Answer:
The company cost of capital is calculated as the weighted average of the cost of debt and the cost of equity. The weights are determined by the proportion of debt and equity in the company’s capital structure.
First, we need to calculate the market value of Golden Fleece’s debt and equity. The market value of debt is equal to the book value since the yield to maturity is given, which is $330,000. The market value of equity is equal to the number of shares outstanding multiplied by the price per share, which is 11,500 * $50.30 = $578,450.
Next, we need to calculate the weights for debt and equity. The weight for debt is calculated as the market value of debt divided by the sum of the market values of debt and equity, which is 330,000 / (330,000 + 578,450) = 0.3634. The weight for equity is calculated as the market value of equity divided by the sum of the market values of debt and equity, which is 578,450 / (330,000 + 578,450) = 0.6366.
Finally, we can calculate Golden Fleece’s company cost of capital as the weighted average of the cost of debt and the cost of equity: (0.3634 * 7%) + (0.6366 * 14%) = 11.09%.
Therefore, Golden Fleece’s company cost of capital is 11.09%.
Consider an economy, where there is a single consumption good and two states of nature {a,b}. There are two consumers, A and B, with preferences and (random) endowments as follows: • Agent A: uA (2 A(a), XA(b)) E logxA(a) + logxA(b), (ex(a), e (b)) = (1,2) • Agent B: UB (XB(a), xb(b)) = logxB(a) + logrl(b), (eb(a), eb(b)) = (3, 1)
(i) In order to hedge against risk individuals can trade two securities with returns = = А 7 7 denominated in units of the commodity: ri = - (1) and r2 - (i). where the top payoff refers to state a and the bottom to state b. How many units of the asset rı will be held by individual A at equilibrium
The optimal consumption for individual A is xA(a) = xA(b) = 1, and the quantity of security r1 held by individual A at equilibrium, q1, is 0, as it does not provide any additional utility to individual A based on their preferences and endowments.
To determine how many units of the asset r1 will be held by individual A at equilibrium, we need to analyze their optimal consumption and investment decisions based on their preferences and endowments.
From the given information, we can see that individual A's utility function is given by:
uA(xA(a), xA(b)) = logxA(a) + logxA(b)
And their endowments in states a and b are:
(eA(a), eA(b)) = (1, 2)
To hedge against risk, individual A can invest in two securities with returns r1 and r2, where r1 has a payoff of -1 in state a and 1 in state b, and r2 has a payoff of 1 in state a and -1 in state b.
Let's denote the quantity of security r1 held by individual A as q1. Since the returns of r1 are -1 in state a and 1 in state b, the budget constraint for individual A can be expressed as:
xA(a) - q1 + 2xA(b) + q1 = eA(a) - r1 + eA(b) + r1
Simplifying, we get:
xA(a) + 2xA(b) = eA(a) + eA(b)
Now, to determine the optimal consumption and investment decision of individual A, we need to solve for xA(a) and xA(b) that maximize their utility subject to the budget constraint.
Taking the partial derivatives of uA with respect to xA(a) and xA(b), and equating them to zero, we get:
d(uA)/d(xA(a)) = 1/xA(a) = 0
d(uA)/d(xA(b)) = 1/xA(b) = 0
Solving the above equations, we find that xA(a) = xA(b) = 1.
Substituting these values back into the budget constraint, we get:
1 + 2(1) = eA(a) + eA(b)
3 = eA(a) + eA(b)
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which of the following are affected by the probability of a state of the economy occurring? i. expected return of an individual security ii. expected return of a portfolio iii. standard deviation of an individual security iv. standard deviation of a portfolio multiple choice i and iii only i and ii only ii and iv only iii and iv only i, ii, iii, and iv
The probability of a state of the economy occurring can affect both the expected return and standard deviation of both individual securities and portfolios. So the correct option is E only i, ii, iii, and iv
The expected return of an individual security or portfolio is affected because the probability of different states of the economy occurring can lead to different levels of return. For example, in a recessionary state of the economy, stocks may have a lower expected return due to decreased consumer spending and company profits. Similarly, the standard deviation of an individual security or portfolio can be affected by the probability of different states of the economy occurring since different economic states may result in more or less volatility in the market. Therefore, it is important for investors to consider the probability of different economic states when making investment decisions.
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how can an organization leverage its mission, vision, and values in its communications with customers?
An organization can leverage its mission, vision, and values in communications with customers by consistently emphasizing these elements in its messaging. This approach helps create a strong brand identity and builds customer trust.
The way organization leverage its mission, vision, and values in its communications with customersFirst, the organization should clearly articulate its mission, which defines its purpose and primary objectives. By showcasing the mission in marketing materials, social media, and customer interactions, the organization demonstrates its commitment to achieving specific goals and fulfilling customer needs.
Second, the vision statement, which outlines the organization's aspirations and long-term direction, should be communicated effectively. This helps customers understand the company's future plans and growth potential, creating a sense of confidence and loyalty.
Lastly, incorporating values into customer communications allows the organization to showcase its principles and ethical standards. By highlighting values in decision-making and actions, customers can appreciate the organization's dedication to transparency, responsibility, and social good.
In summary, an organization can strengthen its customer relationships and boost its reputation by consistently integrating its mission, vision, and values into all forms of communication. This approach fosters trust, loyalty, and long-term success
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which of the following is correct?group of answer choicesto find the beta of a stock, one can multiply the correlation coefficient between stock return and market return by the standard deviation of the stock return and divide the product by the standard deviation of the market return.a stock has a return correlation coefficient with the market return of 0.72 and it has a standard deviation of 30%, its beta is equal to 0.75 if the market portfolio has a standard deviation of 25%.the greater the beta of the stock, the higher the risk the stock has.the greater the standard deviation of the stock, the higher the risk the stock has.
The correct statement is "to find the beta of a stock, one can multiply the correlation coefficient between stock return and market return by the standard deviation of the stock return and divide the product by the standard deviation of the market return."
This formula is used to calculate the beta of a stock, which measures the stock's sensitivity to market movements. The statement "a stock has a return correlation coefficient with the market return of 0.72 and it has a standard deviation of 30%, its beta is equal to 0.75 if the market portfolio has a standard deviation of 25%" is an example of using this formula to calculate the beta of a stock. The statement "the greater the beta of the stock, the higher the risk the stock has" is also true, as a higher beta indicates higher market risk. However, the statement "the greater the standard deviation of the stock, the higher the risk the stock has" is not necessarily true, as standard deviation is only one measure of risk and does not capture all types of risk (such as company-specific risk).
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The economic profit of a firm includes the opportunity costs of all resources used in production. What do these opportunity costs measure?
The worth of resources when put to their best possible use. Applying the following formula, opportunity cost is determined as follows: Opportunity Cost is calculated as Return on the Most Profitable Investment - Return on Investment Pursued.
Economic profit is the sum of money that is left over after revenue has been reduced by opportunity costs as well as explicit costs. The profits that a company forfeits by choosing one business endeavour over another are known as opportunity costs. An entrepreneur who runs a firm, for instance, could utilise her labour to pay the bills at a job.
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The opportunity costs included in the economic profit of a firm measure the value of the resources that could have been used in alternative production methods or invested in alternative opportunities.
These costs represent the forgone profits or benefits that the firm could have received if they had chosen a different course of action. By including opportunity costs in the calculation of economic profit, the firm is able to make a more accurate assessment of its true profitability and make more informed decisions about how to allocate its resources in the future. The opportunity costs in the context of economic profit measure the value of the best alternative use of resources that a firm could have chosen instead of using them for their current production.
These costs take into account the potential benefits or profits the firm could have earned by allocating the resources to a different venture or investment. By considering opportunity costs, a firm can make better decisions about the most efficient and profitable use of its resources.
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(Preferred stockholder expected return) Zust preferred stock is selling for $42.71 per share and pays $1.95 in dividends. What is your expected rate of return if you purchase the security at the market price?
If you purchase Zust preferred stock at the market price of $42.71 per share, your expected rate of return is 4.6%.
This rate of return is calculated by dividing the dividend payment ($1.95) by the market price ($42.71). This rate of return is known as the dividend yield, which measures the percentage of the stock's price that is paid out as dividends.
Given the current market price and dividend payment, it appears that investors in Zust preferred stock can expect to earn a return of 4.6%. While this rate of return may seem low, preferred stocks often provide a certain degree of stability as they typically pay out consistent dividends with minimal risk.
Furthermore, preferred stocks are generally less volatile than common stocks and may provide a steady source of income for investors. Ultimately, it is up to the investor to decide if the expected return of 4.6% is worth the risk associated with purchasing Zust preferred stock.
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a. how much fiscal restraint or stimulus occurred between 1930 and 1931? $ 2.5 billion of fiscal stimulus occurred between 1930 and 1931. b. by how much did this policy change aggregate demand if the mpc was 0.90? $ billion
Fiscal restraint stimulus occurred between 1930 and 1931, the policy changed aggregate demand if the mpc was 0.90. the approach alter expanded total requests by $25 billion.
To calculate the alter in total request coming about from the monetary arrangement later, we got to utilize the investing multiplier equation, which is:
Multiplier = 1 / (1 - MPC), where MPC is the negligible penchant to devour. In the event that MPC is 0.90, at that point:
Multiplier = 1 / (1 - 0.90) = 10
This implies that each $1 financial jolt will increment the total request by $10.
Given that $2.5 billion of financial boost happened between 1930 and 1931, the alter in total request would be: Alter in total request = $2.5 billion x 10 = $25 billion
thus, the approach alter expanded total requests by $25 billion.
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An analyst gathered the following information for a stock and market parameters: stock beta = 1.22; expected retum on the Market = 12.90%; expected retum on T-bills = 1.00%; current stock Price = $9.51; expected stock price in one year = $14.61; expected dividend payment next year = $2.24. Calculate the a) Required retum for this stock (1 point): b) Expected retum for this stock
a) To calculate the required return for this stock, we can use the Capital Asset Pricing Model (CAPM) formula:
Required return = Risk-free rate + Beta * (Market return - Risk-free rate)
Risk-free rate = 1.00%Beta = 1.22
Market return = 12.90%
Required return = 1.00% + 1.22 * (12.90% - 1.00%)
Required return = 15.11%Therefore, the required return for this stock is 15.11%.
b) To calculate the expected return for this stock, we can use the formula:
Expected return = (Expected dividend payment / Current stock price) + (Expected stock price - Current stock price) / Current stock price
Expected dividend payment = $2.24
Current stock price = $9.51
Expected stock price = $14.61
Expected return = ($2.24 / $9.51) + ($14.61 - $9.51) / $9.51
Expected return = 33.67%
Therefore, the expected return for this stock is 33.67%.
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________ is the risk associated with rejecting a lot of materials that has good quality.
Producer risk is the risk associated with rejecting a lot of materials that has good quality.
The risk of rejecting a whole lot of precise gadgets is referred to as producer's risk. Sometimes it is able to take place that the exceptional of the lot isn't always precise however the pattern outcomes display precise exceptional devices as such the customer has to just accept a faulty lot. Rejecting a precise-exceptional batch, additionally referred to as producer's hazard, or a. Accepting a poor-exceptional batch, additionally referred to as customer's risk, or b. In practice, rejecting a hazard may also contain now no longer bidding for a brand new contract (e.g. organizations wishing to keep away from corruption dangers may also pick now no longer to do commercial enterprise in international locations with a excessive hazard at the corruption perceptions index).
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Type I error or alpha error is the risk associated with rejecting a lot of materials that has good quality. This is a statistical term that refers to the incorrect rejection of a true null hypothesis.
In quality control, the null hypothesis is that the material meets the required specifications, and the alternative hypothesis is that it does not meet the specifications.When the inspection process is too strict and rejects a lot of materials that meet the required specifications, it leads to an increase in Type I error. This can have serious consequences, as it can result in increased production costs, delayed production schedules, and damage to supplier relationships. In addition, it can lead to missed opportunities to improve the production process and reduce costs.
To mitigate this risk, quality control professionals must carefully balance the need to maintain high standards with the need to avoid unnecessary rejections. This requires a thorough understanding of the production process, the specifications for the materials, and the statistical tools used to evaluate them. By taking a proactive approach to quality control, companies can minimize the risk of Type I error and ensure that their products meet the highest standards of quality and reliability.
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a series of equal payments or receipts made at any interval of time is a(n)
A series of equal payments or receipts made at any interval of time is known as an annuity. An annuity is a financial product that provides a stream of payments or receipts for a set period of time.
These payments can be made on a monthly, quarterly, semi-annual, or annual basis.An annuity can be either an ordinary annuity or an annuity due. In an ordinary annuity, the payments or receipts are made at the end of each period, while in an annuity due, the payments or receipts are made at the beginning of each period.
There are different types of annuities, including fixed annuities and variable annuities. Fixed annuities offer a guaranteed rate of return, while variable annuities invest in a portfolio of assets and offer the potential for higher returns.
An annuity can be used for various purposes, such as retirement planning, education funding, or to provide a steady income stream. When considering an annuity, it is important to understand the fees, charges, and potential risks associated with the product.
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Which function calculates a periodic rate for an investment orloan given the number of payments, fixed periodic payments, andpresent value?PVIPMTRATENPER
The function that calculates a periodic rate for an investment or loan given the number of payments, fixed periodic payments, and present value is the RATE function.
The RATE function is a financial formula commonly used in finance and accounting to determine the periodic interest rate required to satisfy the conditions of a loan or investment based on the given inputs. In the RATE function, NPER represents the total number of payments, while PV (Present Value) denotes the initial value of the loan or investment. PMT is the fixed periodic payment made for the loan or investment. By inputting these values into the RATE function, one can effectively calculate the periodic interest rate required to meet the predetermined conditions of the loan or investment.
This function is particularly useful in determining the interest rate necessary for a loan to be paid off within a specified period, or to calculate the interest rate required for an investment to reach a desired future value. In summary, The function that calculates a periodic rate for an investment or loan given the number of payments, fixed periodic payments, and present value is the RATE function.
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Eloise plans to accumulate 50,000 at the end of 40 years. She makes the following deposits: (i) X at the beginning of years 1 - 15; (ii) No deposits at the beginning of years 16 - 25; (iii) Y at the beginning of years 26 - 40. The annual effective interest rate is 4%. You are given that X - Y = 120. Calculate Y.
We can use the formula for the future value of an annuity:
[tex]FV = PMT * [(1 + r)^n - 1]/r[/tex]
where FV is the future value, PMT is the annuity payment, r is the annual interest rate, and n is the number of periods.
Let X be the deposit at the beginning of years 1-15, and Y be the deposit at the beginning of years 26-40. The total number of periods is 40, and the interest rate is 4%.
For the first 15 years, the future value of X is:
FV1 = X * [[tex](1 + 0.04)^_{15}[/tex] - 1]/0.04
For the next 10 years, there are no deposits, so the future value remains the same:
FV2 = FV1 * [tex](1 + 0.04)^_{10}[/tex]
For the last 15 years, the future value of Y is:
FV3 = Y * [[tex](1 + 0.04)^_{15}[/tex] - 1]/0.04
The total future value must be $50,000:
[tex]FV_{1}[/tex] + [tex]FV_{2}[/tex] + [tex]FV_{3}[/tex] = 50,000
We are also given that X - Y = 120. We can substitute X = Y + 120 into the equation above and solve for Y:
(Y + 120) * [[tex](1 + 0.04)^_{15}[/tex] - 1]/0.04 + [tex]FV_{2}[/tex] + Y * [[tex](1 + 0.04)^_{15}[/tex] - 1]/0.04 = 50,000
Simplifying the equation and solving for Y gives:
Y ≈ $1,679.61
Therefore, Eloise should deposit $1,679.61 at the beginning of each year for the last 15 years to accumulate $50,000 at the end of 40 years, given the specified conditions.
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2. Have you ever experienced what you thought to be an attempt at phishing, or have you ever
received a phone call that sounded like a scam? Describe the situation below and what you did to
protect your personal or financial information.
If you don't recall an experience like this, write a fictional scenario of a scam that might be used to
get someone's personal information, and what can be done to avoid it.
(8 points: 4 points to describe the act of phishing or scam; 4 points to describe what was done to
avoid the situation)
One possible scenario of a scam to get someone's personal information is a phishing email scam.
What happens in an email scam ?In this scenario, a person receives an email that appears to be from a legitimate company, such as a bank or an online retailer. The email may claim that there is a problem with the person's account or an unauthorized transaction has been made.
The email will then provide a link or attachment for the person to click on to resolve the issue. However, the link or attachment will direct the person to a fake website or download malicious software that can steal the person's personal information, such as their login credentials or credit card details.
To avoid falling victim to this scam, there are several things that can be done. First, always be cautious of unsolicited emails or messages. Second, do not click on any links or attachments in emails or messages, especially from unknown sources.
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get the percentage of people who are no longer alive. alias the result as percentage_dead. remember to use 100.0 and not 100!
percentage_dead = (float(total_dead) / total_population) * 100.0
The percentage of people who are no longer alive can be calculated by dividing the total number of people who are dead by the total population and then multiplying by 100.0. We can alias this result as percentage_dead.
For example, if the total population is 1,000 and the total number of people who are dead is 400, then the percentage of people who are no longer alive is 40%. In this case, percentage_dead = 40.0.
It is important to note that it is necessary to use 100.0 instead of 100 in the calculation, because if we used 100, then the result would be an integer and not a float. By using 100.0, we can make sure that the result is a float and not an integer.
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in q1, a firm sold 23,000 units of a particular product. in q2, the firm sold 25,000 and in q3 22,850 units were sold. assume weights of 0.7 and 0.3 (descending for older data). what is the two period weighted moving average forecast for q4?
Because there is no sales data for Q4, the two-period weighted moving average projection for Q4 cannot be generated.
The weighted moving average method forecasts by giving weights to past data points, with more recent data often receiving a higher weight. In this scenario, we are provided sales data for the first, second, and third quarters, but not for the fourth.
As a result, calculating a two-period weighted moving average projection for Q4 without additional information or assumptions about future sales trends is impossible. We would need to employ additional forecasting methodologies, such as regression analysis or time series analysis, or make assumptions based on external factors that could effect sales to generate a projection for Q4.
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For last year Company W had sales income of £44.4 million, cost of sales of £22.3 million, distribution costs of £1.4 million, administration costs of £4.0 million and finance costs of £3.3 million. What was Company W's operating profit for last year in millions of £. Enter your answer to 1 decimal place in millions of £. For example, for £2.2 million enter 2.2
For last year Company W had sales income of £44.4 million, cost of sales of £22.3 million, distribution costs of £1.4 million, administration costs of £4.0 million and finance costs of £3.3 million. Company W's operating profit for last year in millions of £ is 16.7 .
The ongoing costs related to the routine day-to-day operations of a business are known as operating costs. Costs of goods sold (COGS) and other operating costs, often known as selling, general, and administrative (SG&A) costs, are both included in operating costs.
Last years' Sales Income = £44.4 million
Amount in millions of £Sales 44.4
Less: Cost of Sales (22.3)
Gross Profit 22.1
Less: Distribution Costs (1.4)
Less: Administration Cost (4.0)
Operating Profit 16.7
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QUESTION 3 You receive a $15,000 4-year constant payment loan (CPL). The loan's annual interest rate is 11%. What is the principal portion of the total payment in year 4, rounded to the nearest dollar
The principal portion of the total payment in year 4 for this loan is $1,029.
To calculate the principal portion of the total payment in year 4 for the $15,000 4-year constant payment loan at 11% interest, you can use the formula for the present value of an annuity:
P = A / ((1 + r)^n - 1) * (1 + r)^(-t)
Where:
P = Principal portion of payment
A = Constant payment amount
r = Annual interest rate
n = Total number of payment periods
t = Number of payment periods remaining
In this case:
A = $15,000 / 4 = $3,750
r = 11% or 0.11
n = 4 years * 1 payment per year = 4
t = 1 year (since we want to find the principal portion of the payment in year 4)
Plugging in these values, we get:
P = $3,750 / ((1 + 0.11)^4 - 1) * (1 + 0.11)^(-1)
P = $1,029.41
Therefore, the principal portion of the total payment in year 4 for the $15,000 4-year constant payment loan is $1,029, rounded to the nearest dollar.
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The $1.000 face value bonds of Galaxies International have coupon of 5.5 percent and pay interest semiannually. Currently, the bonds are quoted at 98.02 and mature in 12 years a. What is the current price of the bond? b. What is the yield to maturity?
a. The current price of the bond is $980.20. b. The yield to maturity of the bond is 5.80%.
a. To calculate the current price of the bond, we first need to determine the semiannual coupon payment, which is $27.50 (=$1,000 x 5.5% / 2).
Then, we can use the formula for the present value of an annuity to calculate the present value of the semiannual coupon payments and the formula for the present value of a lump sum to calculate the present value of the bond's face value:
PV of semiannual coupon payments = $27.50 x [1 - 1/(1 + 2.75%)¹²ˣ²] / (2.75%) = $450.48
PV of face value = $1,000 / (1 + 2.75%)¹²ˣ²= $529.72
Therefore, the current price of the bond is:
Current price = PV of semiannual coupon payments + PV of face value = $450.48 + $529.72 = $980.20
b. To calculate the yield to maturity of the bond, we can use an iterative process or a financial calculator.
Using a financial calculator, we can input the following values:
N = 24 (12 years x 2 semiannual periods),
PMT = $27.50, FV = $1,000,
PV = -$980.20, and solve for I/Y,
which gives us a yield to maturity of 5.80%.
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Problem 7-1 Stock Values [LO 1] Fowler, Inc., just paid a dividend of $265 per share on its stock. The dividends are expected to grow at a constant rate of 6 percent per year, indefinitely. Assume investors require a return of 10 percent on this stock. a. What is the current price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What will the price be in five years and in fourteen years? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a. Current price _______b. Price in five years Price in fourteen years_______
a) the current price of the stock is $6,625.
b)the price of the stock in five years is $412.92. & the price of the stock in fourteen years is $944.34.
a. To find the current price of the stock, we can use the formula for the present value of a growing perpetuity:
Current price = Dividend / (Required return - Growth rate)
Current price = $265 / (0.10 - 0.06)
Current price = $6,625
b. To find the price of the stock in five years, we can use the formula for the future value of a growing perpetuity:
Price in 5 years = Dividend x (1 + Growth rate)^n / (Required return - Growth rate)
Price in 5 years = $265 x (1 + 0.06)^5 / (0.10 - 0.06)
Price in 5 years = $412.92
To find the price of the stock in fourteen years, we can use the same formula:
Price in 14 years = Dividend x (1 + Growth rate)^n / (Required return - Growth rate)
Price in 14 years = $265 x (1 + 0.06)^14 / (0.10 - 0.06)
Price in 14 years = $944.34
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The Forever Happy Floral Company included on their income statement an amount of $45,000 for depreciation expense. What is unique about depreciation expense?
A. It does not have any effect on net income.
B. none of the above.
C. It is a noncash expense.
D. It is used to account for obsolete inventory which must be written off.
E. It is a part of cost of goods sold in a service company’s income statement.
The Forever Happy Floral Company included on their income statement an amount of $45,000 for depreciation expense. The unique about depreciation expense, is a c. noncash expense.
Depreciation expense represents the decrease in value of a company's assets over time due to wear and tear or obsolescence. However, it does not involve any actual cash transactions. This noncash nature of depreciation expense differentiates it from other expenses that directly affect the company's cash flow. It also has an impact on net income, as depreciation is subtracted from revenues to determine the company's net income. However, it does not affect the cash flow statement, because it is simply an allocation of the asset's cost over its useful life.
Depreciation expense is not used to account for obsolete inventory (Option D), nor is it a part of cost of goods sold in a service company's income statement (Option E). Option A and Option B are incorrect, as depreciation does have an effect on net income and there is a unique aspect of depreciation mentioned above. The Forever Happy Floral Company included on their income statement an amount of $45,000 for depreciation expense. The unique about depreciation expense, is a c. noncash expense.
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bengal company provides the following unit sales forecast for the next three months: julyaugustseptembersales units5,5006,2005,650the company wants to end each month with ending finished goods inventory equal to 20% of the next month's sales. finished goods inventory on june 30 is 1,100 units. the budgeted production units for august are:
To determine the budgeted production units for August, we first need to calculate the expected sales for August, which would be 20% of September's sales, or:
5,650 x 0.2 = 1,130 So the company expects to sell 5,650 + 1,130 = 6,780 units in August.
To end August with the required ending finished goods inventory of 20% of September's sales, the company needs to have:
5,650 x 0.2 = 1,130 units
So the total number of units the company needs to have on hand at the end of August is:
6,780 + 1,130 = 7,910 units
The company currently has 1,100 units of finished goods inventory on hand, so it needs to produce:
7,910 - 1,100 = 6,810 units
Therefore, the budgeted production units for August are 6,810 units.
Bengal Company provides a unit sales forecast for July, August, and September with sales units of 5,500, 6,200, and 5,650 respectively. The company aims to have ending finished goods inventory equal to 20% of the next month's sales. With a June 30 finished goods inventory of 1,100 units, the budgeted production units for August are calculated as follows:
August sales: 6,200 units
Desired ending inventory for August (20% of September sales): 0.20 * 5,650 = 1,130 units
Beginning inventory for August (20% of July sales): 0.20 * 5,500 = 1,100 units (June 30 inventory)
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The Terranian Kwacha (TEK) is pegged to the dollar at the rate of 2.000 Kwacha per dollar. USDTEK 3-month forward points are +100. If the expected jump (depreciation) should the Kwacha break its dollar peg is 10% what is the implied probability of this event occuring over the next 3 months (approximately)?
The implied probability of the Terranian Kwacha breaking its dollar peg and experiencing a 10% jump (depreciation) over the next 3 months is approximately 49.9%
Using the information provided, we know that the current spot rate is 2.000 Kwacha per dollar. Therefore, the 3-month forward rate can be calculated as follows: Forward rate = Spot rate x (1 + forward points / 10,000) = 2.000 x (1 + 100 / 10,000) = 2.020 Kwacha per dollar
Next, we need to calculate the implied probability of a 10% jump (depreciation) in the Kwacha should it break its dollar peg over the next 3 months. We can use the following formula to do so: [tex](1 - e^(-rT)) x 100[/tex]
Where r is the interest rate and T is the time period in years. In this case, T is 0.25 (3 months is one-quarter of a year) and r can be assumed to be the risk-free rate. Assuming the risk-free rate is 2%, we can calculate the implied probability as follows: [tex](1 - e^(-0.02 x 0.25)) x 100 = (1 - e^-0.005) x 100[/tex] = 0.499 or 49.9%
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ow does the amortization schedule for an installment note, such as a car loan, differ from an amortization schedule for bonds? multiple choice the final carrying value is not zero in either amortization schedule. the final carrying value is zero in both amortization schedules. the final carrying value is zero in an amortization schedule for an installment note. the final carrying value is zero in an amortization schedule for bonds.
The final carrying value is zero in an amortization schedule for an installment note.
In an amortization schedule for an installment note (like a car loan), the principal amount is gradually reduced over the term of the loan through periodic payments. By the end of the term, the final carrying value becomes zero, as the borrower has paid off the entire principal amount.
On the other hand, in an amortization schedule for bonds, the carrying value is not reduced to zero. Instead, the bond's premium or discount is amortized over the bond's life, adjusting the carrying value until it reaches the bond's face value at maturity. The bond's principal amount is then paid in full to the bondholders at the end of the bond's term.
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luca is preparing a presentation on employment trends at his company over the last five years. he is struggling to find a clear and memorable way to show that seasonal temp workers have gotten steadily older and more experienced in that time period, which has had both positive and negative outcomes for the company. what's the best way for him to figure this out?
Luca should start by gathering data on the age and experience level of the seasonal temp workers over the last five years.
He can then use this data to create a graph or table that illustrates the trends in the age and experience of the seasonal temp workers over the last five years. This will make it easier for Luca to quickly and clearly show the changes in the demographic of the seasonal temp workforce.
To provide a more detailed and memorable representation of the data, Luca can add a brief description of the positive and negative outcomes associated with the changes in the age and experience level of the temp workers. This will help Luca show the full picture of the changes in the demographics of the temp workers and the resulting effects on the company over the last five years.
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(Capital asset pricing model)
The expected return for the general market is 12.8 percent, and the risk premium in the market is 9.3%. Tasaco, LBM, and Exxos have betas of 0.864, 0.693 and 0.575, respectively. What are the corresponding required rates of return for the three securities?
The required rates of return for Tasaco, LBM, and Exxos are 20.01%, 18.41%, and 17.34%, respectively.
To calculate the required rate of return for each security using the Capital Asset Pricing Model (CAPM), follow these steps:
1. Identify the risk-free rate (Rf): Subtract the market risk premium from the expected market return: Rf = 12.8% - 9.3% = 3.5%
2. Determine the beta for each security: Tasaco (β1) = 0.864, LBM (β2) = 0.693, Exxos (β3) = 0.575
3. Calculate the required rate of return for each security using the CAPM formula: Ri = Rf + βi (Market Risk Premium)
For Tasaco: R1 = 3.5% + 0.864(9.3%) = 20.01%
For LBM: R2 = 3.5% + 0.693(9.3%) = 18.41%
For Exxos: R3 = 3.5% + 0.575(9.3%) = 17.34%
These rates represent the minimum returns required for each security, considering their individual risk levels (beta) and the overall market risk premium.
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You have received a job offer with total compensation of $70,000 per year from a mature company. You have also received a job offer to earn $90,000 per year from a start-up. You are willing to take either job, but you are concerned that the start-up will fail, and you will be unemployed with SO compensation in two years. You estimate the probability of being unemployed in two years as 10% if you work for the mature company and 50% if you work for the start-up. Which job offers you the highest expected compensation per year two years from now? How much would the start-up have to offer you now in order for the expected compensation to be the same for either job? I (0.50 X 0)+(0.50 X offer) = $63.000 Offer=
The decision between taking a job with a mature company offering a total compensation of $70,000 per year versus a start-up offering $90,000 per year can be challenging. The main concern is that the start-up may fail, and you may end up unemployed with no compensation in two years.
To make an informed decision, it is necessary to consider the probability of being unemployed in two years for both options.
If you work for the mature company, the probability of being unemployed in two years is estimated to be 10%. Therefore, the expected compensation per year after two years would be $63,000 (($70,000 x 0.9) + ($0 x 0.1)).
If you work for the start-up, the probability of being unemployed in two years is estimated to be 50%. Therefore, the expected compensation per year after two years would be $45,000 (($90,000 x 0.5) + ($0 x 0.5)).
Comparing the two options, it is evident that the job with the mature company offers the highest expected compensation per year two years from now.
To make the expected compensation for both jobs equal, the start-up would need to offer $126,000. This is calculated by setting the expected compensation for the start-up job to be equal to the expected compensation for the mature company job: (0.5 x 0) + (0.5 x offer) = $63,000, thus (0.5 x offer) = $63,000, and offer = $126,000.
In conclusion, while the start-up offers a higher salary, it also poses a higher risk of unemployment, making the job with the mature company the better option for long-term financial security.
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if relative resource cost is low and relative resource produced value is high, one would expect to achieve:
If relative resource cost is low and relative resource produced value is high, one would expect to achieve a higher profit margin.
When the relative resource cost is low, it means that the cost of acquiring the resources needed to produce the goods or services is low. When the relative resource produced value is high, it means that the value of the goods or services produced is high.
This combination creates a favorable situation for businesses because they can produce high-value goods or services at a relatively low cost. This leads to higher profit margins since the cost of production is low and the revenue generated from selling the goods or services is high.
In this scenario, businesses can make more profit for each unit sold, which can help to increase their overall profitability.
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the ralston company manufactures a special line of graphic tubing items. the company estimates it will sell 81,000 units of this item during the upcoming year. the beginning finished goods inventory contains 26,000 units. the target for each year's ending inventory is 16,000 units. each unit requires six feet of plastic tubing. the tubing inventory currently includes 79,000 feet of the required tubing. materials on hand are targeted to equal 3 months' production. any shortage in materials will be made up by the immediate purchase of materials. sales take place evenly throughout the year. what is the production budget (in units) for the upcoming year?
The production budget for the upcoming year is 45,000 units
To calculate the production budget for the upcoming year, we need to determine the number of units the company needs to produce to meet the expected sales and ending inventory targets. Here's how we can calculate it:
Calculate the total units needed for sales and ending inventory:
Expected sales: 81,000 units
Target ending inventory: 16,000 units
Beginning inventory: 26,000 units
Total units needed = Expected sales + Target ending inventory - Beginning inventory
Total units needed = 81,000 + 16,000 - 26,000
Total units needed = 71,000 units
Determine the amount of tubing needed:
Each unit requires 6 feet of tubing
Total tubing needed = Total units needed * 6
Total tubing needed = 71,000 * 6
Total tubing needed = 426,000 feet of tubing
Determine the amount of tubing available:
Tubing inventory: 79,000 feet
Materials on hand are targeted to equal 3 months' production, which is 3/12 or 0.25 of a year
Estimated annual production is 71,000 units (from step 1)
Estimated production per month is 71,000 / 12 = 5,916.67 units
Estimated production for 3 months is 5,916.67 * 0.25 = 1,479.17 units
Each unit requires 6 feet of tubing, so 1,479.17 units require 8,875 feet of tubing
Total tubing available = Tubing inventory + Materials on hand
Total tubing available = 79,000 + 8,875
Total tubing available = 87,875 feet of tubing
Determine if there is a shortage of tubing:
Total tubing needed: 426,000 feet
Total tubing available: 87,875 feet
There is a shortage of tubing, which needs to be made up by the immediate purchase of materials.
Calculate the production budget:
The production budget is the total units needed minus the beginning inventory:
Production budget = Total units needed - Beginning inventory
Production budget = 71,000 - 26,000
Production budget = 45,000 units
Therefore, the production budget for the upcoming year is 45,000 units.
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randall hired terri to manage his store. terri negligently hit sam, a customer, with a shopping cart, injuring him. true or false - randall is liable to the customer.
The given statement "randall hired terri to manage his store. terri negligently hit sam, a customer, with a shopping cart, injuring him" is True. Randall is liable to the customer because Terri was acting as his employee and was carrying out duties within the scope of her employment at the time of the incident.
As the owner of the store, Randall has a legal responsibility to ensure the safety of his customers while they are on his premises.
In this case, Terri was hired by Randall to manage his store, and her actions of negligently hitting Sam with a shopping cart occurred while she was working at the store. T
herefore, Randall can be held liable for the injuries Sam sustained as a result of Terri's negligence.
This liability is based on the employer-employee relationship and the fact that Terri's actions occurred within the scope of her employment.
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X-1 Corp's total assets at the end of last year were $390,000 and its EBIT was $55,000. What was its basic earning power (BEP) ratio? a. 18.80% b. 14.10% c. 7.05% d. 10.58% e. 12.36%
Basic earning power (BEP) ratio is option B- 14.10% if X-1 Corp's total assets at the end of last year were $390,000 and its EBIT was $55,000.
The basic earning power (BEP) ratio is calculated by dividing earnings before interest and taxes (EBIT) by total assets.
BEP ratio = EBIT / Total Assets
Substituting the given values:
BEP ratio = $55,000 / $390,000
BEP ratio = 0.1410 or 14.10%
Therefore, the answer is (b) 14.10%.
The basic earning power (BEP) ratio is a financial ratio that measures a company's ability to generate operating earnings from its total assets before considering the effects of financing and taxes. The BEP ratio provides insight into a company's operating efficiency and profitability by comparing its earnings to its invested capital.
In the given scenario, X-1 Corp's basic earning power (BEP) ratio is 14.10%. This means that for every dollar of assets the company has, it generates 14.10 cents of operating income before considering the effects of financing and taxes.
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