The required rate of return on AA's stock is 9.5%. To calculate the required rate of return on AA Corporation's stock, we need to use the Capital Asset Pricing Model (CAPM) formula, which includes the beta, risk-free rate, and expected return on the market.
The CAPM formula is: Required Rate of Return = Risk-free rate + Beta * (Expected return on the market - Risk-free rate)
Given the information provided, we have:
- Beta: 0.9
- Risk-free rate: 5% (0.05 in decimal form)
- Expected return on the market: 10% (0.10 in decimal form)
Now we can plug these values into the CAPM formula:
Required Rate of Return = 0.05 + 0.9 * (0.10 - 0.05)
Step-by-step calculation:
1. Calculate the difference between the expected return on the market and the risk-free rate: 0.10 - 0.05 = 0.05
2. Multiply this difference by the beta: 0.9 * 0.05 = 0.045
3. Add the risk-free rate to this product: 0.05 + 0.045 = 0.095
So the required rate of return on AA's stock is 9.5%.
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richard earns $550 a week. although he has received a recent raise, he is unsatisfied because most other people on his job earn $100 a week more. richard's dissatisfaction is based on:
Richard's dissatisfaction with his earnings is based on relative income, income inequality, and social comparison.
What the dissatisfaction based on for this case?Richard's dissatisfaction can be attributed to the concept of relative income. Although he earns $550 a week and has received a recent raise, he still feels unsatisfied because most of his colleagues earn $100 more per week.
This comparison with others leads him to perceive his income as inadequate. In this scenario, Richard is experiencing income inequality, which is a disparity in earnings among individuals or groups.
Richard's dissatisfaction is also linked to the idea of social comparison, where individuals evaluate their own circumstances by comparing themselves to others.
In his case, he compares his income to that of his coworkers, and the perceived discrepancy contributes to his dissatisfaction.
Despite his recent raise, the perceived gap between his earnings and that of his colleagues leads to discontentment.
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Bill Broodiest, star quarterback for the Spring Bay Smashers, would like to invest a small portion of his earnings in stocks of one of three firms. His estimated dividends and the probabilities of their occurrence follow.
Galaxy Communication Grasshopper Tractor Breathiest electronics
.1 500 .2 0 .1 500
.3 800 .4 700 .2 700
.4 1000 .4 800 .4 900
.2 1200 .2 900 .2 1100
.1 1200
(A) Calculate the expected cash flow for each.
(B) Calculate the coefficient of variation for each.
(C) Rank the three from the least risky to the riskiest.
(A) The expected cash flow for Galaxy Communication is $860, for Grasshopper Tractor is $640, and for Breathiest Electronics is $840.
(B) The coefficient of variation for Galaxy Communication is 0.28, for Grasshopper Tractor is 0.34, and for Breathiest Electronics is 0.17.
(C) Ranking from least risky to riskiest: Breathiest Electronics, Galaxy Communication, Grasshopper Tractor.
(A) To calculate the expected cash flow for each firm, we multiply each dividend by its corresponding probability of occurrence and sum up the results. For example, the expected cash flow for Galaxy Communication is calculated as follows: (0.1 x 500) + (0.3 x 800) + (0.4 x 1000) + (0.2 x 1200) = $860.
(B) The coefficient of variation is calculated by dividing the standard deviation of each firm's cash flows by its expected cash flow. For example, the coefficient of variation for Galaxy Communication is calculated as follows:
CV = standard deviation / expected cash flow = [sqrt(((500-860)^2 x 0.1) + ((800-860)^2 x 0.3) + ((1000-860)^2 x 0.4) + ((1200-860)^2 x 0.2))] / 860 = 0.28.
(C) The ranking from least risky to riskiest is based on the coefficient of variation, with a lower coefficient indicating lower risk. Therefore, Breathiest Electronics has the lowest coefficient of variation and is the least risky, followed by Galaxy Communication and Grasshopper Tractor as the riskiest.
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7. Discuss two important economic behaviors of a monopoly, which are different from economic behaviors of firms in a competitive market 8. What is the consequence when a firm exercises its monopoly po
The consequences of monopoly power can negatively impact both consumers and overall economic welfare.
1. Price-setting ability: Unlike firms in a competitive market, a monopoly has the power to set its own price for goods or services. In a competitive market, firms must accept the market-determined price, whereas a monopolist can adjust the price to maximize its profits. This is due to the lack of competition, as a monopolist is the sole provider of a particular product or service.
2. Output restriction: A monopolist may intentionally restrict the output of goods or services to maintain a higher price. In a competitive market, firms cannot restrict output without losing market share, as consumers can easily switch to competitors' products. However, a monopoly can restrict output without the risk of losing customers, allowing it to maintain a higher price and earn greater profits.
Consequence of monopoly power: When a firm exercises its monopoly power, it often leads to allocative inefficiency, which is a misallocation of resources. Monopolies tend to produce less output and charge higher prices compared to competitive markets. As a result, consumer surplus decreases, and deadweight loss occurs. Additionally, monopolies may also invest less in innovation and improvements, since they face less competitive pressure to do so.
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P12-10 Calculating Real Returns and Risk Premiums [LO1] You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 4 percent. -8 percent, 29 percent, 14 percent, and 14 percent. The average inflation rate over this period was 3.6 percent and the average T-bill rate was 5.65 percent.What was the average real return on the company's stock? [First find average of the nominal returns and use Fisher's equation to find average real return] ______What was the average nominal risk premium on the company's stock?______
The average nominal risk premium on the company's stock over the past five years was 4.95%.
How to calculate the average real return and average nominal risk premium of Crash-n-Burn Computer's stock?To calculate the average real return and average nominal risk premium of Crash-n-Burn Computer's stock over a five-year period given the nominal returns, inflation rate, and T-bill rate.
The average of the nominal returns is:
(4 - 8 + 29 + 14 + 14) / 5 = 10.6%
Using Fisher's equation, the average real return can be calculated as:
(1 + 0.106) = (1 + r_real) x (1 + 0.036)
r_real = (1 + 0.106) / (1 + 0.036) - 1 = 6.40%
Therefore, the average real return on the company's stock over the past five years was 6.40%.
The average nominal risk premium can be calculated as the difference between the average nominal return and the average T-bill rate:
Average nominal risk premium = Average nominal return - Average T-bill rate
= 10.6% - 5.65%
= 4.95%
Therefore, the average nominal risk premium on the company's stock over the past five years was 4.95%.
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7. should the rate of return of a call option on a long-term treasury bond be more or less sensitive to changes in interest rates than the rate of return of the underlying bond?
In contrast to the rate of return of the underlying bond, the rate of return of a call option on a long-term government bond ought should be more sensitive to changes in interest rates. Because of variables like time to expiration, volatility, and strike price, options have higher volatility than their underlying assets.
These elements may magnify the effect of interest rate changes on the price of the option, having a greater impact on its rate of return than the underlying bond. Investors who own call options on long-term government bonds ought to be aware that their sensitivity to interest rate fluctuations will be higher than that of holders of the underlying bonds.
In conclusion, because of the option's sensitivity to volatility, time before expiration, and strike price, the rate of return of a call option on a long-term treasury bond is typically more sensitive to changes in interest rates than the rate of return of the underlying bond.
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Hello pls I need help
Is from economic class
The article discusses President Biden's economic strategy and fiscal responsibility plan to decrease the US federal deficit by more than $1.3 trillion, which would be the largest one-year decline in US history. The plan is under discussion and not yet approved.
What are the responses to other questions?2. The fiscal policy action discussed in the article is aimed at reducing the budget deficit, which could promote price stability by reducing inflationary pressures in the long run. However, the short-term impact on economic growth and employment is uncertain, as reducing government spending and increasing taxes may decrease demand and slow down economic activity.
3. If approved, the fiscal policy action discussed in the article would contribute to the creation of a budget surplus, as the plan aims to reduce the deficit by more than $1.3 trillion. This would likely decrease the national debt in the long run, as the government would need to borrow less to finance its spending.
4. The fiscal policy action described in the article aims to reduce the budget deficit, which is a positive step towards fiscal responsibility and reducing the national debt in the long run.
However, this may come at the cost of short-term economic growth and employment, as reducing government spending and increasing taxes may decrease demand and slow down economic activity.
Moreover, there may be tradeoffs between different policy goals, such as promoting economic growth versus reducing the budget deficit, which policymakers need to balance.
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54.0% complete question marge has been dollar cost averaging in a mutual fund by investing $2,000 at the beginning of every quarter for the past 7 years. she has been earning an average annual compound return of 11% compounded quarterly on this investment. how much is the fund worth today?
To calculate the current value of Marge's mutual fund investment, we can use the formula for compound interest: [tex]A=P*(1+r/n)^(n*t)[/tex].
After calculation, the current value of Marge's mutual fund investment is approximately $4,469.70.
A mutual fund is a type of investment vehicle that pools money from multiple investors to invest in a diversified portfolio of securities, such as stocks, bonds, or other assets. It is managed by a professional fund manager or a team of managers who make investment decisions on behalf of the investors.
Mutual fund shares are generally redeemable on any business day, allowing investors to buy or sell their shares at the fund's net asset value (NAV) at the end of the trading day.
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ryanbay, incorporated had net income of $900,000 based on variable costing. beginning and ending inventories were 55,000 units and 52,000 units, respectively. assume the fixed overhead per unit was $1.25 for both the beginning and ending inventory. what is net income under absorption costing?
To calculate net income under absorption costing, we need to include fixed overhead costs in the cost of goods sold.
First, let's calculate the fixed overhead cost per unit:
Fixed overhead cost per unit = Total fixed overhead cost / Total number of units produced
Since the same fixed overhead cost was incurred for both beginning and ending inventory, we can use the average inventory level:
Average inventory = (Beginning inventory + Ending inventory) / 2
= (55,000 + 52,000) / 2
= 53,500 units
Fixed overhead cost per unit = $1.25
Next, we can calculate the cost of goods sold under absorption costing:
Cost of goods sold = Beginning inventory + Cost of goods manufactured - Ending inventory
The cost of goods manufactured includes variable manufacturing costs and fixed manufacturing costs:
Variable manufacturing cost per unit = Total variable manufacturing cost / Total number of units produced
= Cost of goods sold / Total number of units sold
= $900,000 / (55,000 - 52,000)
= $300,000
Fixed manufacturing cost per unit = Fixed overhead cost per unit
= $1.25
Cost of goods manufactured per unit = Variable manufacturing cost per unit + Fixed manufacturing cost per unit
= $300,000 / 3,000 + $1.25
= $101.25
Cost of goods sold = 55,000 x $101.25 + ($900,000 - $300,000) = $6,038,750
Finally, we can calculate net income under absorption costing:
Revenue - Cost of goods sold = $900,000 - $6,038,750 = -$5,138,750
The negative net income indicates that the company incurred a loss under absorption costing. This is because absorption costing includes fixed overhead costs in the cost of goods sold, which can result in higher costs and lower profits compared to variable costing, especially if inventory levels fluctuate.
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which of the following are journal entries that are needed to change general ledger account balances at the end of the fiscal period? question 8 options: correcting entries adjusting entries closing entries both b and c
An Adjusting journal entry is an entry in a company's general tally that appears at the end of an account period to record all unacknowledged charges for the period. Option B.
An conforming entry is typically made at the end of an account period to fete income or expenditure in the period in which it's incurred. This results from the addendum account and is subject to the principles of profit comparison and consummation.
Adjustment journal entries are used to attune deals that haven't yet closed but cover account periods. This can be payments or costs if payment isn't made at the time of delivery.
Question:
Which of the following entries are needed to change general tally account balances at the end of the account period?
a) Adjusting entries
b) Corrections
c) Closure of Enrollments
d) both b and c
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Can someone please help?? 15 POINTS!
Answer:
mps mean extra dollars of household saved and mpc means extra dollars of household money that is consumed
I need help asap pls
Based on the Income Statement, December 31, 2012: The foloowing data on income statement was gotten
What was the company's net sales?Net Sales = Sales - Sales returns and allowances = $9,450.00 - $673.41 = $8,776.59
Therefore, the company's net sales were $8,776.59.
What was the company's gross margin?Gross Margin = Net Sales - Cost of Goods sold = $8,776.59 - $4,395.00 = $4,381.59
Therefore, the company's gross margin was $4,381.59.
What was the company's net income after taxes?Net Income after taxes = Net Income before taxes - Federal Income Tax = $1,760.59 - $528.18 = $1,232.41
Therefore, the company's net income after taxes was $1,232.41.
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the fact that a bank's assets tend to be long-term while its liabilities are short-term creates multiple choice interest-rate risk. credit risk. decreased risk for the bank. trading risk.
The fact that a bank's assets tend to be long-term while its liabilities are short-term creates interest-rate risk.
Interest-rate risk is the risk that changes in interest rates will affect the value of a bank's assets and liabilities differently, leading to a decline in the bank's net worth or earnings. In this case, if interest rates rise, the value of the bank's long-term assets will decrease more than the value of its short-term liabilities, resulting in a decline in the bank's net worth. Conversely, if interest rates fall, the value of the bank's long-term assets will increase more than the value of its short-term liabilities, resulting in an increase in the bank's net worth.
Credit risk (option B) is the risk that a borrower will default on their obligations, leading to losses for the bank. Decreased risk for the bank (option C) is not an accurate description of the situation, as interest-rate risk can lead to losses for the bank if interest rates move against them. Trading risk (option D) is a type of risk that arises from a bank's trading activities and is not related to the maturity mismatch between assets and liabilities.
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Total food orders delivered (Q) # of cooks (C) # of packagers (P) 20 1 1
28 1 2
40 2 3
44 3 3
From the above table, what is the production function? A. Q = 8 + 8C +4P B. Q = 4C +4P C. Q = 8 + 4C + 8P D. Q = 4C + 8P E. Q = 4C
After running the regression, we find that the production function that best fits the data is Q = 4C + 8P.
The production function is a mathematical equation that describes the relationship between inputs and outputs in a production process. In this case, the inputs are the number of cooks and packagers, and the output is the total number of food orders delivered. To determine the production function from the given table, we can use the method of least squares to estimate the coefficients of the equation that best fits the data.
This means that each additional cook contributes 4 units to the output, while each additional packager contributes 8 units to the output. The intercept term is not significant, which means that there is no fixed component to the production function.
Overall, the production function helps to provide insights into the productivity of the production process and can be used to make decisions on how to allocate resources to maximize output.
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the maximum legal limit for a loan in walter's state is 5.8%. keeli charges walter 23% because she does not trust he can pay back the loan. what is the term for giving a loan at an interest rate that exceeds the legal maximum?
The term for giving a loan at an interest rate that exceeds the legal maximum is called usury.
Usury is the practice of charging an excessive or illegal rate of interest on a loan. The maximum legal limit for a loan is set by the state to protect borrowers from predatory lenders who take advantage of their financial need.
Charging interest rates that exceed the legal limit is illegal and can result in penalties for the lender. In the case of Walter and Keeli, Keeli's decision to charge Walter 23% interest is not only unethical but als
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a corporate-level strategy is a plan of action that involves choosing in which industries and countries a company should invest its resources to achieve its:
A corporate-level strategy is a plan of action that involves choosing in which industries and countries a company should invest its resources to achieve its long-term goals and objectives, maximize profitability, and create sustainable competitive advantage.
Corporate-level strategy is a strategic management approach that focuses on the overall direction and scope of a company. It involves making decisions about which industries or markets a company should enter, exit, or expand into, and allocating resources accordingly.
The goal of corporate-level strategy is to achieve long-term success and competitive advantage for the company as a whole.
This may involve decisions such as diversification into new industries or markets, expansion into different geographic regions or countries, strategic alliances or partnerships, mergers or acquisitions, and resource allocation to different business units or divisions.
The ultimate aim of corporate-level strategy is to align the company's resources, capabilities, and competitive positioning with its overall business objectives in order to create value for shareholders and stakeholders.
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owners of stock may receive income in the form of: interest. dividends. rent. transfer payments. A. Dividends.
B. Dollar appreciation of stock value.
C. Possible increases in stock price due to stock splits.
D. Two of these are correct.
E. All of these are correct.
The correct answer is A. Dividends
The dollar appreciation of stock value is not considered income until the stock is sold and the gain is realized. It is the increase in the price of the stock over time, which can result in a capital gain if the stock is sold at a price higher than the purchase price. However, until the stock is sold, the appreciation is considered unrealized gain, and it is not taxed as income. Therefore, it is not an income that owners of stock may receive in the form of dividends.
Interest is not a form of income for stockholders, as interest is earned on debt securities such as bonds, not on equity securities such as stocks. Rent is also not a form of income for stockholders, as rent is earned on real estate properties and not on stocks.
Dividends are periodic payments made by companies to their stockholders out of their profits. These payments represent a portion of the company's earnings and are typically distributed quarterly. Stockholders can also receive income in the form of dollar appreciation of the stock's value, which occurs when the stock price increases over time. This allows stockholders to sell their shares at a higher price than what they paid for them, realizing a profit.
Therefore, owners of stock may receive income in the form of dividends and dollar appreciation of stock value.
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You want to make an investment in Vietnam since its booming economy but you lack critical information necessary for an intelligent investment decision, namely, what are the laws and legal system of Vietnam like. How will your investment profits be taxed, how will the state protect your resources, will the state expropriate your investment, is there adequate enforcement of contracts? Law is the foundation of private enterprise in the modern nation because if law and its enforcement is inadequate, the risks of doing business are too great. Question 1: Do you know everything you need to make an investment decision? ( 150 - 200 words) Question 2: If not, what else do you need to know about investment in foreign countries? ( 250 - 300 words) Question 3: What does it mean to say that law is the foundation of the private enterprise system? ( 300 - 350 words)
No, you do not know everything you need to make an investment decision in Vietnam. While you recognize its booming economy, you lack critical information about the country's laws, legal system, taxation, state protection, expropriation policies, and contract enforcement.
To make an informed decision, you must gather this information and assess the associated risks before investing.
In addition to the above-mentioned factors, you need to consider the political stability, economic policies, and regulations of foreign countries when investing.
You should also research the investment climate, potential growth sectors, labor laws, and cultural factors that may impact your investment. Understanding the specific requirements and restrictions for foreign investors is crucial to making a well-informed decision.
Saying that law is the foundation of the private enterprise system means that a well-functioning legal framework is essential for businesses to thrive. Laws and regulations create a stable environment, protect property rights, ensure fair competition, and enforce contracts.
Without a reliable legal system, businesses face increased risks and uncertainties, which can hinder investment and economic growth.
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Evolutionary psychologists most clearly emphasize that environmentally adaptive behaviors are those that have promoted. natural selection.
Evolutionary psychologists focus on the idea that certain behaviors and traits are advantageous for survival and reproduction, and therefore have been naturally selected for over time.
This means that behaviors that are adaptive in a particular environment are more likely to be passed on to future generations.
So, evolutionary psychologists emphasize that environmentally adaptive behaviors are those that have promoted natural selection, meaning they have helped individuals survive and reproduce in their particular environment.
Examples of adaptive behaviors might include traits like intelligence, social skills, and physical strength, as well as behaviors like cooperation, altruism, and aggression.
By studying these adaptive behaviors, evolutionary psychologists hope to gain a better understanding of how humans and other animals have evolved over time.
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when a fortune 500 business lays off workers, some displaced employees may decide to start their own businesses. they are best described as
When a fortune 500 business lays off workers, it can be a difficult and challenging time for the affected employees. However, some of these displaced workers may choose to turn this situation into an opportunity and start their own businesses. These individuals are best described as resilient, entrepreneurial, and driven.
Starting a business can be a daunting task, especially for those who have never done it before. However, the experience and skills gained from working for a large corporation can be invaluable in this new endeavor.
Many of these workers have gained valuable knowledge in areas such as marketing, finance, and management, which can be applied to their own businesses.
Moreover, these displaced workers often have a strong work ethic and a desire to succeed, which can give them an edge in the competitive world of entrepreneurship. They are motivated by the desire to take control of their own destiny and create a better future for themselves and their families.
In many cases, these new businesses can contribute to the local economy, creating jobs and driving innovation. While the decision to start a new business may have been forced upon them by circumstances outside their control, these workers are taking charge of their own futures and embracing the challenges and opportunities of entrepreneurship.
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suppose a stock had an initial price of $35 per share, paid a dividend of $1.00 per share during the year, and had an ending share price of $48. compute the percentage return.
A stock with an initial price of $35 per share, paid a dividend of $1.00 per share during the year the percentage return will be 40%.
To compute the percentage return for the stock, we need to calculate the total return, which includes both the price appreciation and the dividend received. The formula for total return is:
Total Return = (Ending Share Price - Beginning Share Price + Dividends) / Beginning Share Price
In this case, the beginning share price is $35, the ending share price is $48, and the dividend is $1.00 per share. Plugging these values into the formula, we get:
Total Return = ($48 - $35 + $1) / $35 = $14 / $35 = 0.4 or 40%
Therefore, the percentage return for the stock is 40%.
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Question 8 What is the monthly earnings credit? Assume the following: Ledger Balance = $500,000 Deposit Float = $ 87972 Eamings Credit Rate = 0.50% Days in Month= 30 days Reserve Requirement Ratio = 10%
The monthly earnings credit is the amount of money a bank credits to a customer's account as compensation for the customer's deposits. It is calculated based on the average daily balance in the account and the earnings credit rate (ECR) set by the bank is $24.53.
To calculate the monthly earnings credit for this scenario, we need to take into account several factors:
1. Ledger balance: The ledger balance is the actual balance in the account, including all deposits and withdrawals. In this case, it is $500,000.
2. Deposit float: The deposit float is the amount of funds in the account that have been deposited but are not yet available for use. In this case, it is $87,972.
3. Average daily balance: To calculate the average daily balance, we need to take the ledger balance and add any deposits that have not yet cleared (i.e., the deposit float), and then divide by the number of days in the month.
In this case, the average daily balance is:
[tex]($500,000 + $87,972) / 30[/tex]
= $19,266.40
4. Earnings credit rate: The earnings credit rate is the rate set by the bank for calculating the monthly earnings credit. In this case, it is 0.50%.
5. Reserve requirement ratio: The reserve requirement ratio is the percentage of deposits that a bank is required to hold in reserve. In this case, it is 10%.
Now, we can calculate the monthly earnings credit using the following formula:
Monthly earnings credit = (average daily balance x ECR x days in month) - (average daily balance x reserve requirement ratio x days in month / 365)
Substituting the values we have, we get:
[tex]Monthly earnings credit = ($19,266.40 * 0.005 * 30) - ($19,266.40 * 0.10 *30 / 365)[/tex]
= $24.53
Therefore, the monthly earnings credit in this scenario is $24.53.
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estion 2 pointe interest rates are compounded daty What is the monthly Tinancing payment for a car wordt met the end of the winter Round your aver to two decimal place. Do not enter the downsample (Hint: The value in the ordinaryotyformulare Mathew
The monthly financing payment for this car would be $377.42
To calculate the monthly financing payment for a car, we need to use the formula for the present value of an annuity:
[tex]PMT = PV * r / (1 - (1 + r)^{(-n)})[/tex]
Where:
- PMT is the monthly payment
- PV is the present value (in this case, the price of the car)
- r is the interest rate per period (in this case, the daily interest rate divided by 30 to get the monthly rate)
- n is the total number of periods (in this case, the number of months of the loan)
Assuming the price of the car is $20,000 and the daily interest rate is 0.05%, the monthly interest rate would be 1.5% (0.0005 * 30) and let's say the loan is for 5 years (60 months), then:
PMT = [tex]20000 * 0.015 / (1 - (1 + 0.015)^{(-60)}) = $377.42[/tex]
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(Related to Checkpoint 9.3) (Bond valuation) Pybus, Inc. is considering issuing bonds that will mature in 24 years with an annual coupon rate of 8 percent. Their par value will be $1,000, and the interest will be paid semiannually. Pybus is hoping to get a AA rating on its bonds and, if it does, the yield to maturity on similar AA bonds is 11 percent. However, Pybus is not sure whether the new bonds will receive a AA rating. If they receive an A rating, the yield to maturity on similar A bonds is 12 percent. What will be the price of these bonds if they receive either an A or a AA rating? a. The price of the Pybus bonds if they receive a AA rating will be s (Round to the nearest cent.) Enter your answer in the answer box and then click Check Answer. part remaining Clear All Check Answer
If the bonds receive a AA rating, their price will be $634.76, and if they receive an A rating, their price will be $595.43.
To calculate the price of the bonds, we need to use the bond pricing formula:
P = (C / r) x [1 - 1 / (1 + r)^n] + M / (1 + r)^n
where:
P = price of the bond
C = semiannual coupon payment
r = semiannual yield to maturity
n = number of semiannual periods until maturity
M = par value of the bond
For the AA rating, the semiannual yield to maturity is 11%/2 = 5.5%, and the number of semiannual periods until maturity is 24 x 2 = 48. Therefore, we can calculate the price of the bond as:
P = ($40 / 0.055) x [1 - 1 / (1 + 0.055)^48] + $1,000 / (1 + 0.055)^48
P = $634.76
For the A rating, the semiannual yield to maturity is 12%/2 = 6%, and we can use the same number of semiannual periods until maturity. Therefore, the price of the bond with an A rating is:
P = ($40 / 0.06) x [1 - 1 / (1 + 0.06)^48] + $1,000 / (1 + 0.06)^48
P = $595.43
Thus, if the bonds receive a AA rating, their price will be $634.76, and if they receive an A rating, their price will be $595.43.
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which of the following defines a foreign-based entity that uses a functional currency different from the local currency? i. a u.s. subsidiary in britain maintains its accounting records in pounds sterling, with the majority of its transactions denominated in pounds sterling. ii. a u.s. subsidiary in peru conducts virtually all of its business in latin america, and uses the u.s. dollar as its major currency. group of answer choices i only. ii only. both i and ii. neither i nor ii.
The first statement i.e. a U.S. subsidiary in Britain maintaining its accounting records in pounds sterling with the majority of its transactions denominated in pounds sterling defines a foreign-based entity that uses a functional currency different from the local currency.
The functional currency is the primary currency that a company uses for accounting purposes to report financial results.
In this case, the U.S. subsidiary in Britain is using the British pound sterling as its functional currency instead of the U.S. dollar.
This is because the majority of its transactions are denominated in pounds sterling, making it more practical to use the local currency for accounting purposes.
On the other hand, the second statement i.e. a U.S. subsidiary in Peru conducting virtually all of its business in Latin America and using the U.S. dollar as its major currency does not define a foreign-based entity that uses a functional currency different from the local currency.
In this case, the U.S. subsidiary is using the U.S. dollar as its functional currency, which is also the major currency it conducts its business in.
It's important to note that a company's choice of functional currency can have significant impacts on its financial statements and performance.
For example, fluctuations in exchange rates between the functional currency and other currencies can impact the company's reported revenues, expenses, and profits.
Therefore, companies must carefully consider their choice of functional currency based on the nature of their operations, local regulations, and accounting standards.
The correct answer is: i only.
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Tina is applying for the position of a daycare assistant at a local childcare center. Which document should Tina send with a résumé to her potential employer?
A.
educational certificate
B.
work experience certificate
C.
cover letter
D.
follow-up letter
Cover letter document should Tina send with a résumé to her potential employer. The answer is OPTION C
A cover letter is a letter in which a job candidate lists his or her qualifications, skills, and experience. This cover letter should also describe why you are qualified for the position and why an employer should choose you as the best candidate for the job.
When applying for a job, an employee should always submit a cover letter with their CV. In your cover letter, you should address two primary points: why you're the best candidate for the position and why you want to work for the organization you're applying to. The answer is OPTION C
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for a cafe and deli small business answer these questions:
-Goals and objectives, including a brief discussion of why you believe the business will be successful
-Market environment considerations, including current needs for the product and discussion of current or potential competition
-Brief description of owners and principal managers, including what they offer to help the business succeed (you may include a resume for each in an appendix if desired)
-Marketing plan and strategy
-2 keys to success
Goals and objectives for a small café and deli business include providing high-quality food and beverages, excellent customer service, and creating a welcoming atmosphere. The business is expected to be successful due to its unique menu offerings, convenient location, and competitive pricing.
Market environment considerations include the current demand for healthy and locally sourced food, and potential competition from other cafes and delis in the area. The owners and managers bring extensive experience in the foodservice industry and are committed to providing exceptional products and service.
The marketing plan includes social media promotions, local advertising, and word-of-mouth recommendations. Two keys to success include maintaining high standards for food and service, and fostering strong relationships with customers.
Goals and objectives for a small café and deli business: The goals and objectives for a small café and deli business include providing high-quality food and beverages, excellent customer service, and creating a welcoming atmosphere.
This can be achieved by offering unique menu items that differentiate the business from competitors, maintaining competitive pricing, and hiring knowledgeable and friendly staff. The business's overall success will depend on its ability to attract and retain customers through exceptional products and service.
Market environment considerations: The market environment for a café and deli business is highly competitive, with many other similar businesses offering similar products and services. Therefore, it is essential to consider the current demand for healthy and locally sourced food to ensure that the business meets the needs of its target market.
Additionally, potential competition from other cafes and delis in the area should be taken into account when developing marketing strategies and determining pricing strategies.
Owners and principal managers:The owners and principal managers of the café and deli business bring extensive experience in the foodservice industry and are committed to providing exceptional products and service.
They have experience in menu development, food preparation, customer service, and financial management. Their expertise will be essential in ensuring that the business operates efficiently and effectively.
Marketing plan and strategy:The marketing plan for the café and deli business should include a mix of online and offline marketing strategies, including social media promotions, local advertising, and word-of-mouth recommendations.
The business should also consider offering discounts and promotions to attract new customers and retain existing ones. Additionally, the café and deli business should focus on building relationships with its customers, offering personalized recommendations and customer service.
Two keys to success:Two keys to success for a café and deli business include maintaining high standards for food and service and fostering strong relationships with customers.
This can be achieved by ensuring that all menu items are of the highest quality, using fresh and locally sourced ingredients whenever possible, and hiring knowledgeable and friendly staff. Building strong relationships with customers will help to ensure repeat business and positive word-of-mouth recommendations.
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(Nonconstant Growth) Question 17 of 20 Check My Work (3 remaining) B eBook Problem Walk-Through Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Computech to begin paying dividends, beginning with a dividend of $1.75 coming 3 years from today. The dividend should grow rapidly - at a rate of 29% per year - during Years 4 and 5, but after Year 5, growth should be a constant 5% per year. If the required return on Computech is 14%, what is the value of the stock today? Do not round intermediate calculations. Round your answer to the nearest cent.
The value of the stock today is $38.17.
To calculate the value of the stock today, we need to find the present value of all the future dividends and the future stock price.
First, let's find the dividend in year 3.
D3 = $1.75
Next, let's find the dividends in years 4 and 5, which are growing at a rate of 29% per year.
D4 = D3 * (1 + 29%) = $2.26
D5 = D4 * (1 + 29%) = $2.92
After Year 5, the dividends are expected to grow at a constant rate of 5% per year. Let's find the expected dividend in Year 6.
D6 = D5 * (1 + 5%) = $3.06
To find the present value of these future dividends, we need to discount them back to the present using the required return of 14%.
[tex]PV(D3) = $1.75 / (1 + 14%)^3 = $1.1655[/tex]
[tex]PV(D4) = $2.26 / (1 + 14%)^4 = $1.3642[/tex]
[tex]PV(D5) = $2.92 / (1 + 14%)^5 = $1.4466[/tex]
[tex]PV(D6) = $3.06 / (14% - 5%) / (1 + 14%)^5 = $16.1597[/tex]
Now, let's find the present value of the future stock price, which is the present value of the stock price at the end of Year 5.
To find the future stock price, we need to find the dividend in Year 6 and the constant growth rate beyond that year.
D6 = $3.06
g = 5%
The stock price in Year 6 can be calculated using the constant growth model:
P6 = D6 * (1 + g) / (r - g) = $3.06 * (1 + 5%) / (14% - 5%) = $36.72
Now, we can discount this stock price back to the present using the required return of 14% and the number of years to Year 5.
[tex]PV(P5) = $36.72 / (1 + 14%)^5 = $18.0321[/tex]
Finally, we can calculate the value of the stock today by adding up the present value of all the future dividends and the future stock price.
Value of stock today = PV(D3) + PV(D4) + PV(D5) + PV(D6) + PV(P5)
Value of stock today = $1.1655 + $1.3642 + $1.4466 + $16.1597 + $18.0321 = $38.1681
Therefore, the value of the stock today is $38.17.
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Insuring While Away at College Kate's son, Hubert, is a college student ving in an off-campus apartment where he resides year round. He owns an expensive computer and wants to make sure the full value is insured. Which of the following statements regarding Hubert's Insurance needs are true? Check all that apply.a. Hubert should purchase an HC-2 broad form insurance polley because he is not covered under his parents' policy b. If he purchases an H0-4 polley, he can choose the value of the property he wishes to insure c. His computer is covered under his parents' policy Insuring a Condominium Kate's parents own a condominium that they fully insured for the replacement value of $120,000. Last year a portion of their roof collapsed due to the weight of snow after a severe storm. rendering the condo uninhabitable for the month that it took to complete repairs. Based on the coverago details of their condominium form ______ Insurance policy, the additional living expenses they incur as a result of the damage (such as the cost of staying in a hotel during the repairs)_____.
a. Hubert should purchase an policy because he is not covered under his parents' policy.
c. His computer may not be covered under his parents' policy, so he should consider purchasing additional coverage through an policy.
Consider a project with a life of 7 years with the following information: initial fixed asset investment = $440,000: straight-line depreciation to zero over the 7-year life: zero salvage value; price = $37, variable costs = $18: fixed costs = $154,000. quantity sold = 101.640 units, tax rate - 25 percent. How sensitive is OCF to changes in quantity sold? Multiple Choice $0.07 $18.38 S1012 $14.25 $16.24
The sensitivity of the OCF to changes in quantity sold is $14.25.
The sensitivity of the OCF to changes in quantity sold can be determined by calculating the projected change in the OCF if the quantity sold is changed. To calculate the sensitivity, the projected OCF if the quantity sold is changed by one unit can be compared to the OCF if the quantity sold is unchanged.
By comparing these two values, the change in OCF per unit can be determined. In this case, the sensitivity of the OCF to changes in quantity sold is $14.25.
This means that if the quantity sold changes by one unit, then the OCF will change by $14.25. This sensitivity analysis can be helpful in determining the potential impact of changes in quantity sold on the overall profitability of the project. It can also be helpful in determining the optimal pricing and quantity of the project.
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Assuming P > AVC, a firm would find it profitable to increase its production when:
Higher resource costs raise its marginal cost.
Its fixed costs fall.
Its marginal revenue exceeds its marginal cost AND its fixed costs fall.
Its marginal revenue exceeds its marginal cost.
New regulations reduce the market given price for the firm's product.
Assuming P > AVC, a firm would find it profitable to increase its production when its marginal revenue exceeds its marginal cost.
Under this assumption, if the firm's marginal revenue exceeds its marginal cost, it implies that the additional revenue generated from selling one more unit of output is greater than the additional cost incurred in producing that unit.
This suggests that the firm can increase its profits by producing and selling more units of output, as the extra revenue from each additional unit will exceed the extra cost incurred in producing it.
In a competitive market, where firms are price takers and face a horizontal demand curve, the marginal revenue is equal to the price of the product. Therefore, if P > AVC and MR > MC, it would be profitable for the firm to increase its production, as the extra revenue from selling additional units at the given price would exceed the extra cost of production.
This means that the firm is able to sell additional units of its product for a price that is higher than the cost of producing each additional unit. In addition, if the firm's fixed costs fall, this would further increase its profitability as it would reduce the overall cost of production.
On the other hand, if higher resource costs raise its marginal cost or new regulations reduce the market given price for the firm's product, the firm may find it less profitable or even unprofitable to increase its production.
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