Answer:
As the price level rises, the purchasing power of households' real wealth will fall, causing the quantity of output demand to fall. This phenomenon is known as the wealth effect.
Additionally, as the price level rises, the impact on the domestic interest rate will cause the real value of the dollar to rise in foreign exchange markets. The number of domestic products purchased by foreign (exports) will therefore fall, and the number of foreign products purchases by domestic consumers and firms(imports) will rise.
Net exports will therefore fall, causing the quantity of domestic output demanded to fall. This phenomenon is known as the exchange rate effect.
A lot of fluctuations is often seen in prices of goods. As the price level falls, the purchasing power of households' real wealth will rise, causing the quantity of output demanded to rise. This phenomenon is known as the wealth effect.
Additionally, as the price level falls, the impact on the domestic interest rate will cause the real value of the dollar to fall, in foreign exchange markets.
The number of domestic products purchased by foreigners (exports) will therefore rise, and the number of foreign products purchased by domestic consumers and firms (imports) will fall.
Net exports will therefore rise, causing the quantity of domestic output demanded to rise. This phenomenon is known as the exchange effect.
The wealth effect is simply known as the idea that when households become richer as a result of a rise in asset values, example corporate stock prices, they tend to spend more and boast a broader economy.
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Suppose that a small town has seven burger shops whose respective shares of the local hamburger market are (as percentages of all hamburgers sold): 23 percent, 22 percent, 18 percent, 12 percent, 11 percent, 8 percent, and 6 percent. Instructions: Enter your answers as a whole number. a. What is the four-firm concentration ratio of the hamburger industry in this town? percent b. What is the Herfindahl index for the hamburger industry in this town? c. If the top three sellers combine to form a single firm, what would happen to the four-firm concentration ratio and to the Herfindahl index? Four-firm concentration ratio = percent Herfindahl index =
Answer:
a= 75%
b= 1702
c= 94% , 4334
Use the data below to construct the advance/decline line for the stock market. Volume figures are in thousands of shares. (Do not round intermediate calculations. Round your answers to the nearest whole number. Input all amounts as positive values.) Stocks Advancing Advancing Volume Stocks Declining Declining Volume Monday 1,634 825,503 1,402 684,997 Tuesday 1,876 928,360 1,171 440,665 Wednesday 1,640 623,369 1,410 719,592 Thursday 2,495 1,101,332 537 173,003 Friday 1,532 508,790 1,459 498,585
Adv./Dec. Cumulative
Monday
Tuesday
Wednesday
Thursday
Friday
Answer:
Adv./Dec. Cumulative
Monday 1 1
Tuesday 2 3
Wednesday 1 4
Thursday 5 9
Friday 1 10
Explanation:
Note: See the attached excel file for the construction of he advance/decline line for the stock market.
The purpose of this assignment is to build an analysis model to explore what-if scenarios when buying a new car. We will consider two types of vehicles on the market: Gasoline powered vehicles that operate solely using gasoline. Fully electric vehicles that operate solely on battery-stored power and use no gasoline. The batteries are charged by plugging in to an external power source.
Answer:
The decision to choose specific type of vehicle will be based on the mileage, cost, environmental effects and driving experience.
Explanation:
There are two types of vehicles, one operate on gasoline and others operate on electricity. Both of the vehicles are used by the people but since gasoline vehicles are most commonly used people prefer buying this type of vehicle. Electric vehicles are also gaining significance in todays world as it saves natural resource like oil and the vehicle is energy efficient so gives better mileage.
The following are the unit costs of making and selling an item at a volume of 30,000 units per month, which represents the company's capacity: Manufacturing: Direct materials $ 5.90 Direct labor 11.90 Variable overhead 1.90 Fixed overhead 3.90 Selling and administrative: Variable 7.90 Fixed 9.90 Assume the company has 300 units left over from last year which have small defects and which will have to be sold at a reduced price as scrap. This would have no effect on the company's other sales. The variable selling and administrative costs would have to be incurred to sell the defective units. The cost that is relevant as a guide for setting a minimum price on these defective units is: (Round your answer to two decimal places.) Multiple Choice $35.60 per unit. $7.90 per unit. $17.80 per unit. $31.50 per unit.
Answer:
$7.90 per unit
Explanation:
The computation of the minimum price on these defective units is shown below:
It is equivalent to the selling & admin variable cost per unit i.e. $7.90 per unit
oAs all the other cost would be considered as a sunk cost because the product is already generated and the fixed cost is not considered as it would remain the same whether the production is increase or not
Therefore the second option is correct
Hardware is adding a new product line that will require an investment of . Managers estimate that this investment will have a 10-year life and generate net cash inflows of the first year, the second year, and each year thereafter for eight years. The investment has no residual value. Compute the payback period.
Answer: 6.17 years
Explanation:
Payback period = Period before debt is paid back + Amount left to to be paid back / Cashflow in year of payback.
Year Cash Flows Amount left to be paid back
0 (1,540,000) (1,540,000)
1 315,000 (1,225,000)
2 265,000 (960,000)
3 230,000 (730,000)
4 230,000 (500,000)
5 230,000 (270,000)
6 230,000 (40,000)
7 230,000 190,000
Year before payback = 6
Payback amount = 6 + (40,000 / 230,000)
= 6.17 years
Barton Industries expects next year's annual dividend, D1, to be $2.00 and it expects dividends to grow at a constant rate g = 4.2%. The firm's current common stock price, P0, is $20.00. If it needs to issue new common stock, the firm will encounter a 4.5% flotation cost, F. What is the flotation cost adjustment that must be added to its cost of retained earnings? Do not round intermediate calculations. Round your answer to two decimal places.
Answer: See explanation
Explanation:
The flotation cost adjustment that must be added to its cost of retained earnings will be calculated thus:
= Expected dividend / [Current price × (1 - Floatation cost)] + Expected growth rate
= 2.00/[20.00 × (1 - 4.5%)] + 4.2%
= 2.00 /[20.00 × (1 - 0.045)] + 0.042
= 2.00 / (20.00 × 0.955) + 0.042
= (2.00/19.10) + 0.042
= 0.104712 + 0.042
= 0.146712
New cost of equity = 14.67%
You didn't give the cost of equity calculated without the flotation adjustment. Let's assume that this is maybe 11%, the floatation on adjustment factor = 14.67% - 11% = 3.67%
Ahnberg Corporation had 580,000 shares of common stock issued and outstanding at January 1. No common shares were issued during the year, but on January 1, Ahnberg issued 200,000 shares of convertible preferred stock. The preferred shares are convertible into 400,000 shares of common stock. During the year Ahnberg paid $120,000 cash dividends on the preferred stock. Net income was $1,222,000.
Required:
What were Ahnberg's basic and diluted earnings per share for the year?
Answer:
basic earnings per share = $1.90
diluted earnings per share = $1.25
Explanation:
Basic Earnings per share = Earnings attributable to holders of Common Stock ÷ Weighted Average Number of Common Stocks Outstanding.
where,
Earnings attributable to holders of Common Stock = $1,222,000 - $120,000 = $1,102,000
and
Weighted Average Number of Common Stocks Outstanding = 580,000 shares
therefore,
Basic Earnings per share = $1.90
Diluted Earnings per share = Adjusted Earnings attributable to holders of Common Stock ÷ Adjusted Weighted Average Number of Common Stocks Outstanding.
where,
Adjusted Earnings attributable to holders of Common Stock = $1,222,000
and
Weighted Average Number of Common Stocks Outstanding = 580,000 + 400,000 = 980,000 shares
therefore,
Diluted Earnings per share = $1.25
The economy is in long-run equilibrium. Technological change shifts the long-run aggregate supply curve $120 billion to the right. At the same time, government purchases increase by $30 billion. If the MPC equals 0.8 and the crowding-out effects are $30 billion, we would expect that in the long run. (C)
a. real GDP would be higher but the price level would be lower
b. both real GDP and the price level would be lower
c. real GDP would be higher but the price level would be the same
d. both real GDP and the price level would be higher
Answer:
C. Real GDP would be higher but the price level would be the same
Explanation:
Real gdp would get to be higher as long run aggregate supply goes up. Prices would go down because as long run aggregate supply goes up, aggregate demand does not experience the same proportional increase. As long run aggregate supply goes up, short run aggregate supply falls backwards.
Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Osaka Yokohama Sales $ 3,000,000 $ 9,000,000 Net operating income $ 210,000 $ 720,000 Average operating assets $ 1,000,000 $ 4,000,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 15%. Compute the residual income for each division. 3. Is Yokohama’s greater amount of residual income an indication that it is better managed?
Answer:
1. Return on Investment = Sales Margin / Capital turnover
= (Net income / Sales) ÷ (Assets / Sales)
Osaka:
= (210,000 / 3,000,000) ÷ (1,000,000 / 3,000,000)
= 0.07 / 0.33
= 21%
Yokohama
= (720,000 / 9,000,000) ÷ (4,000,000 / 9,000,000)
= 0.08 / 0.44
= 18%
2. Residual income = Operating income * (Required return * Average operating assets)
Osaka = 210,000 - (15% * 1,000,000)
= $60,000
Yokohama = 720,000 - (15% * 4,000,000)
= $120,000
c. No is isn't because Residual income is not a good matric to use to compare companies or departments as it does not show the amount of assets used by the companies being compared.
Example: (0) sweeps
Rising from the sea like a goddess, the island nation of Cyprus ......... (sweep) you off
your feet with ancient monuments. Cyprus has the distinction of ........ (be) the birthplace
of Aphrodite --Goddess of Love and Beauty. With such a legendary background it is
hardly ......... (surprise) that Cyprus ....3.... (develop) into a ....4.... (tour) destination. It
........ (bless) with natural beauty that ranges from golden beaches to ......... (roll) hills.
To walk through its old streets is ....7.... (step) backwards in time. Old houses with
ornate balconies peep from weather-beaten walls, and craftsmen in small workshops
practise trades, which have not ....8.... (change) for centuries.
Answer:
(0)Sweeps, (1)being, (2)surprising, (3)has developed, (4)tourist, (5)is blessed, (6)rolling, (7)to step, (8)changed.
Explanation:
The use of the correct form of the words refers to using or changing the given words in such a way that they correspond to the noun(s) or subjects in the sentence. This will also enable the correct construction of the sentences in a perfect and corresponding form of tenses.
The verbs given in parenthesis in the given passage will be changed accordingly as given below-
Rising from the sea like a goddess, the island nation of Cyprus sweeps you off your feet with ancient monuments. Cyprus has the distinction of being the birthplace of Aphrodite-- Goddess of Love and beauty. With such a legendary background, it is hardly surprising that Cyprus has developed into a tourist destination. It is blessed with natural beauty that ranges from golden beaches to rolling hills.
To walk through its old streets is to step backwards in time. Old houses with ornate balconies peep from weather-beaten walls, and craftsmen in small workshops practice trades, which have not changed for centuries.
Transactions for Buyer and Seller Ellis Co. sold merchandise to Chang Co. on account, $147,800, terms FOB shipping point, 2/10, n/30. The cost of the merchandise sold is $88,680. Ellis Co. paid freight of $2,500. Assume that all discounts are taken. Journalize Ellis Co.'s entries for the (a) sale, (b) purchase, and (c) payment of amount due. If an amount box does not require an entry, leave it blank.
Answer:
Transaction a
Debit :
Credit :
Transaction b
Debit :
Credit :
Transaction c
Debit :
Credit :
Explanation:
he Hudson Corporation has 8,100 obsolete units of a product that are carried in inventory at a manufacturing cost of $162,000. If the units are remachined for $40,900, they could be sold for $73,000. Alternatively, the units could be sold for scrap for $28,100. The alternative that is more desirable and the total relevant costs for that alternative are:
Answer:
It is more profitable to re-process the units. Income will increase by $4,000.
Explanation:
Giving the following formula:
Number of units= 8,100
Re-process the units:
Total cost= $40,900
Selling price= $73,000
Sold as-is:
Selling price= $28,100
We will conduct an incremental analysis, therefore the first manufacturing costs should not be taken into account. They remain constant in both options.
Re process:
Effect on income= 73,000 - 40,900
Effect on income= $32,100 increase
Sold as-is:
Effect on income= $28,100 increase
It is more profitable to re-process the units. Income will increase by $4,000.
Concord uses the periodic inventory system. For the current month, the beginning inventory consisted of 7400 units that cost $10.00 each. During the month, the company made two purchases: 3000 units at $11.00 each and 11900 units at $11.50 each. Concord also sold 12800 units during the month. Using the FIFO method, what is the ending inventory
Answer:
$109,250
Explanation:
FIFO assumes that the units to arrive first, will be sold first. Therefore, inventory valuation is based on later or recent prices.
Step 1 : units in ending inventory
Ending Inventory = units available for sale - units sold
= 9,500
Step 2 : inventory value
Ending Inventory = 9,500 x $11.50 = $109,250
i need help What is an IPO?
Answer:
An IPO stands for Initial Public Offering. It's a public offering in which shares of a company are sold to institutional investors and usually also retail investors.
Machinery purchased for $73,800 by Blossom Co. in 2016 was originally estimated to have a life of 8 years with a salvage value of $4,920 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2021, it is determined that the total estimated life should be 10 years with a salvage value of $5,535 at the end of that time. Assume straight-line depreciation.
Required:
Prepare the entry to correct the prior years' depreciation, if necessary.
Answer:
See explanation
Explanation:
Prior year depreciation lies in the Profit Reserve called Retained Earnings and in the Asset therefor correct Profit Balance and Asset Balances to effect this adjustment.
Depreciation Expense = (Cost - Salvage Value ) ÷ Estimated Useful Life
On January 1, 2021, Rapid Airlines issued $240 million of its 8% bonds for $221 million. The bonds were priced to yield 10%. Interest is payable semiannually on June 30 and December 31. Rapid Airlines records interest at the effective rate and elected the option to report these bonds at their fair value. On December 31, 2021, the fair value of the bonds was $229 million as determined by their market value in the over-the-counter market. Rapid determined that $1,000,000 of the increase in fair value was due to a decline in general interest rates.
Required:
Prepare the journal entries to record interest on June 30, 2021 (the first interest payment), on December 31, 2021 (the second interest payment) and to adjust the bonds to their fair value for presentation in the December 31, 2021, balance sheet.
Answer:
June 30
Dr Interest expense $11,050,0000
Cr Discount on bond payable $1,450,000
Cr Cash $9,600,000
December 31, 2021
Dr Interest expense $11,122,500
Cr Discount on bond payable $1,522,500
Dr Cash $9,600,000
December 31, 2021
Dr Unrealized Holding loss -NI $1,000,000
Dr Unrealized Holding loss -OCI $9,972,500
Cr Fair value Adjustment $10,972,500
Explanation:
Preparation of the journal entries to record interest on June 30, 2021
June 30
Dr Interest expense $11,050,0000
($221 million*10%/2)
Cr Discount on bond payable $1,450,000
($11,050,000-$9,600,000)
Cr Cash $9,600,000
($240 million*8%/2)
(To record first interest payment)
Preparation of the journal entries to record interest on December 31, 2021
December 31, 2021
Dr Interest expense $11,122,500
[($221,000,000+$1,450,000)*10%/2]
Cr Discount on bond payable $1,522,500
($11,122,500-$9,600,000)
Dr Cash $9,600,000
($240 million*8%/2)
(To record second interest payment)
Preparation of the journal entry to adjust the bonds to their fair value for presentation in the December 31, 2021, balance sheet.
December 31, 2021
Dr Unrealized Holding loss -NI $1,000,000
Dr Unrealized Holding loss -OCI $9,972,500
($10,972,500-$1,000,000)
Cr Fair value Adjustment $10,972,500
($229 million-$221 million+$1,450,000+$1,522,500)
(To adjust the bonds to Fair value)
Look up a field in nutrition and wellness that interests you.
Part A
Choose any two job titles and give a brief description of the job.
in damselflies a basal quadrangular cell in the wing venation is called
Jonah tells his friend Derek that he would like to go parasailing. Derek is very enthusiastic and suggests that they try an outfit called Wind Beneath My Wings because he has heard good things about it. Derek offers to arrange everything. He makes a reservation, puts the $600 fee on his credit card, and picks Jonah up to drive him to the Wings location. What a friend! But the day does not turn out as Jonah had hoped. While he is soaring up in the air over the Pacific Ocean, his sail springs a leak, he goes plummeting into the sea and breaks both legs. During his recuperation in the hospital, he learns that Wings is unlicensed. He also sees an ad for Wings offering parasailing for only $350. Derek is listed in the ad as one of the company's owners.
Required:
a. Does an agency relationship exist between Derek and Jonah?
b. Discuss what duties the agent had to the principal in the above example. Did the agent fulfill his duties? Why or Why not?
Answer:
- Derek is an agent of Jonah
- Derek failed in his fiduciary duties to his principal
Explanation:
An a agent is someone that is appointed by a principal to take care of their interests. The agent's loyalty is to only his principal and he should not manipulate the relationship for personal gain.
In the given scenario Jonah appointed Derek to arrange for parasailing activity. So he is an agent to Jonah in this respect.
However Derek chooses an outfit called Wind Beneath My Wings where he is an owner, he put aside $600 instead of $350 for the reservation, and the company is unlicensed.
All these are violations of Derek's fiduciary duty. He put Jonah at risk for his own personal gain.
McDarrel's records $500 of accrued salaries on December 31. Three days later, on January 3, total salaries of $4,000 (including the $500 accrued at year end) are paid. Demonstrate the required journal entry on January 3 by selecting from the choices below. (Check all that apply.) Multiple select question. Salaries payable will be credited for $500. Salaries expense would be debited for $3,500. Salaries payable will be debited for $500. Cash would be credited for $4,000. Wages expense will be debited for $4,000.
Answer:
Salaries payable will be debited for $500
Salaries expense would be debited for $3,500
Cash would be credited for $4,000
Explanation:
Based on the information given the Required journal entry for Jan 3rd will be:
Dr Salaries Payable $500
Dr Salaries expense $3,500
($4,000-$500)
Cr Cash $4,000
A special order offering to buy 112,000 units has been received from a foreign distributor. The only selling costs that would be incurred on this order would be $19.80 per unit for shipping. The company has sufficient idle capacity to manufacture the additional units. Two-thirds of the manufacturing overhead is fixed and would not be affected by this order. In negotiating a price for the special order, the minimum acceptable selling price per unit should be: (Round your answer to two decimal places.)
Answer: $88.60
Explanation:
In negotiating a price for the special order, the minimum acceptable selling price per unit is calculated below:
Direct materials = $25.80
Direct labor = $31.80
Variable manufacturing overhead = $11.20
Selling cost = $19.80
Total variable cost = $88.60
At the end of a fiscal period, expense accounts are closed through
Answer:
see the explanation
Explanation:
The temporary accounts get closed at the end of an accounting year. Temporary accounts include all of the income statement accounts (revenues, expenses, gains, losses), the sole proprietor's drawing account, the income summary account, and any other account that is used for keeping a tally of the current year amounts.
Time, energy, and money are examples of:
-unlimited resources.
-limited resources.
-flexible resources
-fixed resources
Answer:
Flexible resources
Explanation:
Flexible resources are defined as those that can be utilised under different categories of resource groups.
They are able to serve multiple functions.
For example money can be used for different activities like production of goods, training of staff, purchase of raw materials, and so on.
Time can be allocated to different endeavours.
Same applies to energy. It can be focused on pursuing various objectives
Quilcene Oysteria farms and sells oysters in the Pacific Northwest. The company harvested and sold 8,000 pounds of oysters in August. The company’s flexible budget for August appears below: Quilcene Oysteria
Flexible Budget
For the Month Ended August 31
Actual pounds (q) 8,000
Revenue ($4.00q) $32,000
Expenses:
Packing supplies ($0.50q) 4,000
Oyster bed maintenance ($3,200) 3,200
Wages and salaries ($2,900 + $0.30q) 5,300
Shipping ($0.80q) 6,400
Utilities ($830) 830
Other ($450 + $0.05q) 850
Total expense 20,580
Net operating income $11,420
The actual results for August appear below:
Quilcene Oysteria
Income Statement
For the Month Ended August 31
Actual pounds 8000
Revenue 35,200
Expenses:
Packing supplies .4200
Oyster bed maintenance .3100
Wages and salaries .5640
Shipping . .6950
Utilities .810
Other .980
Total expense .21,680
Net operating income .13,520
Required:
Prepare a report showing the company's revenue and spending variances for August.
Answer:
$ 2,100.00 F
Explanation:
Preparation of the report showing the company's revenue and spending variances for August.
QUILCENE OYSTERIA
REVENUE AND SPENDING VARIANCES
For the Month Ended August 31
Actual Results Flexible Budget
Revenue and Spending Variances
Pounds 8,000 8,000
Revenue ($4.00q) $
35,200- $32,000 =$3,200 F
Expenses:
Packing supplies ($0.50q)
4,200-4,000=200 U
Oyster bed maintenance ($3,200)
3,100-3,200=100 F
Wages and salaries ($2,900 + $0.30q) 5,640-5,300=340 U
Shipping ($0.80q)
6,950-6,400=550 U
Utilities ($830) 810-830=20 F
Other
($450 + $0.05q) 980 -850=130 U
TOTAL EXPENSE
21,680 20,580 1,100 U
NET OPERATING INCOME
$ 13,520 $ 11,420 $ 2,100 F
(35,200-21,680=$ 13,520)
($32,000-20,580=$11,420)
($3,200-1,100=$2,100)
Summary:
Quilcene Oysteria
Revenues and Spending Variance
For the Month ended August 31
Revenue $ 3,200.00 F
Expenses:
Packing supplies $ 200.00 U
Oyster Bed Maintenance $ 100.00 F
Wages and Salaries $ 340.00 U
Shipping $ 550.00 U
Utilities $ 20.00 F
Other $ 130.00 U
Total Expenses $ 1,100.00 U
Net Operating Income $ 2,100.00 F
Therefore the company's revenue and spending variances for August will be :$ 2,100.00 F
The calculation of finding the revenue and spending variances and the net increase in Q Company’s operating income for Quilcene Oysteria in August, is shown in the attached image below.
Operating income, also known as operating profit or operating earnings, is a measure of a company's profitability that reflects the results of its core operations. It represents the income generated from the company's primary business activities, excluding non-operating items such as interest income, interest expense, and income taxes. Operating income provides insight into the profitability and efficiency of a company's core operations, independent of its financing and tax-related activities.
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On January 8, the end of the first weekly pay period of the year, Regis Company's employees earned $21,760 of office salaries and $60,840 of sales salaries. Withholdings from the employees' salaries include FICA Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $12,860 of federal income taxes, $1,360 of medical insurance deductions, and $900 of union dues. No employee earned more than $7,000 in this first period.
Required:
Calculate the amounts for each of these four taxes of Regis Company.
Answer:
FICA-Social security = $5,121.20
FICA-Medicare = $1,197.70
FUTA = $495.60
SUTA = $4,130
Explanation:
Note: The four taxes of Regis Company required to be calculated as follows:
FICA-Social security
FICA-Medicare
FUTA
SUTA
Therefore, we have:
Total earnings = Office salaries + Sales salaries = $21,760 + $60,840 = $82,600
Tax = Total earnings * Tax rate ...................... (1)
Using equation (1), we have:
FICA-Social security = $82,600 * 6.20% = $5,121.20
FICA-Medicare = $82,600 * 1.45% = $1,197.70
FUTA = $82,600 * 0.60% = $495.60
SUTA = $82,600 * 5% = $4,130.00
what is the burden of proof in a civil case
The burden of proof in a civil case remains on the person who files the case.
What is Civil Case?Civil cases are those cases which includes the cases related to property , including respecting rights mentioned in the constitution. It does not include the criminal lawsuit.
For example: breach of the contract, divorce, violations regarding the copyright are the examples of the civil cases.
In Civil cases the person or the government entity also known as plaintiff has to proof the allegations are true. Plaintiff can provide the proofs in the form of the documents, witness testimonies or any object.
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You own a stock portfolio invested 35 percent in Stock Q, 25 percent in Stock R, 25 percent in Stock S, and 15 percent in Stock T. The betas for these four stocks are .83, 1.21, 1.22, and 1.39, respectively. What is the portfolio beta
Answer:
Beta= 1.1065
Explanation:
Giving the following formula:
Proportions:
35 percent in Stock Q, 25 percent in Stock R, 25 percent in Stock S, and 15 percent in Stock T.
Betas:
0.83, 1.21, 1.22, and 1.39,
To calculate the beta of the portfolio, we need to use the following formula:
Beta= (proportion of investment A*beta A) + (proportion of investment B*beta B)
Beta= (0.35*0.83) + (0.25*1.21) + (0.25*1.22) + (1.15*1.39)
Beta= 1.1065
The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reports—the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 61 students enrolled in those two courses. Data concerning the company’s cost formulas appear below:
Fixed Cost per Month Cost per Course Cost per Student
Instructor wages $2,950
Classroom supplies $280
Utilities $1,220 $65
Campus rent $4,800
Insurance $2,300
Administrative expenses $4,000 $44 $4
For example, administrative expenses should be $4,000 per month plus $44 per course plus $4 per student. The company’s sales should average $870 per student. The company planned to run four courses with a total of 61 students; however, it actually ran four courses with a total of only 51 students. The actual operating results for September appear below:
Actual
Revenue $51,660
Instructor wages $11,120
Classroom supplies $17,830
Utilities $1,840
Campus rent $5,000
Insurance $2,240
Administrative expenses $3,734
Required:
Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September.
Answer:
From the attached excel file, we havee:
Revenue and spending income from operations variance = $4,566 Favorable
Activity income from operations variance = -$5,860 Unfavorable
Explanation:
Note: See part a of the attached excel file for the flexible budget performance report that shows both revenue and spending variances and activity variances for September.
Also Note: See parts b and c of the attached excel file for the calculations of revenue and spending variances and activity variances respectively for September.
In the sales comparison approach, how is the appropriate unit of comparison chosen?
a. Price per square foot is always used.
b. Price per square foot is used except for hotels, for which the price per room is used.
c. It depends on the appraisal problem. The appraiser should apply all appropriate units of comparison, explain differences in wide variation in the results, and choose the most reliable unit.
d. It depends on the extent to which each comparable property differs from the subject property.
Answer:
c. It depends on the appraisal problem. The appraiser should apply all appropriate units of comparison, explain differences in wide variation in the results, and choose the most reliable unit.
Explanation:
The three (3) main methods used for the valuation or appraisal of real-estate properties are;
I. Income approach.
II. Cost approach.
III. Sales comparison approach.
A sales comparison approach can be defined as a real-estate appraisal technique that is typically based on comparing a property to other recently sold real-estate properties with similar characteristics. Thus, this appraisal method or technique requires that the real-estate property being appraised should be in current use and fall within the same area or locality as the other recently sold real-estate properties.
In the sales comparison approach, the appraised property should mimic the market behavior of other real-estate properties sold recently.
You purchased 1,000 shares of the New Fund at a price of $38 per share at the beginning of the year. You paid a front-end load of 2.5%. The securities in which the fund invests increase in value by 9% during the year. The fund's expense ratio is 1.3%. What is your rate of return on the fund if you sell your shares at the end of the year
Answer:
1.40%
Explanation:
Calculation to determine your rate of return on the fund if you sell your shares at the end of the year
Rate of Return=[($38,000*(1.13-.09))-((1000 x $38/(1-.025))]/[1000 x $38/(1-.025)]
Rate of Return=[$39,520-($38,000/(1-.025))]/-[$38,000/(1-.025)]
Rate of Return=($39,520-38,974.36)/38,974.36
Rate of Return=1.40%
Therefore your rate of return on the fund if you sell your shares at the end of the year will be 1.40%