 - %ΔPrices - 0.4

%ΔPrices = 2.0 - 0.4 - 0.3

%ΔPrices = 1.3

Inflation rose by 1.3%

Consider this case: Mildred’s Brewing Corp. needs to take out a one-year bank loan of $500,000 and has been offered loan terms by two different banks. One bank has offered a simple interest loan of 11% that requires monthly payments. The loan principal will be paid back at the end of the year. Another bank has offered 8% add-on interest to be repaid in 12 equal monthly installments. Based on a 360-day year, what will be the monthly payment for each loan for November? (Hint: Remember that November has 30 days.) Value Simple interest monthly payment Value Add-on interest monthly payment

Answers

Answer:

Mildred's Brewing Corp.

Monthly Payment for each loan for November:

a) Simple Interest = $55,000/12

= $4,583

b) Value Add-on interest  monthly payment

= $43,494.31 ($521,931.68/12)

Explanation:

a) Data:

Bank loan = $500,000

Terms by bank one:

Simple interest of 11% paid monthly

Loan principal to be repaid at the end of the year.

Terms by bank two:

Add-on (Compound) interest = 8%

Repayment of interest and loan principal in 12 equal monthly installments.

b) Total Simple Interest Calculation:

Monthly Simple interest = ($500,000 x 11% )

= $55,000

c) Add-on Interest Calculation:

Using an online calculator, the total add-on interest will be $21,932.68 at an effective interest rate of 0.667% compounded monthly or 8%/12.

Principal =                $500,000.00

Total interest               $21,931.68

Principal + Interest  $521,931.68

Monthly Repayment = $43,494.31 ($521,931.68/12)

d) The simple interest option will cost $55,000 in simple interest and the loan repayment at year-end of $500,000.  The Add-on interest with equal monthly repayment of interest and principal will be $43,494.31, which costs $21,931.68 in total compound interest.

. Identify each of the following as (i) part of an expansionary fiscal policy, (ii) part of a contractionary fiscal policy, or (iii) not part of fiscal policy. a. The personal income tax rate is lowered. b. Congress cuts spending on defense. c. College students are allowed to deduct tuition costs from their federal income taxes. d. The corporate income tax rate is lowered. e. The state of Nevada builds a new tollway in an attempt to expand employment and ease traffic in Las Vegas.

Answers

Answer:

Option, A , D, E = expansionary fiscal policy.

Option B = Contractionary fiscal policy

Option C = not a part of fiscal policy

Explanation:

The expansionary fiscal policy occurred when there is a decrease in taxes and an increase in government expenditure (spendings). While contractionary fiscal policy occurs when taxes are increased by the government and there is a fall or decrease in government spendings. Therefore, Option A, Option D, and Option E are part of the expansionary fiscal policy.

Option B is a contractionary fiscal policy. While option C is not a part of fiscal policy

The Federal Reserve and the money supply
Suppose the money supply (as measured by checkable deposits) is currently $400 billion. The required reserve ratio is 20%. Banks hold $80 billion in reserves, so there are no excess reserves. The Federal Reserve ("the Fed") wants to decrease the money supply by $35 billion, to $365 billion. It could do this through open-market operations or by changing the required reserve ratio. Assume for this question that you can use the oversimplified money multiplier formula. If the Fed wants to decrease the money supply using open-market operations, it shouldsell $7 billion worth of U.S. government bonds. If the Fed wants to decrease the money supply by adjusting the required reserve ratio, it shouldincrease the required reserve ratio.

Answers

Answer:

1. Sell $7 billion worth of U.S. government bonds

2. Increase the required reserve ratio.

Explanation:

1. If the Fed wants to change the money supply in the economy, it can use the Money Multiplier to determine how much is it has to put in or take out of the economy to increase/decrease the Money supply to a certain level. The Money Multiplier is a figure that shows how much the money supply will increase/ decrease by as a result of an additional dollar put into or removed from the economy.

Formula is;

= 1/ Reserve Ratio

= 1 / 20%

= 5

Federal Reserve wants to decrease supply by $35 billion.

$35 billion = Amount of Bonds to sell * Multiplier

$35 billion = Amount of Bonds to sell * 5

Amount of Bonds to sell = 35/5

Amount of Bonds to sell = $7 billion worth of bonds

2. If the Fed wants instead to use the required reserve ratio to reduce money supply then it should increase the ratio. This way banks will have to keep more money in reserve instead of giving it out as loans. This reduced lending in the economy will lead to less money being created and hence a reduced money supply.

Granfield Company has a piece of manufacturing equipment with a book value of $40,000 and a remaining useful life of four years. At the end of the four years the equipment will have a zero salvage value. The market value of the equipment is currently $22,000. Granfield can purchase a new machine for $120,000 and receive $22,000 in return for trading in its old machine. The new machine will reduce variable manufacturing costs by $19,000 per year over the four-year life of the new machine. The total increase or decrease in net income by replacing the current machine with the new machine (ignoring the time value of money) is:

Answers

Answer:

The total decrease in net income by replacing the current machine with the new machine (ignoring the time value of money) is $22,000

Explanation:

Taking note of "Ignoring the time value of money "

The total decrease in net income by replacing the current machine with the new machine = (-Initial cash outlay + Saving in annual variable) + manufacturing costs * Number of year

The total decrease in net income by replacing the current machine with the new machine = -$120000 + $22000 + $19,000 *4

=  (-$120000 +  $22000)+ $19,000 *4

= -$98,000 + $76,000

= -$22,000

Conclusion: The total decrease in net income by replacing the current machine with the new machine = $22,000

The new machine will increase cash flow by $326,000 per year. You believe the technology used in the machine has a 10-year life; in other words, no matter when you purchase the machine, it will be obsolete 10 years from today. The machine is currently priced at $1,760,000. The cost of the machine will decline by $111,000 per year until it reaches $1,205,000, where it will remain.
1. If your required return is 13 percent, calculate the NPV today.
2. If your required return is 13 percent, calculate the NPV for the following years.
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
3. Should you purchase the machine?
4. If so, when should you purchase it?
A. Today
B. One year from now
C. Two years from now

Answers

Answer:

1. If your required return is 13 percent, calculate the NPV today.

initial outlay -$1,760,000

10 annual cash flows $326,000

NPV = $8,955.37

2. If your required return is 13 percent, calculate the NPV for the following years.

Year 1

initial outlay -$1,649,000

9 annual cash flows $326,000

NPV = $23,919.57

Year 2

initial outlay -$1,538,000

8 annual cash flows $326,000

NPV = $26,399.12

Year 3

initial outlay -$1,427,000

7 annual cash flows $326,000

NPV = $14,771

Year 4

initial outlay -$1,316,000

6 annual cash flows $326,000

NPV = -$12,798.77

Year 5

initial outlay -$1,205,000

5 annual cash flows $326,000

NPV = -$169,382.61

Year 6

initial outlay -$1,205,000

4 annual cash flows $326,000

NPV = -$346,322.35

3. Should you purchase the machine?

You can purchase the machine this year, but it would be more profitable if you purchase it later.

4. If so, when should you purchase it?

C. Two years from now

If the U.S. dollar appreciates in the foreign exchange market, U.S. exports will be __________ and U.S. imports will be __________.

Answers

decrease and increases

A product line should NOT be discontinued if the contribution margin lost is A. less than the variable costs saved. B. less than the fixed costs saved. C. more than the fixed costs saved. D. more than the variable costs saved.

Answers

Answer:

B. less than the fixed costs saved.

Explanation:

A product line should NOT be discontinued if the contribution margin lost is "more than the fixed costs saved."

According to the economic rule, the product line should only be discontinued when the contribution margin lost is less than the fixed cost saved.

Also, this implies that the cost of production should be reduced or the production line discontinued.

However, when the contribution lost is more than the fixed cost saved, that shows profits.

Hence, in this case, it is concluded that the correct answer is option C. "more than the fixed costs saved."

Learn more here: https://brainly.com/question/17848137

When working on a reconciliation, the Reconciliation screen has all the transaction data you need.


On the Reconciliation screen, by default, the list of transactions hides transactions that occur after the statement end date. To show all transactions _______________________________ or select the Clear filter/View all link in this same area to remove all filters.

Answers

Answer:

On the Reconciliation screen, by default, the list of transactions hides transactions that occur after the statement end date. To show all transactions _________Click to Reset______________________ or select the Clear filter/View all link in this same area to remove all filters.

Explanation:

By clicking the Clear filter/View all link, you are able to Reset the filter and remove all filters which hide transactions that occur after the statement end date.  Then all the transactions will be showed on the Reconciliation screen for your viewing and review.  The Reset function enables you to carry out your desired filter, just with a click of your mouse.

Customer Z is a single 26-year-old man who earns $125,000 annually. He informs you that he is getting married and that his new wife's income of $75,000 per year will put them into the highest federal tax bracket. The couple will have investable income of $25,000 per year. The couple wishes to buy a house in 5 years that will be substantially more expensive than the condominium in which they currently reside. To meet the customer's needs for the large cash down payment in 5 years and to reduce taxable income, the BEST recommendation is to:_____________.
A. open a margin account and invest in income bonds
B. open an Individual Retirement Account and invest in tax-deferred variable annuities
C. open a cash account and invest in mutual funds holding high yielding common and preferred stocks
D. open a trust account and invest in Treasury STRIPs

Answers

Answer: C. open a cash account and invest in mutual funds holding high yielding common and preferred stocks

Explanation:

Investing in Mutual funds which hold high yielding common and preferred shares is the best option here. The dividends received will be high enough but will not be taxed too much as dividend tax is limited to 15% thereby saving the investment on taxes.

Also seeing as they will require the investment in other to buy a house in 5 years, they will need something that can be easily liquidated. Mutual funds are easy to liquidate from and so their investment here can be easily withdrawn when the time comes to allow them meet the house down payment.

Real GDP means GDP:________.
a. corrected for changes in quality.
b. valued at prices in a base year.
c.that does not change from year to year.
d. valued at prices at which goods are actually sold.

Answers

Answer:

b. valued at prices in a base year.

Explanation:

Real gross domestic product (GDP) is basically nominal GDP adjusted to inflation. This means that the in order for the real GDP to increase or decrease, the actual output of goods and services must change, not only their price.

E.g. a small economy that produces 10 hats at $5 and 5 bikes at $10 in 2019, the 2019 (base year) GDP = $100.

In 2020, the economy produced 12 hats at $50 and 5 bikes at $10, the nominal GDP = $650, but the real GDP = (12 x $5) + (5 x $10) = $110.

Suppose Acap Corporation will pay a dividend of $2.88 per share at the end of this year and $3.01 per share next year. You expect​ Acap's stock price to be $53.87 in two years. Assume that​ Acap's equity cost of capital is 10.3%. a. What price would you be willing to pay for a share of Acap stock​ today, if you planned to hold the stock for two​ years? b. Suppose instead you plan to hold the stock for one year. For what price would you expect to be able to sell a share of Acap stock in one​ year? c. Given your answer in ​(b​), what price would you be willing to pay for a share of Acap stock today if you planned to hold the stock for one​ year? How does this compare to your answer in ​(a​)?

Answers

Answer:

A.P(0)=$48.89

B.P(1)=$51.56

C.P(0)=$49.35

Explanation:

A. Calculation for what price would you be willing to pay for a share of Acap stock​ today if you planned to hold the stock for two year

Using this formula

P(0)=Dividend per share/Percentage of Equity cost of capital +(Dividend next year+Stock price)/Percentage of Equity cost of capital

Let plug in the formula

P(0) = 2.88/ 1.103 + (3.01+ 53.87) / 1.103^2=

P(0)=2.611+56.88/1.216609

P(0)=59.491/1.216609

P(0)=$48.89

b. Calculation for what price would you expect to be able to sell a share of Acap stock in one​ year

Using this formula

P(1)=(Dividend next year + Stock price)/Percentage of Equity cost of capital

Let plug in the formula

P(1) = (3.01 + 53.87) / 1.103 = $50.00

P(1)=56.88/1.103

P(1)=$51.56

c.Calculation for what price would you be willing to pay for a share of Acap stock today if you planned to hold the stock for one​ year

Using this formula

P(0)=(Dividend per share + P(1)/Percentage of Equity cost of capital

Let plug in the formula

P(0) = (2.88 + 51.56) / 1.103

P(0)=54.44/1.103

P(0)=$49.35

Therefore compare to the answer in ​(a​)

if you planned to hold the stock for two year you will have $48.89 and if you planned to hold the stock for one​ year you will have $49.35.

You paid cash for $1,400 worth of stock a year ago. Today the portfolio is worth $2,134. a. What rate of return did you earn on the investment?

Answers

Answer:

rate of return on investment = 52.4%

Explanation:

The rate of return earned on the investment can be worked out using the Future value of a lump sum formula. The future value of a lump sum is the amount lump would amount to if interest is earned and compounded at a certain interest rate.

The formula is  FV = PV × (1+r)^(n)

PV = Present Value- 1,400

FV - Future Value, - 2,134

n- number of years- 1

r- interest rate - ?

2,134  = 1,400× (1+r)^(1)

(1+r)^(1) = 2,134/1,400

r= 1.5242  - 1

r = 0.524   × 100 = 52.4%

r= 52.4%

rate of return on investment = 52.4%

CHEGG If you invest $200 in a stock, borrowing 90 percent of the $200 at 10 percent interest, and the stock price rises by 20 percent, what is the return on your investment

Answers

Answer:

Return on your investment (ROI) = 20%

Explanation:

Return on investment would be the proportion of the amount invested that is earned as profit. Note the following :

The amount earned as cash return would be determined as the capital gains less the interest on the loan.

Also, the amount invested would refer to the personal capital contribution made by the investor. This implies the total cost of the stock less the interest earned on the amount borrowed.

The principles above are illustrated as follows:  

Capital gain on stock  = stock price at the end - stock price at the beginning

Stock price at the end= 120% × 200 = 240

Capital gain = 240  - 200 = 40

Cost of fund = interest rate × amount borrowed

Amount borrowed = 90% × 200 = 180

Cost of fund = 20% ×   (90% × 200) = 36

Return on investment = Capital gains - cost of funds /(Total cost - amount borrowed)

ROI = (40 - 36)/(200 - 180)× 100 = 20%

Return on your investment (ROI) = 20%

The tri-star company currently use an old lathe that was purchase 2 years ago at $6000. This machine is being depreciatin on a MACRS five year (20%, 32%, 19%, 12%, 11%, 6%). The current market value for this machine is $3,000. The proposed new improved lathe cost $10,000 and additional installation fee of $1,000. The new lathe would require that inventories be increased by $800 and account receivable increase $600, but accounts payable would simultaneously increase by $700. Tri-Star's marginal federal-plus-state tax rate is 30%. What is the initial investment of company when evaluating the replacement of old lathe by the new one?

Answers

Answer:

$8,736

Explanation:

initial investment = capital expenditures (machine's purchase cost + installation costs) + any increase in working capital - disposal of old machine

capital expenditures  = $10,000 + $1,000 = $11,000

after tax salvage value = market value + taxes on disposal

the current book value of the old machine = $6,000 - $1,200 - $1,920 = $2,880

taxes on salvage value = (book value - market value) x tax rate = ($2,880 - $3,000) x 30% = -$36

after tax salvage value = $3,000 - $36 = $2,964

net working capital = current liabilities - current assets

change in working capital = $800 + $600 - $700 = $700

initial investment = $11,000 + $700 - $2,964 = $8,736

Fortune Enterprises is an all-equity firm that is considering issuing $13.5 million of perpetual debt. The interest rate is 10%. The firm will use the proceeds of the bond sale to repurchase equity. Fortune distributes all earnings available to stockholders immediately as dividends. The firm will generate $3 million of earnings before interest and taxes (EBIT) every year into perpetuity. Fortune is subject to a corporate tax rate of 40%. Suppose the personal tax rate on interest income is 55%, and the personal tax rate on equity income is 20%.

What is the annual after-tax cash flow to debt holders under each plan?

a. Debt holders get $0 mil. under the unlevered plan vs. 1.2 mil. under the levered plan
b. Debt holders get $1.2 mil. under the unlevered plan vs. 0.66 mil. under the levered plan
c. Debt holders get $0 mil. under the unlevered plan vs. 0.66 mil. under the levered plan
d. Debt holders get $0 mil. under the unlevered plan vs. 0.6075 mil. under the levered plan

Answers

Answer:

d. Debt holders get $0 mil. under the unlevered plan vs. 0.6075 mil. under the levered plan

Explanation:

interests paid to debt holders = $13,500,000 x 10% = $1,350,000

generally, interest revenue is taxed as ordinary revenue = corporate income tax rate (if debt holder is a business) or personal income tax (if debt holder is an individual).

under the first plan, debt holders get nothing because there is no outstanding debt since the company is an all equity firm.

under the second plan, if the personal tax rate on interest income is 55%, which is really high, the debt holders will earn $1,350,000 x (1 - 55%) = $607,500

What 3 payroll options are available inside of QuickBooks Online?

Answers

The answer is core, premium, and elite
Core, Premium and Elite, all of which allow small business owners to run payroll and file taxes automatically.

When generating a globalized marketing plan, a Japanese company called Trusco decided to implement a localization strategy when introducing its work and tool products into the Swiss and Canadian markets. In order to reach the new markets, Trusco needed to translate its product packaging, consider the political and economic environments, identify its competitors, and consider other areas of the marketing mix that require additional localization efforts. Which of the following statements matches best with Trusco's experience in generating its marketing plan?
a. Generating worldwide marketing plans requires most companies to communicate one identical message to all global markets.
b. Creating a global marketing plan is a task that can be accomplished with very little effort.
c. Creating a global marketing plan is a complex task.

Answers

Answer:

c. Creating a global marketing plan is a complex task.

Explanation:

It is correct to say that creating a global marketing plan is a complex task.

There are several barriers that can spell failure if the international company's strategy is poorly planned.

Therefore, the ideal is to research in depth about the new market to which the organization intends to enter.

In addition to legally adapting to local legislation, the company must analyze and plan to generate local interest in its products and services.

This requires market research that seeks to identify your target audience, what are their particularities, preferences, characteristics and needs.

The set of variables in the marketing mix: price, product, place and promotion, should also be adapted to the location where the company is located, the key to success is adaptation and the strategy aligned with the location.

An investment adviser is opening that day's mail and receives a check from a customer made out to the "Jones Cleaning Service" - the check was mailed in error to the adviser. The same day, the investment adviser mails the check back to Jones Cleaning Service. Under NASAA rules, the investment adviser:

Answers

Complete Question:

An investment adviser is opening that day's mail and receives a check from a customer made out to the "Jones Cleaning Service" - the check was mailed in error to the adviser. The same day, the investment adviser mails the check back to Jones Cleaning Service. Under NASAA rules, the investment adviser:

I. is deemed to have taken custody of the customer's funds

II. has not taken custody of the customer's funds

III. must keep a record of the check received

IV. is not required to keep a record of the check received

A. I and III

B. I and IV

C. II and III

D. II and IV

Answer:

C. II and III

Explanation:

In this scenario, an investment adviser is opening that day's mail and receives a check from a customer made out to the "Jones Cleaning Service" - the check was mailed in error to the adviser. The same day, the investment adviser mails the check back to Jones Cleaning Service. Under North American Securities Administrators Association (NASAA) rules, the investment adviser has not taken custody of the customer's funds and must keep a record of the check received.

According to NASAA rules, if an investment adviser inadvertently receives a check made out to a third party like it was made out to the "Jones Cleaning Service" in error, provided that the investment adviser mails the check to the third party (customer) within 3 business-working days, then the adviser has not taken custody of the customer's funds. Also, it is required that the investment adviser must keep a record of the check received.

Ayayai Company issued $612,000 of 10%, 20-year bonds on January 1, 2017, at 102. Interest is payable semiannually on July 1 and January 1. Ayayai Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of 9.7705%. Prepare the journal entries to record the following. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a)The issuance of the bonds. (b)The payment of interest and related amortization on July 1, 2017. (c)The accrual of interest and the related amortization on December 31, 2017.

Answers

Answer:

(a)The issuance of the bonds.

January 1, 2017, bonds are issued

Dr Cash 624,260

    Cr Bonds payable 612,000

    Cr Premium on bonds payable 12,260

(b)The payment of interest and related amortization on July 1, 2017.

July 1, 2017, first coupon payment

Dr Interest expense 30,497

Dr Premium on bonds payable 103

    Cr cash 30,600

(c)The accrual of interest and the related amortization on December 31, 2017.

December 31, 2017, accrued interest

Dr Interest expense 30,492

Dr Premium on bonds payable 108

    Cr Interest payable 30,600

Explanation:

We must first determine the market price of the bonds:

PV of face value = $612,000 / (1 + 4.88525%)⁴⁰ = $90,818.5814

PV of coupons = $30,600 x 17.43274 (PV annuity factor, 4.88525%, 40 periods) = $533,441.844

market price = $90,818.5814 + $533,441.844 = $624,260

amortization for first coupon payment:

= ($624,260 x 4.88525%) - ($612,000 x 5%) = $30,496.68194 - $30,600 = $103.31806

amortization for second coupon payment:

= ($624,156.6819 x 4.88525%) - ($612,000 x 5%) = $30,491.6143 - $30,600 = $108.3856955

During which step in the STP marketing process is a value proposition defined and an action plan developed? Group of answer choices Profiling Planning Targeting Positioning Segmentation

Answers

The correct answer is Positioning

Explanation:

In marketing, the acronym STP means Segmentation, Target, and Positioning, which are essential steps to develop an effective marketing strategy. In the case of Positioning, this is the last stage of the process and implies creating a unique and clear perception of customers about the products. Due to this, in the positioning stage, it is necessary to propose the value of the product or the value the product has for the customer and therefore the reasons to buy it. Moreover, during this stage an action plan is developed, this means a set of strategies are defined to position the product.

The following data have been recorded for recently completed Job 450 on its job cost sheet. Direct materials cost was $2,108. A total of 36 direct labor-hours and 234 machine-hours were worked on the job. The direct labor wage rate is $18 per labor-hour. The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $25 per machine-hour. The total cost for the job on its job cost sheet would be:

Answers

Answer:

Total cost= $8,606

Explanation:

Giving the following information:

Job 450:

Direct materials= $2,108

A total of 36 direct labor-hours and 234 machine-hours were worked on the job.

The direct labor wage rate is $18 per labor-hour.

The predetermined overhead rate is $25 per machine-hour.

We need to calculate the total cost for Job 450:

Direct materials= 2,108

Direct labor= 36*18= 648

Overhead= 234*25= 5,850

Total cost= $8,606

The bank section of the bank reconciliation a.ends with the adjusted balance. b.begins with the cash balance according to the company's records. c.ends with the unadjusted bank balance. d.None of these choices are correct.

Answers

Answer:

a. ends with the adjusted balance.

Explanation:

In Financial accounting, bank reconciliation can be defined as an evaluation which give a complete details of the financial items responsible for any difference between the balance of the cash account in the balance sheet and the cash balance reported in an entity's bank statement. These reconciliations should be done at regular intervals so as to ensure a balanced record of the cash account are kept by an organization or firm.

The bank section of the bank reconciliation ends with the adjusted balance. Therefore, in the event of any fraudulent behavior by an employee, the bank reconciliation would detect any anomaly or financial fraud in the organization.

In a nutshell, after a reconciliation of the bank statement, the adjusted bank balance should be equal to the company's ending adjusted cash balance on the balance sheet.

A company purchased $270,000 in supplies during the year. The supplies account increased by $10,000 during the year to an ending balance of $66,000. For what amount was the adjusting entry to supplies expense?

Answers

Answer:

$260,000

Explanation:

Opening balance = Ending balance - Increase in ending balance

=$66,000 - $10,000

=$56,000

Supplies Expenses = Opening balance + Purchases - Closing balance

=$56,000 + $270,000 - $66,000

=$336,000 - $66,000

=$260,000

Therefore, the amount that will be the adjusting entry to supplies expenses is $260,000

To create a budget: Multiple Choice From the Banking Menu, select Planning & Budgets > Budgets From the Company Menu, select Planning & Budgeting > Set Up Budgets From the Company Center, select Company & Financials > Budgets From the Edit Menu, select Preferences > Set Up Budgets

Answers

Answer: From the Company Menu, select Planning & Budgeting > Set Up Budgets

Explanation:

Quickbooks is a very popular and effective accounting software that is mainly used by Small to Medium Scale Businesses to manage their Accounting affairs with its myriad of functions including on-premises and online cloud functions for ease of operations.

When setting up a new budget with Quickbooks, from the Company menu, click on Planning and Budgeting and then click on Set Up Budgets. After that you should click on Create New Budget and then continue from there.

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