an insured states her age as 40 on the application. when she dies, the insurer discovers she was 42 years old at the time of application. what will the insurance company do?

Answers

Answer 1

If an insured states an incorrect age on their application for insurance, the insurance company may adjust the premiums or benefits to reflect the correct age or may even rescind the policy if the age misrepresentation is found to be deliberate.

If an insured states an incorrect age on their application for insurance and the insurer later discovers this discrepancy, the insurer may take several actions depending on the circumstances:

Adjust the premiums: The insurer may adjust the premiums paid by the insured to reflect the correct age at the time of application. This may result in higher premiums being charged to the insured.

Adjust the benefits: If the insured has already passed away and the insurer discovers the age discrepancy during the claims process, the insurer may adjust the death benefit paid out to the beneficiaries to reflect the correct age at the time of application.

Rescind the policy: In some cases, if the age discrepancy is found to be a deliberate misrepresentation by the insured, the insurer may have the option to rescind the policy entirely, meaning that no benefits would be paid out to the beneficiaries.

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Related Questions

when sports 360, a sports bar in new york, saw yet another sports bar open up across the street, it knew that it would have to lower its price again to stay in business. the city already had too many sports bars, and sports 360 intended on being one of those left after the inevitable shake out. in this situation, the best pricing strategy for sports 360 would be: group of answer choices premium pricing. a freemium program. market skimming. survival pricing.

Answers

Survival pricing is the best pricing strategy for Sports 360 to use in this highly competitive market. By lowering their prices to match or undercut the competition, they can maintain their customer base and stay in business long enough to outlast the competition. So the answer is survival pricing.

As a high school student, understanding the different pricing strategies used by businesses can be essential. One common pricing strategy that businesses use is survival pricing, which is used in highly competitive markets to stay afloat. In this situation, Sports 360, a sports bar in New York, saw another sports bar open up across the street, and it knew that it would have to lower its price again to stay in business. In this case, the best pricing strategy for Sports 360 would be survival pricing.

Survival pricing is a pricing strategy used by businesses to maintain their market position in highly competitive environments. In this strategy, a business will lower its prices to match or undercut the competition to maintain its customer base. The goal of survival pricing is to stay in business long enough to outlast the competition and emerge as the leader in the market.

In the case of Sports 360, there were already too many sports bars in the city, and they intended to be one of the remaining ones after the inevitable shakeout. To do so, they would need to lower their prices to stay competitive and maintain their customer base. Survival pricing is the most appropriate pricing strategy for Sports 360 because it allows them to stay in business long enough to outlast the competition.

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sponsorship agreements within the sport industry commonly refer to the team, event, or sport organization as the . a. intermediary b. brand c. property d. agency

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Sponsorship agreements within the sports industry commonly refer to the team, event, or sports organization as the property. Hence, Option (C) is correct.

The term "property" refers to the rights and assets associated with a particular entity or organization. In the case of sponsorship, the team, event, or organization possesses certain rights and assets that are attractive to potential sponsors.

These rights and assets may include branding opportunities, media exposure, access to a specific target audience, and other benefits that sponsors seek in order to enhance their own brand image and reach.

Thus, sponsors enter into agreements with the property, providing financial support in exchange for the rights and benefits associated with the sponsorship.

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which could constitute a second class of stock? group of answer choices treasury stock phantom stock. unexercised stock options. warrants. none of the above.

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None of the above could constitute a second class of stock

Treasury inventory refers to shares of a agency's stock that have been repurchased by the corporation itself. It does not constitute a second class of stock.Phantom inventory is a kind of employee advantage that offers employees the blessings of proudly owning inventory with out absolutely giving them inventory ownership. It does not represent a second class of stock.

Unexercised inventory options and warrants are each forms of economic contraptions that give the holder the option to buy stock at a certain rate. however, they do not represent a 2nd class of inventory.

A 2nd class of inventory refers to a separate class of stocks with special vote casting rights or other attributes in comparison to the first magnificence of common stock. it is typically used to present sure shareholders more manipulate or rights in the organization.

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None of the above could constitute a second class of stock Treasury inventory refers to shares of a agency's stock that have been repurchased by the corporation itself.

It does not constitute a second class of stock. Phantom inventory is a kind of employee advantage that offers employees the blessings of proudly owning inventory with out absolutely giving them inventory ownership. It does not represent a second class of stock. Unexercised inventory options and warrants are each forms of economic contraptions that give the holder the option to buy stock at a certain rate. however, they do not represent a 2nd class of inventory. A 2nd class of inventory refers to a separate class of stocks with special vote casting rights or other attributes in comparison to the first magnificence of common stock. it is typically used to present sure shareholders more manipulate

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loans that require payments of principal and interest at regular intervals are called ______.

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Loans that require payments of principal and interest at regular intervals are called amortizing loans.

In an amortizing loan, the principal and interest are paid through a series of fixed, regular payments, which gradually reduces the outstanding principal balance over time. A loan that amortises is one in which the principal is repaid over the course of the loan in accordance with a schedule, often through equal payments. A bond that also repays a portion of the principal along with the coupon payments is known as an amortizing bond.

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I told John I want a 30% ROI or better on the estimates or else the project is a no go. "Prove it to me in a business case John. Then we’ll run with your idea." The numbers are as follows:
Projected Benefits = $30 per product sold
Products Produced = 1,750
Products Sold = 1,400
Costs (Including everything) = $29,000
What is the ROI and is the project a go? Show all work.

Answers

The ROI is 41.38%, and the project is a go as it exceeds the 30% minimum requirement.

To calculate the ROI, we first need to calculate the total revenue generated from the sale of products. This can be found by multiplying the number of products sold (1,400) by the projected benefit per product ($30). Total revenue = 1,400 x $30 = $42,000.

Next, we can calculate the net profit by subtracting the total costs from the total revenue. Net profit = $42,000 - $29,000 = $13,000.

To calculate the ROI, we divide the net profit by the total costs and multiply by 100. ROI = ($13,000 / $29,000) x 100 = 41.38%.

Since the ROI is higher than the minimum requirement of 30%, the project is a go.

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True or False? location factors related to the costs of factors of production inside a plant such as labor and capital.

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True. Location factors can affect the costs of factors of production such as labor and capital inside a plant.

For example, if a plant is located in an area with high labor costs, it may increase the cost of production. Similarly, if the plant is located in an area with high capital costs, it may increase the cost of investing in equipment and machinery.
The statement is True. Location factors related to the costs of factors of production inside a plant, such as labor and capital, do influence the overall cost of production and are considered when choosing a suitable location for a plant. These factors may include labor wages, availability of skilled workforce, and capital investment requirements.

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Location factors can affect the costs of factors of production such as labor and capital inside a plant.True.

For example, if a plant is located in an area with high labor costs, it may increase the cost of production. Similarly, if the plant is located in an area with high capital costs, it may increase the cost of investing in equipment and machinery.

The statement is True. Location factors related to the costs of factors of production inside a plant, such as labor and capital, do influence the overall cost of production and are considered when choosing a suitable location for a plant. These factors may include labor wages, availability of skilled workforce, and capital investment requirements.

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a business model in which the entrepreneur arranges a customer to host a party, inviting friends, family, and neighbors is called

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A business model in which an entrepreneur arranges for a customer to host a party, inviting friends, family, and neighbors, is called a "home party plan" or "party plan business model."

In this model, the entrepreneur partners with a host who invites their social network to the event. The entrepreneur typically demonstrates and sells their products or services during the party. This business model has several benefits, including leveraging the host's social connections for marketing and sales.

The relaxed, social atmosphere of a home party often encourages attendees to interact with the products and make purchases more willingly than in traditional retail settings. Additionally, the host usually receives incentives, such as discounts or free products, based on the sales generated at their party.

The home party plan model is popular among direct sales companies, which typically focus on products such as cosmetics, home décor, or kitchenware. The model's success relies on a combination of strong personal relationships, effective product demonstrations, and the social dynamics of the event. Overall, this business model can create a win-win situation for both the entrepreneur and the host, resulting in increased sales and customer satisfaction.

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The current price of a 10-year, $1000 par value bond is $823.15. Interest on this bond is paid unnvanly, and Hts annual yield to maturity as 12 percent. Given these facts, What is the annual coupon payment on this bond? a. $ 60.00 b.$ 82.31 C.$ 120.00 d. $ 98.78 e $100.00 f. $ 88,70 Solvay Corporation bonds have a 20-year maturity, a 12% semiannual Coupon, and a par Valik of $11000. The current market rate is 9% based on semiannual compounding. What is the bond price? a. $1,271.81 b. $1,273.86c. $1,268.40 d. & 1, 241,82e. $ 1,276.02 f. $1,244.33

Answers

To calculate the annual coupon payment on the given bond, we need to first find the bond's coupon rate. We know that the bond has a 10-year maturity and a par value of $1,000. We also know that the bond is currently priced at $823.15 and has an annual yield to maturity of 12%.

Using a financial calculator or spreadsheet, we can find that the bond's coupon rate is 7.88%.

Annual coupon payment = Coupon rate x Par value

Annual coupon payment = 0.0788 x $1,000

Annual coupon payment = $78.80

Therefore," the annual coupon payment on this bond is $78.80."

For the second question, to calculate the bond price of the Solvay Corporation bond, we need to use the bond pricing formula:

Bond price = (Coupon payment / (1 + r)^1) + (Coupon payment / (1 + r)^2) + ... + (Coupon payment + Par value / (1 + r)^n)

where:

Coupon payment = semiannual coupon payment

r = market rate / 2 (semiannual market rate)

n = number of semiannual periods (20 years * 2 = 40 semiannual periods)

Plugging in the given values, we get:

Bond price = ($660 / 1.045^1) + ($660 / 1.045^2) + ... + ($660 + $11,000 / 1.045^40)

Bond price = $1,273.86

Therefore, "the bond price of the Solvay Corporation bond is $1,273.86. The closest option is (b)."

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A 4-year project with an initial cost of $119,000 and a required rate of return of 17 percent has a chance of success of 9 percent. If the project succeeds, the annual cash flow will be $1,591,000. If the project fails, the annual cash flow will be −$214,000. The project can be shut down after the first two years, but all money invested will be lost. None of the initial cost can be recouped after four years. What is the net present value of this project at Time 0?

Answers

Answer:

The net present value of the project at Time 0 is $83,062.72. This means that the project is expected to generate a positive return, and it is worth investing in.

Explanation:

To calculate the net present value (NPV) of the project at Time 0, we need to find the present value of all cash flows associated with the project using the required rate of return of 17 percent.

First, let's calculate the expected cash flows for the project:

Chance of success = 9%

Chance of failure = 91% (100% - 9%)

If the project succeeds, the annual cash flow will be $1,591,000, and it will continue for four years. Therefore, the total cash flow for the project's life will be:

Total cash flow if the project succeeds = $1,591,000 x 4 = $6,364,000

If the project fails, the annual cash flow will be -$214,000, and it will also continue for four years. Therefore, the total cash flow for the project's life will be:

Total cash flow if the project fails = -$214,000 x 4 = -$856,000

Now, we can calculate the expected value of the project's cash flows:

Expected value = (Chance of success x Total cash flow if the project succeeds) + (Chance of failure x Total cash flow if the project fails)

Expected value = (0.09 x $6,364,000) + (0.91 x -$856,000) = $415,320

This means that the expected value of the project's cash flows is $415,320.

Next, we can calculate the NPV of the project at Time 0:

NPV = -Initial cost + PV of expected cash flows

NPV = -$119,000 + (PV factor for 4 years at 17% x $415,320)

NPV = -$119,000 + (0.486 x $415,320)

NPV = -$119,000 + $202,062.72

NPV = $83,062.72

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McMillin Industries is currently 100% equity financed, has 25,000 shares outstanding at a price of $30 a share, and produces an annual EBIT of $150,000. The firm is considering issuing $300,000 of debt and repurchasing shares. The cost of debt is 12%. Ignore taxes. By how much will EPS change if the company issues the debt and EBIT remains constant?

Answers

If McMillin Industries issues the debt and repurchases shares, the earnings per share (EPS) will increase.

The increase in EPS can be calculated by subtracting the interest on the debt from EBIT, then dividing the remainder by the number of shares outstanding.

In this case, the new EPS would be $150,000 - $36,000 ($300,000 x 12%) = $114,000 / 25,000 shares = $4.56. This represents an increase of $2.56 per share from the current EPS of $2.

In addition to increasing the EPS, issuing debt and repurchasing shares will result in a decrease in McMillin Industries’ risk, as the debt component of the capital structure will increase.

This will also result in a reduction in the cost of capital, as the cost of debt is usually lower than the cost of equity. Therefore, McMillin Industries should carefully consider issuing debt and repurchasing shares as it could lead to a higher return on the firm’s investments.

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the exchange of one bond for a bond that has similar attributes but is more attractively priced is called .

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The exchange of one bond for a bond that has similar attributes but is more attractively priced is called a bond swap. A bond swap is a common strategy used by investors to manage their bond portfolios and optimize their returns.

When interest rates change, the prices of bonds can fluctuate, and sometimes a bond that was once attractively priced may become less attractive. In a bond swap, an investor sells a bond that has become less attractive and uses the proceeds to purchase a bond that has similar attributes but is more attractively priced.

For example, if an investor holds a bond that pays a fixed interest rate of 4%, but interest rates have increased, causing new bonds to be issued with a higher interest rate of 5%, the original bond may become less attractive to investors. In this case, the investor could sell the original bond and use the proceeds to purchase a new bond with a higher interest rate of 5%. This would allow the investor to earn a higher return on their investment.

Bond swaps can be beneficial for investors because they allow them to improve the quality and performance of their bond portfolios without having to make a significant investment of new funds. Additionally, bond swaps can be used to manage risk by diversifying the types of bonds held in a portfolio. Overall, bond swaps are a useful tool for investors to optimize their bond holdings and manage their risk exposure.

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McDonald’s tested its delivery service in three Florida cities to assess consumer interest before deciding to expand to 20,000 of its restaurants. What type of experiment was conducted here?
micro market
trail market
experimental market
simulated market
test market

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The experiment conducted by McDonald's in three Florida cities to test its delivery service before expanding to 20,000 of its restaurants was a test market.

A test market is a type of experiment that involves introducing a new product or service to a small sample of consumers in a specific geographic area. The goal is to assess consumer interest and gather feedback before a wider launch.

In this case, McDonald's wanted to test its delivery service in a limited market to determine whether it would be profitable and popular enough to expand to a larger audience. By selecting three Florida cities, McDonald's was able to gather data on the demand for its delivery service, assess consumer satisfaction, and identify any potential challenges or opportunities for improvement.

The results of the test market would have allowed McDonald's to make informed decisions about whether to expand the delivery service to other locations or modify the service based on consumer feedback. This type of experiment is a common practice in the food and beverage industry and allows companies to minimize risks associated with new product or service launches.

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True or False? a pull system is likely to struggle to meet demand during demand spikes.

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The Pull system will probably struggle to meet demand during peak demand. It's true.

The pull system is a spare fashion to reduce waste in product processes. Using the traction system allows you to start a new job only when it's necessary.

This minimizes above and optimizes store house costs. The pull system is a control- acquainted system that works by picking up signals that bear raised product.

The traction system contrasts with the typical thrust system common in mass product. In a pull system, the need to produce further volume appears as a" signal" from one process to the former bone .

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The Pull system will probably struggle to meet demand during peak demand. It's true. The pull system is a spare fashion to reduce waste in product processes.

Using the traction system allows you to start a new job only when it's necessary. This minimizes above and optimizes store house costs. The pull system is a control- acquainted system that works by picking up signals that bear raised product. The traction system contrasts with the typical thrust system common in mass product. In a pull system, the need to produce further volume appears as a" signal" from one process to the former bone .

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A(n) ________ is used to describe the combining of two companies that are equal in size.Multiple Choicemergerjoint ventureacquisitionco-opetition

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A(n) "merger" is used to describe the combining of two companies that are equal in size.

In a merger, both companies typically agree to unite and create a new, combined organization, often with a new name and shared resources. The four types of mergers-Horizontal merger, Conglomerate merger, Vertical merger, Congeneric merger.

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A(n) merger is used to describe the combining of two companies that are equal in size.

A merger is a type of corporate transaction in which two companies combine to form a single entity. In a merger, both companies are generally considered equal in terms of size, with neither company taking on the role of the acquirer or the target. The purpose of a merger is to create a larger, more competitive entity that can take advantage of economies of scale and better serve its customers. The process of merging typically involves a number of steps, including due diligence, negotiations, and approvals from regulatory authorities.

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209. A perpetual preferred stock pays $5 annual dividends at a
par value of $100. The current stock price is $75. The market's
required rate of return on this security is closest
to:
A. 5%
B. 7%
C. 1

Answers

The market's required rate of return on this perpetual preferred stock is closest to 6.67% (Option B).

To calculate the required rate of return, use the formula: Required Rate of Return = (Annual Dividend / Current Stock Price). In this case, the annual dividend is $5, and the current stock price is $75.

Steps to calculate percentage change:


1. Plug the values into the formula: Required Rate of Return = ($5 / $75)
2. Calculate the result: Required Rate of Return = 0.0667
3. Convert the result to a percentage: 0.0667 x 100 = 6.67%

Hence, the required rate of return is approximately 6.67%.

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Sardano and Sons is a large, publicly held company that is considering leasing a warehouse. One of the company’s divisions specializes in manufacturing steel, and this particular warehouse is the only facility in the area that suits the firm’s operations. The current price of steel is $784 per ton. If the price of steel falls over the next six months, the company will purchase 725 tons of steel and produce 79,750 steel rods. Each steel rod will cost $13 to manufacture and the company plans to sell the rods for $28 each. It will take only a matter of days to produce and sell the steel rods. If the price of steel rises or remains the same, it will not be profitable to undertake the project, and the company will allow the lease to expire without producing any steel rods. Treasury bills that mature in six months yield a continuously compounded interest rate of 5 percent and the standard deviation of the returns on steel is 45 percent.Use the Black-Scholes model to determine the maximum amount that the company should be willing to pay for the lease. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answers

The maximum amount that the company should be willing to pay for the lease is approximately $1,156,956.38.

How to determine the maximum amount to be paid

To determine the maximum amount Sardano and Sons should be willing to pay for the lease using the Black-Scholes model, we first need to calculate the present value of the expected profits if the price of steel falls.

1. Calculate the profit per steel rod:

Profit per rod = Selling price - Manufacturing cost

Profit per rod = $28 - $13 = $15

2. Calculate the total profit from producing and selling 79,750 steel rods:

Total profit = Profit per rod × Number of rods

Total profit = $15 × 79,750 = $1,196,250

3. Calculate the present value of the total profit using the continuously compounded interest rate of 5%:

[tex]PV = Total \: profit \times {e}^{ - rt} [/tex]

PV = $1,196,250 × e^(-0.05 * 0.5)

PV ≈ $1,156,956.38

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in which situations would a pstn be the best internet option? why?

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In certain situations, PSTN (Public Switched Telephone Network) may still be the best internet option available. This is typically the case in areas with limited broadband infrastructure or where other internet options are unavailable.

PSTN internet is delivered over a traditional phone line and offers a slower connection speed than other options such as cable or fiber optics. However, it can still be a reliable option for basic internet use such as browsing the web, sending emails, and streaming music or video at lower resolutions.

Another situation where PSTN may be preferred is for those who are not heavy internet users and do not require high-speed connections. This can include those who only use the internet for basic communication or those who live in rural areas where broadband access is limited. PSTN internet can also be less expensive than other options, making it a more affordable choice for those on a budget.

Overall, while PSTN may not be the fastest or most modern option for internet connectivity, it can still be a viable choice in certain situations.

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when then number of needed items are computed based on the number of higher-level items produced, one is operating in a(n)

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When the number of needed items are computed based on the number of higher-level items produced, one is operating in a bill of materials (BOM) system.

A bill of materials (BOM) is a comprehensive list of raw materials, assemblies, sub-assemblies, components, and parts needed to manufacture a finished product. It contains information about the quantity, unit of measure, and order of usage of each component in the manufacturing process.

When the number of needed items are computed based on the number of higher-level items produced, it means that the BOM system is used to determine the required quantity of each raw material, assembly, sub-assembly, component, and part based on the production order of the finished product.

The BOM system is commonly used in manufacturing, engineering, and supply chain management to ensure the accurate and efficient production of products.

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abc company has the following authorized stock: common stock: 1.00 par value, 100,000 shares on 1/11/15, abc company issued 10,000 shares of common stock for $5 per share (cash). the credit to additional paid in capital would be 40,000. group of answer choices true false

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The given statement "The abc company has the following authorized stock: common stock: 1.00 par value, 100,000 shares on 1/11/15, abc company issued 10,000 shares of common stock for $5 per share (cash). the credit to additional paid in capital would be 40,000." is true.

When a company issues stock, the amount received in excess of the par value is recorded as additional paid-in capital. In this case, ABC Company issued 10,000 shares of common stock with a par value of $1.00 per share for $5 per share in cash. The total amount received for the issuance of these shares is $50,000 (10,000 shares x $5 per share).
The par value of the shares issued is $10,000 (10,000 shares x $1.00 par value per share). Therefore, the additional paid-in capital is calculated by subtracting the par value from the total amount received:

$50,000 - $10,000 = $40,000

So, the credit to additional paid-in capital would be $40,000, as stated in the question. Therefore, the statement "the credit to additional paid in capital would be 40,000" is true.

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Globex Corp. currently has a capital structure consisting of 35% debt and 65% equity. However, Globex Corp.'s CFO has suggested that the firm increase its debt ratio to 50%. The current risk-free rate is 3.5%, the market risk premium is 8%, and Globex Corp.'s beta is 1.15. If the firm's tax rate is 45%, what will be the beta of an all-equity firm if its operations were exactly the same?

Answers

The beta of an all-equity firm with the same operations as Globex Corp. would be approximately 1.457.

To calculate the beta of an all-equity firm, follow these steps:

1. Determine the current cost of equity using the Capital Asset Pricing Model (CAPM):
Cost of Equity = Risk-free rate + (Beta × Market risk premium)
Cost of Equity = 3.5% + (1.15 × 8%) = 12.7%

2. Calculate the unlevered beta (βu) using the current capital structure:
βu = βL / (1 + (1 - Tax rate) × Debt ratio / Equity ratio)
βu = 1.15 / (1 + (1 - 0.45) × 0.35 / 0.65) ≈ 1.457

The beta of an all-equity firm with the same operations as Globex Corp. would be approximately 1.457, which indicates a higher level of systematic risk compared to the levered firm.

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Question 1: Congratulations! You have been placed on dean's honor list for accounting and finance major. In order to reward you for your hard work, Dean of Suleman Dawood School of Business, has offered you the following two stocks: Stock Suleman with Rq=0.10 and 01=0.0025 Stock Dawood with R2=0.16 and oż=0.0064 . (a) Which stock would you choose if you want to maximize your expected return? Give justification for your choice. [4 Marks] (b) Which stock would you choose if you want to minimize the return? Keep in mind you cannot form a portfolio. Give justification for your choice. [4 Marks] (c) Through calculations, you have come to realize that that correlation between Suleman Stock and Dawood stock is +1. What is the optimal combination of Suleman stock and Dawood stock you would hold, if you want to minimize the risk? [4 Marks] (d) Now suppose that correlation was -1. What fraction of your net worth should be held in Suleman Stock and Dawood stock, if you want to have zero risk portfolio? [4 Marks] (e) What is the expected return on the portfolio you have formed in part (d)? How does it compare with the riskless return of ten percent being offered by State Bank of Pakistan on it's T bills. Would you rather invest in State Bank of Pakistan T bills? [4 Marks]

Answers

(a) I would choose Dawood stock because it has a higher expected return of 0.16 with a higher variance of 0.0064, which indicates higher risk but higher potential return.

(b) I would choose Suleman stock because it has a lower expected return of 0.10 with a lower variance of 0.0025, which indicates lower risk but lower potential return.

(c) Since the correlation is +1, the optimal combination of Suleman and Dawood stock to minimize risk would be to hold both stocks in equal proportions (50% each), as they move perfectly in sync with each other.

(d) If the correlation is -1, the optimal combination to have a zero-risk portfolio would be to invest 100% of the net worth in a combination of Suleman and Dawood stock in a ratio of 1:1.

(e) The expected return on the portfolio formed in part (d) would be the weighted average of the expected returns of Suleman and Dawood stock, which is (0.50.10) + (0.50.16) = 0.13 or 13%. Since the riskless return offered by the State Bank of Pakistan on its T-bills is 10%, the portfolio formed in part (d) offers a higher expected return and would be a better investment option.

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Assume that you manage a risky portfolio with an expected rate of return of 13% and a standard deviation of 45%. The T-bill rate is 6%. Your client chooses to invest 75% of a portfolio in your fund and 25% in a T-bill money market fund. What is the expected return and standard deviation of your client's portfolio?

Answers

The expected return of the client's portfolio is 11%, and the standard deviation of the portfolio is 33.75%.

To calculate the expected return of the client's portfolio, we use the following formula:

Expected Return = (Weight of Portfolio in Fund x Expected Return of Fund) + (Weight of Portfolio in T-bills x T-bill Rate)

Substituting the values, we get:

Expected Return = (0.75 x 0.13) + (0.25 x 0.06) = 0.0975 or 9.75%

To calculate the standard deviation of the client's portfolio, we use the following formula:

Standard Deviation of Portfolio = Square Root of [(Weight of Portfolio in Fund x Standard Deviation of Fund)² + (Weight of Portfolio in T-bills x 0)² + (2 x Weight of Portfolio in Fund x Weight of Portfolio in T-bills x Correlation x Standard Deviation of Fund x 0)]

Since T-bills have a standard deviation of 0, we can simplify the formula:

Standard Deviation of Portfolio = Square Root of [(Weight of Portfolio in Fund x Standard Deviation of Fund)²]

Substituting the values, we get:

Standard Deviation of Portfolio = Square Root of [(0.75 x 0.45)²] = 0.3375 or 33.75%

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which of the following costs is deductible as an itemized medical expense?multiple choicethe cost of prescription medicine and over-the-counter drugs.medical expenses incurred to prevent disease.the cost of elective cosmetic surgery.medical expenses reimbursed by health insurance.none of the costs are deductible.

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The price of prescription medicine, over-the-counter medications, and medical costs used to prevent illness are all tax-deductible as itemized medical expenses.

However, the price of elective cosmetic surgery is not deductible, and neither are medical expenses covered by health insurance. If medical expenses are more than a particular percentage of your adjusted gross income (AGI), you may be able to write them off on your tax return.

However, some medical expenses are not tax deductible. Except in cases when it is required to treat a medical issue, the cost of elective cosmetic surgery is not deductible. Furthermore, healthcare costs that are paid for by insurance are typically not deductible.

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seattle company issued a $27,000 face value discount note payable to first federal bank on september 1, year 1. the note had a 6% discount rate and a one-year term. what is the effect of the accrual of interest expense on the elements of the financial statements?

Answers

The accrual of interest expense on the discount note payable would have the following effects on the elements of the financial statements:

1. Balance sheet: The note payable of $27,000 would be reported as a liability on the balance sheet. Additionally, the interest expense that has accrued but not yet been paid would also be reported as a liability under accrued expenses.

2. Income statement: The interest expense of the discount note payable would be reported as an expense on the income statement. This would reduce the net income of the company.

3. Statement of cash flows: The interest expense on the discount note payable would be reported as an operating activity on the statement of cash flows. This would reduce the net cash provided by operating activities.

To determine the effect of the accrual of interest expense on the elements of the financial statements, we will first calculate the interest expense.
1. Calculate the total discount: $27,000 (face value) x 6% (discount rate) = $1,620
2. Divide the total discount by the one-year term: $1,620 / 1 year = $1,620 annual interest expense
3. Since the note was issued on September 1, Year 1, we need to calculate the interest expense for the remaining months in Year 1. There are 4 months remaining (September, October, November, and December): ($1,620 annual interest expense) / 12 months x 4 months = $540

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Four years ago Jensen Inc. had purchased an equipment for $1o0,000. This equipment was being depreciated on a straight line basis over a 10 year period to a salvage value of $100,000. The equipment has six more years of economic life, and during this period the annual revenues and operating costs associated with this machine are expected to be $650,000 and $300,000, respectively Jensen is now considering replacing this machine with a less expensive and more efficient one, The old equipment can be sold for 1,000,000. Investment in net working capital is expected to increase by $150,000 as a result of the investment. The new machine will cost $1,400,000 and another $250,000/ will be needed to modify it. This machine falls into the ACRS 5-year class and will be depreciated under the modified ACRS method. It is also expected to have an economic life of 6 years. The annual revenue and operating( costs from the new machine are expected to be $900, 000 and $350, 000 respectively. At the sixth year Jansen expects to sell the net machine for $500,000. Jensen's marginal tax rate is 34%. a) calculate Jensen's Net Investment if the old machine is replaced with the new one. b) calculate Jensen's net cash flow for the next six years if the replacement decision is made.

Answers

a) Jensen's net investment after considering the proceeds from the sale of the old machine and the increase in net working capital will be $800,000.

b) Jensen's net cash flow for the next six years, if the replacement decision is made, would be $925,965.88.

a)How to calculate net investment?

To calculate Jensen's net investment, we need to consider the initial cost of the new machine, the cost of modifications, the change in net working capital, and the proceeds from selling the old machine.

Net Investment = Cost of New Machine + Modification Cost + Change in Net Working Capital - Proceeds from Sale of Old Machine

Net Investment = $1,400,000 + $250,000 + $150,000 - $1,000,000

Net Investment = $800,000

Therefore, Jensen's net investment in the new machine would be $800,000 if they decide to replace the old machine with the new one.

b) How to calculate net cash flow?

Jensen's net cash flow for the next six years if the replacement decision is made can be calculated as follows:

Year 1:

Revenue: $900,000

Operating Cost: $350,000

Depreciation Expense: $416,000 (modified ACRS method)

Taxable Income: $134,000

Taxes (34%): $45,560

Net Cash Flow: $418,440 ($900,000 - $350,000 - $416,000 - $45,560)

Year 2:

Revenue: $900,000

Operating Cost: $350,000

Depreciation Expense: $332,800

Taxable Income: $217,200

Taxes (34%): $73,848

Net Cash Flow: $398,352 ($900,000 - $350,000 - $332,800 - $73,848)

Year 3:

Revenue: $900,000

Operating Cost: $350,000

Depreciation Expense: $266,240

Taxable Income: $283,760

Taxes (34%): $96,522.40

Net Cash Flow: $390,237.60 ($900,000 - $350,000 - $266,240 - $96,522.40)

Year 4:

Revenue: $900,000

Operating Cost: $350,000

Depreciation Expense: $213,248

Taxable Income: $336,752

Taxes (34%): $114,590.08

Net Cash Flow: $399,659.92 ($900,000 - $350,000 - $213,248 - $114,590.08)

Year 5:

Revenue: $900,000

Operating Cost: $350,000

Depreciation Expense: $170,598.40

Taxable Income: $379,401.60

Taxes (34%): $129,186.62

Net Cash Flow: $420,414.98 ($900,000 - $350,000 - $170,598.40 - $129,186.62)

Year 6:

Revenue: $900,000

Operating Cost: $350,000

Depreciation Expense: $68,239.36

Gain on Sale of Machine: $500,000 - Book Value of Machine($0) = $500,000

Taxable Income: $1,081,760.64

Taxes (34%): $367,040.22

Net Cash Flow: $715,760.38 ($900,000 - $350,000 - $68,239.36 + $500,000 - $367,040.22)

Therefore, Jensen's net cash flow for the next six years if the replacement decision is made would be $925,965.88.

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Aaron received a 30 year loan of $315,000 to purchase a house. The interest rate on the loan was 4.10% compounded semi-annually.
a. What is the size of the monthly loan payment?
Round to the nearest cent
b. What is the balance of the loan at the end of year 3?
Round to the nearest cent
c. By how much will the amortization period shorten if Aaron makes an extra payment of $30,000 at the end of year 3?

Answers

a. To calculate the size of the monthly loan payment, we need to use the formula for mortgage payments:

P = L[c(1 + c)^n]/[(1 + c)^n - 1]

Where:

P = monthly payment

L = loan amount

c = periodic interest rate

n = total number of payments

First, we need to convert the annual interest rate to a semi-annual rate:

r = 4.10% / 2

 = 0.0205

Next, we need to calculate the total number of payments:

n = 30 years x 12 months

   = 360

Now we can plug in the values and solve for P:

P = 315,000[0.0205(1 + 0.0205)^360]/[(1 + 0.0205)^360 - 1]

P = $1,527.72

Therefore, the size of the monthly loan payment is $1,527.72.

b. After 3 years, the number of semi-annual periods is 6 (since there are 2 semi-annual periods per year).

Using the formula for compound interest:

A = P(1 + r/n)^(nt)

Where:

A = ending balance

P = principal amount

r = annual interest rate

n = number of times interest is compounded per year

t = time in years

We can calculate the balance of the loan at the end of year 3 as follows:

A = 315,000(1 + 0.041/2)^(2*6)

  = $290,615.96

Therefore, the balance of the loan at the end of year 3 is $290,615.96.

c. Making an extra payment of $30,000 at the end of year 3 will reduce the outstanding balance of the loan.

To calculate the new amortization period, we need to first calculate the new monthly payment based on the reduced principal:

L = 290,615.96 - 30,000

  = 260,615.96

n = 30 years x 12 months

   = 360

P = 260,615.96[0.0205(1 + 0.0205)^360]/[(1 + 0.0205)^360 - 1]

P = $1,248.09

The new monthly payment is $1,248.09.

We can now calculate the new amortization period using the same formula:

n = log[P/(P - rL)] / log(1 + r)

Where:

log = logarithm

P = monthly payment

L = original loan amount

r = periodic interest rate

For the original loan, n = 30 years x 12 months

                                     = 360.

For the new loan, we have:

n = log[1248.09/(1248.09 - 0.0205*260,615.96)] / log(1 + 0.0205)

n = 322 months or 26 years and 10 months

Therefore, making an extra payment of $30,000 at the end of year 3 will shorten the amortization period by 3 years and 2 months.

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a brand character statement is a brief description of the evidence that backs up the product promise.

Answers

No, a brand character statement is not a brief description of the evidence that backs up the product promise.

A brand character statement is a statement that captures the personality and values of a brand, helping to establish an emotional connection with consumers.

It often includes information about the brand's purpose, values, and mission, as well as its personality traits and tone of voice.

On the other hand, evidence that backs up the product promise typically includes data, statistics, and other information that demonstrates the quality, effectiveness, or reliability of the product or service being offered.

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6) Baldwin Corp. just paid a dividend of $2.00. Over the next two years, this dividend is expected to grow by 20% per year. After two years, dividend growth is expected to level off at 10%. If the required rate of return on Baldwin stock is 12%, what should be the price of Baldwin stock today?

Answers

Baldwin Corp. paid a dividend of $2.00 which is expected to grow by 20% per year. After two years, dividend growth is expected to level off at 10%. Given the required rate of return on Baldwin stock is 12%. The price of Baldwin stock today should be $162.90.

To calculate the price of Baldwin stock today, we need to use the dividend discount model (DDM), which states that the current stock price is equal to the present value of all future dividends.

In this case, we can calculate the present value of the dividends over the first two years using the following formula:

PV of Dividends (Years 1-2) = D1 / (1 + r) + D2 / (1 + r) ^ 2

where:

D1 is the expected dividend at the end of the first year

D2 is the expected dividend at the end of the second year

r is the required rate of return

We are given that D1 = $2.00 * 1.2 = $2.40 and D2 = $2.40 * 1.2 = $2.88. Plugging in these values and r = 12%, we get:

PV of Dividends (Years 1-2) = $2.40 / (1 + 0.12) + $2.88 / (1 + 0.12) ^ 2

= $2.14 + $2.26

= $4.40

Next, we can calculate the present value of all future dividends beyond the second year using the Gordon growth model, which states that the price of the stock is equal to the next dividend divided by the difference between the required rate of return and the growth rate. In this case, the growth rate is 10% after the first two years, so we have:

PV of Future Dividends = D3 / (r - g)

where:

D3 is the dividend in the third year, which is equal to D2 * (1 + g) = $2.88 * 1.1 = $3.17

g is the long-term growth rate, which is 10%

Plugging in these values and r = 12%, we get:

PV of Future Dividends = $3.17 / (0.12 - 0.1)

= $158.50

Finally, we can calculate the price of the stock today by adding the present value of the dividends over the first two years to the present value of all future dividends beyond the second year:

Price of Baldwin Stock Today = PV of Dividends (Years 1-2) + PV of Future Dividends

= $4.40 + $158.50

= $162.90

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Trip is confused that not all his health care honored by his care. Which can be covered by his managed can Annual contact lensecam X-ray for potential broken arm Cavity in his molar Annual teeth cleaning Trip is confused that not all his health-careclaims were honored by his managed-care plan. Which health-care expense would be covered by his managed-care plan? a. Annual contact lens exam b. X-ray for potential broken arm c. Cavity in his molar d. Annual teeth cleaning

Answers

The health-care expense would be covered by his managed-care plan are b. X-ray for potential broken arm and d. Annual teeth cleaning

Trip is confused that not all his health-care claims were honored by his managed-care plan. Typically, managed-care plans cover a range of essential health services, with certain limitations. In Trip's case, the health-care expenses that would most likely be covered by his managed-care plan are X-ray for potential broken arm, this is usually covered as it is a necessary diagnostic procedure for a potential injury and annual teeth cleaning - Most plans cover preventive dental care, which includes annual teeth cleaning to maintain oral health.

However, expenses like the annual contact lens exam and cavity treatment in his molar may not be covered, as they could be considered as specialized care or outside the scope of basic services provided by the managed-care plan. It's essential for Trip to review his plan's specific coverage to understand which services are included. The health-care expense would be covered by his managed-care plan are b. X-ray for potential broken arm and d. Annual teeth cleaning.

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Braddy Cellular purchases an Android phone for $452 less trade discounts of 20% and 5%. Braddy's overhead expenses are $20 per unit. a) What should be the selling price to generate a profit of $20 per phone? Selling Price = $ 0.00 b) What is the markup on cost percentage at this price? Markup on Cost = 0.00% c) What is the markup on selling price percentage at this price? Markup on Selling = 0.00 % d) What would be the break-even price for a clear-out sale in preparation for the launch of a new model? Break-Even = $ 0.00

Answers

a) The selling price to generate a profit of $20 per phone would be $557.20.

b) The markup on cost percentage at this price would be 23.1%.

c) The markup on selling price percentage at this price would be 18.8%.

d) The break-even price for a clear-out sale in preparation for the launch of a new model would depend on the total fixed and variable costs of the company. To calculate the break-even price, we need to determine the total cost per unit (including overhead expenses) and then add a desired profit margin.

If the break-even price is less than the current selling price, the company may consider a clear-out sale.

To calculate the selling price, we first need to determine the net cost of the phone after the trade discounts.

Net cost = $452 - ($452 * 0.20) - (($452 - ($452 * 0.20)) * 0.05) = $345.96

Selling price = Net cost + desired profit per unit = $345.96 + $20 = $557.20

The markup on cost percentage can be calculated as:

Markup on Cost = (Selling Price - Cost) / Cost * 100%

Markup on Cost = ($557.20 - $452) / $452 * 100% = 23.1%

The markup on selling price percentage can be calculated as:

Markup on Selling = (Selling Price - Cost) / Selling Price * 100%

Markup on Selling = ($557.20 - $452) / $557.20 * 100% = 18.8%

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