The new breakeven point in units, based on the mentioned values and the provided informations is calucated to be 5,000 units.
To find the new breakeven point in units, we first need to calculate the current breakeven point using the given information:
Current breakeven point (units) = Fixed costs / Contribution margin per unit
= $26,000 / ($35 - $5)
= 800 units
This means that the company needs to sell 800 units to cover its fixed costs and break even.
Next, we need to calculate the new contribution margin per unit using the information given:
New contribution margin per unit = $5 per unit x 1.5
= $7.50 per unit
We also need to calculate the new fixed costs:
New fixed costs = $26,000 + $11,500
= $37,500
Finally, we can calculate the new breakeven point (units) using the formula:
New breakeven point (units) = New fixed costs / New contribution margin per unit
= $37,500 / $7.50
= 5,000 units
Therefore, the new breakeven point in units is 5,000 units.
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Suppose that the stock price follows a geometric Brownian motion: dSt = uStdt + σtdBt, where u = 10%, σ = 20%, Sa = 100, and r = 2%. Note that this means that under the risk-neutral measures, the stock follow the process:
dSi = rSidt + σSidBi
Consider a European put struck at K = 110 expiring at T = 1
For reference, the Black-Scholes formula for the price of call/put struck at K expiring in T years is:
BScell = S0N (d1) - Ke-rTN(d2)
BSput = Ke cT N(-d2)-S0N(-d1)
d1 = log(so/K) + (r+1/2σ2)T
d2 = d1 - σ squareroot T
What is the risk-neutral probability that the put option will be in the money at T = 1?
The answer is approximately 0.386.
To find the risk-neutral probability that the put option will be in the money at T=1, we need to calculate the value of d2 using the given parameters and then use a standard normal distribution table to find the corresponding probability. First, we calculate d2 as follows:
d2 = [log(S0/K) + (r - 1/2σ^2)T] / (σsqrt(T))
= [log(100/110) + (0.02 - 1/20.2^2)1] / (0.2sqrt(1))
= -0.24495
Using a standard normal distribution table, we can find that the probability of being in the money is approximately 0.386.
Therefore, the risk-neutral probability that the put option will be in the money at T = 1 is approximately 0.386.
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renfro rentals has issued bonds that have a 10% coupon rate, payable semiannually. the bonds mature in 8 years, have a face value of $1,000, and a yield to maturity of 8.5%. what is the price of the bonds?
Renfro Rentals has issued bonds that have a 10% coupon rate and it's bond price is $1,260.46
How to determine the bond's priceTo calculate the price of the bonds, we need to use the present value formula.
The formula is:
PV = (C / (1 + r/n)(ⁿˣt⁾+ (FV / (1 + r/n)⁽ⁿˣt) )
Where:
PV = present value
C = coupon payment
r = yield to maturity
n = number of coupon payments per year
t = number of years to maturity
FV = face value
Plugging in the given values, we get:
PV = (100 / (1 + 0.085/2)⁽²ˣ⁸⁾) + (1000 / (1 + 0.085/2)⁽²ˣ⁸⁾)
PV = (100 / 1.539)¹⁶ + (1000 / 1.539)¹⁶
PV = 65.03 + 806.86
PV = $871.89
The price of the bonds= $871.89.
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explain the importance of cities establishing a strong and unique basic industry
The establishment of a strong and unique basic industry is crucial for cities looking to establish a competitive advantage in the global economy, create jobs, and drive economic growth and development.
Cities that establish a strong and unique basic industry are able to create a competitive advantage for themselves in the global economy. A basic industry is one that provides goods or services that are essential to the economy, such as manufacturing, agriculture, or energy production. By establishing a strong and unique basic industry, a city can attract investment, create jobs, and boost economic growth.
The importance of this lies in the fact that a strong basic industry can help the city weather economic downturns and stay resilient in the face of changing market conditions. For example, if a city's basic industry is agriculture, it can continue to produce food even during a recession, providing a stable source of income for the local economy. Similarly, if a city's basic industry is energy production, it can help to reduce dependence on imported energy and create jobs in the energy sector.
Furthermore, a strong basic industry can attract other businesses and industries to the area, creating a multiplier effect that boosts economic growth and development. For example, a city with a strong manufacturing industry may also attract suppliers and logistics companies, creating a cluster of related businesses that can benefit from each other's presence.
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If a decision maker is risk averse, then the best strategy to select is the one that yields the
a. highest expected payoff.
b. lowest coefficient of variation.
c. highest expected utility.
d. lowest standard deviation.
The best strategy for a risk-averse decision maker is the one that yields the highest expected utility. Option c. is the answer.
This is because risk-averse individuals prefer a certain outcome with a lower expected payoff than a risky outcome with a higher expected payoff. Expected utility is a measure of the overall satisfaction or happiness that an individual expects to receive from the outcomes of different decisions.
In contrast, the expected payoff (option a) is the sum of the product of each possible outcome and its probability. The coefficient of variation (option b) and the standard deviation (option d) are measures of risk, but they do not take into account the preferences of a risk-averse decision maker.
Therefore, these options are not the best strategy for a risk-averse decision maker and the answer is c.
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Economics
Unit 5 - Economic Systems (Circular Flow Model)
Check for Understanding
Mastery Understanding
1. Fill in the missing information:
buy resources
• sell products
• Households sell
• Businesses buy
• Businesses sell
Households buy
• sell resources
• buy products
The model is important because it helps economists and policymakers understand how different sectors of the economy are connected and how changes in one sector can affect other sectors.
What is Circular Flow Model and its importance?The circular flow model is an economic model that illustrates the flow of goods and services, income, and resources in an economy. It shows how households, businesses, and government interact with one another in a circular flow of economic activity.
In the model, households provide labor and resources to businesses in exchange for income, which they use to purchase goods and services from businesses. Businesses use the income to pay for labor and resources, and also invest in capital goods and technology.
The government collects taxes from households and businesses, and uses the revenue to provide public goods and services. The circular flow model is useful in understanding how changes in government policies, such as changes in tax rates or government spending, can affect the economy as a whole.
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if a company uses process costing to account for the costs in its five production departments, how many work in process accounts will it use?a.2b.6c.14d.5
If a company uses process costing to account for the costs in its five production departments, it will use five work in process accounts, one for each department. (option.d)
Process costing is a method of cost accounting used to determine the cost of each unit of production by dividing the total cost of production by the number of units produced.
In process costing, the cost of raw materials, labor, and overheads are accumulated for each department, and then allocated to the units produced in that department.
Each department has its own work in process account, which reflects the costs incurred for the units being produced in that department. Therefore, the answer to the question is option D, five.
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which is a true statement social media return is calculated as financial roi group of answer choices social media return is calculated as financial roi young adults are the fastest growing social
The true statement among the options provided is: Young adults are the fastest growing social media user group. The correct option is B.
This statement is accurate because young adults, typically aged 18 to 24, have embraced social media at a rapid pace. They are more likely to adopt new platforms and trends, making them a significant driving force behind the growth of social media usage.
a. Social media return is not calculated as financial ROI (return on investment) alone. It also includes various non-financial metrics such as brand awareness, customer engagement, and customer satisfaction.
c. Thought leadership is not a lesser benefit of SMM (social media marketing). In fact, it's an important aspect that can help businesses build credibility and establish themselves as industry experts.
d. Monitoring social media engagement is not inefficient for B2B firms. On the contrary, it can provide valuable insights into customer behavior, preferences, and feedback, enabling better decision-making and strategy development.
e. Marketers should not focus on just one social media platform for network communications. A successful social media strategy involves using multiple platforms to reach diverse audiences, create brand awareness, and engage with customers.
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Complete question:
which is a true statement:
a. social media return is calculated as financial ROI
b. Young adults are the fastest growing social media user group.
c. Thought leadership ranks as a lesser benefit of SMM.
d. Monitoring social media engagement is inefficient for B2B firms.
e. Marketers should focus on one social media platform for network communications.
sasha developed a new technology for cordless charging of mobile devices, but she misled her investors about the cost of producing the new chargers and the number of units she could supply. what type of failure is sasha exhibiting?
Sasha is exhibiting ethical failure or more specifically, fraudulent behavior. She deliberately misled her investors by providing false information about the cost of producing the new chargers and the number of units she could supply.
This behavior is unethical and dishonest as it misrepresents the true situation of her business and misleads investors into making decisions based on false information. Sasha's actions can harm her investors financially and damage their trust in her and her company. Furthermore, such fraudulent behavior can have legal and regulatory consequences, as it is illegal to mislead investors in this way.
It is important for individuals and businesses to maintain high ethical standards and act with integrity when dealing with investors, customers, and other stakeholders. Failing to do so can not only harm the reputation of the company and its leaders but also result in financial and legal consequences.
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in evaluating internal control, the auditor is basically concerned that the system provides reasonable assurance that
In evaluating internal control, the auditor is basically concerned that the system provides reasonable assurance that financial statements are reliable and accurate, that assets are safeguarded against theft or loss, and that the company complies with laws and regulations.
The auditor's job is to assess the effectiveness of internal controls by testing and examining the controls that are in place, identifying any weaknesses or deficiencies, and making recommendations for improvement.
Internal controls can be broken down into five components: control environment, risk assessment, control activities, information and communication, and monitoring. The auditor will evaluate each of these components to determine how effective they are in mitigating risk and achieving the company's objectives.
The control environment refers to the tone at the top of the organization and how it influences the control consciousness of its employees. The auditor will assess whether management is committed to ethical values, whether there are adequate policies and procedures in place, and whether employees are properly trained.
Risk assessment involves identifying and assessing risks that could impact the achievement of the company's objectives. The auditor will evaluate whether the company has identified and assessed its risks, and whether it has implemented appropriate controls to mitigate those risks.
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Today, you invest a lump sum amount in an equity fund that provides an 11% annual return. You would like to have $12,100 in 6 years to help with a down payment for a home. How much do you need to deposit today to reach your $12,100 goal? Do not round intermediate calculations. Round your answer to the nearest cent.
You need to deposit $6,313.87 today to reach your goal of $12,100 in 6 years, assuming an 11% annual return.
We can use the formula for the future value of a lump sum to calculate the amount needed to deposit today to reach the goal of $12,100 in 6 years:
[tex]FV = PV x (1 + r)^n[/tex]
where FV is the future value, PV is the present value (the amount we need to deposit today), r is the annual interest rate (11% or 0.11), and n is the number of years (6).
Substituting the values we have:
[tex]$12,100 = PV x (1 + 0.11)^6[/tex]
Simplifying:
[tex]PV = $12,100 / (1.11)^6[/tex]
PV = $6,313.87
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food harvesting corporation is considering purchasing a machine for $3,500,000. the machine is expected to generate a constant after-tax income of $80,000 per year for 14 years. the firm will use straight-line (sl) depreciation for the new machine over 15 years with no residual value. what is the estimated accounting (book) rate of return (rounded to two decimal places) on the initial investment?
The estimated accounting (book) rate of return on the initial investment for the machine is 2.29%.
To calculate the estimated accounting rate of return, we first need to calculate the average annual profit from the machine. Since the machine generates a constant after-tax income of $80,000 per year for 14 years, the average annual profit is $80,000.
Next, we need to calculate the average investment in the machine. Since the machine costs $3,500,000 and has a useful life of 15 years with no residual value, the average investment is ($3,500,000 / 15) = $233,333.33 per year.
Finally, we can calculate the estimated accounting rate of return by dividing the average annual profit by the average investment and multiplying by 100 to express the result as a percentage:
Estimated accounting rate of return = ($80,000 / $233,333.33) x 100 = 2.29%
Therefore, the estimated accounting rate of return on the initial investment for the machine is 2.29%.
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a(n) is responsible for verifying that the accounting procedures within a firm are consistent with established accounting principles.
A certified public accountant (CPA) is responsible for verifying that the accounting procedures within a firm are consistent with established accounting principles. CPAs are highly trained and educated professionals who have a deep understanding of accounting principles and procedures.
They are responsible for ensuring that the financial statements of a company are accurate, complete, and in compliance with generally accepted accounting principles (GAAP). CPAs play a vital role in the financial management of a company.
They help ensure that the company's financial statements are reliable, which is essential for making sound business decisions. CPAs are also responsible for ensuring that the company's accounting procedures are efficient and effective.
They review and analyze the company's financial data to identify areas where improvements can be made, such as reducing costs, increasing revenue, or improving cash flow.
In summary, a CPA is responsible for verifying that the accounting procedures within a firm are consistent with established accounting principles. This ensures that the company's financial statements are accurate, complete, and in compliance with GAAP, which is essential for making sound business decisions.
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Your pro forma income statement shows sales of $1,003,000, cost of goods sold as $505,000, depreciation expense of $97,000, and taxes of $100,250 due to a tax rate of 25%. What are your pro forma earnings? What is your pro forma free cash flow?
The pro forma earnings are $300,750 and the pro forma free cash flow is $397,750.
Pro forma earnings refer to a company's projected earnings based on estimated financial data, whereas free cash flow refers to the cash that a company generates after accounting for capital expenditures.
To calculate the pro forma earnings, we subtract the cost of goods sold, depreciation, and taxes from the sales figure, which results in $300,750 in this case.
To calculate the pro forma free cash flow, we start with the pro forma earnings and then add back depreciation expenses, resulting in $397,750 in this case.
This represents the amount of cash the company has available for debt repayment, share repurchases, or other capital expenditures.
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a is a specialized document used to share relevant information with the news media. a. press release b. tweet c. developmental brief d. direct- to- consumer release e. treatise
A Press release is a specialized document used to share relevant information with the news media.
A press release is a specialized record used to proportion relevant data with the information media. it's far normally written in a journalistic fashion and is aimed at producing media coverage for a selected corporation, organisation, or occasion.
Press releases can be used to announce a new services or products, a commercial enterprise merger or acquisition, a new partnership, or every other news-worth occasion. they may be regularly allotted to a huge variety of media shops, inclusive of newspapers, magazines, tv and radio stations, and online news web sites.
The purpose of a press release is to generate interest and exposure for the organization or organisation in query, and to speak key messages to the public in a clean and concise way.
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a). The specialized document used to share relevant information with the news media is a press release.
In order to announce anything noteworthy, a press release is a written statement sent to members of the news media. It is frequently used to disseminate information like a product launch, an occasion, or other business news. A headline, dateline, body text, and contact information are often included in press release writing. A press release's main objective is to grab journalists' attention and persuade them to publish a news article on the information being released. Email, wire services, social media, and other means can all be used to deliver press releases.
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Write the term from the following list that is best defined by each of these phrases. Use each term no more than once. Survival values Self-expression values Traditional values Terminal values Extrinsic work values Instrumental values Interpersonal value conflict Secular-rational values Some countries give employees extended parental leave and emphasize environmental responsibility In some countries, businesses must close on all religious holidays. Although the work isn't as interesting, you decide to accept the job offer with the organization that offers the best benefit package. You decide to turn down the promotion offer when you learn that it will require substantial travel that will take you away from your family, which is the thing that is most important to you. Jessie reassesses her long-term goals and realizes that she would rather make a meaningful contribution to her community than make as much money as she can.
The terms that are best defined by each of these phrases are in the following sequence: Secular- rational values, Traditional values, Extrinsic work values, Intrapersonal value conflict, and Self-expression values.
1. Secular-rational values are best defined by the phrase "Some countries give employees extended parental leave and emphasize environmental responsibility." These values prioritize scientific reasoning and modernization over traditional beliefs and customs.
2. Traditional values are best defined by the phrase "In some countries, businesses must close on all religious holidays." These values prioritize maintaining cultural and religious customs and beliefs over modernization and progress.
3. Extrinsic work values are best defined by the phrase "Although the work isn't as interesting, you decide to accept the job offer with the organization that offers the best benefits package." These values prioritize external rewards such as salary and benefits over intrinsic job satisfaction.
4. Intrapersonal value conflict is best defined by the phrase "You decide to turn down the promotion offer when you learn that it will require substantial travel that will take you away from your family, which is the thing that is most important to you." This conflict occurs when an individual's values or goals are in conflict with each other within themselves.
5. Self-expression values are best defined by the phrase "Jessie reassesses her long-term goals and realizes that she would rather make a meaningful contribution to her community than make as much money as she can." Self-expression values prioritize individual freedom, creativity, and quality of life.
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Complete Question:
Write the term from the following list that is best defined by each of these phrases. Use each term no more than once.
Terms :
Survival values, Self-expression values, Traditional values, Terminal values, Extrinsic work values, Instrumental values, Interpersonal value conflict, Secular-rational values, Intrapersonal value conflict, Intrinsic work values
Phases:
1. Some countries give employees extended parental leave and emphasize environmental responsibility.
2. In some countries, businesses must close on all religious holidays.
3. Although the work isn't as interesting, you decide to accept the job offer with the organization that offers the best benefits package.
4. You decide to turn down the promotion offer when you learn that it will require substantial travel that will take you away from your family, which is the thing that is most important to you.
5. Jessie reassesses her long-term goals and realizes that she would rather make a meaningful contribution to her community than make as much money as she can.
uppose the marginal product of labor is 8 and the marginal product of capital is 2. if the wage rate is $4 and the price of capital is $2, then in order to minimize costs the firm should use:
To minimize costs, a firm should equate the marginal rate of technical substitution (MRTS) to the relative factor prices.
What's MRTSThe MRTS is the ratio of the marginal product of labor (MPL) to the marginal product of capital (MPK).
In this case, MPL is 8 and MPK is 2.
Thus, the MRTS is 8/2 = 4.
The relative factor prices are the ratio of the wage rate to the price of capital.
The wage rate is $4 and the price of capital is $2, so the ratio is 4/2 = 2.
Since the MRTS (4) is greater than the relative factor prices (2), the firm should use more labor and less capital in order to minimize costs.
By doing so, the firm can take advantage of the higher productivity of labor compared to capital, while keeping costs lower due to the relative prices of these factors.
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Question 5 (1 point) A stock has a covariance of 0.06 with respect to the market portfolio. The variance of market portfolio is 0.05. The return on market index (market portfolio) is 10%. The return on the stock is 11%. What is the risk free rate? 4% 6% 5% 4.5% Question 6 (1 point) What is the standard deviation of a portfolio in which $8,400 is invested in stock S and $3,600 in stock T? Returns if State Occurs State of Economy Probability of Stocks State of Economy Stock T Boom 5% 30% 3% Normal 80% 9% 7% Recession 15% -30% 10% 9.54% 6.42% 10.14% 0.91%
The standard deviation of a portfolio is 9.54%.
The standard deviation of a portfolio is calculated by weighting the standard deviation of each component in the portfolio, according to its contribution to the total portfolio value.
In this case, the portfolio consists of 8,400 dollars invested in stock S and 3,600 dollars invested in stock T. To calculate the portfolio's standard deviation, we must first calculate the standard deviation of each stock.
For stock S, we use the probabilities and returns associated with each state of the economy, as given in the question. To calculate the standard deviation of stock S, we multiply each probability by the square of its associated return and then sum them up.
Doing the same for stock T, we can obtain the standard deviations for both stocks. We then weight each of these standard deviations according to the fraction of the portfolio invested in each stock. Finally, we sum these weighted standard deviations, giving us the portfolio's standard deviation of 9.54%.
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individual taxpayers who are unable to file by the due date can request an automat _____ month extension file
Individual taxpayers who are unable to file by the due date can request an automatic 6-month extension to file their tax return. To do so, follow these steps:
1. Recognize the need for an extension: If you realize you cannot complete your tax return by the due date, which is generally April 15th for most taxpayers, you can request an extension to avoid penalties for late filing.
2. File Form 4868: To request the 6-month extension, you need to submit Form 4868, "Application for Automatic Extension of Time to File U.S. Individual Income Tax Return," to the IRS. This form can be submitted electronically through tax software or by mail.
3. Estimate your tax liability: On Form 4868, you will need to provide an estimate of your total tax liability for the year. This should be based on the information available to you at the time of filing the extension request.
4. Pay any taxes owed: It's important to note that the 6-month extension is only for filing your tax return, not for paying any taxes owed. To avoid interest and potential penalties, you should pay any estimated taxes due by the original due date.
5. Complete your tax return: With the 6-month extension granted, you now have until October 15th to file your tax return. Use this additional time to gather all necessary documentation and complete your return accurately.
In summary, individual taxpayers who are unable to file by the due date can request an automatic 6-month extension by filing Form 4868 and paying any estimated taxes owed.
This will give them until October 15th to submit their completed tax return without incurring late-filing penalties.
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A manufacturer of men’s shirts determines that her costs will be $500 for overhead plus $9 for each shirt made. Her accountant has estimated that her selling price p should be determined by p = 30 − 0.2 √ q, where q is the number of shirts sold.
The total revenue that the firm should obtain is __________.
The total cost that the firm will encounter is __________.
The profit that the firm will realize is __________.
1. Total Revenue (TR): TR is the amount of money earned from selling q shirts. Using the given price function p = 30 - 0.2√q, we can calculate the total revenue as TR = p * q.
2. Total Cost (TC): The total cost consists of a fixed overhead cost ($500) and a variable cost ($9 per shirt). So, the total cost function is TC = 500 + 9q.
3. Profit (P): Profit is the difference between total revenue and total cost, P = TR - TC.
Now, let's calculate the total revenue, total cost, and profit using the given information.
Total Revenue: TR = p * q = (30 - 0.2√q) * q
Total Cost: TC = 500 + 9q
Profit: P = TR - TC = (30 - 0.2√q) * q - (500 + 9q)
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suppose the fed buys $1 million of bonds from the first national bank. if the first national bank and all other banks use the resulting increase in reserves to purchase securities only and not to make loans, what will happen to checkable deposits?
If the Fed buys $1 million of bonds from the First National Bank, the reserves of the First National Bank will increase by $1 million. Assuming that the bank and all other banks use the resulting increase in reserves to purchase securities only and not to make loans, the reserves of the banking system will increase by $1 million.
However, the purchase of securities by the banks will increase the demand for securities and push up their prices. This will lower the yields on securities and make other interest-bearing assets less attractive. As a result, some people will switch from holding interest-bearing assets to holding checkable deposits. This will increase the demand for checkable deposits and push up their prices (i.e., the interest rates on checkable deposits will decrease).
Therefore, if the banks use the increase in reserves to purchase securities only and not to make loans, the checkable deposits in the economy will increase due to the increase in the demand for checkable deposits.
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paul borrows $5,000 from the bank and wishes to repay the amount in equal installments of $800 per year over a period of years. the payments will be made at the end of each year. the bank wishes to earn interest on this loan at 8%. approximately how many years will it take for paul to repay the loan? multiple choice question. 7 years 8 years 6 years 9 years
Approximately Paul needs 8 years to repay the loan.
Correct option is 8 years.
How to calculate years for paul to repay the loan?We can use the formula for the present value of an annuity to calculate the number of years it will take for Paul to repay the loan:
[tex]PV = PMT * [(1 - (1 + r)^{-n} / r][/tex]
where:
PV = present value of the loan
PMT = payment per period
r = interest rate per period
n = total number of periods
In this case, we have:
PV = $5,000 (the amount borrowed)
PMT = $800 (the equal annual payments)
r = 8% (the annual interest rate)
n = the number of years
We can solve for n by plugging in the values and using algebra:
[tex]5,000 = $800 * [(1 - (1 + 0.08^{-n}) / 0.08][/tex]
[tex]5,000 = $800 * [(1 - 1.08^{-n}) / 0.08][/tex]
[tex]$6.25 = 1 - 1.08^{-n}[/tex]
[tex]1.08^{-n} = 0.75[/tex]
[tex]-n * ln(1.08) = ln(0.75)[/tex]
[tex]n = ln(0.75) / ln(1.08)[/tex]
n ≈ 8.36
Therefore, it will take approximately 8 years for Paul to repay the loan. So the closest answer is 8 years. The correct answer is: 8 years.
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commercial banks are allowed to invest in group of answer choices treasury securities. freddie mac securities. all of these are correct; banks can invest in all of these securities. fannie mae securities.
All of these are correct
Commercial banks are allowed to invest in a group of answer choices that include Treasury securities, Freddie Mac securities, and Fannie Mae securities. Banks can invest in all of these securities. Treasury securities are issued by the U.S. Department of the Treasury, while Freddie Mac and Fannie Mae securities are mortgage-backed securities issued by government-sponsored enterprises.
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QUESTION 4 Texas Instruments has $ 17 million of outstanding equity and $6 million of bank debt. The bank debt costs 5% per year. The estimated equity beta is 2. If the market risk premium is 6.5% and the risk-free rate is 3%, compute the weighted average cost of capital if the firm's tax rate is 30%. (Answer in percent: For 0.05324 answer, 5.324)
The weighted average cost of capital for Texas Instruments is 7.55%.
The cost of debt for Texas Instruments is 5% because the question states that the bank debt costs 5% per year.
The cost of equity can be calculated using the Capital Asset Pricing Model (CAPM):
Cost of Equity = Risk-Free Rate + Beta * Market Risk Premium
Cost of Equity = 3% + 2 * 6.5%
Cost of Equity = 16%
The weight of equity is 17/(17+6) = 0.7391, and the weight of debt is 6/(17+6) = 0.2609.
The weighted average cost of capital (WACC) can be calculated using the following formula:
WACC = (Cost of Equity x Weight of Equity) + (Cost of Debt x Weight of Debt) x (1 - Tax Rate)
WACC = (0.16 x 0.7391) + (0.05 x 0.2609) x (1 - 0.3)
WACC = 0.118064 + 0.008347 x 0.7
WACC = 0.118064 + 0.005843
WACC = 0.123907 or 7.55% (rounded to two decimal places)
Therefore, the weighted average cost of capital for Texas Instruments is 7.55%.
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nadine would like to improve the management of inventory in her company. one of her first activities should be to:
Nadine can take a number of steps to improve the management of inventory in her company such as reviewing current inventory management processes, introducing new software, reviewing the company's purchasing policies and procedures, etc.
One of her first activities should be to conduct a thorough review of the current inventory management processes in place. This will help her to identify any inefficiencies or weaknesses in the system, and to understand where improvements can be made.
Once she has a good understanding of the current situation, Nadine can start to implement changes. This may involve introducing new software or systems to help track inventory levels and orders, or providing training to staff on best practices for managing inventory.
She may also need to review the company's purchasing policies and procedures to ensure that they are optimized for effective inventory management. Ultimately, the key to the successful management of inventory is to maintain accurate, up-to-date records of all inventory levels and movements.
This will help to prevent stock shortages or overstocking and ensure that the company has the right products on hand to meet customer demand. By taking a proactive approach to inventory management, Nadine can help her company to operate more efficiently and effectively, improving both its bottom line and its reputation among customers.
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the seller accepts a buyer's offer of $200,000 to buy a home. the appraisal on the property comes in at $118,000. if the lender requires an ltv of 80%, how much is the lender willing to lend?
The lender is only willing to lend $94,400 on this property.
What is LTVThe LTV or loan-to-value ratio is a critical factor in determining how much a lender is willing to lend on a property.
In this case, the seller has accepted the buyer's offer of $200,000 to buy a home, but the appraisal on the property came in at only $118,000.
This means that the lender will only provide a loan for 80% of the appraised value, which in this case is $118,000 x 0.80 = $94,400.
Therefore, the lender is only willing to lend $94,400 on this property.
This means that the buyer will need to provide the remaining amount of $105,600 as a down payment to complete the purchase of the home.
It's essential to note that lenders use the LTV ratio to determine the level of risk involved in a loan and determine the maximum amount they are willing to lend.
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After deciding to get a new car, you can either lease the car or purchase it with a two-year loan. The car you wish to buy costs $34,000. The dealer has a special leasing arrangement where you pay $97 today and $497 per month for the next two years. If you purchase the car, you will pay it off in monthly payments over the next two years at an APR of 6 percent, compounded monthly. You believe that you will be able to sell the car for $22,000 in two years.
Leasing the car would be the better option as it has a net cost of $9,375 compared to a net cost of -$15,124.64.
How can we compare the two options by total cost?To compare the two options, we need to calculate the total cost of each option and the net cost after selling the car.
Option 1: Lease the car
Total cost of lease = $97 + ($497 x 24) = $12,625
Net cost after selling the car = $22,000 - $12,625 = $9,375
Option 2: Purchase the car with a two-year loan
Monthly payment = $34,000 / [((1+0.06/12)^24) x (0.06/12)] = $1,546.86
Total cost of loan = $1,546.86 x 24 = $37,124.64
Net cost after selling the car = $22,000 - $37,124.64 = -$15,124.64
Based on these calculations, leasing the car would be the better option as it has a net cost of $9,375 compared to a net cost of -$15,124.64 for purchasing the car with a two-year loan.
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What quarterly compounded nominal rate of return must an endowment of $450,000 earn to fully fund a perpetuity of $15,000 end of quarterly payment 3.3% compounded quarterly 14.6% compounded quarterly O 14.1% compounded quarterly O 4AX compounded quarterly O 13.3% compounded quarterly
The quarterly compounded nominal rate of return required is 4.4%. Option D is correct.
The quarterly compounded nominal rate of return is the interest rate at which an investment grows over a quarter, assuming that the interest earned is reinvested at the end of each quarter and the interest rate is expressed on an annual basis. It is also known as the quarterly compound interest rate or quarterly nominal interest rate.
This rate takes into account the compounding effect of interest, which means that the interest earned on the investment is added to the principal and reinvested at the end of each quarter, leading to exponential growth in the value of the investment over time. The quarterly compounded nominal rate of return is commonly used to compare the performance of different investment options and to calculate the future value of investments
For this case, we can use the formula for the present value of a perpetuity to find the required nominal rate of return:
Present value of perpetuity = Payment amount / Nominal rate of return
Plugging in the given values, we get:
$450,000 = $15,000 / (r/4)
where r is the nominal annual rate of return we are trying to find. Simplifying, we get:
r = (4 * $15,000 / $450,000) x 100%
= 4.4%
Therefore, the quarterly compounded nominal rate of return required is 4.4%. Option D holds true.
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marketers expedite the exchange process by using promotion activities to persuade a customer to purchase a product. this is the essence of which function of marketing?
If marketers expedite the exchange process by using promotion activities to persuade a customer to purchase a product. this is the essence of the selling function of marketing.
Within the promotional component of the marketing mix, selling and marketing are sometimes regarded as two separate responsibilities. Selling is, nevertheless, a more personalized form of communication than other forms of marketing when considering marketing and communications as a broad term that includes all promotional initiatives.
Selling is one of the marketing functions and is very important to every business since without sales, businesses cannot make money and without customers, businesses cannot sell their products, implying that sales and customers go hand in hand.
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207. Adam Ventures (AV) has the following earnings for 2014. Numbers in millions.
* Net Income: $2.5
* Payments to preference shareholders: $0.5
* Income available to common shareholders: $2.0
AV's beginning of year stock is valued at $20 per share, with a book value of $15/share. AV has 500,000 shares outstanding.
V's return on equity is closest to:
A. 20%
B. 27%
C. 32%
The return on equity (ROE) for Adam Ventures (AV) is closest to 27% (Option B).
To calculate the ROE, follow these steps:
1. Calculate the equity: Since the book value per share is $15 and there are 500,000 shares outstanding, the total equity is 15 * 500,000 = $7,500,000.
2. Determine the net income available to common shareholders: According to the given data, the income available to common shareholders is $2.0 million.
3. Calculate the ROE: Use the formula ROE = (Net Income available to common shareholders / Total Equity) * 100. So, the ROE = (2,000,000 / 7,500,000) * 100 = 26.67%.
Therefore, the return on equity for Adam Ventures is closest to 27%.
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Assume the following information: Quoted Price Spot rate of Canadian dollar $.80 90‑day forward rate of Canadian dollar $.79 90‑day Canadian interest rate 4% 90‑day U.S. interest rate 2.5% Given this information, what would be the yield (percentage return) to a U.S. investor who used covered interest arbitrage? (Assume the investor invests $1,000,000.) ANSWER IN PERCENTAGE FORMAT OR YOU WILL GET THE QUESTION WRONG!!!
The yield to a U.S. investor who used covered interest arbitrage would be 1.25%. This is calculated by subtracting the 90-day forward rate of the Canadian dollar from the spot rate of the Canadian dollar (0.80 - 0.79 = 0.01), and then subtracting the 90-day U.S.
interest rate from the 90-day Canadian interest rate (4% - 2.5% = 1.5%). This gives a yield of 1.5% per $1,000,000 invested, which is then converted to a percentage return of 1.25%.
Covered interest arbitrage is a strategy used by investors to take advantage of discrepancies in interest rates and currency exchange rates between two countries. By investing in one country and simultaneously hedging the currency of the other, the investor can benefit from the difference in interest rates and exchange rates. This is possible because the forward rate of the currency is usually lower than the spot rate, allowing the investor to make a profit by investing in the country with the higher interest rate while simultaneously hedging against any currency losses.
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